Wolfowitz exit seen clearing way for W.Bank progress

SINGAPORE, May 18 (Reuters) Paul Wolfowitz's exit as World Bank president clears the way for the global aid body to move ahead, many said after he announced his decision, though not everyone was pleased to see him go.

The general reaction was that a protracted battle over his stewardship, prompted by his involvement in a high-paying promotion for his companion, had undercut any chance he had to be an effective leader.

''The poorest people in the world ... deserve the very best we can deliver,'' Wolfowitz himself said in a statement. ''Now it is necessary to find a way to move forward.'' His resignation takes effect on June 30.

''Wolfowitz's actions have impeded the ability of the World Bank to carry out its critical mission of alleviating global poverty,'' said Senator Christopher Dodd, a Democratic presidential hopeful from the state of Connecticut.

''His resignation will help to restore the integrity and credibility of the World Bank, both of which are central to the bank carrying out its mission.'' Wolfowitz took the top post in the bank - responsible for billions of dollars in aid projects around the world - in 2005.

A former US deputy defense secretary already controversial as a leading architect of the 2003 US-led invasion of Iraq, he won praise from some in Africa and Asia for his bank policies, which included a strong campaign against corruption in aid programs and in the governments of recipients.

JAPANESE SUPPORT ''I think he's doing a good job. We evaluate his work highly,'' Japanese Finance Minister Koji Omi had said shortly before Wolfowitz announced his departure.

Japan is the second-largest shareholder and supplier of capital to the World Bank after the United States.

Wolfowitz was highly regarded as well by many in Indonesia, a major recipient of bank aid where he once served as ambassador.

''...it is such a shame for a man like him to resign. He was well known for his vigorous anti-corruption campaign and poverty eradication,'' Fauzi Ichsan, Indonesia economist for Standard Chartered Bank, told Reuters today.

But for others, Wolfowitz's involvement in the promotion of his companion, Shaha Riza, a Middle East expert at the bank, an involvement a bank panel found broke several rules, had wiped out any credibility he might have had as an anti-corruption champion.

''I just returned yesterday from a mission in West Africa where I was beginning to feel most acutely the impact of the crisis... in terms of the legitimacy we have in advocating good governance,'' said Daniel Owen of the World Bank's social development department.

''We've got a job to do now in rebuilding our credibility on those issues, and it's going to be easier now that Wolfowitz is gone,'' he added.

Policy expert Nancy Birdsall, president of the Center for Global Development, said, ''This whole mess illustrates the need for change in how the nations of the world oversee the bank.'' ''To succeed in leading any change, the next World Bank president will sorely need the legitimacy and broad support that only a widely accepted, merit-based selection process can provide.'' Some outside critics said the resignation was a chance to end the tradition of the Bank's president being an American, and make the selection process more open and transparent.

But key player Japan said the process was a matter for the Bank.

''I think the World Bank will make its own decision on personnel issues such as the nationality of its president,'' Chief Cabinet Secretary Yasuhisa Shiozaki told a news conference.

Reuters RN GC1403