By Lesley Wroughton
WASHINGTON, April 2 (Reuters) - World Bank President Paul Wolfowitz is considering expanding bank operations in Iraq, which would put his agency at the center of rebuilding from a war he helped plan as the Pentagon's former No. 2 official.
Senior bank officials, who spoke on condition of anonymity because no final decision had been made, said key donor countries including Britain, Japan, Germany and Denmark are pressuring Wolfowitz to establish a Baghdad office.
The development agency has not had a Iraq office since an Aug. 19, 2003, bombing at U.N. headquarters in Iraq killed a bank employee. A consultant, with a staff of seven Iraqis, is paid by the World Bank looks after its affairs in Iraq.
No World Bank staff would be forced to accept an Iraq assignment, the officials said.
In recent weeks, Wolfowitz sent a fact-finding mission to Iraq, and he was now examining security matters and several reconstruction-related issues, officials said.
The possibility of a new World Bank office revives attention to Wolfowitz's role as an architect of the Iraq war. Many critics have accused the Bush administration and the Pentagon in particular of failing to plan for a post-invasion Iraq, as violence rages three years after Saddam Hussein's ouster.
Michael O'Hanlon, a reconstruction expert at Washington's Brookings Institute, said Wolfowitz's history with Iraq "complicates everything."
"He is a very smart man," O'Hanlon said, "but he is also obviously very controversial in his basic support of the Iraq invasion."
Wolfowitz's predecessor as World Bank president, Jim Wolfensohn, resisted pressure from U.S. lawmakers to return bank reconstruction experts to Iraq after the 2003 bombing.
Since the attack, the World Bank has operated from an office in neighboring Amman, Jordan. However, Iraqi officials have complained about the burden of traveling to Amman to consult with the World Bank. In December, Barham Salah, a Kurdish leader, wrote to Wolfowitz urging the bank's full engagement in rebuilding.
"Reconstruction is an important part of the World Bank's mission -- from Bosnia and Afghanistan to Liberia and Iraq," a senior World Bank official told Reuters. "The objectivity the World Bank brings is greatly valued by donors from around the world, as well as host governments."
U.N. representatives recently met Wolfowitz and urged the bank to help with Iraq's major problems of financial management and civil-service reform.
"There has been a need for the bank to be in Iraq," said James Dobbins, director of the International Security and Defense Policy Center at Rand Corp.. He said, however, the violence in Iraq could limit bank activities.
Other analysts note that the U.S. State Department is winding down its $20 billion Iraq reconstruction program, which focused on large electricity and water projects that have failed to deliver desired results.
O'Hanlon said the bank could offer a "fresh set of eyes," act as an independent broker and generate much-needed employment for Iraqis.
Experts estimate the cost of resuming an expatriate mission in Baghdad at around $1 million a year. "It's not too soon to go into Iraq, but the security issue is extremely serious," a bank official working on reconstruction projects noted.
Others note that if the World Bank expands its presence in Iraq, more international agencies and donor countries would be encouraged to follow.
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