Growing pressure on Wolfowitz to quit

Analysts say World Bank board hopes he will do the right thing and leave.

EMBATTLED World Bank president Paul Wolfowitz headed yesterday for what might well be his last meeting for the institution as pressure piled on him to resign over charges of favouritism.

His desperate lobbying for support during the weekend gathering of finance ministers and central bankers for semi-annual meetings of the bank and the International Monetary Fund appeared to have limited success.

Resistance to his leadership of the 185-member World Bank was growing in Europe, which represents three of the five largest donors to the US$20 billion (S$30.3 billion) annual lending and assistance programmes of the bank.

Germany’s minister in charge of the World Bank, Ms Heidemarie Wieczorek-Zeul, underscored the European wariness.

She spoke to reporters about the importance of preserving the bank’s “moral authority” and suggested that even though Mr Wolfowitz had apologised, he might need to leave for the good of the bank.

“The controversy is distracting the World Bank from its mission,” she said. “He has to decide for himself whether he can continue to fulfil his duties credibly under these circumstances.”

Mr Wolfowitz last week apologised for arranging a US$193,590 (S$294,000) job for his partner, former World Bank communications specialist Shaha Riza, in the US State Department in 2005, shortly after he assumed leadership of the bank.

His fate is being deliberated by the Bank’s 24-member executive board even as he was scheduled to present reports to the bank’s policysteering Development Committee yesterday and participate in its closing news conference.

British International Development Secretary Hilary Benn said “this whole business has damaged the bank and should not have happened”.

Europe, together with the US – the bank’s largest donor – and Japan, get a place each on the board, which acts as a kind of legislature, setting policies as a counterweight to Mr Wolfowitz.

It is customary for the White House to nominate the bank’s president, and US President George W. Bush would be consulted if there is a decision to remove Mr Wolfowitz.

The Bush administration has pledged its backing for the former deputy defence secretary, who was one of the architects of the Iraq war.

US Treasury Secretary Henry Paulson expressed “very high regard” for “a very dedicated public servant”.

The bank has been gripped by resentment for years over the perception that it has been under too much influence from the United States, at a time when European and Asian countries have gained in economic clout.

But bank officials and analysts think the board and international finance ministers are unlikely to force Mr Wolfowitz out in a putsch.

Instead, they believe that a reprimand of some kind might persuade him that his leadership at the bank was untenable.

A bank official told The Straits Times: “The board could recommend a strong censure. He could do the right thing and leave. Or he could bite the bullet and stay on but he won’t have much respect then.”

Several African finance ministers who held meetings behind the scenes with Mr Wolfowitz expressed support, saying he had made the continent a greater priority at the bank by increasing aid and stemming corruption.

Mr Wolfowitz could do little, however, to appease bank employees. They held demonstrations over the weekend to press for his resignation.

DAMAGING SITUATION
“While this whole business has damaged the bank and should not have happened, we should respect the board process.”
BRITISH DEVELOPMENT MINISTER Hilary Benn

A QUESTION OF CREDIBILITY
“He himself has to decide whether he still has the credibility to represent the position of the World Bank.”
GERMAN DEVELOPMENT MINISTER Heidemarie Wieczorek-Zeul

STRONG LEADERSHIP
“We have seen visionary leadership and steadfast progress under Mr Wolfowitz.”
ANTOINETTE SAYEH, Finance Minister of Liberia and a former World Bank official

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