World Bank: A crisis of leadership and governance

The hullabaloo surrounding Paul Wolfowitz, President World Bank, accused of orchestrating out of the way $60,000 pay raise for his girlfriend has raised questions about the effective leadership of the six-decade-old development lender itself.

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The Wolfowitz-girlfriend scandal that has been blown out of proportion still remains to be seen, but the fiasco brings to light a lapse in real governance and leadership. More interesting is to see whether this scandal will finally bring an end to the outmoded practice by which the president of the United States independently appoints the head of the world's most important development agency.

The appointment of ineffectual to positions of responsibility demonstrates extreme disregard for the people and institutions they represent and not to mention Mr. Wolfowitz had been a prominent figure and a hero to many on the right for his advocacy of the US invasion of Iraq when he worked under the Bush administration. This also brings to the surface how fragile the current governance structure at the World Bank is.

Yes, have to agree that this isn't about personalities however; the importance of this fiasco lies in the impetus for calls to make the bank's board meetings and other policymaking discussions open to the public and also to bring change to the bank as well as its sister organization, the International Monetary Fund (IMF). Surely, the reform is needed but it won't be possible to bring that from the top down.

The damage is done

The damage is done and at a time when the Bank has been emphasizing high governance standards as the key to development. One thing's clear; it won't be easy to undo the damage done by the World Bank's president and with the exposure of the controversy's details it may take some time before the agency's credibility as a savior for the world's poor is restored but only if Mr. Wolfowitz is barred from continuing what he calls an 'important work'.

World Bank problems deeper than Wolfowitz

The World Bank that is supposed to be a pillar of good governance and fairness appears from nowhere a good governed and fair institution. These points prove the fact:

• United States is unwilling to give up the custom regardless of criticisms relating to the practice of having a U.S. national as the head of World Bank.

• The same goes for Europe as it too wants to maintain equally out-dated privilege of appointing the head of the International Monetary Fund.

Why does the world meekly go along with the status quo and let the US and Europe dictate the Bank's top position?

The irony is Asia with its under-representation in both organisations has little choice but to hang up to the US and Europe's high jinks. As for Africa, there's nothing they can say as that might interrupt the flow of World Bank bounty.

This is a sorry tale and sorry fate of poor global governance however; Wolfowitz debacle can prove to be the catalyst to bring an end to this status quo but only if the political leaders, particularly international diplomats, don't swallow their words this time.