Obama Considering Larry Summers To Head World Bank
Jan 18, 2012
President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter.
Summers has expressed his interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and the current NEC Director, Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations.
Lael Brainard, the under secretary of Treasury for international affairs, is compiling a list of potential candidates to replace Zoellick, who was nominated to a five-year term that began in July of 2007 by then-President George W. Bush. By tradition, the U.S. president chooses the leader of the World Bank while the head of the International Monetary Fund is selected by European leaders. The nomination is subject to approval by the World Bank’s executive board.
White House press secretary Jay Carney declined to comment. Summers’ assistant, Julie Shample, said he was unavailable. Philippe Reines, a spokesman for Clinton, did not respond to a request for comment.
Scrutiny of Record
A nomination of Summers would bring scrutiny of his previous stints in government, both as former President Bill Clinton’s Treasury Secretary and Obama’s NEC director, as well as his tenure as the president of Harvard University.
“Larry is controversial,” said Erskine Bowles, who served as Clinton’s chief of staff. “Anything you appoint Larry to, you know there are going to be some people who are going to take shots at him. But you know he’s a brilliant economist, which I think everybody recognizes.”
Bowles said he had no information on the White House deliberations.
“He performed well in some difficult markets,” Bowles said. “I think it’s been a passion of his for a long, long time and I am confident that he will do a good job.”
Summers also may come under fire for some of his previous work at the bank, as well as the commercial relationships he has forged since leaving the White House in December of 2010.
In 1991, at the World Bank, he signed off on a memo that argued that less-developed countries might benefit from accepting pollution from first world countries.
Return to Harvard
After leaving the Obama administration at the end of 2010, Summers, 57, returned to Harvard University, where he once served as president and is now a professor at the John F. Kennedy School of Government.
Summers earned his doctorate in economics at Harvard in Cambridge, Massachusetts, and at 28 was granted tenure, the youngest age anyone had gained tenure at the time. He spent time on the staff of the White House Council of Economic Advisers in the 1980s before joining the World Bank as chief economist.
He was Clinton’s Treasury secretary from 1999 to 2001, after which he became president of Harvard. Summers quit that post in 2006 after a series of battles with the Faculty of Arts and Sciences, which teaches most of the undergraduate courses, and following a controversy over comments he made at a conference, in which he suggested women lacked an aptitude for science.
Period of Upheaval
Jared Bernstein, former chief economist for Vice President Joe Biden, said Summers would be a good choice for the World Bank.
“Larry has a deep understanding of global economics and is particularly tuned in to this moment in time, with all the upheaval in the system,” Bernstein said.
Under a long-standing unwritten agreement, the IMF has always been led by a European while the World Bank has been headed by an American. The U.S. in June backed then-French Finance Minister Christine Lagarde to take the head of the IMF.
Emerging market leaders such as Brazilian Finance Minister Guido Mantega have questioned the division of leadership posts at the two institutions, saying the choice should be made on the basis of merit, not nationality.
The World Bank, which was established to rebuild Europe after World War II, offers financial and technical assistance to countries. Under Zoellick, shareholders approved a capital increase providing the institution with $5.1 billion in cash and enhancing China’s clout at the lender. http://www.bloomberg.com/news/2012-01-18/summers-under-consideration-to-lead-world-bank-when-zoellick-s-term-ends.html