In late May, when President Bush stood in the Roosevelt Room toannounce that Robert Zoellick would succeed Paul Wolfowitz as headof the World Bank, he appeared to have a slight scowl on his face.Bush was no doubt annoyed that Wolfowitz--whom he called "a man ofcharacter and integrity"--had been drummed out of the Bank afterengineering a pay raise for his girlfriend. But Bush may also havebeen scowling because he was introducing someone he wasn'tparticularly fond of. According to former administration officials,Zoellick has never been close to the president, who was known todislike his egghead lectures and his habit of correcting the bossduring meetings.
Of course, the fact that Zoellick isn't a Bush man is precisely thereason why so many observers are cheering his nomination. "Mr.Zoellick is just about everything Mr. Wolfowitz was not," gushedThe New York Times editorial page. "He is an able diplomat,experienced and interested in the details of development." And, atfirst glance, Zoellick does seem well-suited to avoid repeatingWolfowitz's experience at the Bank. "It's a good sign that he hasfinancial expertise," says Kenneth Rogoff, a former economist atthe International Monetary Fund. "The way the World Bank is now,you need to understand things like how loans are structured.Wolfowitz apparently had to have these things translated in termsof home mortgages." Crucially, Zoellick has support fromEurope--where German officials, who led the charge to oustWolfowitz, fondly remember his role in helping to brokerreunification during the first Bush administration. Moreover,despite a resume that includes Enron and Goldman Sachs, Zoellickseems less in thrall to corporate interests than other Republicans.He reportedly worked behind the scenes to persuade the first Bushadministration to sign the 1992 U.N. Framework Convention onClimate Change. And, as U.S. trade representative (ustr) in 2001,he sought to ensure that intellectual property agreements did nothamper access to generic HIV drugs in the developing world. "It wasvery clear that pharma was trying to yank him back, and he was seenas selling out their interests," says Jeff Bader, who worked underZoellick at the time.
As I spoke to Zoellick's peers and former colleagues, some went evenfurther in their praise. "If you ask people to name great Americanstrategic thinkers, they would offer names like Kissinger orBrzezinski," says Kurt Campbell of the Center for a New AmericanSecurity. "Well, Zoellick is one of the great strategic operatorsworking in the intersection of strategy and economics."Miraculously, Robert Zoellick seems to be just about the only personwhose reputation has survived close contact with George W. Bush.You might say he sounds too good to be true.
In fact, Zoellick's past suggests he could fall prey to some of thesame problems that doomed Wolfowitz. In 1999, after working atFannie Mae and teaching for a year at the U.S. Naval Academy,Zoellick took over the Center for Strategic and InternationalStudies (csis), vowing to revitalize what he saw as an organizationlosing its relevancy-- the same task he's taking on at the Bank. Bymost accounts, his attempt to shake things up was a disaster. "Fromday one, he was in attack mode," says a former staffer. At oneearly meeting, Zoellick asked for the name of a regional contact,and, when only a junior employee knew the answer, he glared at theexecutive staff and erupted, "What the hell is wrong with all ofyou?" He not only incurred the wrath of his employees but alsomanaged to alienate key donors. Hank Greenberg, then head ofAmerican International Group, was a major csis benefactor who pridedhimself on his knowledge of China. One story that made the roundshad Zoellick offending Greenberg by telling him that his views onChina were facile--not exactly a wise move.
Within four months, Zoellick had run afoul of the think tank'sboard, and he left to serve as a foreign policy adviser to GeorgeW. Bush's campaign. A protege of James Baker, he assisted hismentor during the Florida recount and then, after the election, wasrewarded with the post of U.S. trade representative. Bader says hisboss "mellowed" during his stint as ustr: "I think he'd learnedfrom some of his previous management experience the risks in howhis personality was perceived." But other former colleagues sayZoellick was still given to temper tantrums, and they recall thathe periodically humiliated employees in public. He was known tohold grudges and could be remarkably thin-skinned. In 2005, theFinancial Times reported on a testy exchange between Zoellick andEU Trade Commissioner Peter Mandelson over subsidies for Airbus.According to the paper, the exchange involved Zoellick saying "youdon't have to spin" and ultimately "slamming down the telephone."After the story appeared, Zoellick wrote a letter to the editor todispute that he had hung up first--and to insist that he had neverapologized to Mandelson, as the paper reported, "because I had noreason to do so." "I suggest in the future that the FT check itssources," he wrote snippily.
"Zoellick wasn't an organizations man," says a veteran of his tenureat csis. "He was good at saying, 'This is the way things shouldbe,' and he's a smart guy. What he didn't get were interofficedynamics, the way that people who are entrenched can dig theirheels in." Yet that is exactly the skill Zoellick will need as hetries to steer the World Bank; and, by all accounts, that isprecisely where Wolfowitz faltered.
But it isn't just Zoellick's personality that could create problems.There are questions about his politics, too. As ustr, he wasunquestionably a brilliant negotiator and managed to keepinternational economic issues alive in an administration that hadmostly lost interest after September 11. But not everyone isconvinced that his time there bodes well for the World Bank. "Ithink his [appointment] is a dagger drawn at the developingcountries," Jagdish Bhagwati, an economist at Columbia, told me.Bhagwati is hardly a man of the far left; he has written booksdefending free trade against anti-globalization activists. But hepoints out that Zoellick's tenure as ustr involved a much heavierfocus on bilateral deals with developing countries than on broadmultilateral trade agreements. The idea, Bhagwati says, was to allowthe United States to negotiate with poorer countries one-on-one inorder to force them to accept demands unrelated to trade. "He wasusing bilateral deals with Chile and Singapore to try to ramthrough restrictions on the use of capital controls," Bhagwatisays. "I can't think of a single developmental economist who wouldsay this is a good idea, and it suggests a cavalier interest indeveloping countries."
Moreover, Zoellick's Office of the ustr often put economicdevelopment at the service of the Bush administration's foreignpolicy. Before the invasion of Iraq, a trade official darkly hintedthat the administration would have a "long memory" when it came tothose who crossed it. That year, Zoellick scotched a trade dealwith New Zealand, which had opposed the war--while fast-tracking adeal with Australia, which had backed it. He also reacted angrilywhen Egypt balked at supporting a U.S. challenge to Europe's ban ongenetically modified foods, announcing that the country hadjeopardized its hopes of a free-trade agreement. During a speech inMay 2003, Zoellick said the United States would require"cooperation--or better--on foreign policy and security issues"from potential trading partners. While such a worldview may bedefensible from the U. S. trade representative, it could encounterheavy resistance at the World Bank. One of the main complaintsabout Wolfowitz's anti-corruption campaign was that he conducted itin a haphazard and selective manner: It wasn't always clear whyChad was targeted but not Lebanon, or Uzbekistan but not Tajikistan,and many suspected that Wolfowitz was simply carrying out aneoconservative foreign policy by other means. "I think he sees thebank as another instrument to achieve what I see as long-heldgoals," one former Bank official told The New Yorker. Given histrack record, Zoellick will have to prove quickly that he does notintend to take the same tack.
At the moment, of course, he is sending all the right signals. Asustr, Zoellick hired Chris Padilla, a former Kodak lobbyist, to dopublic outreach and put a more palatable face on the agency.Padilla, who now works in the Commerce Department, is quietlyreaching out to European representatives to assuage their concernsover Zoellick's appointment. Moreover, at the beginning of thismonth, Zoellick embarked on a two-week listening tour in Africa,Europe, and Latin America--a sign that he is serious aboutmollifying those countries still seething over Wolfowitz's tenure.Yet former colleagues at the Office of the ustr note that Zoellickdid something very similar in his first year there, making a showof extending an olive branch to labor and environmental groups onlyto disregard their concerns later. If that's what happens at theWorld Bank, President Bush won't be the only one scowling.