The World Bank passed a big test in December when Congress quietly approved its request for additional funding, part of the development group's first general capital increase in more than 20 years. During a time of fiscal stress and partisan gridlock, the vote showed renewed confidence in an organization that not long ago faced doubts about its future — even whether it was worth supporting at all.
The bank hit a rough patch during the waning days of the George W. Bushadministration, after then-chief Paul Wolfowitz resigned amid doubts about his leadership. Credit Robert Zoellick, the low-key technocrat who succeeded Wolfowitz, with putting the bank back on track. The mustachioed native of west suburban Naperville announced Wednesday that he will step down at the end of his five-year term on June 30. He leaves behind a stronger organization with a big job left to do.
The bank is owned by its 187 member countries, but the U.S. retains a voting share that in effect gives it a veto over important decisions. It is U.S.-dominated, and an American traditionally heads it, unlike its Euro-centric counterpart, the International Monetary Fund. Its main function is making loans to the developing world, and providing managerial skill and technical knowledge to ensure the money contributes to the public good.
The world economy has been transformed by the U.S. financial meltdown that began less than a year after Zoellick started, and the European sovereign debt crisis that continues today. Developing countries have become sources of growth and stability, and under Zoellick the bank shifted slightly more voting power to those countries. If Congress had balked at providing additional capital, developing countries would have wanted a much bigger voice.
Besides safeguarding the American veto over bank affairs, the capital infusion reflected a growing appreciation of the bank's role in supporting U.S. interests abroad by fighting poverty and promoting the rule of law. In this fundamental mission, Zoellick shined.
He dealt with the life-and-death issue of food security, boosting World Bank agriculture lending to $6 billion a year. He correctly recognized that developing countries with good prospects and rising incomes needed less help than the poorest of the poor: The bank raised an additional $90 billion for the International Development Association, its fund aimed at assisting the most impoverished. In the Middle East and Asia, the bank's work supported the hard-won progress made by America's armed forces over the past decade.
This work is never finished, and President Barack Obama faces a difficult task in replacing Zoellick. The bank has become more representative of those it serves: More than half of its senior officers are women, and almost half are from developing countries. On Wednesday, speculation swirled about big names such as Secretary of State Hillary Clinton (who denied any interest) and ex-Treasury Secretary Lawrence Summers. Whoever gets the nod must be prepared to navigate crises. Given the shaky state of the world economy, there will be no margin for learning on the job.Copyright © 2014, Los Angeles Times