By JIM LOB
While the U.S. candidate for World Bank president, Jim Yong Kim, still has the inside track, the two non-U.S. candidates, Nigerian Finance Minister Ngozi Okonjo-Iweala and former Colombian finance minister Jose Antonio Ocampo, have been raking in high-profile endorsements.
In an open letter sent to the Bank’s executive board Wednesday, 39 former senior Bank staff endorsed Okonjo-Iweala’s candidacy, citing her “deep experience in international and national issues of economic management”, which includes four years as the Bank’s managing director.
“She would hit the ground running and get things done from the start,” the former officials, who included senior vice presidents, vice presidents, and directors, wrote. “In a word, she would be the outstanding World Bank President the times call for.”
In another letter released Thursday, more than 100 economists endorsed Ocampo, arguing that his experience leading the ministries of finance, agriculture and planning, as well as stints as the head of the Economic Commission for Latin America and the Caribbean, the U.N. Commission for Latin America and the Caribbean, and as U.N. under-secretary general for economic and social affairs, made him “the most suitable candidate for World Bank President”.
The signers included internationally recognized figures, primarily from North America, Latin America, Europe, China, and India, including former Bank officials, ministers of finance and development, and central bank governors, as well as academics.
The endorsements are coming as the Bank’s executive board prepares to interview all three candidates early next week and reach a final decision the following week, by the opening of the annual Spring meetings of the Bank and its sister institution, the International Monetary Fund (IMF).
The current race is the first since the Bank was created at the Bretton Woods conference in 1944 in which the U.S. candidate has faced a challenge.
Under an informal “gentlemen’s agreement” between the U.S. and Europe, a U.S. national has always held the top Bank position, while a European has run the IMF.
In recent years, that arrangement has come under sustained attack by developing countries and non-governmental organizations (NGOs) that have complained that it is undemocratic and increasingly outdated, particularly given the growing importance to the world economy – and of the Bank’s own financial health – of the emerging economies.
“To maintain a cabal among developed countries, whereby the U.S. appoints the World Bank president and Europe picks the (IMF’s) head, seems particularly anachronistic and perplexing today, when the Bank and the Fund are turning to emerging-market countries as a source of funds,” wrote Nobel Economics laureate Joseph Stiglitz, who served as the Bank’s chief economist and as chair of the Commission of Experts to the U.N. General Assembly on international financial reforms, earlier this week.
Under the existing scheme, the combined shares of the U.S., the Bank’s largest single shareholder, Europe, and Japan account for just over half of the votes on the executive board – more than the majority needed to elect Kim if it comes to a vote.
The U.S. and Japan, as well as South Korea, have already announced their backing for Kim, and it is widely assumed here that Europe will also support him, if only because the U.S. faithfully backed its candidate for the IMF’s managing director, Christine Lagarde, last year.
“I haven’t heard anyone is willing to break ranks,” said one insider, who also noted that, with its 16 percent share, Washington has the power to veto any other candidate.
Still, the race is being taken seriously by both Okonjo-Iweala and Ocampo, who have been rallying support for their respective candidacies and, unlike Kim, have accepted invitations to discuss and answer questions about their visions of the Bank’s future at public forums here next week sponsored by the widely respected Center for Global Development (CGD).
The South Korean-born Kim, who has been travelling across much of the world in what has been described as a combination of a “get- acquainted” and “listening” tour since Obama nominated him two weeks ago, is widely considered an unconventional, if not an inspired choice.
Currently president of the elite Dartmouth University, Kim is chiefly known for his grassroots-oriented work on global-health issues. An anthropologist and medical doctor, he co-founded the highly regarded NGO Partners in Health, and headed the HIV/AIDS department at the World Health Organization (WHO) where he won many admirers for his dedication, innovation, and pragmatism.
He immediately won the support of former President Bill Clinton and the president of Columbia University’s Earth Institute, Jeffrey Sachs, who had himself publicly campaigned for the nomination, among other development specialists.
But his nomination has also come under criticism based mainly on his lack of experience in government and in managing an institution as large as the Bank and the relatively narrow focus on global health.
“Kim’s specialty, public health, is critical, and the Bank has long supported innovative initiatives in this field,” Stiglitz, who praised all three candidates, wrote. “But health is only a small part of the Bank’s ‘portfolio,’ and it typically works in this area with partners who bring to the table expertise in medicine.”
By contrast, both Okonjo-Iweala and Ocampo have had significantly more experience in managing very large international institutions and national bureaucracies and in dealing with other dimensions of the Bank’s portfolio.
Of the two, Okonjo-Iweala, who began her career as an agricultural economist, appears to be the more conventional choice in terms of lengthy Bank experience and general adherence to the neoliberal and “pro-market” ideology that has dominated the Bank’s policy guidance for most of the last 30 years.
Endorsed by The Economist magazine and the Financial Times, and nominated by South Africa, Okonjo-Iweala was praised by the former senior Bank officials for “the combination of her experience as finance and foreign minister of a large and complex African country with her wide experience of working at all levels of the Bank’s hierarchy in different parts of the world.” They also noted that she would be the first woman to head the Bank.
Ocampo, who is currently teaching at Columbia University, on the other hand, appears to be the favourite of development economists who are not so closely tied to the Bank’s orthodoxy or its existing structure and priorities.
“Throughout his career, Dr. Ocampo has managed and reformed national ministries of finance, agriculture and planning, and regional and global UN Agencies pertaining to economic development and social affairs,” they wrote in their letter, which was co-ordinated by academics from the U.S. and China. “Furthermore, he is one of the most noted development economists of our time.”
Brazil had been expected to nominate Ocampo but demurred after the Colombian government said that it intended to devote its lobbying efforts at the international level to seeking the top slot at the International Labour Organisation. He was instead nominated by the Dominican Republic.
Many eyes next week will be focused on Brazil, whose president, Dilma Roussef, is scheduled to meet Obama at the White House Monday.
Brazil’s finance minister, Guido Mantega, said earlier this week that he is consulting with his counterparts from the BRICS group – Brazil, Russia, India, China, and South Africa – to try to reach a common position on one candidate, although Pretoria appears committed to Okonjo-Iweala.