James Wolfensohn: World Bank millionaire who wants to save the poor

James Wolfensohn is a mass of contradictions. A millionaire bon viveur who sees himself as the champion of the poor; an Australian who took US citizenship so allowing him to take the top job at the World Bank; a former investment banker who criticises rich countries; and a man paid $276,990 who worries about those living on less than a dollar a day.

James Wolfensohn is a mass of contradictions. A millionaire bon viveur who sees himself as the champion of the poor; an Australian who took US citizenship so allowing him to take the top job at the World Bank; a former investment banker who criticises rich countries; and a man paid $276,990 who worries about those living on less than a dollar a day.

Despite hitting 70 in December, Mr Wolfensohn, the president of the World Bank, operates at a gruelling pace - perhaps unsurprising for someone who spent 14 years running his own Wall Street investment firm.

Last week he spent several days in meetings in Europe before flying back overnight to Washington with just minutes to spare before holding a keynote press conference at the bank's spring meetings.

He appears to live and breathe the sometimes fetid atmosphere of development politics - controversial issues such as official aid, debt and poverty relief and major investment projects in some of the world's most troubled nations that always attract controversy.

The bank, which was formed at the end of the Second World War, is owned by its 184 country shareholders, of whom about 100 benefit from the $19.6bn it hands out each year in assistance and loans.

There is little sign he will lay down the reins soon. His second five-year term runs out in May next year and he refuses to rule out seeking a third term.

"I am going to take a look in December," he said. "I'm not under pressure from the US administration [which selects the president]. There's a large amount of speculation around people such as [US Secretary of State] Colin Powell but I don't want to look like a lame duck."

If he did seek - and win - a third term, that would take him to 75 by the time he finally retired, a mere stripling compared with the US Federal Reserve chairman Alan Greenspan, who will be 80 at the end of his term.

At such a point in their career, most people start to ponder the legacy they will leave and grow concerned about how they be remembered. Asked to write his own testimony, Mr Wolfensohn passes up the chance to boast of a fall in the number of people in poverty and illiteracy, and advances in public health to focus on the less headline-grabbing side to his career.

He also glosses over his reputation for outspoken criticism of rich countries for failing to come up with the cash - and particularly his willingness to bite the American hand that feeds him.

"I would like to be thought to have helped the bank get closer to our clients and made it more effective at what we are trying to do," he says. "I would like to be respected for having committed the bank to convince others that this can be done along with the businesses and in partnership with the leadership of the countries involved."

He does take the credit for getting the bank to forgive two-thirds of the debt of 27 of the most highly indebted poorer countries (HIPC), an initiative he launched in 1996 - just a year after taking over the at the bank.

Less surprisingly, he brushes over the tsunami of criticism aimed at him over the past nine years, focusing particularly on the bank's financial support for major investment projects. Pressure groups lambast the bank for funding projects such as a Chinese dam in Tibet that led to the relocation of several thousand farmers, a similar project in Uganda that was accused of creating environmental havoc and most recently a pipeline across central Asia that objectors say is stoking civil unrest.

Mr Wolfensohn is aware of the criticism - how could he not be when tens of thousands of hostile protesters camp routinely outside his Washington HQ during their biannual meetings?

He said he has improved decision-making by shifting 2,500 staff out into the field and placing most of its country directors on the ground rather than in its glistening offices.

He singles out the Chad-Cameroon pipeline connecting oil resources in landlocked Chad with access to ports which could pump up to £2bn into the low-income sub-Saharan country.

The bank has been accused of facilitating projects whose revenues have been siphoned off by governments rather than going to people in the producing regions. This time it has set up an account in London to gather the proceeds and has arranged for community groups and trade unions to oversee the spending.

"There is no better discussion on this than Chad-Cameroon where I get beaten up all the time but if we pull it off it will be unique," he says. "People will say you were foolish to go into it but if we had not, that project would have been financed elsewhere by people who certainly wouldn't have done this."

This brings us to the nexus of issues surrounding corruption. It is said that when Mr Wolfensohn took over in 1995 he was told not to refer to the issue. His response was to devote his first speech to the cancer of corruption.

He does not mince his words. "We have made a full frontal attack on corruption. The question is whether we can address the question of governance in developing countries and particularly corruption," he says.

"In developing countries everyone knows who the crooks are and it would take just 48 hours to round them up. It is easy to bitch at the rich countries but if you deal with developing countries you know that a lot of them have more to do [on corruption]. It is far from unusual."

However, he backs the idea mooted by George Soros, the billionaire philanthropist, that Western companies should be forced to disclose all payments they make when doing deals with developing countries.

But he is quite happy to dish out some tough language to the world's major governments, accusing them of spending $900bn on defence, $300bn on subsidies for their farmers and just $50bn to $60bn on aid, of which just half is in cash rather than loans. "That is the fundamental imbalance that one needs to deal with, and it is just so clear," he says.

He recognises that the rich countries have quite a lot on their plates at the moment in the wake of a global downturn and the war on terrorism but is clearly upset they have not come up with more money. "Everybody is concerned with growth and jobs and there is a desire in these countries to move forward but they are involved in Iraq, Afghanistan and they have budget deficits that are not small," he says.

Currently none of the Group of Eight (G8) nations hits a target to spend 0.7 per cent of national economic output on overseas aid. The US does not recognise the target, while the UK is committed to hit 0.4 per cent by 2006 but declines to comment on whether there is more cash in the pipeline.

The bank believes that scale of increase in spending is the minimum needed to meet the millennium development goals (MDGs), which aim to cut poverty and increase standards of health and education across the world. On current trends many of them will be missed. "If you are going for the MDGs you can't wait for 10 years and although it does not have the element of urgency or crisis of Iraq or Afghanistan or Gaza, we can easily find a crisis in terms of poverty," he says.

Mr Wolfensohn reserves singular praise for Gordon Brown, who is trying to persuade his finance minister colleagues to adopt his idea of an international finance facility. The IFF, which the Chancellor is proposing together with the French, would double spending from $50bn to $100bn by encouraging private banks to lend against the promise of future government aid payments.

"Gordon is right to say we need money now and he has been extraordinarily articulate," Mr Wolfensohn says. "Gordon is unrelenting."

He now has his sights on the bank's annual meetings in September - perhaps the last of these headline events he will chair - when he hopes to get decisions on many of these issues. With Britain holding the presidency of the G8 and the European Union in the second half of this year, Mr Wolfensohn could benefit from a tailwind towards those meetings.

He concedes there were few concrete decisions to emerge from the five-day long meetings that closed at the beginning of this week, but said he believed there had been progress on debt relief for HIPC countries and the "fast track" fund for education.

"I agree there was no action but to say that it was a non-meeting is just not right. But the real task will be in September [to see] whether we can address the question of debt and the question of corruption," he says.

But now he is already late for a World Bank management committee and rushes off at the end of our interview to continue his whirligig round of meetings and committees.