Tuesday 16 Aug 2022 | 05:58 | SYDNEY
Tuesday 16 Aug 2022 | 05:58 | SYDNEY

World Bank game of thrones


Stephen Grenville

2 April 2012 14:36

The selection of Robert Zoellick's successor as President of the World Bank is turning out to be more interesting than expected. Rather than putting forward a high-profile candidate (like Hillary Clinton or Larry Summers), US President Barack Obama has nominated Jim Yong Kim, Dean of Dartmouth College, a world-renowned health expert and former World Health Organisation senior official. 

It's a bold choice. The fact that he was born in South Korea might seem to give him international credibility, but he came to the US aged 5, so in practical terms this doesn't count for much. Perhaps the Koreans will have a warm feeling in the same way we Australians took special pride when our boy from Melbourne Sydney, Jim Wolfensohn, got the job (although only after changing his nationality).

The proper measure of Kim's candidature should be whether he is the best candidate to run this institution. Running the World Bank is far more challenging than leading its sister organisation, the International Monetary Fund. The Fund is like a religious priesthood: the staff agree on what they are trying to do, and how it should be done. Critics are dismissed as heretics.

The World Bank, in contrast, is a vast conglomeration of disparate people largely doing their own thing, constantly doing battle with outsiders (NGOs) who passionately believe that the limited resources should be shifted in their favoured direction.

The way the Bank is led matters far more than in the case of the IMF. Its heterogeneity and doctrinal diversity presents a formidable organisational challenge. And there are big calls to be made on strategic direction. For example, should the Bank concentrate more on global issues rather than country-specific projects? The relationship with members is changing too: China has gone from being an aid recipient to being a provider.

Wolfensohn, with his investment banker background, tried to instill some discipline into this diversity. Paul Wolfowitz was not there long enough to make a difference, but the manner of his leaving suggests that he had created some serious enemies inside the organisation. Zoellick the seasoned bureaucrat lasted the distance, gathered more funds for the low-income arm of the Bank and helped save the tigers. But he left after a single term and there is no suggestion that the Augean stables have been cleaned.

Perhaps running a big academic organisation might be a better background: they say that administering academics is like herding cats, and the World Bank staff may be similar. But the World Bank is hugely larger than anything Kim has run before. Health is an important element of the World Bank's work, but it is only one aspect of the development task, and he'll face quite a few heated debates on those areas where he has less background. He has a reputation for inter-disciplinary exploration, and (who knows?) not being an economist might even be an advantage.

Some of his old writings have been resurrected, in which he reveals a luke-warm attitude towards economic growth, which is still the bedrock of the World Bank's purpose in life. Perhaps more seriously, his recent predecessors have had deep experience in the byzantine worlds of institutional politics and international diplomacy. He'll need a lot of diplomatic skill, as there will be quite a few among the World Bank's 187 members who start from the position that he has been chosen by a deeply flawed process.

The other interesting element of the succession is that there are two other candidates, one of whom is strong enough to garner serious support.

Former Colombian Finance Minister Jose Ocampo has a good record but doesn't stand out from earlier futile challenges for this sort of role. But the other nominee, Ngozi Okonjo-Iweala, seems outstandingly well qualified. Twice Finance Minister in Nigeria with a track record of being on the right side of reformist arguments; former World Bank Managing Director (the rung down from the President); an African at a time when more of the Bank's work is in that continent. And she's a woman. What a revolution it would be to have a woman leading both the IMF and the World Bank!

But, short of a miracle, she won't get the job. The US, by far the largest contributor, is not yet ready to let this perquisite go. And the emerging countries have not yet developed the consensus-building processes which would push the issue to the limit. The BRICS demonstrated once again that this grouping is the product of an investment banker's slick rhetoric, not a alliance with enough common interests to make any difference in any international debate. They called for reform to the selection process, but couldn't agree on a candidate.

The gloves are off among the candidates. Okonjo-Iweala said the selection process would test 'the level of hypocrisy'. Ocampo had this put-down for rival Kim: 'He is an excellent physician – nobody denies that – but we're talking about  a development institution'.

Australia is among the countries that will have to make a vote on this. Do we want to stay close to our great and powerful friends and reaffirm that 'he who pays the piper calls the tune', or cast our vote for different succession processes which reflect the changing world?

Photo by Flickr user nene9.