President Bush's New Choice to Lead the World Bank

Readers:

Last week’s news brought the long-awaited resignation of World Bank President Paul Wolfowitz, following conflict of interest revelations involving the job promotion of his romantic partner.

In choosing Mr. Wolfowitz to head the Bank in January 2005, President Bush selected a man who had been one of his government’s most vocal cheerleaders pushing the U.S. into its Iraqi quagmire. As Deputy Secretary of Defense, Wolfowitz was arguing for an Iraq invasion even before 9/11. His declarations about how easy it all would be included this now-famous prediction beforehand:

“I think what you’re going to find, and this is very important, you’re going to find Iraqis out cheering American troops.” He added, “I think the ethnic differences in Iraq are there but they’re exaggerated.”

On the basis of this gift of foresight and analytic ability, President Bush put Mr. Wolfowitz in charge of one of the world’s most important lending institutions, raising the question – exactly how bad do you have to screw up in the Bush Administration to be held accountable?

Based on the astuteness of Mr. Bush’s last nomination, it is reasonable to ask if he has taken any more care in replacing Mr. Wolfowitz. This week the President nominated his former trade representative, Robert B. Zoellick. Mr. Zoellick has an advantage people in politics like, a remarkably easy act to follow. Initial reports in the standard press have been favorable.

But who is Mr. Zoellick and what philosophies and policies is he likely to bring to the World Bank (assuming, as is likely, that his nomination is approved by the Bank board)?

In this post we want to share some useful insight from a close colleague of ours, Sarah Anderson of the Institute for Policy Studies. Below is a brief article by Sarah on the appointment of a man who once suggested that the attacks on September 11, 2001 were inspired, in part, by Americans who took to the streets to challenge conservative World Bank economic policies.

Jim Shultz


Mr. Hardball Goes to the World Bank
By Sarah Anderson, Institute for Policy Studies

Nine days after the September 11 terrorist attacks, I opened up The Washington Post and stared right into the flinty mind of one Robert B. Zoellick, the Bush administration’s pick for new World Bank president.

While the rest of the country was still in a haze of horror and confusion, Zoellick had seized the moment to advance his agenda as U.S. trade representative. In a commentary titled “Fighting Terror with Trade,” he argued that Congress needed to pass fast track trade negotiating authority as part of their support for the “War on Terror.”

Having failed to sell the legislation on its merits, Zoellick had moved with breathtaking speed to take advantage of public fears and pressure on lawmakers to stand with the president during a national crisis.

In a speech at the Institute for International Economics four days later, Zoellick really let loose by insinuating that there were links between the September 11 terrorists and anti-globalization protestors.

“In the wake of the shock of 13 days ago, many people will struggle to understand why terrorists hate the ideas America has championed around the world,” Zoellick said. “It is inevitable that people will wonder if there are intellectual connections with others who have turned to violence to attack international finance, globalization, and the United States.”

Zoellick’s hardball tactics worked. President George W. Bush, and President Bill Clinton before him, had tried in vain to renew fast track (now re-branded Trade Promotion Authority), which allows the Executive Branch to negotiate new deals that Congress must vote up or down. Anger over the negative impacts of existing pacts, such as the North American Free Trade Agreement (NAFTA), on jobs and the environment had prevented both presidents from obtaining this authority.

But the new “fight terrorism with trade” sales pitch helped turn the controversial trade bill into a test of wartime patriotism. It passed by one vote in the House of Representatives.

By fueling paranoia about free trade critics, Zoellick helped secure Department of Homeland Security funds to deploy 2,500 law enforcement personnel in Miami during trade talks in the fall of 2003. Police fired rubber bullets and tear gas at peaceful demonstrators, causing scores of injuries.

That same fall, Zoellick had aimed verbal bullets at developing country leaders who refused to embrace his trade agenda. In a Financial Times commentary, Zoellick accused Brazil, India and other key middle-income nations of employing the “rhetoric of resistance” and the “politics of protest.” These countries had formed a bloc to persuade the United States to reduce its multi-billion dollar per year agricultural subsidies in exchange for other concessions.
Casting all pretense of diplomacy aside, Zoellick accused Brazil of being the leader of the “won’t do” nations that were to blame for the collapse of World Trade Organization negotiations.

This time, the hardball approach didn’t work as well. During his remaining year and a half as chief trade negotiator, Zoellick was unable to revive the WTO talks, which remain stalled today. His jabs at Brazil no doubt also contributed to the death of the hemispheric Free Trade Area of the Americas (FTAA). Zoellick left his trade post for the State Department the same week that now-forgotten deal was due to be concluded.

Critics of corporate-driven trade agendas celebrated Zoellick’s failures as a trade negotiator. Since he was deaf not only to the concerns of many developing country governments, but also to those of civil society groups in the United States and abroad, it was certainly preferable to have no deals than bad ones.

But is a tone-deaf, name-calling steely opportunist a good choice to lead the World Bank? The Bank’s official mission, after all, is to fight global poverty, not promote U.S. corporate interests. And after the Wolfowitz uproar, one might have expected the Bush administration to pick a more genteel and broad-minded successor to lead this global institution.

For more than 60 years, however, the United States has enjoyed the unwritten privilege of crowning the Bank’s leader. And unfortunately, despite the wreckage of the Wolfowitz debacle, there appears to be little resistance from the rest of the world to the imposition of yet another Bush administration insider. Even the Brazilian government has decided to adopt a “can-do” attitude on the Zoellick nomination.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies in Washington, DC, and was a staff member of the Congressionally appointed International Financial Institutions Advisory Commission (the Meltzer Commission).

The original version of this article, published by Foreign Policy In Focus can be found here.