Bush taps Zoellick to lead World Bank

WASHINGTON - President Bush on Wednesday tapped his former trade chief and No. 2 diplomat,Robert Zoellick, to run the World Bank, embarking on a healing process to mend wounds inflicted by outgoing president Paul Wolfowitz.

Zoellick, 53, would succeed Wolfowitz, who is stepping down June 30 after findings by a special bank panel that he broke bank rules when he arranged a hefty compensation package in 2005 for his girlfriend, Shaha Riza, a bank employee.

Bush's selection of Zoellick must be approved by the World Bank's 24-member board.

The controversy over Wolfowitz caused a staff revolt and strained U.S. relations with Europeans and other countries and led to calls for him to resign from the poverty-fighting institution.

"The World Bank has passed through a difficult time for all involved. There are frustrations, anxieties and tensions about the past that could inhibit the future," said Zoellick, standing beside Bush at the White House. "This is understandable, but not without remedy. We need to put yesterday's discord behind us and to focus on the future together.

"I believe that the World Bank's best days are still to come," he added.

In tapping Zoellick, Bush picked a seasoned veteran of politics both inside the Beltway and on the international stage. He is known for pulling facts and figures off the top of his head. He also has a reputation for being a demanding boss.

"Bob Zoellick has had a long and distinguished career in diplomacy and development economics. It has prepared him well for this new assignment," Bush said. "This man is eminently qualified."

Internationally, the reaction to Bush's choice was generally positive, although some public health groups and others expressed concern about his ability to carry out the institution's mission.

French Foreign Minister Bernard Kouchner welcomed Zoellick's appointment. Asked whether Zoellick was the right man for the job, Kouchner said "certainly."

"In between the partners and the World Bank, it is mainly a question of confidence, and I hope that Mr. Zoellick will re-establish — or establish — confidence in between all of them," Kouchner told reporters Wednesday on his arrival at a meeting of Group of Eight foreign ministers in Potsdam, Germany. "This is absolutely crucial."

European Commission President Jose Manuel Barroso said, "I certainly respect very much Mr. Zoellick," but declined further comment.

Zoellick announced last June that he was leaving his post as deputy secretary of state to join the Wall Street firm of Goldman Sachs and work to develop investment markets around the world.

If ultimately approved as World Bank chief, Zoellick will need to regain trust, rebuild credibility and mend frayed relations inside the institution as well as with its member countries around the world.

The bank's new leader will try to persuade countries to contribute nearly $30 billion over the next few years to fund a centerpiece bank program that provides interest-free loans to the world's poorest countries.

"We need to approach this task with humility and creative minds," Zoellick said. He said he planned to meet soon with the bank's contributors and borrowers and others, to listen to their perspectives on how the institution can best fulfill its purpose.

Zoellick could build upon strong relations he has developed worldwide as deputy secretary of state and U.S. Trade Representative. He was involved in peace talks in Sudan and he played a key role in negotiations to bring China into the World Trade Organization. He forged free trade deals between the United States and other countries, including Singapore, Chile, Australia and Morocco. And, he helped launch global trade talks in Doha, Qatar.

Under Bush's father's administration, Zoellick worked closely with then-Secretary of State James Baker on policies pertaining to the end of the Cold War. He also had worked on negotiations on German unification.

House Speaker Nancy Pelosi (news, bio, voting record), D-Calif., also praised Zoellick.

"My experience working with him on the subject of Darfur tells me that I know that he cares about that issue, which is very important to the American people," she said. "He's sensitive to the need to alleviate poverty there, to resolve conflict in a peaceful way. ... I have been impressed by what he has done so far."

But Charad D. Wadhva, professor emeritus at the Center for Policy Research, a New Delhi think tank, questions whether Zoellick is right for the World Bank job.

"Professionally, he's competent but I'm not so sure about his background in developing economies or in helping developing countries," Wadhva said. "He may have to learn a lot to understand the needs of the developing countries."

Before taking the helm in 2005, Wolfowitz was the No. 2 official at the Pentagon and played a key role in mapping out the war in Iraq. From the beginning, Europeans and others were upset that Bush would pick someone to run the bank who was so closely associated with the war.

Bush called Wolfowitz an "able public servant" and praised his leadership at the bank.