On Tuesday, January 4, James Wolfensohn sent a note to the dean of the World Bank Board saying that he would not seek a third five-year term as President of the World Bank Group, and suggesting they begin looking for a successor.

The news was less that Wolfensohn would not extend his time at the Bank beyond June than the fact that he was now publicly accepting the fact. He has never had warm relations with the Bush Administration – there were even rumors he might be pushed out mid-term – and with the U.S. government traditionally wielding the unilateral right to name the institution's president, it seemed highly unlikely that Wolfensohn’s offer, a few months before the U.S. presidential election, to stay on for a little while would be accepted.

Wolfensohn is now officially a "lame duck" -- a powerful official whose influence is compromised by his imminent departure. Whoever is chosen to succeed him is likely to exhibit a more hard-nosed, unapologetically market-oriented approach. As flawed as Wolfensohn was, he is likely the most friendly World Bank President to civil society we have seen, or are likely to see in the immediate future.

The U.S. President by custom selects the President of the World Bank. The Financial Times suggests that there is a chance, however small, that the U.S. would consider candidates from other countries. That seems exceedingly unlikely. Such speculation is probably not a result of anything said by the U.S. government, but of the controversy kicked up by the last two rather messy succession processes at the IMF. The Western European countries, also by “ unwritten rule,” choose the IMF’s Managing Director. In both 2000, when Michel Camdessus retired from the IMF post, and in 2004, when Horst Köhler resigned suddenly to accept the presidency of Germany, developing countries and others (including Japan in 2000) protested at their exclusion from consideration. In 2001, a joint IMF-WB board committee came up with a set of recommendations that called for nominations from any member country, interviews, etc. The board expressed its “appreciation” for the recommendations but never actually accepted them.

In 2004 the IMF went to the curious length of interviewing a candidate proposed by the Egyptian government – a man with both Egyptian and French citizenship – after the selection of Rodrigo Rato, a Spaniard, was final. It’s a measure of the calcification of democracy in the institutions that even this blatant “window-dressing” was considered an important new precedent.

The U.S. government took a studiously neutral position during the squabbles over IMF leadership – widely interpreted as a desire not to appear anti-democratic while still retaining its prerogative when it comes to the World Bank. It is conceivable that the U.S. might go through the motions of announcing candidates from other countries, but almost certain that they will discover that the best candidate happens to be a U.S. citizen.

During the presidential campaign, Secretary of State Colin Powell was rumored to be Bush's choice for World Bank President. Since announcing his resignation, Powell has been unequivocal about his lack of interest in the job.

The most frequently mentioned candidate in recent weeks was Robert Zoellick, the U.S. Trade Representative, who manages U.S. actions at the WTO and in negotiations over bilateral and regional trade treaties like the Free Trade Area of the Americas (FTAA). Zoellick has been a convenient villain for global justice activists in his current position, and likely would offer a ripe target at the Bank too. Civil society groups have drafted a letter to World Bank board directors suggesting that they take the unprecedented step of opposing, or at least questioning, the U.S.’s choice if it is Zoellick. They point out that he has no background whatsoever in development -- apart from seeking to undermine it through exploitative trade deals -- and has a reputation as a fierce advocate of U.S. business interests, even at the expense of the livelihoods of millions in impoverished countries.

Just as we went to press, the Wall Street Journal reported that Zoellick would not take the job at the Bank, but would instead serve as Deputy Secretary of State once Condeleeza Rice is confirmed as Secretary.

Randall Tobias, the former pharmaceutical CEO who heads the Bush Administration's AIDS efforts (designed to compete with the UN's Global Fund), was recently mentioned by the New York Times as a candidate for the Bank job. Christine Todd Whitman, the former Governor of New Jersey and Bush's first director of the Environmental Protection [sic] Agency (EPA) is occasionally mentioned, but does not seem a very likely candidate. She did, however, earn consideration, by spending several years wrecking the country's environmental protection infrastructure on behalf of Bush while still managing, like Powell, to get regular reports out that she didn't agree with the policies she was implementing. Ann Krueger, a former Vice President at the Bank and currently the number-two official at the IMF, is also mentioned, though it seems unlikely that the U.S. (which is guaranteed that number-two slot) would want to break in top officials at both institutions at the same time.

John Taylor, Undersecretary of the Treasury for International Affairs, was mentioned by the Financial Times. He is the U.S. government's day-to-day point-person on IFI issues, and would probably be the most interesting choice. He has taken an outspoken position in support of 100% multilateral debt cancellation using the institutions' own funds as "financing." He has also been mentioned as a possible successor to Alan Greenspan as Chair of the Federal Reserve.

The Administration has let it be known that they may announce a decision in January; if not, it's almost certain that the candidate will be known in time for the April meetings of the World Bank and IMF. If you want to keep track of the latest rumors before the announcement is made, visit a website dedicated to the race at www.worldbankpresident.org.