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More than one crisis at World Bank
The controversy over Paul Wolfowitz raises questions about the US role and the bank's future.
from the May 15, 2007 edition
Page 2 of 3
Board takes up Wolfowitz matter
At time of writing, the full 24-member board of the World Bank was scheduled to receive the special committee's findings and conclusions on May 14. Wolfowitz himself was scheduled to testify before the board on May 15. Following that, the board must decide whether or not to take the unprecedented step of ousting the bank president.
If they do, the bank's new leader will have a tough job, say some experts – and not just because they would be taking office following a period of internal turmoil.
"A new president really has to define a new vision for the World Bank," says Nancy Birdsall, president of the Center for Global Development.
For one thing, the bank's role in China, India, and other rapidly developing middle-income countries needs to be revitalized, says Ms. Birdsall.
World Bank borrowing from this group of countries has declined "dramatically," says a Center for Global Development report, due to their increasing access to private capital markets and their perception that dealing with the World Bank can be a hassle.
Among other things, the bank should reorient itself so that the provision of development advice and knowledge is one of its primary products for middle-income nations, says Birdsall.
"Knowledge and experience is what defines the institution," she says.
Birdsall also believes that the bank should focus more and more on projects that deal with problems that cut across national borders, such as global warming, and that it needs to expand its provision of out-and-out grants to countries so poor that their per capita income is below $500.
Many experts also believe that the struggle over Wolfowitz's actions point out that the governing structure of the World Bank should be modernized.
By tradition, the US appoints the head of the World Bank and Europe appoints the head of the International Monetary Fund (IMF). That may have made sense when the bank was founded in 1945, since US financial and military power was unchallenged in the wake of the destruction of World War II. But today it may simply seem a quasi-colonial privilege, say critics.
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