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Zoellick May Prove Wolfowitz Antidote at World Bank (Update5)

By Rich Miller and Matthew Benjamin

May 30 (Bloomberg) -- Robert Zoellick, tapped by President George W. Bush to take over as president of the World Bank, may prove to be the antidote to his ousted predecessor, Paul Wolfowitz.

Officials who've worked with Zoellick describe him as non- ideological and a consensus-builder who's willing to adapt his stance in order to cut a deal.

``Zoellick is a man who gets things done,'' said former Secretary of State James Baker, who brought him into the Reagan administration in 1985. ``He will be able to rebuild and repair relationships to the extent that they have been frayed by the last two years.''

Bush today nominated Zoellick, 53, to run the world's largest development agency. Zoellick served as Bush's trade representative and deputy secretary of state before leaving last year for Goldman Sachs Group Inc.

He will take over an organization bruised by conflicts over the bank's role in Iraq and a campaign against corruption in developing nations. Before joining the bank, Wolfowitz was a leading advocate of the 2003 U.S. invasion of Iraq when he was deputy defense secretary.

Bush, announcing Zoellick's nomination at the White House today, called him a ``committed internationalist.''

Zoellick, speaking later to reporters, said he will consult member countries about ``the role of the bank.'' He said he had spoken to former presidents James Wolfensohn and Robert McNamara.

``One of the biggest challenges, if not the biggest challenge, will be the leadership and management issues that the bank faces today,'' he said. ``This institution has been through a traumatic period.''

Fund Raising

Among Zoellick's first tasks will be to reinvigorate an effort to raise as much as $28 billion that World Bank officials say is needed to help the poorest countries in the coming three years. He'll also need to raise morale among the bank's 13,000 employees, many of whom cheered Wolfowitz's resignation.

Raised in Naperville, Illinois, Zoellick graduated from Swarthmore College in Pennsylvania in 1975 and received a master's degree from Harvard University's Kennedy School of Government six years later. He is married and lives in Virginia.

Zoellick, who declined to comment, has a reputation as a tough and sometimes impatient boss. ``He is very demanding of the people that work for him,'' said Charlene Barshefsky, who served as trade representative during the Clinton administration and is now a senior partner at Wilmer Cutler Pickering, a Washington law firm.

Shouting Match

He can be a hard-nosed negotiator as well. In 2005, he got into a public row with European Union Trade Commissioner Peter Mandelson over subsidies, with each accusing the other of slamming the phone down during one conversation. When he visited Sudan's Darfur region in November of the same year, he got into a chest-to-chest shouting match with a local official who tried to interrupt his tour of an abandoned village. The local backed down.

``He's tough as nails,'' said Kenneth Rogoff, former chief economist at the International Monetary Fund and a professor of economics at Harvard University.

People who know Zoellick say his confidence stems from meticulous preparation for every negotiation and his ability to think tactically to get things done.

``I wouldn't say he is Mr. Smooth when it comes to personal relations, but I have always found him to be one of the few people who is a strategic thinker about trade and foreign policy issues,'' said William Reinsch, president of the National Foreign Trade Council in Washington.

Preparation

Zoellick went into meetings aiming to be more prepared than the others there, former aides say. In briefings with journalists, he didn't use notes prepared by his staff; he brought his own, usually a yellow notepad, lined with his handwritten script.

While in the Bush administration, he often put in 13-hour- plus days in the office. He's also a long-distance runner whose security detail rode motorcycles to keep up with him during one of his trips to China.

Pascal Lamy, head of the World Trade Organization, described Zoellick as ``tout terrain,'' the French term for an all-terrain vehicle.

As trade representative in Bush's first term, Zoellick was left to run policy mostly on his own while the president was consumed with Iraq and Afghanistan.

During that time, he pursued a strategy of what he termed ``competitive liberalization'' -- striking bilateral deals with countries such as Chile and Australia in an effort to pressure other nations to agree to a global pact.

``Bob believes deeply in the mission of the World Bank, and has the trust, respect and support of governments in all regions of the world,'' Treasury Secretary Henry Paulson, who led the search, said in a statement today.

Reaching Out

Stuart Eizenstat, a former deputy Treasury secretary, said that Zoellick reached out to the Europeans after he took over as deputy secretary of state in 2005, seeking to repair ties that had been frayed by the Iraq war. He also won kudos from Germany, a main opponent of Wolfowitz, for his efforts to help reunify the country as a State Department official under Baker.

After Bill Clinton defeated President George H.W. Bush in 1992, Zoellick left the government and became an executive vice president at Fannie Mae, the largest source of money for U.S. home loans.

Zoellick has experience dealing with Africa, which Wolfowitz identified as the World Bank's number one challenge. As deputy secretary of state, he visited Sudan a number of times and played a lead role in trying to bring peace to the country.

China Policy

Prior to his move to Goldman Sachs, and before former Goldman chief executive officer Paulson became Treasury secretary, Zoellick was the Bush administration's point man on dealings with China.

``He knows the perceived failures of Wolfowitz,'' said Claude Barfield, a scholar at the American Enterprise Institute in Washington. ``I don't doubt he will adapt his leadership style to the problems he's going to face.''

To contact the reporters on this story: Rich Miller in Washington at rmiller28@bloomberg.net; Matt Benjamin in Washington at mbenjamin2@bloomberg.net

Last Updated: May 30, 2007 20:02 EDT

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