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