Why Jim Yong Kim won’t change the World Bank

By Felix Salmon
April 9, 2012

Thomas Bollyky has a subtle and slightly confusing op-ed in the NYT today, entitled “How to Fix the World Bank”. Worldbankpresident.org, your one-stop shop for all news on the race, calls it “an important endorsement for Jim Kim, and for change at the World Bank”. But while it’s the latter — Bollyky’s case for change is strong and compelling — it’s by no means the former. Indeed, Kim in many ways represents the status quo ante, and a vote against change at the Bank.

The heart of Bollyky’s argument is the undeniable case that since the world has changed, the Bank needs to change too.

An election based on American citizenship, as opposed to a vision for institutional leadership, limits the support from shareholders that the president of the World Bank needs to enact bold reforms.

As a result, the World Bank remains largely stuck in an operational model of providing country-specific loans and grants that are increasingly irrelevant to its institutional mission of reducing global poverty…

The pressing challenges in international development have changed. While fewer countries are very poor, many of their citizens remain so. The number of people living on less than $2 per day has declined as a share of the world’s population but has stayed around 2.5 billion since 1981. Income disparities have increased. More than two-thirds of the world’s poorest people now live in middle-income countries, where health care, education and environmental regulations lag far behind economic growth. Persistent poverty, when combined with limited governance and unprecedented rates of urbanization, has produced huge slums, which now house nearly one billion people in developing countries. Many of the emerging threats to global prosperity are collective problems that no government alone can solve: climate change, water shortages, inadequate agricultural productivity.

The World Bank is designed along simplistic lines, even if the problems it faces are anything but. The world’s poor live in poor countries, is the implied syllogism, so we should lend those countries money to help them develop and become richer. If we solve the problem of poor countries, we’ll solve the problem of poverty.

This approach became outdated somewhere around the millennium. In 1990, 93% of the world’s poor lived in low-income countries. By 2007, three-quarters of the world’s poor lived in middle-income countries. So if the World Bank is still focused on lending money to low-income countries, it’s by definition missing most of the world’s poor.

Bollyky says that Kim’s inexperience in government will be damning “only if he is forced to lead an institution largely devoted to providing the country-by-country loans and grants that fewer and fewer governments need.” But that is the US vision of the World Bank. Moreover, precisely because he’s unfamiliar with World Bank bureaucracy, Kim is the least qualified candidate if you want someone who is going to radically revamp the way the Bank works.

If you want to understand what the Obama administration thinks the job of the World Bank is, all you need to do is read Barack Obama’s own remarks when he nominated Jim Kim to lead the institution. First, he said that Bob Zoellick “has been a strong and effective leader at the bank for the last five years” — which gives you an idea of what the US considers “strong and effective” in this context. Then, we got this:

The World Bank is more than just a bank. It’s one of the most powerful tools we have to reduce poverty and raise standards of living in some of the poorest countries on the planet…

Ultimately, when a nation goes from poverty to prosperity, it makes the world stronger and more secure for everybody.

Obama here is talking very explicitly in the old language, where the Bank targets the poorest countries on the planet, and tries to help them from poverty to prosperity. That’s sad, because if you look at the the history of the World Bank, it has been quite bad at shepherding countries from poverty to prosperity: it’s been most active in countries where that hasn’t happened, and meanwhile the countries which have managed the change have done so largely on their own, without much in the way of World Bank assistance.

As Bollyky says, what the Bank should do is revamp its architecture so that it can target poverty wherever it is found around the world, rather than working mainly in the world’s poorest countries. And at the same time, it must play a coordinating role in addressing cross-border issues, especially in a world where one country’s necessary crop irrigation looks to its neighbor very much like the theft of precious water.

But the World Bank won’t move far in that direction so long as its president is imposed by fiat of the US. In order to work effectively at the sub-national and international level, the World Bank needs to be a genuinely international organization, run by and for the whole world, rather than being viewed as a means for the US to project “soft power” in Africa and elsewhere. For that reason alone the president of the World Bank should not be a US citizen, and in fact it would probably be helpful if the US didn’t put forward an official nominee at all. After all, as Bollyky notes, the US already has a veto over the Bank’s presidency: that should be more than enough.

More to the point, if the president of the World Bank is going to come in with a mandate to fundamentally change the way that the organization works, then that person really has to be very clear about what they want to achieve before the decision to appoint them is made. Both Okonjo-Iweala and Ocampo are happy to answer detailed questions, in public, about their vision for the Bank; Kim isn’t. And he can’t be vague now if he wants to be decisive once in office.

Bollyky concludes by saying, quite rightly, that “Kim needs to be candid and specific with shareholders and the public about his agenda for revitalizing the World Bank”. Another way of putting that is to say that if Kim is not candid and specific with shareholders and the public about his agenda, then he should not become president of the organization. The time for “listening tours” is over. He needs to start talking, now. Because you can’t have a mandate if the electorate has no idea what it’s voting for.

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Comments
5 comments so far

Geez, did Jim Kim slap you around one day or something? This hard-on you have for attacking his candidacy is getting nutty at this point, and the straws you’re grasping at are weak at best. Saying once he’s perhaps not the best candidate: fine. Going on and on about it like this: fail. I guess all that’s left to add is a video with you flailing your arms about and then you can quit it?

Posted by CDN_Rebel | Report as abusive

KIM FINALLY GAVE AN INTERVIEW (IN PORTUGUESE IN FOLHA DE SAO PAULO)! It shows that it was a good idea not to let him do this, as his patent unsuitability for the job shines through. Translated version follows:

I was born in a poor country and will be a link between the U.S. and emerging
Folha de S. Paul | World
April 6, 2012

ISABEL FLECK

INTERVIEW JIM YONG KIM, 52

Likely future president of the World Bank, Korean-American doctor praises Brazilian anti-AIDS program

The fact that it was carried with only five years on the U.S. country where he grew up and got citizenship after-did not make Jim Yong Kim, 52, American candidate for president of the World Bank, lost his identity with the developing world.

This is what the virtual next president of the institution maintains, after receiving support from Europe and Japan for the post, which many argue is filled by a citizen of the emerging world.

Kim competes with two representatives from developing countries: the Nigerian Finance Minister Ngozi Okonjo-Iweala and former Finance Minister Jose Antonio Ocampo of Colombia.

“I was born in Korea [South], I left the country while still in a state of poverty. Grew up in the U.S., but I know deeply what is living in poverty,” he said in an exclusive interview to Folha, in Brasilia, where he finished a tour for emerging and developing countries-Japan more

In the campaign, the candidate declined to talk about thorny issues such as the impact of protectionism of big savings and financial market regulation.

Folha – It is great pressure for the next World Bank president is the emerging and developing countries. The sr. believes that this group represents?

Jim Yong Kim – I was born in Korea [South], d eixei the country while he was still living in poverty, and my parents were refugees, my father, North Korea, and my mother, the war.

I grew up in the U.S., but I know deeply what is living in poverty. I worked most of his life in developing countries in Latin America-Peru, Mexico, and also in Africa. My career can be a bridge between U.S., Europe, emerging and developing countries in Africa.

The other two candidates have more experience in finance and economics, key issues for the World Bank. As a doctor may be a better option?

The main issues are the World Bank’s economic development and poverty reduction. So I’m very qualified, because most of my life I worked with it, not only health but social development, education, housing, gender equality.

In the book “Dying for Growth” (2000), you that the stimulus to economic growth helped boost world poverty. Ho do you see this relationship today?

The book was written based on data from the early 90s, and his specific argument is that growth can occur in a more inclusive way. At that time, there were policies that provide for the reduction of spending on health and other social areas.

But in 90 years the bank has changed its policy very significantly. Today there is a global consensus that we need to find ways to grow with inclusion.

How can the Brazilian experience help?

When I was assistant director-general of WHO, we watched the Brazilian experience of social inclusion in the program for HIV-AIDS. It was exactly what we needed in Africa.

In the case of the bank, which I think is important to continue looking great innovations, and Brazil have strong examples of how to achieve growth with social inclusion. And the World Bank can do this important job of presenting the work done in Brazil and other developing countries to the rest of the world.

Some specific program may serve other countries?

What I know is the most HIV-AIDS program. It was a classic case in which many people did not want this type of investment, and Brazil and was made an example for the rest of the world.

What were the main demands heard of Brazil?

I’ve been before in India and China and I think that emerging economies want more voice in the World Bank. What I heard, of Brazil, especially, is a desire to have even stronger role in the bank. This could occur in many forms, but it would be premature to give details.

The BRICs want to create their own development bank. He could be a threat to the World Bank?

The World Bank already has a good history of working with other development banks. If the database is created the BRIC countries, believe that the World Bank will work very closely with him.

What should the World Bank’s role in the advancement of emerging economies?

The World Bank still has an extremely important role. On my trip, I realized three things to look forward to working: First, jobs. Every country has a problem with that, and the bank has a key role in generating employment.

Another point is gender equality, and the World Bank to help improve maternal health, for example, which is also a problem of infrastructure.

Finally, I heard a lot about the importance of modernizing the bank. I had the experience of a major restructuring at Dartmouth College [where is dean] during crisis. So I have some experience in institutional reform.

Posted by JAMESBROOKS88 | Report as abusive

“For that reason alone the president of the World Bank should not be a US citizen”

Huh? So Americans should be barred from post?

Felix, if you despise America that much, you are free to leave. You represents a strange kind of America-hating immigrant that previous generations of immigrants would never have understood.

Posted by DanHess | Report as abusive

Ever since I was an Executive Director at the World Bank, 2002-2004, I have publicly held that what has no representation at all in the World Bank, is the World at large. The Executive Directors represent the parochial interest of geographical bound countries, and so it is only rational to allow its President to represent the World.

Posted by PerKurowski | Report as abusive

@PerKurowski – Are you familiar with this Anglo-Saxon turn of phrase –

“He who pays the piper gets to call the tune.”

The biggest chunk of WB money comes to it from the pockets of US taxpayers. Whatever they want is, by definition, the right thing to do, isn’t it?

Posted by MrRFox | Report as abusive
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