The battle for the World Bank presidency has been won and lost, but the issues the contest threw up may linger for a long time
It did not come as a surprise to Africans and citizens of other emerging countries, not the least Ngozi Okonjo-Iweala, a contender for the presidency of the World Bank, when Jim Yong Kim, a Korean-American nominated by the United States, US, carried the day. This deeply flawed selection process has been widely criticised especially by Africa and other emerging economies. The election of Kim over a more qualified Okonjo-Iweala, Nigeria’s finance minister and coordinating minister of the economy, who has worked at the World Bank for over two decades, has brought to the fore the hypocrisy of the US when it comes to issues of national interests. The World Bank also does not appear to be ready for any form of reforms. The institution lectures borrowers on the virtues of competitive bidding, merit selection and transparent procedures, but when it comes to electing its president and other international agencies, these principles are jettisoned.
For Nigerians, the refusal of Okonjo-Iweala to bow out of the race has sent the message that it can no longer be business as usual for those who have dominated the affairs of the bank for ages. Ken Ukaoha, a barrister and national president, National Association of Nigerian Traders, is of the view that Nigerians and indeed citizens of developing countries should learn a very big lesson from the events that threw up Kim as World Bank president – that America under President Barack Obama and any other US president would sacrifice merit if the issue at stake is not in favour of US interests. He said developing countries should begin to fashion out implementable development agenda that would take them out of the shackles of poverty to make them relevant in the comity of nations.
Despite the endorsement of Okonjo-Iweala by President Goodluck Jonathan and other leading African countries, it was largely believed that Nigeria needed her expertise more than the World Bank. This is based on the fact that the countries that have been able to grow out of poverty circle to compete favourably with the developed economies have achieved this feat using the skills and expertise of their committed citizens. China and Brazil have often been cited as examples. These countries belong to the emerging economies referred to as BRICS, that is, Brazil, Russia, India, China, and South Africa. With its abundant natural and human resources, Nigeria could rightly belong to the group and make it BRINCS. It is, therefore, assumed that the country may not need to have its top experts to be at the World Bank or any other global institution to achieve this but the total commitment of its citizens to bring the country out of the woods.
Even though congratulatory messages have been pouring in for the new president of the World Bank from world leaders including President Jonathan, criticisms against the process has refused to go. Critics are of the view that though the process like in the past was flawed, the fact that the position was fiercely contested is an indication of positive developments in the future. For the first time in the history of the bank, the US faced a tough challenge over the bank’s leadership. Even though the most powerful country in the world has had its way, it would continue to bear the moral burden of wielding its might inappropriately. What the world expects of US, therefore, is to champion the cause of the reforms in the World Bank and other global institutions. There are views that the choice of Kim, a physician and anthropologist who is the president of Dartmouth College, New Hampshire, by US smacks of arrogance as he does not have the economic or banking qualification that could be at par with those of past leaders of the bank.
Indeed, the feeling across the world is that the last election did not favour the best candidate. The election of Kim by the bank’s board was made possible by the US and its allies that include Western Europe, Japan, Canada, India, and China. Okonjo-Iweala who was the candidate backed by Africa and the emerging economies is widely recognised as the best candidate for the job. Unfortunately, she lost to America’s imperial might. Okonjo-Iweala, a Harvard educated economist who also holds a PhD in Regional Economics from the Massachusetts Institute of Technology, MIT, in the US, is said to be more qualified for the position having worked at the World Bank for more than two decades, served as Nigeria’s finance minister two times as well as the minister for foreign affairs.
Kim, a global health expert, is said to be the least qualified candidate to head the World Bank, an international agency that raises money from its member nations and borrows from investors to provide low-cost loans to developing countries. The 52-year-old Kim has had wide experience working to improve health in many poor countries across the world. The public health expert is recognised for his work on HIV/AIDS and drug-resistant tuberculosis in developing countries with the World Health Organisation, WHO, and as the founder of Partners in Health, an advocacy and research organisation. Despite his lack of financial expertise, Kim is credited for promoting data-driven approaches and rigorous evaluations that identify the best approaches to development and building accountability into implementation of development programmes. Since 2009, he has been the president of Dartmouth College, where he is said to have demonstrated managerial resolve in taking on the $100 million operating deficit that he inherited and turning the situation around.
However, there are counter-arguments that his credentials as a global health expert would place him in a position to give effective direction to the global institution. At a time when most countries, both in developed and developing countries, are faced with development challenges, Kim’s supporters argue that his experience in tackling health issues and mobilising affordable treatments for the poor is more relevant than a deep understanding of capital markets. Eswar Prasad, an economist and a former top official at the International Monetary Fund, IMF, told an online publication that Kim’s medical background would give him the vital experience in solving the problems facing developing nations. Kim is the first World Bank president who has his roots in a developing economy but he grew up in the US. His family relocated to the US from an impoverished and war-torn South Korea in the early 1960s. This background, to those in favour of his appointment, would place him in a vantage position to work towards making positive impact in poor countries around the world. Adebayo Thomas, an international trade expert, though faulted the continued dominance of the US in the selection process of the World Bank president, submits that Kim is a development expert who could provide able leadership to make the bank more relevant to the needs of developing countries.
The elected president has not betrayed any notion of being intimidated by the position. “What I bring to the bank, which is a very special bank, is this unshakable optimism that countries can go down the same path I saw Korea go down,” he said, adding that his priority when he assumes duty in July would be job creation as the World Bank faces pressure to shift from making loans to supporting broader economic concerns. In the words of Kim, “I think that there is a very strong sense that job creation, especially for youths, is an extremely importance issue. We’ve heard more than once mention of the Arab Spring and the importance of economic growth that is inclusive and create jobs. This is the very first priority and, of course, on arriving July 1, it will certainly be my top priority.” He assured that he would work hard to ensure the bank “delivers more powerful results to support sustained growth, prioritises evidence-based solutions over ideology, amplifies the voices of developing countries and draws on the expertise and experience of the people we serve.”
Though Kim appears ready to hit the ground running, the controversy generated by his election following the first ever contested race for the World Bank presidency may, in the years ahead, continue to influence the way the institution is run. Unless the US takes the lead to bring about reforms in the governance of the institution by embracing a competitive election process where merit is respected above everything else, the World Bank may begin to slide into irrelevance. The bank’s operational model has often come under criticism for its failure to eradicate poverty, which is the bank’s core objective.
Thus the US and its allies have a duty to put in place an enabling environment which would create the stage Kim requires to revitalise the institution that for ages has been resistant to change to make it more relevant especially to the needs of the developing economies. Already there have been calls on the emerging economies to put up financial structures to give the world institution a run for its money. For some years, Chinese banks have been playing significant roles in financing development, especially in developing countries around the world. In 2009 and 2010, China surpassed the World Bank in loans granted to developing countries. The country, which is the second largest economy, granted about $110 billion against World Bank’s $100.3 billion during the period.
Supporters of the US have often argued that being the major financier of the World Bank, the US has the right to determine the leadership of the institution. But this line of argument has been punctured over the years. Critics contend that there is a need for competitive selection process to ensure the emergence of the best candidate to drive the vision of the bank. James Wolfensohn who presided over the affairs of the bank between 1995 and 2005 attempted to introduce reforms, in line with changing needs, to the operations of the bank. Robert Zoellick, the outgoing president, made the bank’s databases available for outside researchers and also created trust funds to tackle transnational problems like rising global food prices. But progress on reforms has been slow. Kim would have to demonstrate a commitment to reforms to reposition the global bank for more effectiveness.
The model of many regional development banks in which leaders emerge through the votes of the member countries rather than those of the largest shareholders, has been advocated for the World Bank in subsequent elections. This will ensure that all member countries have a say on the leadership of the institution. Okonjo-Iweala’s bid for the top position is a pointer to this fact, which is why Jonathan said she represented the voice of the developing countries in the campaign for reforms in the World Bank. The contest for the top job is a lesson for US that reforms are inevitable for the bank to make the necessary impact.