Felix Salmon

When I talked to Chrystia Freeland on Monday about World Bank chief Bob Zoellick’s big speech on the Middle East and North Africa today, I said I was looking for two things: concrete promises to do specific things, on the one hand, and a recognition, on the other hand, that the World Bank was working for the struggling citizens of these countries rather than their entrenched elites. The revolutions in the region have shown that politics is inextricably bound up with economics, and that you can’t affect the latter without dealing with the former.

I don’t think I’m going to get what I wanted. Here’s the closest that Zoellick comes to a policy-related promise:

I suggest it is now time for the World Bank to examine, with its Board and shareholders, whether the Bank needs new capabilities or facilities that could leverage support from countries, foundations, and others to strengthen the capacity of CSOs working on accountability and transparency in service delivery. We could give priority to countries in the Middle East and North Africa, and in Sub-Saharan Africa. We could back this work with seed capital, and with knowledge exchange and research aimed at improving the enabling environment for social accountability.

Too political?

No, Bob, this isn’t too political. Instead, it’s not remotely political enough. Setting up a committee with the World Bank board and shareholders will achieve precisely nothing. The World Bank “board and shareholders” comprises precisely the entrenched elites who have the most to lose from popular emancipation. To take an extreme example, the Saudi royal family are World Bank shareholders; I doubt they’re going to be particularly enthusiastic about accountability, transparency, and the like.

This is precisely the sort of issue where Zoellick should just go ahead and do something, daring his board to slap him down: asking forgiveness can work, while asking permission just means certain bureaucratic sclerosis. Zoellick had his opportunity to lead, here. Instead, he’s chosen to kowtow to the representatives of the very regimes who are most at risk. Which is an entirely predictable shame.

Update: In the Q&A period following the speech, in response to a question along these very lines, Zoellick first said that maybe the work could be done bilaterally, by the UK or the US or even by various foundations. Then he said there were “questions” — which he would take to his shareholders — “whether the bank should have a role in this and if so what form.” And he continued by declaring that he’s actually agnostic on these issues, saying “I’m not sure I have a view of whether there is a role for the Bank”. Weak.

Bob Zoellick will say in a speech tomorrow that central banks have proved that they can’t be trusted with regulatory authority, and that in the US Treasury, rather than the Fed, should be the main risk regulator.

It’s an interesting idea, and I’d love to read his argument; weirdly, however, the World Bank has released only excerpts from the speech, rather than the speech itself.

I can understand why the Bank might not want to release the speech until after it’s been delivered. But in that case, why release the excerpts now? It smacks of trying to artificially manipulate the news cycle in a manner unbecoming to a major multilateral institution. On the other hand, Zoellick clearly doesn’t think the Bank’s present form is sustainable:

Bretton Woods is being overhauled before our eyes. This time, it will take longer than three weeks in New Hampshire. It will have more participants. But it is just as necessary. The next upheaval, whatever it may be, is taking form now. Shape it or be shaped by it.

Maybe trying to manipulate news coverage is part of Zoellick’s attempt to shape the new World Bank?

Dani Rodrik spots a particularly bright bit of the G20 communiqué:

We agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process.

This is spectacularly good news: as Dani says, it “may mean that the era of the World Bank and the IMF being run by Americans and Europeans, respectively, is over. And good riddance too”.

Might Ngozi Okonjo-Iweala become the next World Bank president? Might Mohamed El-Erian be the next managing director of the IMF? Suddenly, there are all manner of tantalizing and exciting possibilities. It’s taken long enough, but I’m very happy this day has finally arrived.