Wolfowitz's appointment is not a smart move

Wolfowitz's appointment is not a smart move

Ari A. Perdana, Cambridge, Massachusetts

The nomination of Paul Wolfowitz as the World Bank president has
been the hottest issue on the international stage for the past
few weeks. The story about Wolfowitz's nomination has outshone
the discussions on the Millennium Development Goals or appeals to
relieve third world debt.

After President George W. Bush confirmed that the U.S
government officially wants Wolfowitz to lead the Bank last week,
he is only one step away from the post. As the biggest
shareholder of the Bank, the U.S. government virtually has a
prerogative to appoint their man to lead the organization. The
U.S. and Europe traditionally share the leadership of the Bank
and the IMF -- the U.S. gets the Bank's presidency while Europe
gets the Fund's executive director post.

The problem, however, is that Wolfowitz's nomination has been
widely rejected by the other stakeholders. He does not have any
experience in the international development field, nor does he
have a background in economics or banking. But the more serious
concern is that he is perceived as Bush's man.

Many fear that if he becomes the World Bank president, the
Bank's policies will be directed by the U.S. government's
interests. Developing countries worry that whatever lending or
development assistance they receive will be tied to non-
development issues such as international security.

Unfortunately, the decision-making process in the Bank means
that the U.S. government's position is very strong. European
countries may try to negotiate for a rejection or approval
option. The probability is quite small, though.

As a person, Wolfowitz is a great and well-respected man. He
is a professional bureaucrat, an excellent diplomat and a
reputable academic. He is known as an idealist -- he has a clear
vision about democratization and how to spread this vision.
Whether or not people agree with his vision and his way of
spreading it is another story. But even his political opponents
respect him because of it.

When he was U.S. ambassador to Indonesia for three years under
the Reagan administration, both governments were very satisfied
with him. During his term, the U.S. Embassy in Jakarta was
considered as one of the most effective diplomatic missions in
the country. The relationship between the two nations was also of
the highest quality.

As an academic, he has served as the dean of the Paul Nitze
School of Advanced International Studies (SAIS), a school of
Johns Hopkins University in Washington, D.C., which is also a
well-respected institution.

However, there are several reasons why his nomination for the
World Bank leadership may not be a good thing for the U.S.
government, for the institution and for its other stakeholders.

First, the World Bank is an international organization whose
core business is development. As an expert in defense and
international security, the development community knows little
about Wolfowitz's vision for international development. He may be
a professional bureaucrat, but running an organization like the
Bank is different with running the Pentagon.

It is debatable whether being an economist or a banker should
be a strict requirement for a World Bank president. Senior U.S.
politician Alan Metzer argued that the Bank does not need its
leader to be a development expert. It already has a lot of such
experts. What they need is someone that can be trusted to manage
the huge sums of money handled by the Bank.

But economist Jeffrey Sachs has a different view. He says that
Wolfowitz has never shown an interest, let alone a commitment, to
the Millennium Development Goals or global poverty eradication.
That is the reason, according to Mr. Sachs, why Wolfowitz is not
qualified for the position.

A second reason is that his nomination by the Bush administration
will send a signal that the U.S. has an obvious agenda with the
organization. The perception that the World Bank is merely a vehicle
for furthering U.S. interests will become stronger. Wolfowitz,
the deputy defense secretary, was the intellectual architect of
the Iraq war. The Iraq war represents heavy baggage for U.S.
relations with the international community, and is also an issue
that has created internal divisions. A move by the Bush
administration to appoint their man to the biggest donor
organization could further tarnish its image.

The Bush administration may not care too much about its image.
But I believe the professionals who work in the Bank care about
their image. The Bank has been trying hard to maintain its image,
which has been deteriorating since the rise of the anti-
globalization movement in the late '90s. Many World Bankers have
published various self-criticisms. The Bank has also issued
revisions to its development approaches in the past half-century.
But if Wolfowitz becomes the Bank's president, it would be hard
to avoid the perception that the World Bank will become, in Paul
Krugman's words, "an ugly American Bank".

For Indonesia, perhaps, Wolfowitz' appointment may not be too
bad after all. Indonesia gain some benefit from his close ties
with the country. However, I don't see that his position in the
Bank would produce significant added value for Indonesia. With or
without him, Indonesia is still an important stakeholder for the
Bank. From the Indonesian perspective, we may be better off
having Wolfowitz in the inner circle of the Bush administration
as our relationship with the U.S government is more uncertain
than that with the World Bank.

Lastly, my Harvard professor, who is also a World Banker, once
told of an experience when he had to defend his institution in
front of an audience of some eight hundred people hostile to the
Bank. He said that he could do so if deep in his heart he had
confidence that he was doing his job professionally, not as a
servant of a big country's interests. Such confidence may not be
there anymore should Wolfowitz become his boss.

The writer is a researcher at the Centre for Strategic and
International Studies, Jakarta, and the Kennedy School of
Government, Harvard University, Cambridge, USA.
Ari_Perdana@ksg06.harvard.edu