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Wolfowitz quits, row looms over next chief

Washington, May 18 (Reuters): Paul Wolfowitz resigned as World Bank president, ending turmoil over his leadership, but the next battle loomed for the US over how and if it should continue to appoint the head of the institution.

Wolfowitz’s resignation yesterday, forced by his handling of a high-paying promotion for his companion, takes effect on June 30. The World Bank board is scheduled to meet to discuss leadership issues, including the process of selecting the new president.

The White House said it would soon name an American successor. US treasury secretary Henry Paulson said he would help President George W. Bush in identifying a nominee after consultations with other World Bank member countries.

Neither the White House nor Paulson mentioned the possibility of changing the way the US has selected the president of the poverty-fighting institution, even as it emerged from a bruising fight over Wolfowitz.

While the White House cautioned it was too early to speculate over his successor, names being tossed around in the US media included former deputy US secretary of state Robert Zoellick, deputy US treasury secretary Robert Kimmit and even Tony Blair.

Others included Stanley Fischer, governor of the Bank of Israel, Ngozi Okonjo-Iweala, a former Nigerian finance minister, Trevor Manuel, South Africa’s finance minister, and Kermal Dervis, former Turkish minister for economic affairs.

The US, the bank’s largest shareholder, has named the World Bank chief since it led the establishment of the bank and its sister organisation, the International Monetary Fund, more than 60 years ago. By tradition, the head of the IMF is a European.

Wolfowitz was always a controversial choice because of his role in the US-led invasion of Iraq while at the Pentagon. Europeans grudgingly accepted his nomination by Bush in 2005. Lingering misgivings over the US administration’s choice often bubbled to the surface in decisions such as Wolfowitz’s anti-corruption campaign.

While few countries have directly challenged the tradition of the White House selecting the World Bank chief, many have said there needs to be wider consultation on candidates. World Bank staff, anti-poverty and development groups called for a selection process based on merit, not nationality.

“The current unjust arrangement by which the US gets to appoint the head of the World Bank and the Europeans pick the head of the IMF has to end,” said Bernice Romero, advocacy director for international development group Oxfam.

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