US President George W. Bush's re-election may bring stepped-up pressure on global financial institutions to reform their lending practices, quite possibly accompanied by change at the helm of the World Bank. The current World Bank president James Wolfensohn, 70, was a Clinton appointee whose term expires in June 2005.
Friction between the Bush Treasury and Wolfensohn over how World Bank aid is financed and distributed has created certainty in the development community that the government will name its own World Bank chief.
Even Wolfensohn seemed to acknowledge that situation in October when he said he would wait to see the outcome of the November 2 US election before discussing another term.
By informal agreement among countries that finance the World Bank and IMF, the post of World Bank president traditionally goes to an American while the International Monetary Fund's leadership goes to Europeans.
The World Bank spends $20 billion a year on development projects in Africa, Asia, Latin America and Eastern Europe, while its sister organisation, the International Monetary Fund, oversees global financial stability.
Many in the institutions say the Bush administration initially was less involved, a distinct difference from the hands-on approach of the Clinton Treasury.
The Bush administration took more interest after the September 11 terror attacks as part of a broader campaign against money laundering and terror financing.
In particular, it wants more effective use of development aid with greater accountability, said Allan Meltzer, a Carnegie Mellon economics professor whose commission recommended an overhaul of the IMF and World Bank four years ago.
"The previous administration threw a lot of money at countries and their problems rather than trying to take advantage of those situations to get a smaller number of reforms," said Meltzer, a former member of the President's Council of Economic Advisors.
The Bush team, he said, had ensured that poor countries get more in grants and less in loans to help ease debt burdens.
It also enforced a system of performance audits in the belief that little good comes from pouring aid into a country that pursues bad policies, and has kept up tough talk in opposing bailouts, Meltzer said.
While the IMF has shown more willingness to reform, Meltzer said the World Bank's performance was more disappointing.
That means the Bush administration is eager to make a change in the position. No one was willing to say on the record that Wolfensohn would be replaced but it was virtually a foregone conclusion in the development community.
"A real improvement at the bank will have to wait until Wolfensohn is gone," said Meltzer. "Mr Wolfensohn has an enormous appetite for anything that comes along and the bank has a huge menu of activities and a poor record of accomplishment."
Wolfensohn has trained the international spotlight on global poverty, observers say, but his relationship with the Republican administration has been tense.
Former Treasury Secretary Paul O'Neill made no secret of his irritation at how development money was dished out by the World Bank.
Washington rumours include possible successors such as US Secretary of State Colin Powell and US Trade Representative Robert Zoellick.
Wolfensohn, an Australian-born society figure who became American for the job, told journalists in October that Powell was a friend who did not want to head the World Bank.
The difference between the Bush Treasury and its predecessor has involved both style and substance, said Nancy Birdsall who heads the Washington-based Centre for Global Development think tank.
The Clinton administration took a stronger interest in ensuring the IMF had the resources it needed and in getting other countries engaged in international development, she said. But the Bush administration, which will be working with a Republican-controlled Congress, may be able to push through more of the reforms that it wants than was the Clinton administration.
"I don't think the outcome in terms of policies within the administration and the actual relations in getting Congress to be supportive of the international financial institutions is that different," she said.
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