World Bank chief says US should lead some global bodies3 min read . Updated: 25 Feb 2012, 05:36 PM IST
World Bank chief says US should lead some global bodies
Singapore: A solid US candidate to head the World Bank would be good for the United States and the bank because the world’s largest economy should be represented in top international bodies, outgoing president Robert Zoellick said on Saturday, while emphasising he has no role in the selection process.
The World Bank last week launched the nomination process to select a new president to succeed Zoellick when he steps down in June, inviting names from any of its 187 member countries. The Obama administration has said it would open the process to competition.
Zoellick noted however that Americans did not hold top posts at the United Nations, World Trade Organization, regional development banks or International Monetary Fund.
“I want the United States to feel a sense of responsibility to the international system. So in that sense if you get the right American candidate I think that can be good for the United States and the bank."
So far, two people most often mentioned as possible successors are both American: US secretary of state Hillary Clinton and former White House economic adviser and former treasury secretary Lawrence Summers. The state department has insisted that Clinton would not be taking the job.
Much like in 2011, when Dominique Strauss-Kahn resigned as managing director of the International Monetary Fund, officials from countries such as Brazil and the Philippines said it was time to break the decades-old pattern of putting an American in charge of the World Bank and a European atop the IMF.
Agustin Carstens, Mexico’s central bank governor, who had made an unsuccessful bid to head up the International Monetary fund last year, said on Wednesday the World Bank presidency should be open to a wide field of candidates.
Buying Time In Europe
Zoellick said the latest Greek bailout totalling €130 billion would merely buy time.
“It’s too early to know, partly it depends on the actions the Greeks have to take," he said.
“I think that the European Union has dealt with Greece as one element but the core elements are really going to be the success of some of the bigger countries, such as Italy and Spain."
But he said bailouts weren’t necessary for these two countries or Portugal.
“Each country’s situation is different and you really have three interconnected problems. For some it’s the size of the sovereign debt, for some it’s the effect on the banking industry, and for some it’s their competitiveness," he said adding that “Spain and Italy need time to make the reforms."
“But I do think that all this is harder to accomplish when there is a recession in Europe."
Support from other European nations was also crucial.
“What I’ve tried to suggest, given the politics of reform in some of the Mediterranean countries, (is that) it will be important for Germany and other leaders in the process to show some prospects if the reforms are taken and how they will be supported by the other European countries."
Zoellick heads next to China for the release on Monday of a major economic report by the bank and a Chinese government think tank, looking at economic opportunities and challenges to the year 2030.
Global Economy, China And Oil
Zoellick said that prospects for global economic growth this year remain guardedly positive with much hinging on Europe stabilising and China reaching a soft landing, with oil prices a wildcard.
“I have a cautious optimism about the international economy. Our forecasts are that growth might slow down a little bit this year. What I see is that the US economy has got some momentum," he said.
“If Europe is able to continue to stabilise the situation, that’s a big if, but that’s an important part. And I think China has issues in the real estate sector but my own guess is they are on the process for a soft landing.
“The two big question marks to me are energy prices with the political risk and Europe being able to maintain things."
Brent crude futures settled near a 10-month high above $125 a barrel on Friday, posting a fifth straight weekly gain as heightened concerns over tensions with Iran about its nuclear program and cuts in supply sent oil prices up on both sides of the Atlantic.
The crude oil price spike has prompted speculation the International Energy Agency may again call for the release of oil stocks, or the US may release strategic petroleum reserves.
Zoellick said oil prices remain a concern, though the World Bank is only an observer in any decision to release strategic oil stocks.
“Not my call," he said, adding that “I don’t think one should rush into that but the reason that the strategic reserve was created was for use in emergency situations."