World Bank President Paul Wolfowitz will go on the offensive, to quell fears that the Bank could become a tool of US statecraft under his stewardship, in his maiden speech to the annual meeting on Saturday.
At issue is the stance the former US Under Secretary of Defence will take on Iraq, and the extent to which the neo-conservative ideology he has been associated with could influence Bank policies and personnel selection.
Officials are quick to deny claims that Wolfowitz, an advocate of the invasion of Iraq in his Pentagon days, is pushing for the reconstruction of Iraq at the possible expense of Bank staff or financial resources.
The Bank has committed $500 million for reconstruction of the war-torn country, but staff will only return to Baghdad from Amman 'when conditions are right on the ground,' one staffer insisted to Emerging Markets.
Wolfowitz insisted at a press briefing this week that 'no decision has been made' on when to send staff back to Iraq. 'I think what we're looking at is weighing the relative risks against the potential gains in terms of greater effectiveness,' he said. 'It's important to remember the UN has some 600 people in Iraq, the US has a huge embassy and the British have a pretty large one. There are lot of people with presences there,' he added.
Wolfowitz is meanwhile 'reaching out to a broad range of people from across the political spectrum' both in seeking advice and making senior appointments at the Bank, said an official, who denied any 'bias' in the President's approach. He cited as evidence Wolfowitz's choice of two Europeans Lars Thunell, a Swedish banker, as new Managing Director of the IFC and Italian banker Vincenzo La Via as new Chief Financial Officer of the Bank.
Bank staff will be watching Wolfowitz's speech closely for clues as to whether he intends to 'do a Meltzer' with the institution as he gets into his stride, after being in office since 1 June.
A Bank source said that Wolfowitz 'does talk to' Alan Meltzer, who led a commission five years ago calling for the Bank to downsize radically and hive off much of its operations to regional development banks. But he also consults a wide range of other opinions, the source added.
Wolfowitz has made it clear he intends to step up provision of infrastructure in developing countries, after a decade of virtual withdrawal by the Bank from this sector.
There are plans to increase the Bank's funding of infrastructure projects by $1 billion a year in the coming years, according to a Bank report. 'Infrastructure is certainly one of Wolfowitz's top ten priorities,' a Bank source told Emerging Markets, adding that there are likely to be further initiatives in this sphere before long.
But even this initiative could spark controversy, unless Wolfowitz can convince critics that the Bank is not just 'throwing money' at projects without ensuring they are properly supervised, and that they succeed in their development objectives.
Iraq will be 'a big test' of Wolfowitz's resolve in this area, given the criticisms that a good deal of money has already gone missing in the country because of poor supervision of aid, a former staffer said. 'There is still too much emphasis on pushing out money and too little emphasis on supervision,' he charged.