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Paul Wolfowitz’s tenure as president of the World Bank is effectively over. This may be unfair, but life is sometimes unfair. His situation recalls that of Ruud Lubbers, the former Dutch prime minister who resigned two years ago as the United Nations high commissioner for refugees after being accused by an employee of sexual harassment.

The accusation could probably not have been proved in a court but, combined with other allegations and Mr Lubbers’ own clumsy reaction, it became a massive distraction from the agency’s work to help refugees. It created an atmosphere in which he could no longer provide effective leadership.

That is precisely the situation that prevails at the World Bank as a result of Mr Wolfowitz’s clumsy handling of a potential conflict of interest. His friends, including President George W. Bush, should persuade him to stand down before more damage is done.

So far, in public anyway, the US leader has stood by his man. But his own prestige is hardly high enough – either at home or abroad – to allow him to remain associated much longer with the discredited leader of an important world institution. The tradition whereby other nations allow the bank to be headed by an American, nominated by the US president, is clearly in danger. Indeed, it has been reported this week that European governments are now telling Mr Bush they will accept another American in the post only if Mr Wolfowitz is soon replaced by a more credible candidate. It would be surprising if Condoleezza Rice, the US secretary of state, and other trusted counsellors are not advising Mr Bush to accept this offer.

I have an alternative suggestion for him. He should propose a European candidate for the job – namely Tony Blair. The outgoing British prime minister, who is stepping down next month after 10 years in office, is still at the height of his powers and is a familiar figure on the world stage. He has also proved, far beyond the call of duty, his affection for the US and his loyalty as an ally.

For many people – not least in his own country – that loyalty counts against him. Many who objected to Mr Wolfowitz’s appointment as inappropriate, because of his involvement in advocating and planning the Iraq war, might see giving the job to Mr Blair as a repetition of the same mistake.

Yet I suspect this objection would not be pressed hard. Before he went to the bank, Mr Wolfowitz was not well-known for any strong interest in economic development or the welfare of the world’s poor. Mr Blair is.

Under his leadership, the UK has steadily increased the share of its gross domestic product devoted to foreign aid; and he has been a strong and consistent advocate of more and better international aid to Africa. In 2000 he sent British troops to support the elected government of Sierra Leone; in 2004 he appointed a high-level international commission to take a broad look at Africa’s problems and suggest new solutions; and in 2005, during Britain’s presidency of the Group of Eight leading industrial nations, he took the lead in securing new pledges of development aid – especially to Africa.

So far, only the UK has lived up to those pledges. But last month, together with Angela Merkel, the German chancellor and current G8 president, Mr Blair formed another international commission, headed by Kofi Annan, the former UN secretary-general, to monitor donor commitments and the promises of reform made by African governments. As president of the World Bank, Mr Blair would be well-placed to continue this role.

Giving him a major international position would also be good for Britain and, in particular, for Gordon Brown, his likely successor as prime minister. It is never easy to govern the country with a larger-than-life predecessor sitting behind you, as John Major found in the 1990s after succeeding Margaret Thatcher.

Finally, by making this imaginative proposal, Mr Bush would do something to redeem his own international reputation and take the wind from the sails of his European critics. He would be breaking with a bad tradition, according to which leading international officials are chosen for their nationality, and inaugurating a better one, in which skill, experience and personal commitment to the institution’s mission would count for more.

The writer is senior vice-president and chief programme officer of the Salzburg Seminar. He was formerly director of communications in the office of the UN secretary-general under Kofi Annan. The views expressed here are his own

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