The World Bank has removed some developing countries including Nigeria from its list of countries eligible for charity and aid from the foremost development agency.
Outgoing chief executive of the bank, Robert Zoellick disclosed this at the on-going International Monetary Fund/World Bank spring meetings in Washington DC where he noted that the developing countries have provided two-thirds of global growth over the past years, hence they are no longer charity cases.
Even though developing countries are vital to the world economy, Mr Zoellick stressed the need for both developing and developed countries to focus on structural reforms that will be the drivers of future growth; otherwise the world will keep stumbling along.
The World Bank chief said the countries must work to remove barriers to the great economic potential of the region and seek to achieve regional integration.
Lant Pritchett, a tenured professor at Harvard’s Kennedy School of Government who worked at the World Bank for 17 years, has blasted the nomination of Dartmouth President Jim Yong Kim as “a terrible idea” and tipped Nigeria’s finance minister, Ngozi Okonjo-Iweala, as more suited to assumed the head of World Bank.
Professor Pritchett, who teaches courses in the practice of international development is quoted by Forbes as saying “it’s an embarrassment to the US” to have nominated the scientist to lead the World bank.“There is no way you can say with a straight face that this man is more qualified to head the World Bank than Ngozi,” insists Pritchett.
He argues that Okonjo-Iweala has tackled corruption in Nigeria and because she has worked inside the Bank and as the Bank’s government counterpart in a developing country with complex problems, Pritchett insists she has precisely the kind of experience needed in a World Bank leader.
“At best, Kim has worked with ministers of health, but they are in one of many, many government agencies,” says Pritchett. “A minister of finance has to make hard choices across sectors. Having the experience of a minister of finance is the optimal experience for being president of the World Bank” explained the Havard professor.
He further adds that nominating Kim “is like picking the short stop for the New York Yankees out of the scrub leagues.”
Pritchett points out that the World Bank, whose mission is to reduce global poverty by providing financial resources and sharing expertise with developing nations, works with fragile governments like Pakistan and Afghanistan on complex development issues, from raising tax revenues to elevating GDP to reforming education.
For Pritchett, there is an important distinction between the kind of work Kim has done, which he calls “charity work,” and the complex tasks engaged in by the World Bank.
“Development is about countries becoming prosperous, democratic and capable, like being able to deliver the mail, having police forces that work and kids who get educated,” says Pritchett. “Charity work is helping people cope with the fact that they live in places where they don’t have those things.”
Pritchett, who supported Obama’s presidential bid, says that the President overlooked much more qualified candidates like PepsiCo CEO Indra Nooyi and Lawrence Summers, the former Treasury secretary who is a colleague and friend of Pritchett’s at Harvard.
“The Obama administration had some concerns about the political left flank on this and did the craven thing,” he said. “There’s no question that Kim has done terrific things, but I wouldn’t nominate Mother Teresa to head the World Bank if she were still alive” he quipped.
An infectious disease specialist, Kim helped found a Boston-based nonprofit called Partners in Health that trains community health workers in developing countries to make home visits to treat diseases like TB. Kim also directed the World Health Organization’s department of H.I.V./AIDS. But unlike past World Bank presidents, he has no experience in banking, policy making, economics or development. Kim has been president of Dartmouth for the last three years. Kim was also awarded a MacArthur “genius” fellowship in 2003, and was born in Seoul, South Korea, moving to the U.S. with his family at age 5.
In the World Bank’s 68-year history, the U.S. has always nominated the president, who must be voted on by the Bank’s 25-member executive board. This year, Angola, South Africa and Nigeria nominated a competing candidate, Ngozi Okonjo-Iweala, the Nigerian finance minister and a former World Bank official.
Pritchett insists she is much more qualified than Kim. He points out that the U.S. has less than a 20% share of board votes and though he gives Kim a 60% chance of being appointed, he says that countries like India and China could wind up opposing Kim’s nomination and pressing for Okonjo-Iweala.
Coordinating Minister for the economy and finance Minister, Dr Ngozi Okonjo-Iweala has finally thrown her hat in the ring for the race for the World Bank’s president.
Flanked by her counterparts from South Africa and Angola, Dr Okonjo-Iweala, unveiled her candidacy at a press conference in Pretoria, on Friday.
Her candidacy is backed by Africa’s leading economies and its two biggest oil producers in a push for greater influence at global financial bodies dominated by rich nations.
According to the two-time Minister of finance, “I consider the World Bank a very important institution for the world and particularly for developing countries deserving of the best leadership,” she said.
“So I look forward to a contest of very strong candidates, and am I confident? Absolutely” she added emphatically.
Her bid was unveiled in the South African capital, hours before the deadline for nominations to succeed current president Robert Zoellick, who is stepping down at the end of his term on June 30.
Former Colombian finance minister and central bank chief, Jose Antonio Ocampo, who has also been tipped to assume the office, announced his candidacy on Wednesday. Washington has yet to announce its own candidate for the office which American has held since it was founded nearly 70 years ago.
Okonjo-Iweala is a respected former World Bank managing director who joined the Goodluck Jonathan administration as finance minister in August. A capacity she once served during the regime of President Olusegun Obasanjo after which she was transferred to the Ministry of foreign affairs before her resignation.
“I have long experience in the World Bank, in government and in diplomacy and I look forward to giving you my vision at the appropriate time,” she said.
“I share the World Bank vision of fighting poverty with passion. The issue is in what direction one must take this to make this the most beneficial,” she said.
The World Bank has 187 member nations and focuses its activities on development loans.
Under a tacit agreement since the World Bank and its sister institution the International Monetary Fund were founded, the United States always selects an American as World Bank president and Europe puts a European at the IMF helm.
That traditional arrangement has triggered outrage from developing and emerging economies seeking greater representation to reflect their rising contributions to the global economy.
The US Treasury in February declared “the United States continues its leadership role in the World Bank,” as the largest shareholder, and would announce its candidate “in the coming weeks.”
Since then, the Treasury has declined to comment on the nomination process.
Secretary of State Hillary Clinton has long been among the most circulated names rumoured to be under consideration by President Barack Obama, along with UN ambassador Susan Rice, Democratic Senator John Kerry and former Treasury secretary Larry Summers.
Clinton has insisted that she is not interested in the job. Another American, economist Jeffrey Sachs, has garnered support for his self-declared candidacy in small developing countries.
Sachs, the director of the Earth Institute at Columbia University, has a decades-long career in development and poverty eradication and headed the United Nations’s Millennium Development Goals project.
A candidate must be presented by the Bank’s 25 executive directors, or by governors through the director representing them on the executive board.
The World Bank said that if there are more than three candidates, it will release a short list of three candidates but did not indicate the timing of the publication.
The coordinating Minister of the economy and finance Minister, Ngozi Okonjo-Iweala, has been tipped to be amongst the candidates to be nominated from the developing countries to head the World Bank ahead of the planned resignation of the incumbent president.
According to Reuters, Dr Okonjo-Iweala and former Colombian Finance Minister, Jose Antonio Ocampo are the two tipped to be nominated to lead the World Bank, sources with knowledge of emerging market efforts to find candidates said on Tuesday.
The candidacies of Okonjo-Iweala and Ocampo, who have credentials as both economists and diplomats and according to sources the respective backing of Brazil and South Africa, pose a challenge to the United States, whose hold on the top post has never been contested.
But with its majority of votes and the expected support of European countries, the United States is still likely to ensure that another American will succeed Robert Zoellick, who plans to step down when his term expires at the end of June.
Washington has held the presidency since the Bank’s founding after World War II, while a European has always led the International Monetary Fund. It has yet to publicly identify a nominee to succeed Zoellick.
The decision to nominate Okonjo-Iweala and Ocampo followed weeks of discussions among emerging and developing countries at the World Bank board including China and India.
Two sources said South Africa’s director at the World Bank board, Renosi Mokate, who also represents Nigeria and other English-speaking African countries, personally flew to Abuja to consult with Okonjo-Iweala about her nomination.
“The impressive credentials of both Ocampo and Okonjo-Iweala puts tremendous pressure on the White House to come up with a candidate of at least equivalent standing,” said Domenico Lombardi, a former World Bank board official now at the Brookings Institution in Washington.
“This signals a big shift and really reflects a game change,” Lombardi added. “This is the first time in history we have a truly contested election.”
Okonjo-Iweala, who left the World Bank as managing director last year to become Nigeria’s finance minister, and Ocampo, a former U.N. under-secretary for economic and social affairs, will join American economist Jeffrey Sachs, who has the backing of a handful of small countries, on the nomination list.
The deadline for submitting nominations is Friday, and the Obama administration has said it will name a candidate by then. All of the World Bank’s 187 members nations have committed to a merit-based process to select Zoellick’s successor.
Sources said Ocampo, currently a professor at Columbia University in New York, would be formally nominated by Brazil while Okonjo-Iweala could be nominated on Wednesday.
Nominations will be submitted to the 25-member World Bank board, which has said it will decide on the next president within the next month. The candidacy of Dr Okonjo-Iweala’s candidacy is said to have the blessing of President Goodluck Jonathan, who convinced her to join his cabinet last year to lend more weight to his reform agenda.
Emerging and developing economies have long talked up their desire to break U.S. and European dominance of the Bretton Woods Institutions, but have until now have failed to build a coalition large enough to change the status quo.
Sources with knowledge of the administration’s thinking say Washington has focused on convincing a woman to enter the race, which could go some way to address calls by emerging market nations for change. A woman has never led the bank.
Susan Rice, the U.S. ambassador to the United Nations, was a leading contender, however, it is not clear she wants the job, sources have said. Former adviser to President Barack Obama, Lawrence Summers, has also been short-listed for the job. He has declined to comment.
The United States has insisted that to keep funding flowing from Congress for the World Bank, it is important to retain the presidency.
Lombardi said the test was whether large emerging economies like China would rally support for Ocampo and Okonjo-Iweala, or in the end vote for a U.S. nominee.
Last year, Brazil and China failed to rally around Mexico’s central bank chief, Agustin Carstens, for the top post at the IMF, instead favoring former French Finance Minister Christine Lagarde, who now heads the institution. It is unclear if big emerging nations such as China and India would support a fellow developing nation candidate.