Bush nominates tough diplomat for World Bank

By Tony Czuczka May 31, 2007, 2:08 GMT

U.S. President George W. Bush (C) introduces former U.S. Deputy Secretary of State Robert Zoellick (L) as his choice to be the next World Bank president, at the White House in Washington, D.C. on 30 May 2007. At the right is U.S. Secretary of the Treasury Henry Paulson. Zoellick, 53, would succeed Paul Wolfowitz, who is stepping down 30 June after a special bank panel found that he broke bank rules when he arranged a compensation package for his girlfriend, Shaha Riza, a bank employee. EPA/ROGER WOLLENBERG / POOL

Washington - Former deputy secretary of state Robert Zoellick, tapped by US President George W Bush to head the World Bank, has a reputation as a hard-nosed defender of US economic and strategic interests.

Now, Zoellick needs other nations' approval to lead the anti- poverty agency for a five-year term and restore morale, after a divisive uproar over Paul Wolfowitz, who will quit as World Bank president on June 30.

The World Bank's 24-member board, which represents its 185 member countries, said Wednesday that it 'looks forward to holding discussions with Mr Zoellick' in a selection process that remains open to candidates from other countries.

While Wolfowitz was forced out partly over his role in the Iraq war and a reliance on aides with links to the Bush administration, Zoellick - currently a senior executive at Goldman Sachs Group - carries baggage of his own.

In 1998, he signed a letter that urged then-president Bill Clinton to oust Saddam Hussein from power in Iraq by military force if necessary, and rejected 'a misguided insistence on unanimity in the UN Security Council.'

The other 17 signers included 'neoconservatives' who rose to prominence after Bush won office - Wolfowitz, former US defence secretary Donald Rumsfeld and current UN Ambassador Zalmay Khalilzad.

Critics accuse Zoellick, 53, of strong-arm tactics as the chief US trade negotiator during Bush's first term from 2001 to 2005.

He helped launch the Doha round of world trade talks in 2001, a month after the September 11 attacks on the US. But he also pushed for separate deals with nations including Morocco, Chile and Central American countries to open their markets to the US.

Columbia University trade economist Jagdish Bhagwati and aid groups voiced concern that Zoellick's background might colour his approach to helping the poor.

'He's damaged the poor countries' cause, in my opinion,' Bhagwati said in a telephone interview. 'He's someone who uses American power to advance American interests, as far as trade is concerned.'

Zoellick has worked on US relations with China, Latin American debt relief and peace efforts for Darfur. As a US negotiator, he helped guide Germany's 1990 reunification, which may help him win the German vote on the World Bank's board.

After Bush introduced him Wednesday as a 'a committed internationalist,' Zoellick pledged to work with World Bank staff and consult with both donor governments and the developing countries that borrow from the bank.

'We need to put yesterday's discord behind us and to focus on the future together,' Zoellick said.

Berlin helped lead the charge to oust Wolfowitz, and German Development Minister Heidemarie Wieczorek-Zeul on Wednesday called Zoellick 'a good candidate with great international experience.' Brazil and Mexico also expressed support.

'I certainly respect very much Mr Zoellick,' European Commission President Jose Manuel Barroso said in Brussels.

Zoellick's immediate task would be to gain confidence among the bank's thousands of staffers and its senior managers, many of whom openly called for Wolfowitz's resignation after he became entangled in a scandal over a pay raise he arranged for his girlfriend.

European powers such as Germany accused Wolfowitz, a former Pentagon official and leading planner of the Iraq war, of trying to keep member governments out of the loop on policy decisions.

The United States is the World Bank's biggest donor. By tradition, a US citizen heads the bank, and a European leads the International Monetary Fund, a sister agency based across the street in Washington.

But in an unusual move on the eve of Zoellick's nomination, the World Bank's board stressed that any country can propose a candidate until June 15 and issued a list of job qualifications, including 'political objectivity and independence.'

Bush appears to be gambling on an overriding desire among other key countries to end the World Bank's festering leadership crisis. Still, the US monopoly on the top job is widely viewed as outdated.

'It is necessary that that election process can reflect the new reality of the world,' Brazilian Finance Minister Guido Mantega said Wednesday.