WOLFOWITZ AT THE BANK. A NEW TRANSATLANTIC AGENDA FOR DEVELOPMENT?

Peter Sain Iey Berry
EU Observer

In a curious way the appointment, now confirmed, of Dr Paul Wolfowitz to the Presidency of the World Bank sets the seal on a transatlantic partnership between Europe and America that has been newly revived following President Bush's re-election for a second White House term.

European acceptance of the American nomination indicates a restored level of trust and an acknowledgement that, while we may differ in our approach to world problems, we cannot make much progress unless we march in step.

Our public falling out, prompted largely by the Iraq war, did neither side any good. Nor did American remarks that seemed designed - on the eve of enlargement - to split Europe into 'old' and 'new.' These had added curiosity value given the US traditional stance, like some worried offspring, of always wanting to see Europe more united, not less. Europe's own actions, meanwhile, had not always been best calculated to heal the rift. Now both sides are rowing back. Indeed, if the purpose of President Bush's recent embassy to Europe was not to pay demi-penance for the turbulence of the Iraq war, then certainly it was to engage in some serious bridge-building.

Two-way bridge-building

Nor was this bridge-building one way. Back in January, for instance, Louis Michel, the Belgian Commissioner, who has charge of the International Development portfolio in Mr Barroso's Commission, delivered a talk in Washington in which he highlighted the challenges facing the world and the response that the Commission believed should be forthcoming from Europe and the USA during George Bush's second term. He called it 'A New Transatlantic Agenda for Development.'

It was a thoughtful and moving speech that discussed the linkages between poverty and security, trade and health. Michel argued that the real threats to the transnational partnership - poverty, oppression, disease, terrorism - were better fought if Europe and America could present a united front. At its heart was the conclusion - partly based on a report by the eminent UN adviser Professor Jeffrey Sachs - that the world had made insufficient progress since the Millennium Summit in 2000 when world leaders set themselves certain key targets to be achieved by 2015, including the halving of the numbers living in absolute poverty.

Just how patchy progress has been - generally Asia has fared better than Africa - and whether the rich world holds to the pledges made five years ago - we shall discover in September, when the United Nations will host another World Summit in New York that will place both America and Europe on their mettle. The European Union is mindful of the challenges. At last week's European Council member states committed themselves to playing 'a major role within the UN and in preparations for the Summit in particular.' It was typical of Europe's desire to seek multilateral solutions.

Provocation?

So why then should President Bush seek to provoke Europe by nominating Dr Paul Wolfowitz, one of the chief architects of the unilateralist Iraq war, and closely identified with the strategies of the first Bush term, to the World Bank - the most important poverty fighting multilateral institution? Particularly when his experience of development and poverty issues is at best limited? And why did the Europeans accept him, when it was in their power to block the appointment?

Plenty criticised Mr Wolfowitz's abilities. "We have one nomination of a person with no experience in development and absolutely no clarity of what it means," thundered the same Jeffrey Sachs whose report on poverty Michel had used to illustrate his case. Sach's remarks on 22 March came just six days after Wolfowitz's nomination, according to Global Development Briefing. Others felt that Bush's former Deputy Secretary of Defence would turn the Bank into another foreign policy instrument acting, Mugabe-fashion, to steer largesse in the direction of America's supporters.

That was certainly how many characterised the appointment. Others, on the other hand, argued that Wolfowitz was a public servant who had demonstrated remarkable competence in a variety of jobs. Moreover, his status as one of Bush's most trusted and capable lieutenants suggested that the Administration was now beginning to attach a new importance to poverty issues, particularly in the run-up to the World Summit in September. After the European Governors of the World Bank (mostly Finance or Development Ministers) had listened carefully to Dr Wolfowitz's case, they were prepared to give him the benefit of any doubt. Accordingly, there was no veto.

A kind of handshake

Some have suggested a quid pro quo. Europeans are in the running for various senior multilateral posts, including the head of the $3 billion UN Development Programme and the UN Refugee Agency, where one of the candidates is Emma Bonino, a former European Commissioner. The major prize, however, is the World Trade Organisation - arguably the most influential of all the global agencies - to the head of which another former Commissioner, Pascal Lamy hopes for a call in September. But for this and for the other jobs US support is vital.

So were the Europeans just holding back on the principle of 'Buggin's Turn?' I don't think so. When Wolfowitz was asked whether he would give the Europeans greater influence by appointing more Europeans to the Board, his reply was measured but non committal. He accepts that more European money funds the Bank than anyone else's and that this buys appropriate influence, but that was as far as he wanted to go.

Far more important were the sentiments that he conveyed regarding the commitment to poverty reduction and multilateralism that his nomination entailed. The Bank had a unifying purpose, he said, and people would find him a capable leader. He would serve not America but the Bank's 184 shareholder nations. It became a kind of handshake, which Europe acknowledged and reciprocated. The two Continents continue to diverge in significant ways but perhaps, with the Wolfowitz appointment, Louis Michel's Transatlantic Agenda for Development is up and running.