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DEVELOPMENT: Bush Nominates Arch-Hawk to Lead World Bank

Emad Mekay

WASHINGTON, Mar 16 2005 (IPS) - U.S. Deputy Defence Secretary Paul Wolfowitz, a chief architect of one of the most unpopular wars in U.S. history, is President George W. Bush’s choice to head the World Bank, the world’s largest development agency.

His nomination has sparked a wave of outrage among independent development groups, who blame him for promoting unilateralism and militarism in U.S. foreign policy, and for a lack of transparency in bidding for reconstruction contracts in the occupied Arab country.

"I appreciate the world leaders taking my phone calls as I explained to them why I think Paul will be a strong president of the World Bank," Bush told a press conference on Wednesday.

"I’ve said he’s a man of good experiences. He helped manage a large organisation. The World Bank is a large organisation; the Pentagon is a large organisation – he’s been involved in the management of that organisation," Bush said.

Bush described Wolfowitz, 62, as a skilled diplomat, referring to his positions at the State Department and his tenure as U.S. ambassador to Indonesia in 1980s. The U.S. president also said Wolfowitz is "committed to development".

The nomination was quickly welcomed by fellow countryman James Wolfensohn, the outgoing World Bank president, and by Rodrigo Rato, the managing director of the Bank’s sister institution, the International Monetary Fund (IMF).

"If he is confirmed by the member countries, Mr. Wolfowitz will bring to the Bank an impressive record of public service with extensive experience of management and of international affairs, in particular in Asia and the Middle East," said Rato in a statement.

Traditionally, the World Bank’s president has been a U.S. citizen, based on the United States being the largest shareholder in the institution.

Wolfowitz’s nomination would be subject to a routine vote of the World Bank’s executive directors.

Before moving into the Pentagon’s No. 2 position, he spent seven years as dean and professor of international relations at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.

Many independent development groups and watchdog institutions say they are shocked at the choice.

"The deputy defence secretary’s strong support for the Iraq war reflects a disdain for international law and a multilateral approach to conflict resolution that disqualifies Wolfowitz from leading a multilateral institution," said the International Rivers Network (IRN), a California-based non-governmental organisation, in a statement.

Some civil society analysts predicted a new phase of confrontation between the global social justice movement and one of the largest symbols of U.S. and European domination, the World Bank.

"In his career, Wolfowitz has so far not shown any interest in poverty reduction, environmental protection and human rights," said Peter Bosshard, the policy director of IRN.

"His election as World Bank president would most likely exacerbate the current backlash against social and environmental concerns at the World Bank, and would initiate a new era of conflict between the Bank and civil society."

Wolfowitz was behind the 2003 U.S. decision to exclude non-U.S. companies from competing for billions of dollars in Iraqi reconstruction contracts, a move that fueled international fury and accusations that the United States was partly motivated by economic greed in its invasion of the oil-rich Arab country.

Iraq reconstruction contracts and projects have been marred ever since by charges of favouritism, corruption and fraud because of the no-bid contracting process, little or no official supervision and manipulation of prices by several U.S. companies.

Watchdog groups say that hundreds of millions of dollars are being wasted as a result of corruption by contractors and sloppy government controls.

Wolfowitz is an architect of many of the post-invasion policies in Iraq, including privatisation, deregulation and commodification of social services and public goods, along with plans to end subsidies that sustain millions of Iraqi citizens.

"Wolfowitz’s role in promoting economic changes in Iraq and elsewhere suggest he would work to push the Bank to focus even more on imposing so-called ‘structural adjustment’ policies like forced privatisation and indiscriminate trade liberalisation, policies which have failed to create growth and have exacerbated poverty across the globe," said Neil Watkins, national coordinator for the anti-debt campaigning group Jubilee USA Network

"Paul Wolfowitz is the most controversial choice Bush could have made," said Njoki Njoroge Njehu, director of the 50 Years Is Enough Network.

"As the most prominent advocate of imposing the U.S.’s will on the world – the architect of the disastrous invasion and occupation of Iraq – this appointment signals to developing countries that the U.S. is just as serious about imposing its will on borrowers from the World Bank as on the countries of the Middle East," she added.

Critics say that the Wolfowitz nomination, coming on the heels of the nomination of another hawk, John Bolton, as U.S. ambassador to the United Nations, reveals "the contempt this administration has for the international community."

"Wolfowitz brings no apparent development experience to the job, but does offer a record of unabashed militarism and unilateralism that represents exactly the wrong direction for the World Bank," said Robert Weissman, director of Essential Action.

But some economists argue against his lack of experience in development and poverty issues.

"His term as ambassador to Indonesia taught him a lot about development," said Peter Timmer, senior fellow at the Center for Global Development in Washington.

"My personal sense is he got the idea of what a liberal Muslim society would look like by working in Indonesia. I honestly think he is going to surprise people and turn out to be quite effective," said Timmer, who worked as a development economist in Indonesia while Wolfowitz was ambassador, and later served on academic committees with him.

Timmer compared Wolfowitz’s anticipated leadership of the World Bank to that of Robert McNamara, a former secretary of defence during the Vietnam War. McNamara later became the longest-serving president of the World Bank, instituting sweeping changes.

Those opposed to the Wolfowitz nomination are placing their hopes on a strong European opposition. The European countries together form a substantial enough bloc that they could reject the U.S. action.

But some say that given the anti-democratic nature in which the heads of the international financial institutions, dominated by the group of seven most industrialised nations, are chosen, the Europeans are unlikely to be effective in their opposition.

Last year Rodrigo Rato, a European, was appointed to head the IMF after being nominated by the European nations. The United States made no objection in what was interpreted as an early preemption of a European objection when it is Washington’s turn to pick the World Bank president.

The U.S. president, by custom, selects the president of the World Bank. Similarly, the managing director of the IMF has traditionally been a European, handpicked by European governments, much to dismay of citizen groups and some governments in developing countries who complain about the secretive process of selecting the leaders of the two institutions.

But some longtime critics of the bank still saw a silver lining to the controversial nomination.

"If confirmed, we would no longer have to work so hard to convince people that the World Bank is an instrument of U.S. foreign and economic policy," said Soren Ambrose, senior policy analyst with the 50 Years Is Enough Network.

"Wolfowitz has no experience in development, just a fierce ideological dedication to hard-core neoliberal economics and U.S. domination."

"In other words, between exposing the true dangers of the lack of democracy at the World Bank and putting the most visible symbol of U.S. imperialism in the most prominent position in international development, President Bush will accomplish more in de-legitimising the World Bank than any other single action ever could," said Ambrose.