Why Ngozi Okonjo-Iweala should run the World Bank

By Felix Salmon
March 30, 2012

I first wrote at length about Ngozi Okonjo-Iweala in September 2005, when the magazine gave her its genuinely prestigious Finance Minister of the Year award. It’s here, on my Tumblr, since the original is behind a paywall. (Update: you can read it directly now, Euromoney has taken it out from behind the paywall.)

I think it’s important this story be much better known than it is, because it neatly encapsulates a lot of why Okonjo-Iweala would be a fantastic head of the World Bank. When she arrived as Nigerian finance minister in 2003, the country was what you might call an oil-poor kleptocracy, with virtually no credibility in the international community. Within two years, she had managed to use $12 billion of windfall oil profits to pay off $31 billion in bilateral debt, thereby not only massively improving the country’s debt dynamics, but also ensuring that money didn’t get stolen domestically.

It was an astonishing feat of negotiating prowess, not least because the Paris Club had never before allowed a country to buy back its debt below par, let alone 60% below par. Being able to pull it off involved Okonjo-Iweala leveraging her extremely strong credentials as an economist and finance minister (she has a PhD in regional economics and development from MIT); making full use of her high-powered contacts in the international community; and deftly navigating the labyrinthine bureaucracy surrounding World Bank classifications. Frankly, it’s impossible to imagine any other Nigerian being able to get this particular deal done.

Okonjo-Iweala’s qualifications for the job are well known; see the Economist, the FT, and also this Edward Luce column for good arguments as to why she would be a significantly better World Bank president than Jim Yong Kim. It’s worth reminding ourselves, in this context, of the Bank’s own description of the qualifications required by its president:

A proven track record of leadership;
Experience managing large organizations with international exposure, and a familiarity with the public sector;
Ability to articulate a clear vision of the Bank’s development mission;
A firm commitment to and appreciation for multilateral cooperation; and
Effective and diplomatic communication skills, impartiality and objectivity.

It’s hard to see how Kim can beat Okonjo-Iweala on any of these criteria. Meanwhile, Kim’s own FT op-ed, in which he tries to explain why he’s the right person for the job, is vapid in the extreme. “A more responsive World Bank must meet the challenges of the moment but also foresee those of the future. The World Bank serves all countries.”

Tim Geithner is lobbying for Kim, writing a letter to the Bank’s 187 governors saying that Kim “is committed to pursuing an agenda for the Bank that supports all the necessary components of development,” in a sign that the US doesn’t consider Kim a shoo-in for the job. And consummate Bank insider Lant Pritchett has laid out a credible, if admittedly improbable, series of possible events which could result in Okonjo-Iweala getting the job. “Everyone regretted letting the Americans ram through their choice of Paul Wolfowitz in 2005,” he writes. “The damaging consequences of that fiasco are still fresh in people’s minds.”

Kim is still the favorite for the job, just because he has the full and awesome power of US international diplomatic pressure behind him. But in any fair fight, Okonjo-Iweala would win. And if there are any signs at all that the European vote might not be completely in the bag, we might yet have a real contest on our hands here.

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Comments
3 comments so far

Nigeria needs Ngozi much more than the WB does, and much more than anybody needs the WB.

Posted by MrRFox | Report as abusive

As a former Executive Director of the World Bank, 2002-2004, I support Ngozi Okonjo-Iweala for the presidency of the World Bank because I remember her, in the context of a very risk-adverse organization, as a person more willing to discuss new ideas in delicate issues than most of her peers. And also, when she left WB in order to be the Finance Minister of Nigeria, I was much impressed by her gutsiness.

This does of course not mean that any of the other two candidates, whom I do not really know well, would not be capable of doing that as well.

But if it is going to be an election on merit it is also important to ascertain that the Executive Directors of the World Bank, and who as I see it are personally responsible for their decisions at the board are not allowed to hide behind the skirts of a “my government instructed me so”.

For your information the articles of incorporation of the World Bank state that the Executive Director “shall be responsible for the conduct of the general operations of the Bank, and for this purpose, shall exercise all the powers delegated to them by the Board of Governors”.

Posted by PerKurowski | Report as abusive

I understand her credentials, but accusations, true or otherwise, of corruption swarm around Nigeria and her.

See: http://saharareporters.com/news-page/wik ileaks-okonjo-iweala-ferried-50-million- jobs-brother

Though she may vow to fight corruption, she needs to first distance herself from it.

I heard her speak at the WEF in 2007 or 2008, and she sounded quite isolationist, saying to leave Africa to the Africans. This is not what is needed for a leader of the World Bank.

Also, if she is such a great candidate, why is Nigeria not doing better, given their wealth of natural resources. Certainly, there is a large hurdle of corruption to overcome, but she has had more than enough time to do overcome this.

I fail to see why she is a better solution, other than she is not an American and she is an African, where much of the World Bank’s initiatives need to be focused. Is there not a better African, who is not saddled with accusations of corruption?

Posted by netvet | Report as abusive
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