Saturday, April 14, 2012

World Bank Presidency - a question of politics or ability?

As the race for the World Bank Presidency hots up, it occurred to me to drop a couple of lines of my thoughts on the issue. Three candidates emerged for the post:

Jim Yong Kim (United States)

An anthropologist and physician, Dr. Kim emigrated to the U.S. from South Korea with his family when he was 5, settling in Iowa. Dr. Kim, 52, co-founded Partners in Health, a non-profit agency that works in poorer countries, and ran the World Health Organization’s HIV-AIDS program. One of his WHO initiatives successfully treated three million AIDS patients in 2005.

Ngozi Okonjo-Iweala (Nigeria)

A renowned performer on the international economic scene, Dr. Okonjo-Iweala, 57, studied at Harvard University and MIT. Currently Nigeria's minister of finance (a post she held previuosly) and coordinating minister of the economy, she worked many years as an economist at the World Bank, most recently as a managing director.

Jose Antonio Ocampo (Colombia)

A respected development expert, Mr Campo, 59, lectures at Columbia University in New York. He was previously Colombia’s finance minister. He also held senior positions at the United Nations.

Mr. Ocampo withdrew from the race yesterday, Friday 13 April 2012, having failed to win the support of his home government, which reportedly was concentrating its efforts on winning a different international post.

That leaves us with two finalists: the Nigerian, Okonjo-Iweala and the American, Kim.

The American nominee fails on two counts:

a) he's a health expert - whilst health is important to development (development being the purported aim of the World Bank), it is only a by-product, a symptom if you like. Economics is the central aim of the Bank and so an economic expert is required. Further, the complex state of global economics today means that economic policies are what is required at this moment.

b) he's an American. In a world where the forcefully-imposed American economic world order has finally begun its long-overdue descent and several others rising in it's place such as China, Brazil & Africa (note that Africa's economy is larger than even India's despite the latter being larger in size), oppressive organisations like the World Bank and the IMF need to adjust & modernise to maintain relevance or face the alternative: extinction!

That leaves us with Okonjo-Iweala. According to the selection guidelines, which were updated in 2011, the ideal candidate should have run a big organisation and possess extensive diplomatic and multilateral experience. Here, Okonjo-Iweala comes out on top. She has extensive multilateral and diplomatic experience having spent over 20years at the World Bank (most recently as a Managing Director) dealing with economic matters for many south American, Asian, African and Middle-Eastern countries. She has also been finance minister in Nigeria (the 3rd fastest growing economy in the world, after Mongolia and China) twice. As a result, she has a well developed network of academic, political and economic relationships across the world which should aid her in dealing with the challenges an institution like the the World Bank. As a World Bank Managing Director, she led the recent negotiation of the $49bn funding package for the International Development Association (IDA) for the poorest countries around the world. Her credentials for the job are, therefore, outstanding.

Barack Obama's decision to nominate Kim, a non-caucasian person, was predictable and callous. It betrays Obama's subsisting fears and continuing insecurities of being an African in charge of a caucasian-controlled country like the USA. Something that he betrays all too readily in the context of issues pertaining to Israel and Palestine. However, nominating a health expert, as opposed to an economic expert, is disrespectful to the world that the World Bank supposedly serves. If this is the political manner in which the institution will continue to be run going forward, then emerging economies should reconsider their continuing patronage of the institution and consider the possibility of creating an alternative.

Finally, it is time for the World Bank to respond to the major shift in the global economic power (in terms of resources, trade, investment and growth) from the west to the emerging economies of Africa, Asia and South America. The International Monetary Fund must also make this important shift the next time around. The shift is important because the reality facing these two outdated and oppressive institutions is that they must stay relevant (by adapting to the world around them) or die!

- Olu Omoyele