Paul Wolfowitz

Paul Wolfowitz

WASHINGTON - President George W. Bush has nominated his Administration's leading neo-conservative hawk, Deputy Defence Secretary Paul Wolfowitz, to be the new head of the World Bank, a choice likely to exacerbate tensions between the United States and its key international allies because of Wolfowitz's central role in planning and executing the war in Iraq.

It was the second time in just over a week that Bush offered a hardliner to take up a sensitive international post, after his nomination of the hotly anti-United Nations State Department official John Bolton, to be US Ambassador to the UN.

Sources close to the World Bank board said Wolfowitz's name was informally circulated several weeks ago among the 23-member board, which represents the bank's 184 member countries, and the reaction was made clear to Treasury Secretary John Snow. "Mr Snow knows that the reaction from the board was unfavourable," one source said. "Mr Wolfowitz's nomination today tells us the US couldn't care less what the rest of the world thinks."

"The enthusiasm in old Europe is not exactly overwhelming," German Development Minister Heidemarie Wieczorek-Zeul said.

The World Bank presidency was the subject of furious speculation in recent weeks, as Wolfowitz's name was circulated alongside those of Carly Fiorina, the recently departed chief executive of Hewlett-Packard, and Bono, the lead singer of U2 who is an advocate for the poor and dispossessed.

Joseph Stiglitz, a former chief economist at the World Bank, now at Columbia University, suggested that there were a number of obviously outstanding candidates for the job, but that Wolfowitz was not one of them.

By tradition Washington selects the World Bank president while Europeans nominate the head of its sister organisation, the International Monetary Fund. The US is the bank's largest shareholder followed by Japan, Germany, Britain and France.

Wolfowitz, a life-long academic and diplomat with no direct experience of the financial world, is an incendiary figure in international circles because he has consistently pushed for an end to the US doctrine of containment in international affairs and argued that the US has the right to take pre-emptive action wherever it sees fit and extend what he has called a "benevolent hegemony" over the rest of the world.

The invasion of Iraq, which he had championed since the early 1990s, was the moment when his vision became reality and his view of international affairs became official White House policy.

Wolfowitz's views on questions of development and Third World lending - the bread and butter of the World Bank's activities - are not known, but he is much more likely to favour a return to the austerity of so-called "structural adjustment" programmes, advocated during the Reagan era, than he is to continue the softer approach taken by the incumbent, Australian James Wolfensohn.