World Bank President Leaving

Stephen –  Amid calls to change the current US-European dominance of major world banking organisations, several US-based names are already being floated as possible replacements. These include both Bill and Hilary Clinton, former US Treasury Secretary Larry Summers and current Treasury Secretary Timothy Geithner.

By HARRY DUNPHY, Associated Press – February 15, 2012

WASHINGTON (AP) — World Bank President Robert Zoellick said Wednesday he is stepping down, raising the possibility that a non-American might be chosen for the first time to head the 187-nation lending organization.

Zoellick, 58, informed the board he will leave June 30 at the end of a five-year term, during which he led the bank’s response to the global financial crisis.

The board now begins looking for a new president under guidelines directors adopted in 2011 calling for an “open, merit-based and transparent selection” process.

That suggests a break from the informal agreement that dates to the bank’s founding almost 68 years ago, under which the bank’s president is an American and the head of its sister institution, the International Monetary Fund, is a European.

There is no guarantee that a non-American will be chosen to head the bank even though China is now the world’s second largest economy, and Beijing and other countries with growing economic clout have been exerting pressure for a change in the U.S.-European arrangement.

The IMF was supposed to follow the same open selection guidelines when it searched for a new managing director last year, but wound up again choosing a European, former French Finance Minister Christine Lagarde.

The World Bank is an international financial institution that provides loans to developing countries. The IMF helps countries when they encounter financial crises. Both institutions are based in Washington.

The decision to leave was Zoellick’s, according to an official familiar with the situation. Zoellick did not ask to be reappointed and his decision was accepted by the administration, said the official who spoke on condition of anonymity to discuss the private personnel matter.

The White House has offered no indication that President Barack Obama will forgo precedent and nominate a non-American for the job.

In a statement, Treasury Secretary Timothy Geithner praised Zoellick’s leadership at the World Bank and said the administration would put forward a candidate for the World Bank board to consider as his replacement.

“We encourage the board to move forward with an open and expeditious process,” Geithner said. “In the coming weeks, we plan to put forward a candidate with the experience and requisite qualities to take this institution forward.”

Geithner’s comments did not indicate whether the administration would be willing to back a non-American for the top job at the World Bank. But the United States controls the largest share of votes on the World Bank board, giving it significant say in who leads the institution.

Oxfam, an international aid agency often critical of the bank, said developing countries should play a major role in choosing a successor to Zoellick.

A spokeswoman, Elizabeth Stuart, said, “The bank only operates in developing countries, so any candidate not supported by a majority of these countries would plainly lack legitimacy.”

As Zoellick’s term drew to a close, Secretary of State Hillary Rodham Clinton and former Treasury Secretary Lawrence Summers were mentioned as possible successors.

Clinton directly addressed speculation about the World Bank job last June.

“I have had no discussions with anyone. I have evidenced no interest to anyone,” she said then. “I do not have any interest and am not pursuing that position.”

Clinton’s name has continued to circulate, however. She has repeatedly said she has no plans to stay on as secretary of state past the end of Obama’s first term.

State Department spokesman Victoria Nuland said Clinton’s position remained unchanged Wednesday.

Summers was the chief economist at the World Bank before joining the Clinton administration.

Zoellick, a Republican appointed by former President George W. Bush, has a good relationship with Geithner and other members of the Obama administration.

His plans after leaving were unclear. Zoellick could return to the private sector, where he was once a senior adviser at Wall Street’s Goldman Sachs investment firm. He could likely count on a high-ranking post if Republicans win the November elections, having served as deputy secretary of state and U.S. trade representative in the Bush administration. But he did make enemies while in those positions.

White House spokesman Jay Carney said he did not know if Obama had spoken with Zoellick and had no information on possible successors. “There has been much speculation but I’m not going to confirm any of it,” Carney said.

Zoellick said he will stay focused on being bank president until June 30 and will continue to drive policies and programs at a heightened tempo. For example, later this month the bank said he will unveil a groundbreaking study on the future structure of China’s economic growth model.

Under Zoellick’s leadership, the bank provided more than $247 billion to help developing countries boost growth and overcome poverty.

Zoellick said he was “pleased that when the world needed the bank to step up, our shareholders responded with expanded resources and support for key reforms that made us quicker, more effective and more open.”

He said the bank was now in a strong position and ready for new challenges “so it is a natural time for me to move on and support new leadership.”

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