White House Turns to Veteran Diplomat to Head World Bank

The White House moved last night to mend fences with the international community when it indicated it would nominate a respected veteran diplomat, Robert Zoellick, to replace Paul Wolfowitz as head of the World Bank.

The Bush administration, bruised by the fallout after the former Pentagon deputy was forced to step down after granting pay rises to his girlfriend, turned to Mr Zoellick, an experienced Washington insider who served as Condoleezza Rice's number two at the state department and played a key role in the reunification of Germany in 1990.

Sources in the World Bank said the announcement followed careful negotiations by the US treasury secretary, Hank Paulson, with leading governments, including Britain and Germany, in which Mr Zoellick's name was mentioned as the top choice. "It certainly could be worse. He's a solid appointment - he's not a former architect of the Iraq war," said Ken Rogoff, a former chief economist at the International Monetary Fund and a professor at Harvard University.

White House officials said Mr Bush intended to formally announce Mr Zoellick's nomination today and they were confident he would be endorsed by the bank's board of directors. If approved, he would take over on June 30, when Mr Wolfowitz steps down.

Mr Zoellick's nomination maintains the US prerogative of choosing an American for the post which has been criticized following the disastrous tenure of Mr Wolfowitz. Aid agencies and some governments argue that the appointment process should be open to other nationalities and conducted transparently.

The US has selected the head of the World Bank since the institution was founded 60 years ago, while European governments have chosen the head of its sister organisation, the International Monetary Fund.

Gene Sperling, an economist during the Clinton administration and a senior fellow at the Council of Foreign Relations, said Mr Zoellick was a "very smart and very serious" operator. "He's been seen as the one person in the Bush administration who is a true internationalist and that probably put him in favour with many of the key G8 partners that the administration wanted to get on board," he said.

The new president faces enormous challenges in healing the wounds within the bank after Mr Wolfowitz's controversial reign, which provoked a staff revolt, as well as overhauling the bank's role. Experts say it needs to focus on giving grants to very poor countries, and scale down the amount of lending to middle-income countries.

Nancy Birdsall, president of the Center for Global Development, while praising Mr Zoellick's analytical skills and experience, said: "The question is whether other countries will be satisfied that he is indeed the best candidate, for example, whether he has the right management skills."

Described by former colleagues as a policy wonk with sharp elbows, Mr Zoellick's background means he is familiar with the rigors of international diplomacy. Before his official jobs under Mr Bush, he served as a protege of James Baker, a long-time confident of the Bush family. Mr Zoellick helped run two presidential election campaigns and served in the administration of Mr Bush's father.

Profile:

Robert Zoellick may hail from the conservative wing of US Republican party but, unlike his predecessor, Paul Wolfowitz, he has a formidable record in financial and economic governance. After a spell at the treasury and a stint as economics undersecretary of state in the 1980s, he returned to a more senior role in 2001 as George Bush's first trade representative, the chief US trade negotiator. During his four years in the job, he helped launched the Doha round of world trade talks and negotiations to bring China and Taiwan into the WTO. He moved to the state department before leaving government for Goldman Sachs and a job as managing director.