Nigeria: World Bank Presidency - US vs the World? (PERSPECTIVE)

By Yemi Ajayi

(PHOTO: Dr. Jim Yong Kim, new World Bank President/Dartmouth College) *Since this article posted on Monday, the World Bank board voted to confirm Jim Yong Kim as the next World Bank President. He will start his tenure on June 30 when Robert Zoellick steps down from this same post.

The race for the World Bank presidency will enter the homestretch Monday when the bank's 25-member executive board votes on who succeeds its outgoing president, Robert Zoellick.

It is a defining race for the Bretton Woods institution (comprising the World Bank and the International Monetary Fund) founded in 1944. It is also a race that has assumed the character of a clash between an arcane tradition and the quest for change in the way the international finance institution with the official goal of fighting poverty picks its president.

In the race for the World Bank presidency were initially three candidates: Nigeria's Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, a former Colombian Minister of Finance, Jose Antonio Ocampo and a public health expert and president of Dartmouth College in the United States, Jim Yong Kim. The number was reduced to two last Friday with Ocampo's withdrawal for the post.

However, the candidates are merely instruments in a proxy war between Washington and its European allies, which has traditionally produced the president and the rest of the world that is clamouring for a paradigm shift in how the leadership of the World Bank emerges.

The clamour has pitted the rest of the world against the US, which is out to defend its tradition of producing the World Bank president since foundation.

(PHOTO: Dr. Ngozi Okonjo-Iweala of Nigeria/NigeriaMailOnline)For US President Barack Obama, he cannot afford to fail where his predecessors had succeeded. Losing out in the jostling for the post, especially in a crucial election year, is to hand the Republicans the ammunition to make a bid at undoing his attempt to renew his tenancy at the White House.

Withdrawing from the race last Friday, Ocampo, in a letter to the World Bank, said he was doing so because "it is clear that this is becoming no longer a competition on the merits of the candidates, but a political exercise."

"For me, as an economist and as a Colombian, it has been a great honour to participate in this first open competition for the presidency of the World Bank... to facilitate the desired unity of the emerging and developing economies around a candidate, today (last Friday) I am retiring from the race to support the minister, Ngozi Okonjo-Iweala, who I wish the best of luck in this final stage."

If it were going to be a straight fight based on merit on a level playing field for the candidates, Okonjo-Iweala could start preparing her handover notes for her successor in Nigeria and return to the organization where she was managing director before her call to national duty last year.

Even though she was reluctant to join the race some weeks ago, her candidacy has gathered rave endorsements from the media at home and abroad, 35 former World Bank economists and managers, Africa and other developing nations since she threw her traditional headgear into the ring.

She is the official candidate of Africa and its allies who have canvassed the argument that someone with high-flying credentials and requisite experience like hers is better placed to make the World Bank deliver on its goals of helping developing nations to improve on their peoples' wellbeing.

Since March when Obama picked him as the US candidate for the post, Kim has come under global scrutiny. Despite his credentials and achievements, especially in public health, including his stint as a director of HIV/AIDS at the World Health Organization, he is considered as one who lacks the "appropriate finance and economic credentials" to lead the World Bank.

(PHOTO: Jose Antonio Ocampo of Colombia/Columbia Univ) In contrast, Okonjo-Iweala has institutional knowledge, hands-on experience in development economics and public finance and has proven to be reform minded. In her first appointment as Nigeria's Minister of Finance, she superintended over the country's historical debt relief, an exercise that earned her global accolades; spearheaded the reform of the public sector in Nigeria leading to greater transparency and the monetization policy of the federal government; and championed the creation of the Excess Crude Account that largely provided a buffer for Nigeria during the global economic crisis between 2008 and 2009.

Notwithstanding his diminished credentials, Kim, by some quixotic arrangement, is most likely to succeed Zoellick who bows out on June 30 after a five-year term during which the bank provided over $247 billion to help developing countries boost growth and overcome poverty. His being the US candidate, which some analysts have described as a "wrong call," guarantees him victory under the weighted voting system that Brazil, Russia, India, China and South Africa are calling for a review.

Under the voting system, the US, which is the bank's largest shareholder, Europe and Japan control 54 per cent of the votes. The trio has formed an alliance which ensures that the bloc votes are delivered to the US' candidate. Europe is under obligation to back the US as repayment for its support in always ensuring that the headship of the International Monetary Fund, is held by the continent under an informal pact.

According to reports at the weekend, so far, US, Russia, Canada and Japan are lining up behind Kim alongside Spain, Mexico, New Zealand, Australia and South Korea. This follows a move last Friday by the US members on the World Bank executive board to block the board from transparently assessing the outcome of the interviews of the three candidates, which took place earlier last week.

With Ocampo's withdrawal for Okonjo-Iweala, his backers - Brazil and Argentina - may team up with the three African constituencies to vote for the Nigerian minister.

However, the straw poll held by the bank's board last Friday before Ocampo's withdrawal, showed that Kim was guaranteed 36 per cent of the votes, Okonjo-Iweala about five per cent and six per cent for Ocampo. The votes reflect the voting rights of the countries or regions backing each of the candidates.

The undecided were the European Union with 29.2 per cent; India, 4.6 per cent; China, 3.4 per cent; Switzerland, 3.0 per cent; Saudi Arabia, 2.4 per cent; and Asia, 9.5 per cent bloc votes.

Monday's decision by the bank's executive board was some three weeks ago clearly encapsulated for the members by the Financial Times. The newspaper in an editorial on March 27, in which it endorsed the candidacy of Okonjo-Iweala, said: "In this less than ideal world, Mr. Kim's appointment seems inevitable. But if the Bank's shareholders wanted the best president, they would opt for Ms. Okonjo-Iweala."

Will the board heed the voice of reason as the World Bank, for the first time in its 68 years of existence, chooses between candidates?

Well, if the Nigerian minister loses, as that fact cannot be discounted, given the high stakes politics, she can take solace in the immortal word of American journalist and writer, Damon Runyon, "The race is not always to the swift, nor the battle to the strong...."

--- This editorial originally appeared in AllAfrica HERE. 

Comments

[Expert witness]

The person should be on that position is a man of few words but only actions are true. Presidency of the world bank is a big issue.