United Nations: World Bank and Wolfowitz


Randy Black asks: Is the European media’s opposition to the Wolfowitz nomination to head the World Bank motivated because he is Jewish? RH: No, but because he is unqualified. Columbia University Jeffrey Sachs was vehement in this regard.
 

Randy Black asked: Is the European media’s opposition to the Wolfowitz nomination to head the World Bank motivated because he is Jewish? I answered: No, but because he is unqualified. Columbia University Jeffrey Sachs was vehement in this regard. Randy comments: I cannot argue one way or the other as I am unqualified to judge Mr. Wolfowitz on merit. I can only research the issues. But If Mr. Wolfowitz is unqualified per Mr. Sachs’ opinion, then the question becomes what are the qualifications and who is better qualified?
 
I have heard no one suggest an alternate candidate.
 
Testimonials in favor include: BERLIN, March 21 (Reuters) - German Chancellor Gerhard Schroeder said on Monday that the U.S. nominee to head the World Bank, Paul Wolfowitz, could yield positive surprises and Germany would not block his selection. …."I don't think the Europeans could really have insisted on another candidate," said Henning Riecke, transatlantic relations expert at the German Council on Foreign Affairs. "We mustn't forget Wolfowitz is an experienced diplomat who has experience of different ministries and who has worked intensively in development," he added. "On the strength of his profile he is entirely suitable for the post, so perhaps Germany said let us accept someone who is competent even if on several points he has pursued policies which Germany did not agree with." Wolfowitz's approval by the bank's board -- which operates by consensus -- is widely seen as a foregone conclusion. (1)
Traditionally, the World Bank's president has been a US citizen as the US is the largest shareholder in the institution. Bush said. He described Wolfowitz, 62, as a skilled diplomat, referring to his positions at the State Department and his tenure as US ambassador to Indonesia in the 1980s. The US president also said Wolfowitz is "committed to development".

The nomination was quickly welcomed by fellow countryman James Wolfensohn, the outgoing World Bank president, and by Rodrigo Rato, the managing director of the bank's sister institution, the International Monetary Fund (IMF). "If he is confirmed by the member countries, Wolfowitz will bring to the bank an impressive record of public service with extensive experience of management and of international affairs, in particular in Asia and the Middle East," said Rato in a statement.

Wolfowitz's 35-year public and academic career - notably lacking in direct experience either with banking or development, let alone the bank's supposed core mission of poverty reduction - has also steered a wide berth around both Africa and Latin America, two regions of enormous importance to the bank. Before moving into the Pentagon's No 2 position, Wolfowitz spent seven years as dean and professor of international relations at the Paul H Nitze School of Advanced International Studies at Johns Hopkins University. There, he recruited, among others, Francis Fukuyama, a close friend from college days at Cornell, who also worked under Wolfowitz when the latter was director of policy planning at the State Department in the early 1980s.(2)

His predecessor, James Wolfensohn, (Wolfowitz and Wolfensohn, what a coincidence, two wolfs) appointed during the Clinton Administration, is greatly respected for his work over the past two terms it would appear. Here is a brief synopsis of James Wolfensohn’s career prior to running the world bank: He is better understood as one of the world's richest men and sharpest financial operatives. About his personal fortune, the New York Times of September 14, 1997 said: "He enjoys the trapping of great wealth, like a private jet and a lavish vacation home in Jackson Hole, Wyoming."

Wolfensohn was born in Sydney, Australia. In 1959, he took at Master in Business Administration degree from Harvard Business School. He then he rose very rapidly in the financial world and developed a reputation as smart and ruthless. He held high posts in brokerage and investment firms in Australia from 1959 to 1967, when he moved to London as a top officer of the Henry Schroder investment banking group. Concern for the poor does not seem to have been on his list in those years.

In 1970 he became head of Schroder's operation in New York, a post he held through 1976. He then became an executive partner in Salomon Brothers, the hard-charging bond and investment house. At Salomon he played a key role in the bailout of the Chrysler Corporation by the United States government. His Chrysler play brought him into the world of official policy in Washington, where he caught the eye of World Bank President Robert McNamara. Rumored to be on the short list as McNamara's successor, Wolfensohn speedily arranged to become a U.S. citizen so as best to qualify for the post. When the Bank passed him up, he left Salomon in 1981 to set up his own firm -- James D. Wolfensohn Inc. The new firm was a key player in the hot mergers and acquisitions game on Wall Street during the 1980's (the firm has since been bought by Banker's Trust). Wolfensohn built up his own portfolio along the way and by the end of the decade, he was a millionaire many times over and a close compatriot of the Rockefeller clan. (3)
 
Sources: (1) http://www.alertnet.org/thenews/newsdesk/L21689903.htm
(2) http://www.atimes.com/atimes/Global_Economy/GC18Dj01.html
(3) http://www.globalpolicy.org/socecon/bwi-wto/wolfsohn.htm
 
 RH. A number of economists think Wolfowitz is unqualified.  Robert Whealey says Columbia's leading economist George Stiglitz, a Nobel prize winner, also is convinced that Wolfowitz is unqualified for the job. From Germany, Eugen Solf writes: I think it's more than just being unqualified. Qualification is maybe a "minor" issue since he surely must have more than competent and qualified directors. It is maybe the fear of Europeans about the hawks being sent to more international posts (Bolton UN-ambassador...) and therefore spreading the administration's message across the world via additional channels. Some Europeans think that the thawing of relations between the US and "old Europe" will come to an end (or be more difficult) and that the ultimate goal of the World Bank, reducing poverty, will become less of an issue. I do not mention the fact that shareholder countries are offended because they have been informed only casually over the phone about the appointment  [RH_ Still in the nomination stage. I believe Eugen Solf expresses German opinion better that the official statement by the Chancellor.]

Phyllis Gardner writes: A very interesting story has emerged in the British press regarding an affair that Wolfowitz is having with Shaha Riza.  "Ms Riza grew up in Saudi Arabia and was passionately committed to democratising the Middle East when she allegedly began to date Wolfowitz. ", according to  the London Daily Mail.  "She studied at the London School of Economics in the Seventies before taking a master's degree at St Anthony's College, Oxford, where she met her future husband, Turkish Cypriot Bulent Ali Riza, from whom she is now divorced. After they moved to America, Shaha worked for the Iraq Foundation, set up by expatriates to overthrow Saddam Hussein after the first Gulf War. She subsequently joined the National Endowment for Democracy, created by President Ronald Reagan to promote American ideals.  Bulent Riza said Shaha started to "talk to Paul" about reforming the Middle East. And New Yorker magazine's respected commentator Paul Boyer observed that a senior World Bank official "named Shaha Ali Riza" as an "influence"."

The gist of the article goes on to say that Paul's now estranged wife Clare warned President Bush in 2001 about the affair and the potential conflict of interest.  It further discusses the European community's deep ambivalence about the relationship, which is apparently now in the open.  It is an interesting nuance. 

RH: This brings up an interesting speculation.  Is the appointment of Wolfowitz to the World Bank a way of enduring that it pours money into Iraq, helping the new government to succeed and thus justifying the Bush policy in Iraq?

Phyllus Gardner wrote: A very interesting story has emerged in the British press regarding an affair that Wolfowitz is having with Shaha Riza.  "Ms Riza grew up in Saudi Arabia and was passionately committed to democratising the Middle East when she allegedly began to date Wolfowitz. ", according to  the London Daily Mail.  "She studied at the London School of Economics in the Seventies before taking a master's degree at St Anthony's College, Oxford, where she met her future husband, Turkish Cypriot Bulent Ali Riza, from whom she is now divorced. Ed Jajko comments: Curious that Ms Shaha ("Queenie") Ali Riza had to find her husband, a Turkish Ali Riza, in the UK, given that Alireza, a different spelling, is one of the most prominent family names in the Kingdom of Saudi Arabia.  The Alirezas there have been increasingly wealthy traders and industrialists since 1845.  Perhaps Bulent is a cousin or otherwise related to the Saudi family of the same name, and perhaps Shaha Ali Riza's compound surname is a maiden name and not one taken in marriage to Bulent (not a Middle Eastern custom, anyway). 

RH: One WAISworthy subject would be extended families around the world.   My guess is that in Arab countries they can be very expanded.



Ronald Hilton 2005

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last updated: April 12, 2005