EoW March 2008

EuroWire – March 2008

Transat lant ic Cable

Britain overtakes the US as top

World Bank donor

The decline in the value of the dollar vis-à-vis European

currencies has dealt another blow to the United States, if a largely

symbolic one. For the first time, the US has been superseded –

by Britain – as the biggest donor to the World Bank.

Traditionally, the power to choose the bank’s president and

chart its policies goes with the position. Bank officials meeting

in Berlin, Germany, in December said the change in ranking was

due at least in part to currency swings. But, because the US could

have ensured its hold on the top spot by raising its contribution

to the bank, the ceding of primacy was apparently a willed act.

The motive behind the unprecedented self-demotion is less

clear.The bank’s current president, Robert B Zoellick, an American

appointed by President George W Bush, chose both to stick

with the currency-fluctuation motif and to shift the focus away

from it. “The US is stretching, Britain is stretching,” he said in a

conference call with reporters; then he noted that Britain ‘has the

advantage of a stronger currency, the pound.’

‘Stretching’ refers to the impulse behind a record total of

$25.1 billion pledged to aid the world’s poorest countries,

despite widespread misgivings about the bank’s direction

and leadership under Mr Zoellick’s contentious predecessor,

Paul D Wolfowitz. Another Bush appointee, Mr Wolfowitz left

in July 2007 after a bitter dispute about his ethics that roiled

the bank membership and threatened relations with aid

officials, particularly Europeans.

In less than six months’ time, Mr Zoellick appears to have

redeemed the US in the eyes of the World Bank community,

at least. Big pledges from Britain ($4.2 billion) and Germany

($2.2 billion) indicate that he has succeeded in healing the rift

with Europe. German officials, especially, are warm in their praise

for the former diplomat and trade negotiator.

The decision by Mr Zoellick to skip the bank negotiations in

Berlin to attend a United Nations meeting on climate change,

in Bali, is suggestive. Among his accomplishments is to have

obtained pledges of donations from China and Egypt, nations

that were once recipients of World Bank aid.

Could Mr Zoellick have persuaded his sponsor in the White

House that the work of the 185-member bank is more important

than the perquisites of the top spot?

Dorothy Fabian

USA Editor