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24.04.2007 Business & Finance

Wolfowitz Must Quit — Ex-World Bank Executives

Wolfowitz Must Quit — Ex-World Bank Executives

Forty senior former World Bank officials on Monday called for the immediate resignation of its embattled leader Paul Wolfowitz, saying he had lost trust and respect.

In a letter to the Financial Times, the 42 ex-employees called for change following revelations that the bank's president used his influence to ensure a favourable job and salary for his girlfriend.

"We believe that he can no longer be an effective leader," said the letter, which was signed by staff including four former senior vice presidents and 14 ex-vice presidents.

"He has lost the trust and respect of bank staff at all levels, provoked a rift among senior managers, developed tense relations with the board, damaged his own credibility on good governance -- his flagship issue -- and alienated some key shareholders at a time when their support is essential for a successful replenishment of the resources needed to help the poorest countries, especially in Africa."

The letter concluded: "There is only one way for Mr Wolfowitz to further the mission of the bank: he should resign."

In an accompanying editorial the business daily backed the former staff's concerns.

"If Paul Wolfowitz remains head of the World Bank, he will preside over a rudderless hulk," the leader said.

"That is today's inconvenient truth. The US has always had the prerogative of nominating the president of the bank. But this privilege carries with it a big responsibility. Exercising that responsibility now requires acceptance of an immediate change in the bank's top leadership."

Wolfowitz, a former US deputy defence secretary pivotal in decisions leading to the Iraq war, ordered a hefty salary worth nearly $200,000 for his bank employee girlfriend, Shaha Riza, in 2005.

It left him open to accusations of hypocrisy as he steers a controversial campaign against corruption in the World Bank's 24-billion-dollar annual lending.

Meanwhile the pressure on the World Bank chief has increased after the bank's directors vow to deal "urgently" with the scandal enveloping him.

The US, which appoints the bank's head, said it still supports Mr Wolfowitz.

Dana Perino, a White House spokeswoman, said that the President of the US George W Bush "has confidence in Paul Wolfowitz".

However, Ms Perino said it was appropriate to let the board of director's review process take place.

The World Bank's 24-member board said that the situation regarding the fate of the former US deputy defence chief should be dealt with, "urgently, effectively and in an orderly manner".

On Thursday, Mr Wolfowitz was told directly by one of his two deputies, Graeme Wheeler from New Zealand, to step down at a session attended by senior staff, according to sources quoted by French news agency AFP.

Senior managers from Latin America and Asia apparently sided with Mr Wheeler, but officials from the bank's Middle East and Africa division backed Mr Wolfowitz' intentions to stay on as president of the World Bank. —

Credit - AFP/BBC