Bush taps Zoellick as next president of World Bank

Former American trade chief looks to heal rift between US and Europe over Wolfowitz scandal.

Zoellick 298.88 (photo credit: AP)
Zoellick 298.88
(photo credit: AP)
President George W. Bush tapped his former trade chief and No. 2 diplomat, Robert Zoellick, on Wednesday to run the World Bank, embarking on a healing process to mend wounds inflicted by outgoing bank President Paul Wolfowitz. Zoellick, 53, would succeed Wolfowitz, who is stepping down June 30 after findings by a special bank panel that he broke bank rules when he arranged a hefty compensation package in 2005 for his girlfriend, Shaha Riza, a bank employee. Bush's selection of Zoellick must be approved by the World Bank's 24-member board. The controversy over Wolfowitz caused a staff revolt and strained US relations with European and other countries and led calls for him to resign from the poverty-fighting institution. "The World Bank has passed through a difficult time. For all involved there are frustrations, anxieties and tensions about the past that could inhibit the future," Zoellick said. "This is understandable but not without remedy." He said the bank needed to move past the discord, adding: "I believe the World Bank's best days are still to come." In nominating Zoellick, Bush picked a seasoned veteran of politics both in the Washington milieu and on the international stage. He is known for pulling facts and figures off the top of his head. He also has a reputation for being a demanding boss. "Bob Zoellick has had a long and distinguished career in diplomacy and development economics It has prepared him well for this new assignment," Bush said. Zoellick, the president said, is "eminently qualified." Internationally, the reaction to Bush's choice was generally positive, although some health groups and others expressed misgivings about his ability to carry out the institution's mission. In announcing the choice of Zoellick, Bush also had praise for Wolfowitz's performance as head of the bank. Zoellick announced last June that he was leaving his post as deputy secretary of state to join the Wall Street firm of Goldman Sachs and work to develop investment markets around the world. If ultimately approved as World Bank chief, Zoellick will need to regain trust, rebuild credibility and mend frayed relations inside the institution as well as with its member countries around the world. The bank's new leader will have to persuade countries to contribute nearly $30 billion (€22.4 billion) over the next few years to fund a centerpiece bank program that provides interest-free loans to the world's poorest countries. Zoellick could build upon strong relations he has developed worldwide as deputy secretary and US Trade Representative. He was involved in peace talks in Sudan, and as USTR he played a key role in negotiations to bring China into the World Trade Organization. He forged free trade deals between the United States and other countries, including Singapore, Chile, Australia and Morocco. Before taking the helm in 2005, Wolfowitz was the No. 2 official at the Pentagon and played a major role in mapping out the war in Iraq. From the beginning, Europeans and others were upset that Bush would pick someone to run the bank who was so closely associated with the war.