The Race for the World Bank Presidency is On – Will it be an Open Competition this Time?

Earlier today Robert Zoellick announced he would be leaving the World Bank at the conclusion of his five year term as President at the end of June. The news shouldn’t come as a surprise; in the history of the World Bank only two Presidents – Bob McNamara and Jim Wolfensohn – have survived for more than a term, and there was no particular reason the Obama administration would keep a Bush appointee around when they didn’t have to. Zoellick leaves a mixed legacy – he brought some much needed stability to the Bank after the fiasco that was the Wolfowitz Presidency and did a good job quietly raising money from rich countries. But he never showed particular leadership or foresight on where the Bank fit into a 21st century global economy, always seemed a step behind in responding to the financial crisis, and, at least by my count, holds considerable responsibility for blowing the food price “crisis” out of proportion. (That last point is perhaps not widely shared, but I think the whole narrative of a food price crisis – which was driven by the Bank and a number of aid advocacy groups like Oxfam – is mostly wrong. But that is a post for another day.)

It will be very interesting to see if Zoellick’s announcement kicks off a real campaign to choose his successor. As we all knew this was coming, I’d been surprised how quiet this front had been to date. Other than the long-standing rumours of Hilary Clinton eyeing the job, there’s been very little written on who wants to be in the running, and particularly on the critical twin questions of how hard the US will fight to hold on to its long-standing privilege of picking the President and how much of a fight the developing world will put up to get their own candidate in. When Strauss-Kahn was leaving the IMF there were huge debates over who would take his place, and specifically whether the tradition of allowing Europe to choose the Fund’s top position should persist. So why has there been such little debate so far, and how come those of us (myself included) who want to see developing countries given bigger stakes in the Bretton Woods institutions aren’t making a bigger fuss this time around?

One possible reason is that many people (probably correctly) see the Fund as having more power than the Bank in the world today, and so there are higher stakes over the rights to name its head. But it’s worth noting that the best chance for breaking Europe’s lock on the Fund is by first ending US control of the Bank Presidency. The current situation can only persist so long as the US and Europe stand behind each other and both tacitly agree not to rock the boat (or, to switch the metaphor up a little, to keep everyone else off the boat). If it’s true that the Fund Managing Directorship is a more politically powerful position than World Bank President, it stands to reason that Europe will fight harder to hold on to it than the US will fight for the Bank Presidency, and thus the Bank Presidency is an easier target. And once the US has given up its right to name the head of the Bank, it will undoubtedly side with the rest of the world against the Europeans next time the Fund MD position is open.

But putting all that aside, for those of us who care a lot about the World Bank, ensuring the organization has a legitimate and effective President is an important goal in its own right, regardless of its potential instrumentality in bringing down Europe’s claims on the Fund. So it’s time to start making a push for the Obama administration, and specifically Lael Brainard, the undersecretary of international affairs at the Treasury Department who has been tasked with drawing up a list of potential candidates, to do the right thing and open the competition up. The administration claims (genuinely, as far as I can tell), to really care about development, but, for well known reasons, doesn’t have a lot of money to spend these days. Here’s a chance to do something that will actually make a difference at zero cost, and they should jump on it.

Which non-Americans might be a good fit? A few names come to mind initially. One is ex-Brazilian President Lula da Silva. Or Ngozi Okonjo-Iweala, who’s been in-and-out of Nigeria’s government and also spent time in senior positions at the World Bank. But my favourite choice is probably Sri Mulyani Indrawati, the former Indonesian Finance Minister who’s currently one of three #2’s at the World Bank. On substantive grounds, she knows finance and did a remarkable job guiding Indonesia’s economy through difficult but necessary reforms that paid off, including tackling widespread corruption, always an issue on the Bank’s radar. On symbolic – but still important – grounds, she’s a woman, from the world’s most dynamic region (Asia) and is from a large but not dominant developing country; one can imagine the Chinese blocking an Indian appointee and the Indians blocking a Chinese, but both being able to get behind an Indonesian. (Turkey’s Kemal Dervis benefited from a similar dynamic in his aborted bid to replace Strauss-Kahn at the Fund.) So if anyone  with any clout is reading this (like Andrew Sullivan !!), let’s get the campaign underway…


0 Responses to “The Race for the World Bank Presidency is On – Will it be an Open Competition this Time?”

  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: