World Bank President James Wolfensohn continues to insist that he has not made up his mind whether to stay on after his term of office expires on May 30 next year - but it appears increasingly likely he will go. The fact that Bank Managing Director Jeffrey Goldstein, an old friend of Wolfensohn's from his business days, has decided to quit at the end of this month is a strong signal that the president will follow suit, a well placed source told Emerging Markets.
The end of Wolfensohn's 10-year presidency could open up a review of the process of how World Bank heads are chosen, possibly opening the door for a non-US national to take over, says one senor staffer at the Bank. The convention of the US nominating World Bank presidents while Europe nominates IMF managing directors was reviewed several years ago. There has been no change at the head of the World Bank since then, although Europe again nominated the head of the IMF - Rodrigo Rato - earlier this year.
"I have been 10 years in the job and I will stay if I am asked and if it looks to me that I can really add something," the 71-year old Wolfensohn said yesterday. "I'd like to see what happens politically between now and December and I would like to make up my mind [then]." That would leave him "plenty of time to decide" whether or not to stay on, he added, acknowledging that he did not know "whether I even have an option" to stay.
His December deadline comes after the US presidential election in November. If President George W Bush is re-elected, there is strong speculation he might move Colin Powell from the State Department and that the World Bank would provide a comfortable berth for him. Alternatively, John Taylor, under-secretary for international affairs at the US Treasury might be a candidate, or even Robert Zoellick, US trade representative.
In the event that John Kerry is elected to lead a Democrat administration, Stanley Fischer, former World Bank chief economist and now a senior executive at Citigroup, could be in line to come back as president of the institution, sources say. Another former World Bank chief economist, Lawrence Summers, has also figured in speculation although Summers apparently is eager to succeed Alan Greenspan as Federal Reserve chairman if Kerry is elected.
"Honestly, I do not know," claimed Wolfensohn yesterday when asked at a press briefing whether or not he would stay on at the Bank. He denied that he was "mobilizing forces" to ensure that he could stay on, although some Bank staffers say that the president is adopting this attitude in order to avoid a loss of face if he is not offered another term.
Emerging Markets learned several months ago, however, that if Goldstein announced his resignation before the Annual Meetings - as he has now done - that would be a sure sign that Wolfensohn has decided to quit. Goldstein is leaving the Bank to return to the world of investment banking where he met Wolfensohn in the days when both were in the profession.
Close confidantes of Wolfensohn recently advised him to quit while he is still on top and while he can leave with a good record, Emerging Markets has learned. Wolfensohn has come in for criticism as well as praise since he took over as president. He changed the nature of the Bank, transforming it from an institution involved in financing infrastructure and policy reforms to one dedicated to reducing poverty and a plethora of other aims ranging from combating corruption to fighting Aids and from countering money laundering to promoting the IT revolution.