A New World {Bank} Order? (REPORT)

(Video, The White House)

(HN, March, 23, 2012) - And then there were two.  When US President Obama nominated his World Bank candidate Jim Yong Kim today just hours before the deadline, the choice was a surprise.  

(The World Bank Logo) The deadline for nominations to replace the current president, Robert Zoellick, is 18:00 (6:00P) Washington time (22:00 GMT) tonight.

"I am nominating Dr. Kim to be the next president of the World Bank", said Obama.  "I can think of no one more able to help families, communities, and entire nations break out of poverty, which is the stated goal of the World Bank," he said.

Obama pointed to Dr. Kim's international experience in his statement "He has worked in rural villages and squatter settlements just as he has worked in the halls of power and privilege."

Dr. Kim is a US academic who currently heads Dartmouth College and is by career, a doctor and former director of the HIV/Aids department at the World Health Organization. Dr. Kim also co-founded the health organization `Partners in Health' in 1987 along with Dr. Paul Farmer; and has been lauded on innovation lists from Time to Fast Company.

Paul Farmer, chair of the Department of Global Health at Harvard University, praised the nomination.  "It is time for a development professional to lead the world's leading development agency," he said.

The pick for one of the world's leading development banks could have also gone to another well-known American who openly campaigned for the job, global economist Jeffrey Sachs.

(PHOTO: Dr. Jeffrey Sachs/The Earth Institute) Earth Institute founder, UN advisor, emerging market government consultant Jeffrey Sachs announced his own bid for the World Bank presidency last Fall saying, "The inside process has produced 11 out of 11 politically-orientated appointments.  Not one of them has been a development professional. It has been seven bankers, three defense or military officials, and one congressman."

But following Dr. Kim's nomination, Sachs announced his withdrawal from the race tweeting,   "Jim Kim is a superb nominee for WB. I support him 100%. I thank all who supported me and know they'll be very pleased with today's news".

Sachs had support from several developing countries of the G20 including Costa Rica, Kenya, Haiti, Jordan, Malaysia, East Timor, Bhutan, Guatemala and Chile who openly backed his bid.

Dr. Kim, 52, had not been among the names rumored to be under consideration by President Obama, which included former White House adviser Larry Summers, Pepsi head Indra Nooyi,  UN ambassador Susan Rice, economist Laura Tyson, Senator John Kerry and US Secretary of State Hillary Clinton.

"This is one of the most critical institutions fighting poverty and providing assistance to developing countries in the world today," Dr Kim said in a letter to students at his university.

AFRICA'S CHOICE

The nomination has set up a two person race for the Bank's top spot as three African countries - Angola, Nigeria and South Africa have pledged their support to Mrs. Okonjo-Iweala, the Nigerian Finance minister and a respected economist, diplomat and former World Bank managing director, as their World Bank choice.

(PHOTO: Mrs. Okonjo-Iweala/The Nation) Of the competition Mrs. Okonjo-Iweala has said: "I consider the World Bank a very important institution for the world, and particularly for developing countries deserving of the best leadership, so I look forward to a contest of very strong candidates.  And am I confident? Absolutely."

It was also believed that Brazil was set to nominate former Colombian finance minister, Jose Antonio Ocampo, but on Thursday, Colombia's current finance minister, Juan Carlos Echeverry, said the country was instead focused on a bid for the presidency of the International Labor Organization which it felt it could win.  Mr. Ocampo had agreed to stand for the World Bank post, but Brazil, needed Colombia's support to proceed.  It is unclear if they will nominate someone else by tonight's deadline.

HOW DOES THE WORLD BANK CHOOSE ITS LEADERS?

A US citizen has led the Bank since it was founded in 1944, but developing nations say it is time for change.  The World Bank presidency is chosen by the organization's board, which has 25 representatives of the Bank's 187 member countries.  Some, like the US and the UK have their own seats, like the UN Security Council. Others are grouped by constituencies.

The goal is to choose a new president by consensus, but a simple majority will do. Votes in the World Bank - and in the IMF too - are weighted by financial contribution.  The US accounts for 16% of the vote; EU countries have 29% and Japan as the next largest voting partner.

The World Bank has 13,000 staff in more than 100 countries, and loan funding is expected to reach $26 billion this year.

G8 ECONOMIC DOMINANCE

In recent years the emerging markets of the world have loudly voiced their opinion that the 'monopoly' of G8 dominance over the world's economic system must be changed to incorporate the fastest growing, largest populations of the world such as Asia, Africa and Latin America into the decision making process.

The United States will now face its first unprecedented challenge to its hold on the World Bank presidency with at least one candidate in opposition; setting up the first contested bid for the top job at the global development lender.

The rise of emerging economies such as China, India, Russia and Brazil has put pressure on the United States and Europe to throw open the selection process for both the Bank and the IMF tho these giants have quietly accepted the situation. Mexico, to its credit as this year’s chair of the G20 did not hesitate to make a bid for the IMF leadership last year.

(PHOTO: Christine Lagarde/Wikipedia) The World Bank and the International Monetary Fund were created at the conference at Bretton Woods, New Hampshire in 1944 as a way to standardize trade between nations after the devastation of the Great Depression and World War II.  An unspoken agreement has  traditionally seen a US national head the World Bank and a European run the IMF - currently France's Christine Lagarde.

And it seems the `Geographic Gap' (tm) countries (*HUM research) have support in their arguments for more inclusion.  Recently three former chief economists of the World Bank - Francois Bourguignon, Nicholas Stern and Joseph Stiglitz wrote an editorial saying about the World Bank selection process, "To say it is merit-based, and to choose an American repeatedly, shows scant respect to the citizens of other countries". 

Other critics - from academics to non-governmental organizations - have long argued that the World Bank is ineffectual and even damaging to developing countries because of its emphasis on free market economics. 

The current president, Robert Zoellick, is to step down from his role at the institution when his five-year term comes to an end on 30 June.

(PHOTO: Paul Wolfowitz/Wikipedia) Mr. Zoellick, 58, was nominated for the role in 2007 by then US President George W. Bush, following an employee relationship scandal between then World Bank President Paul Wolfowitz who resigned when it was discovered he had negotiated preferential compensation treatment  for his girlfriend Shaha Riza with the US State Department, shortly after he became bank president in 2005.

The deadline for nominations is 6 p.m. Washington time (2200 GMT). Then the World Bank board of member countries will shortlist the names of two or three candidates and finalize its choice by the time of IMF and World Bank semi-annual meetings on April 21.

--- HUMNEWS, (c) 2012

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