EoW March 2008

Transat lant ic Cable

Britain overtakes the US as top World Bank donor

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?

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 For the first time, the US has been superseded – by Britain – as the biggest donor to the World Bank.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.’

Dorothy Fabian USA Editor

‘Stretching’ refers to the impulse behind a record total of $25.1 billion pledged to aid the world’s poorest countries,

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EuroWire – March 2008