Robert Zoellick, banker, trade official, statesman and intellectual, is President Bush’s choice for President of the World Bank, the world’s largest and most influential development assistance agency. His global trade experience and close relationship to Pascal Lamy, head of the World Trade Organization, is likely to lead to a new era of partnership between the Bank and the WTO-both men agree that expanding trade opportunities for the poorest nations is critical to enhancing their economic growth and development.

However, Zoellick enters an institution in crisis. The last selection President Bush made for this post was former Deputy Defense Secretary Paul Wolfowitz, who was thrown out for abusing his office. He left behind a distressed staff and an institution that now has an acute credibility problem when it seeks to convince governments of developing countries that it assigns highest priority in its programs to sound ethics and good governance.

The Bank, together with the International Monetary Fund, over the last quarter century has convinced scores of governments of poor countries to open their economies to global trade and investment, to pursue sound fiscal and monetary policies, to reduce domestic regulations and privatize many major enterprises, and encourage private sector growth. 

Today, partly because of improved economic fundamentals in many of these economies and partly because of abundant global liquidity, net private capital flows to emerging market economies are running at a record annual rate of around $550 billion. These countries do not need massive loans from the World Bank any longer.

The largest challenge before the Bank, however, concerns the very poorest nations on the planet. These countries have scant access to foreign private cash inflows because they are just not creditworthy. They are the homes of hundreds of millions of people living on the very edge of existence. Zoellick will need to lead the Bank and thereby the international development community, towards the attainment of the key Millennium Development Goal set by the United Nations of cutting poverty in the world’s poorest nations by 50 percent by 2015. We’ve learned that the answer does not rest in just hurling cash at these countries-indeed, that is an approach that all too often provides vast incomes for a few powerful politicians, large deposits in Swiss bank accounts, and nothing for the poor.

Zoellick’s task is particularly difficult because over the last decade Paul Wolfowitz and his predecessor, James Wolfensohn, failed to control their egos and their tempers as heads of the Bank and drove out a host of talented senior managers. They also failed to sustain the research strengths of an institution that in the 1970s and 1980s was the source of exceptional intellectual leadership on the social and economic development stage. 

He must also convince the world’s richer nations to contribute tens of billions of dollars of taxpayer money to the Bank’s concessional lending arm, the International Development Association (IDA), whose grants are to the very poorest countries, notably in sub-Saharan Africa. 

There is nothing in the history of this lifelong member of the Republican Party to suggest that he will introduce radical approaches to the World Bank. Most likely, he will have the common sense to place the promotion of economic growth of developing countries at the top of his agenda. The facts are that countries that do not grow cannot effectively reform their governance systems, curb corruption, promote environmental protection and ensure that the basic needs of their poorest citizens are secured. 

The last two presidents of the World Bank rightly understood that sustained development is not possible in countries where corruption is rampant-the abuse of public office for personal gain. Neither of them, however, adequately appreciated that anti-corruption efforts and, more generally governance reform, cannot be imposed from outside by aid agencies.

Mr. Zoellick must demonstrate across the world that the Bank cannot only talk a lot of sense, but it can listen as well. The Bank can only succeed if it demonstrates the skill and capacity to finally listen to and work with the peoples of the world’s poorest countries, and not just their governments, in the struggle to reduce poverty, to promote creative environmental programs and to support good governance and anti-corruption strategies. wt



Caption: Frank Vogl, president of Vogl Communications, Inc. in Washington D.C., is Co-founder & Board Director of Transparency International (the anti-corruption organization) and served from 1981 to 1990 as the World Bank Director of Information & Public Affairs.