KEY POINTS:
It was right that George W. Bush appointee Paul Wolfowitz resign as World Bank president, Finance Minister Michael Cullen said today.
"I think that's the right position," Dr Cullen said.
"We (the Government) had quietly taken the position without too much public fanfare that his position had become untenable."
Mr Wolfowitz, one of United States President Bush's closest advisers and a key architect of the US invasion of Iraq, quit under huge pressure following an inappropriate involvement the promotion and payrise of his Libyan girlfriend Shaha Ali Riza.
Tensions between the US and its European allies over Iraq were played out over Mr Wolfowitz continuing to hold the position.
Weakened by chaos in Iraq, low popularity and his lame-duck status, President Bush was unable to prevent Mr Wolfowitz's forced departure -- the first of a World Bank president -- after weeks of resistance and public acrimony over his promotion of his companion.
New Zealander Graeme Wheeler, one of two World Bank managing directors, was a central figure in the dispute after he publicly called on Mr Wolfowitz to resign because he had broken the bank's own rules.
Dr Cullen said Mr Wolfowitz had actually contributed a lot to the bank and was"somewhat surprisingly" widely respected in the aid community.
Dr Cullen said the Government had no say in whether Mr Wheeler would be appointed acting president, as some commentators in Washington have speculated.
New Zealand's constituency at the World Bank is headed by South Korea.
"They have been made aware of the New Zealand Government's position... -- the view that the position Mr Wolfowitz had got in was one that couldn't be sustained."
Dr Cullen said the Government would not lobby for Mr Wheeler to become president of the bank.
Some US officials and experts expressed alarm that the controversy could force the United States to give up its World Bank pre-eminence and long tradition of appointing the president. But Dr Cullen doubted that.
"In essence, the American Government chooses the president of the World Bank, it's as simple as that. It's been an American every time."
The United States, the bank's largest shareholder, has named the World Bank chief since it led the establishment of the post-World War 2 international finance system at the Bretton Woods conference in 1944. As a trade-off, Europe picks the International Monetary Fund leader.
European allies, who grudgingly acquiesced to Wolfowitz's appointment as president only two years ago, reversed course in recent weeks and stubbornly insisted he go, despite a vigorous White House defence.
The White House said President Bush had "reluctantly" accepted Wolfowitz's resignation.
- NZPA
