Toronto Star: Wolfie (will be) fired for the wrong reasons

I previously said that Paul Wolfowitz should not have been selected as head of the World Bank in the first place, that he had lost his moral standing not with the promotion of his girlfriend, but long before that. It seems the Toronto Star agrees with me.

But the Riza affair that has dominated media coverage of upheaval at the World Bank is not the compelling reason why it needs to remove Wolfowitz. Even in pleading his case with the 24-member bank board in a private session Tuesday, Wolfowitz conceded that "I relied much too long on advisers" whom he recruited from the White House and the Pentagon, from which he had just arrived as former U.S. deputy defence secretary.

These factotums isolated Wolfowitz even from senior World Bank executives who develop and oversee bank programs, and arbitrarily intervened to cancel programs – despite their lack of experience in international finance and development.

The anti-corruption initiative Wolfowitz inherited from predecessor James Wolfensohn and greatly amplified, was noble on its face, but oddly directed under Wolfowitz mainly at countries deemed unfriendly to the United States.

In a Toronto Star analysis of the Wolfowitz saga last month, the chronic credibility issues at both institutions were described as arising from the tradition of U.S. appointment of the World Bank head and European selection of the IMF chief.

Perhaps more importantly, the Star asks if perhaps other nations, including those the bank lends to, should have more say in who runs the World Bank.

Last week, Joseph Stiglitz, former World Bank chief economist and Nobel Prize winner for economics, argued in an essay in the Financial Times of London that Wolfowitz's moral standing was undercut from the start because the development and finance ministers of the bank's 185-plus member nations, who should have been closely involved in his appointment, "were left to ratify what was essentially a done deal."

Noting the recent decision of some Latin American nations to cut their ties to both the World Bank and the IMF, former Indian economic affairs secretary E.A.S. Sarma added last week that "the developing countries should have adequate voice in determining the policies within the bank and the IMF."

Rumours abound that Bush would like to select as Wolfowitz's replacement Bush's Iraq comrade-in-arms Tony Blair, the British prime minister who plans to step down at the end of June. That would be a break with the tradition of U.S. citizens who've run the bank, but a non-starter since Blair is almost as radioactive with the bank's board as Wolfowitz became.

Better candidates include Kemal Dervis, who as Turkish finance minister effectively steered his country through a period of financial crisis, and has held senior developing-world assistance posts at the World Bank and United Nations. And Arminio Fraga, who gained similar global plaudits running Brazil's central bank. Either appointment would unleash all manner of overdue reforms at an institution badly in need of re-examining its mandate 53 years after its founding.