labels: world bank, banks & institutions
Wolfowitz quits World Bank; US in search of successor news
18 May 2007

Mumbai: Paul Wolfowitz quit as World Bank president less than halfway through his five-year term amid a furor over an out-of-the-way pay raise for his companion Shaha Riza.

But the US moved quickly to maintain its control over the choice of a successor as the former deputy defence secretary put in his papers on May17, after the White House bowed to pressure for his ouster from European governments.

Treasury secretary Henry Paulson said he would swiftly identify a replacement to head the world''s largest development agency.
Wolfowitz''s departure comes as the bank gears up to raise $28 billion it says it needs over the next three years to build schools, clinics and roads in the world''s poorest countries.

Paulson said he would consult with friendly overseas governments as he picks candidates to be considered by President George W. Bush.

The US has always picked the bank president, while the head of the International Monetary Fund is a European choice.

Possible successors include Robert Zoellick, the former US trade representative who is now a Goldman Sachs Group Inc. executive; Allan Hubbard, director of the White House National Economic Council; and even Paulson himself, say bank watchers. Riza, a communications officer at the bank, was, meanwhile, transferred to the state department in compliance with rules forbidding one partner from answering to another. She remained on the bank payroll.

Wolfowitz aroused hostility by pushing aside senior managers in favor of advisers recruited from the Bush administration. His proposal to beef up the bank''s presence in Iraq exposed him to charges he was using the bank to further US foreign policy goals. Wolfowitz also failed to consult bank directors when he suspended loans to Chad, Kenya, India and Bangladesh.

A former professor of political science at Yale, he served as ambassador to Indonesia and assistant secretary of state for East Asian and Pacific Affairs in the 1980s.

But, unlike his predecessors such as Robert McNamara, the Vietnam-war era defence secretary and one-time president of Ford Motor Co., Wolfowitz had scant experience running large organizations.

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Wolfowitz quits World Bank; US in search of successor