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Pol/Econ: Paul Wolfowitz's Resignation
Saturday, 19 May 2007 Written by Henry Midgley
The World Bank
They need a new President
And so Paul Wolfowitz has resigned as head of the World Bank. The resignation was pretty much inevitable- Wolfowitz was dripping blood politically and it was only a question of when he would decide to fall on his sword rather than take another and another blow. Originally the reason for his resignation lay in the fact that his girlfriend, Shaha Riza, had been employed by the Bank and was than transferred lucratively to the state department. Questions were asked about the President's role in her transfer and particularly in her salary deals- and those questions prompted some to suggest that Wolfowitz himself was guilty of corruption.

This came as a significant blow to a President of the Bank who had from the moment he took office prioritised the battle against corruption- the scandal involving Miss Riza looked to be exactly the type of scandal that Mr Wolfowitz would penalise a third world regime for- and therefore the argument that he had to go was strengthened.

Some on the right in US politics- the Wall Street Journal for example- suggest that Mr Wolfowitz has been hounded out of his job. There was say the editors of the Journal, no reason to get rid of Mr Wolfowitz, the arguments against him were 'bogus' and his opponents hated him from the start because of who he was and what he wished to do to the Bank. The Journal though is not alone- at the National Review their online editor, Kathryn Jean Lopez, has declared that she was 'outraged' by the news of Wolfowitz's resignation and immediatly proposed that he be replaced by the equally pugnacious John Bolton.

I don't think that that is a sensible way forwards. If we take the rightwing case on its merits- that there has been a campaign to oust Wolfowitz upon dubious accusations of scandal then on first inspection it reveals two things- firstly he ought not to have gone and secondly he ought not to have been appointed. The point about running a bureacracy which is accountable globally is that you have to be a politician and that means that you have to be a successful and thoughtful negotiator- you may not win every argument indeed you won't but you won't achieve anything unless you pull others with you. John Bolton for precisely those reasons would be precisely the wrong nominee- for his skills lie in articulating principles and not negotiating a position- the World Bank is not the instrument of its chair- ultimately it is the instrument of its members and they are the world, not just the United States.

Mr Wolfowitz was appointed to a diplomatic job and yet it seems that he lacked the skills to be a diplomat. Roberto DaNino- the Bank's Counsel and a former Prime Minister of Peru- furiously told Journalists this week that ''He [Wolfowitz] presumes that anyone who opposes him is incompetent or corrupt.'' Anyone with that view of the world is bound to find it difficult to run a multinational organisation that ultimately depends on consensus. Wolfowitz though exemplifies in this a trend running through Washington since 2000- where officials have publically seemed to dismiss allies without much compunction- having said that others in other countries have appeared as useless- Gerhard Schroeder's anti Americanism in the German election of 2002 was pathetic. At the top of an international organisation such sentiments don't help one negotiate and deal with the people that you have to deal with.

Ultimately though Mr Wolfowitz had to go for another reason- as the chief advocate of cleaning up corruption- to be involved in a corruption scandal was a bad thing. It makes his position forcing governments to be clean weaker- the issue is that Mr Wolfowitz was tarnished and therefore the Bank board were right to accept his resignation. Once you are in the position that Mr Wolfowitz found himself in and there is any doubt as to your probity there is a problem- once it comes to the attention of the press there is a big problem. And to run the Bank in a confrontational way and not realise that this might become an issue demonstrates incompetence and also ignorance that the Bank's reputation matters if its anti-corruption drive is to work.

Mr Wolfowitz's political obituaries may have come to early- we may see him return but should this be the last that we hear from him, I think his obituary is easy to write. Lots about Mr Wolfowitz was good- he is a definite democrat- more than any other member of the Bush administration Mr Wolfowitz's policy in Iraq was based upon the judgement that democracy would be in the interests both of Iraq and of America. At the World Bank he continued in his pursuit of principle- being anti corruption. In both instances though he ran out of political capital- in Iraq due to the fact that his theories came off worse in their confrontation with reality- in the Bank due to the fact that he did not have the requisite diplomatic skill both to soothe those who opposed his policies and to see that, no matter what the ethics committee said, his girlfriend represented a conflict of interest that he had to deal with in a whiter than white way in order for his words to carry credibility. Whether he was guilty or not of actual corruption- the fact remains that he should have realised that any appearance of corruption was fatal to his chances of carrying out his program and sorted out matters so that he remained completely uninvolved with any decisions concerning Miss Riza.

The obvious concern is who next? The Bush administration have various options before them- and no doubt an appointment will be made swiftly. My own thinking is that an American would be fine- but one with a reputation for diplomatic skill would be perfect- Condoleeza Rice would fit the bill if she were not Secretary of State- maybe some other luminary of American diplomacy may come forwards. Whatever happens to perform the task Mr Wolfowitz rightly wanted the Bank to perform- ie to deal with corruption and to help the world- we will need more diplomatic skill in his successsor than the former deputy defence secretary demonstrated.