As soon as Paul Wolfowitz was appointed president of the World Bank by George W Bush, he announced a mission to fight corruption. Indeed, he argued that the bank should withhold aid from the world's poorest countries until they tackle corruption, which he saw as working against economic development. The bank itself has always seen tackling poverty as the priority, arguing that economic stability is a useful tool in weeding out corruption. A case can be made either way, but there can be no argument that Mr Wolfowitz himself has failed to follow his stated principles. When he was appointed, his girlfriend, who worked for the bank, was seconded to the US State Department to avoid a conflict of interests. We now know, however, that the generous increase in salary she was given to compensate for the fact that she did not want to go, was authorised by Mr Wolfowitz above the level recommended by the bank's board.
It is difficult to avoid the conclusion that were the president of a Third World state to act in such a way while borrowing money, Mr Wolfowitz would be swift in deploying sanctions. That makes it all the more unsatisfactory that he did not resign when it was revealed that he had broken the bank's own rules. Yet the fallout from this episode is only the most public of the problems the World Bank has with its president. It has brought to the fore the much deeper conflict between the long-term, international staff and the political allies Mr Wolfowitz brought in from the Pentagon and appointed to senior positions. There is growing unease that the bank was increasingly becoming a vehicle to support American foreign policy.
Yesterday, Germany gave notice that he would not be welcome at a forum to be held by the bank in Berlin next week on aid for Africa. The German Development Minister, Heidemarie Wieczorek-Zeul, is one of Mr Wolfowitz's strongest critics, but she spoke for most of the world bank's major funders. The real problem in this business, of course, is that it is Africa and other struggling parts of the world which stand to lose most as the bank's staff and its beneficiaries lose confidence not just in the leadership of its president, but in the institution itself.
Negotiations on a severance deal for Mr Wolfowitz were reported last night to have reached an impasse. He should have gone long before now. His departure would signal a change in the system of appointing the bank's president. Traditionally, that person is an American, nominated by the US President. An alternative that enshrines probity and enjoys the confidence of the international community must be found as a matter of urgency. Putting American interests first has had a baleful effect.
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