World Bank president James Wolfensohn is a man of charm, talent and managerial skill. When he speaks in public, he conveys an impression of sincerity and commitment. He has convinced many people that the World Bank under his leadership will finally tackle poverty and environmental degradation and work for a better world.
The test of his sincerity lies in the actual performance of the Bank. Since he has now been at the helm for quite some time, there is a substantial record to examine. In fact, the Bank continues to lend large sums for oil exploration, road building, big dams and the like. So it remains environmentally unfriendly and it is hard not to conclude that its President's environmental commitment is largely rhetorical. The Bank also has recently promoted harsh "structural adjustment programs," pension privatization measures and other attacks on the poor. By all measures, income inequality worldwide continues to widen. So it would appear that Mr. Wolfensohn's "commitment" to reduce poverty is not very deep either.
In March 1997, The Nation magazine published an article that reported that the Bank's lavish remodeling -- at a cost of $314 million -- includes gold leaf ceilings and rare woods of the sort that are to be found only in the most elegant business offices. Though this work began before Wolfensohn took over the helm of the Bank, he does not appear to have introduced more modest plans in the meantime, even while wringing millions in interest charges from the world's poorest countries.
To understand Wolfensohn, it helps to know something about him besides his engaging smile, his shock of unruly white hair, and his carefully-cultivated image as a committed social reformer. In fact, he is better understood as one of the world's richest men and sharpest financial operatives. About his personal fortune, the New York Times of September 14, 1997 said: "He enjoys the trapping of great wealth, like a private jet and a lavish vacation home in Jackson Hole, Wyoming."
Wolfensohn was born in Sydney, Australia. In 1959, he took at Master in Business Administration degree from Harvard Business School. He then he rose very rapidly in the financial world and developed a reputation as smart and ruthless. He held high posts in brokerage and investment firms in Australia from 1959 to 1967, when he moved to London as a top officer of the Henry Schroder investment banking group. Concern for the poor does not seem to have been on his list in those years.
In 1970 he became head of Schroder's operation in New York, a post he held through 1976. He then became an executive partner in Salomon Brothers, the hard-charging bond and investment house. At Salomon he played a key role in the bailout of the Chrysler Corporation by the United States government. His Chrysler play brought him into the world of official policy in Washington, where he caught the eye of World Bank President Robert McNamara. Rumored to be on the short list as McNamara's successor, Wolfensohn speedily arranged to become a U.S. citizen so as best to qualify for the post. When the Bank passed him up, he left Salomon in 1981 to set up his own firm -- James D. Wolfensohn Inc. The new firm was a key player in the hot mergers and acquisitions game on Wall Street during the 1980's (the firm has since been bought by Banker's Trust). Wolfensohn built up his own portfolio along the way and by the end of the decade, he was a millionaire many times over and a close compatriot of the Rockefeller clan.
To his credit, Wolfensohn is more than just a money shark. He plays the violin and is a cultured person who appreciates the arts. He has served on the board of directors of a number of public charities, like the Kennedy Center for the Performing Arts and the Rockefeller Foundation. He has also sat on the board of a number of private corporations, like communications giant CBS. And he belongs to the ultimate insider institutions like the Bilderberg and the Council on Foreign Relations.
Let us not judge Wolfensohn unfairly, but let us not close our eyes to who he is and how his career and his millions have shaped him. If he is a Wolf in sheep's clothing, would that really be so surprising, for a President of the World Bank?
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