Search is on for new World Bank president

WASHINGTON, Jan. 4 (UPI) -- It came as no surprised Monday as World Bank President James Wolfensohn announced he would be leaving the institution once his second five-year term was up in May 31.

"I would not wish to be considered for a third term," Wolfensohn said in a statement released to bank staff members about his decision to depart after nearly a decade at the helm of the international agency.

But as the search for his successor kicks into full gear, one thing is certain: Wolfensohn's successor will be an American, even as criticism about U.S. dominance in the institution continues to rise.

Of course, the World Bank is hardly the only international agency that has an unwritten rule about the nationality of its leader. The bank's sister institution, the International Monetary Fund, has always been headed by a European. Its current managing director, Rodrigo de Rato, was formerly Spain's foreign minister, whilst his predecessor Horst Koehler, was a German. Meanwhile, the head of the Asian Development Bank based in Manila has been lead by a Japanese national since its establishment.

In contrast, the United Nations and its agencies often appoint citizens from countries outside the Group of Seven industrialized countries, with the UN's Secretary-General Kofi Annan, a Ghanaian, being the most apparent example. But unlike UN agencies where all member countries theoretically have an equal say in those organizations, international financial institutions such as the World Bank are answerable to its shareholders, with some countries having a far greater stake in the organizations than others.

In the case of the bank, the United States remains its single-largest shareholder with nearly 17 percent of total votes, followed by Japan with 8.1 percent, and Germany with 4.6 percent, while France and Britain have 4.4 percent each.

But much as the nationality of Wolfensohn's successor will come as no surprise, it is also clear that the next bank president will be someone who gets the blessing of the Bush administration. Certainly, the U.S. presidential seal of approval was very much needed when Wolfensohn himself was appointed in June 1995 under the Clinton administration.

The 71-year-old Australian-born naturalized American was a staunch supporter of the Democratic Party, and Wolfensohn certainly made clear his strong personal ties with President Clinton, traveling from time to time with the president on Air Force One and advising him on development issues, particularly on the economic situation in Africa. He was appointed to a second term in 2000, and the man who once made Australia's Olympic fencing team had made it clear that he would want to stay on for another term.

Wolfensohn's relations with the Bush administration, however, have been more of a battle than anything else, and indeed, President Bush made clear even from the initial months of his presidency that he believed both the World Bank and the IMF should undergo major reform. In particular, Bush said that the Bretton Woods institutions should decrease the amount of loans they give to the poorest countries, and those impoverished nations instead should be granted more money which they will not have to pay back.

Any person to succeed Wolfensohn will likely with Bush's basic stance on development aid, yet so far, there has been no official comments from the U.S. Treasury, which is expected to take the lead in identifying potential candidates for the bank's top job.

There was certainly no clue in a statement by Treasury Secretary John Snow which was released shortly after Wolfensohn's announcement that he will be leaving his office by June.

"Because of Jim's leadership, the World Bank today is a more dynamic and effective development organization...I look forward to working with him over the next six months as he continues to lead the bank. His counsel will be invaluable as we go through the transition process," Snow said.

Treasury's spokesman Rob Nichols, meanwhile, said that "we're just beginning discussions with the other shareholders (of the bank) on the process of finding a successor."

But as with any other politically charged position in Washington, there are plenty of speculations about who might succeed Wolfensohn. One candidate who has been mentioned by many bank watchers is Robert Zoellick, the current chief U.S. Trade Representative, who not only has solid relations with the administration, but also has a strong working knowledge of international trade and economic issues.

Other names that have been bandied about include Anne Kreuger, who is now second-in-command at the IMF, and John Taylor, who is Treasury's under-secretary for international affairs.

One board member of the World Bank who spoke on condition of anonymity said that it was about time that the institution started considering a non-U.S. national to head the institution, but added "it's not going to happen this time around."