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Tue, Oct 05, 2004 - Page 12 News List

World Bank's leadership gets ready for change


All weekend, drivers who were headed anywhere near the World Bank and International Monetary Fund headquarters found themselves at newly erected concrete barricades. More than one shouted at the police, "Where are the protesters?"

There were none, except for a few people who gathered in such small vigils that they were easy to miss.

The extraordinary security around the Pennsylvania Avenue corridor was due to the so-called "orange alert" that the two institutions have been under since August because of four-year old computer records suggesting that al-Qaeda might be targeting them. Their annual meetings are the last major events before the election, and the Bush administration did not want to see a terrorist attack -- or protests -- disrupt the proceedings of institutions whose proclaimed missions are to keep the world's financial system on course and help poor countries catch up with rich ones.

But for once the action was inside, where the world's financial leaders tackled the urgent issues of forgiving the debts of impoverished nations, managing the effects on development of rising oil prices and considering how to get rich countries as well as poor ones to address their economic problems and make painful changes.

Overall there was a strong sense of historic transition. China was invited to dine with the Group of 7 major industrial nations, an event that was seen as the first step toward admission to that elite club and a belated acknowledgment of China's huge role in the world economy.

At the same time, the World Bank's leader, James Wolfensohn, was presiding over what could be his last annual meeting. His term as president will end in May and it seems unlikely he will be asked to stay, no matter who wins the November election.

With his snowy hair and unrelenting pitch for more money to help the poor, Wolfensohn gave an impressive performance as a lion in winter. He sat alone at his news conferences -- no spokesmen or aides beside him -- and easily answered questions about Ghana's debt, the success of Turkey's economic changes and ways to privatize a country's water system to lower average citizens' costs.

But the fact that the end of Wolfensohn's term is nearing was rarely mentioned. Most of the speakers turned their attention to the fund's new managing director, Rodrigo de Rato, a former Spanish finance minister who made an impressive debut with his straight talk. Possibly because he is the first politician to lead the organization, de Rato stood out at his news conference for his use of the declarative sentence. When asked about a contentious plan to revalue gold and help the poor, he simply said yes, of course it could be done; it had been done before.

He also did not hesitate to take the big rich countries to task as well as the poorer ones.

Above all, he had a noticeable ability to see the bright side of financial life.

He seemed to be following the adage that you catch more flies with honey than with vinegar. China was doing so well that it could change its currency rate. Growth in the US was good enough for it to begin the essential reduction of its deficit. The good news this year included developments in Japan, which now must speed up its banking changes.

"You must take into account that he was head of his party in opposition for almost 20 years," said Ernesto Ekaizer, assistant managing editor of El Pais in Madrid, who was in Washington to cover the meeting. "He is very, very relaxed in almost any situation."

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