Despite challenge, US pick favoured to lead World Bank
World | Agence France-Presse | Updated: April 15, 2012 11:44 IST
Washington: Despite an unprecedented challenge from two developing-world candidates, Washington's 66-year lock on the World Bank Presidency will almost certainly remain intact when directors meet Monday to fill the post.
Even after one of the challengers dropped out on Friday to push his support to the other -- Nigerian Finance Minister Ngozi Okonjo-Iweala -- they won't be able to overcome US and European backing for the US nominee, health expert Jim Yong Kim, analysts say.
But the first-ever challenge to traditional American control of the job has signaled that, as with the International Monetary Fund, emerging economies are flexing their muscles for a bigger say in how the near seven-decade old institutions are run.
Bank directors say that they aim for a consensus decision when they meet formally on Monday to replace current President Robert Zoellick, the former US diplomat incumbent who is leaving in June at the end of his five year term.
The position is crucial for much of the developing world. The President oversees a staff of 9,000 economists, development experts and other policy specialists, and a loan portfolio that hit $258 billion in 2011.
Last year the bank committed $43 billion to new loans and grants, helping diverse countries to develop infrastructure, administration, and key sectors of their economies.
Bank experts say that Mr Zoellick has done a good job to unite a staff that became dispirited under his predecessor Paul Wolfowitz, and credit him with energizing the bank to act during the 2008-2009 financial crisis.
But they also say the institution needs a new direction that matches the requirements of a much-changed global economic landscape. It needs a cohesive vision for the future, according to former bank staffer Katherine Marshall, now a professor of government at Georgetown University.
The race was taken seriously early as the United States appeared unable to find a candidate while Okonjo-Iweala and Colombian economist and former finance minister Jose Antonio Ocampo threw their names into the hat.
Both were lauded as viable, with Okonjo-Iweala, who spent some 25 years in various positions at the bank, earning prominent endorsements.
But the White House surprised all with the nomination of Kim. Not a banker or diplomat like the previous Bank Presidents, the Korean-American physician is the head of the Ivy League Dartmouth College but is also known for his work with the World Health Organization on fighting AIDS in developing countries.
"It's time for a development professional to lead the world's largest development agency," President Barack Obama said.
Critics, however, raised doubts about Kim's lack of experience across the broad realm of development economics.
But he traveled to around a dozen countries to introduce himself, apparently convincingly enough to earn solid support.
Last week Bank directors interviewed the three candidates on how they aimed to run the Bank, in a process that aimed to show that the choice is made on merit rather than old political arrangements.
That gave rise to some hopes that one of the challengers might have a chance.
Indeed, on Friday as Brazil said that the BRICS emerging economies -- Brazil, Russia, China, India and South Africa -- would back one candidate and Ocampo withdrew and endorsed Okonjo-Iweala, some hoped she might have a fighting chance.
But Russia immediately broke ranks and endorsed Kim, almost guaranteeing that the tradition that Washington names the World Bank head and Europe supplies the leader of the Internationnal Monetary Fund (IMF) is likely to go unchanged.
"The only way around that is if European countries refuse to back the US candidate. In the current context, it doesn't seem likely," said Daniel Bradlow, a law professor at American University in Washington.
But former Bank economist Uri Dadush said the emergence of a competition did count for something.
"Before, when there was only one candidate, the US backing counted for 99 per cent and merit for one per cent," he said.
"Now, with several candidates, merit counts more but it not the essential thing."
Peter Chowla of the Bretton Woods Project, which monitors the behavior of the World Bank and IMF, said the process only appeared to be more open.
Developing countries "don't have the requisite voting power at the Bank, because the Europeans and the Americans have stalled reforms for decades."
"We still have what is essentially an appointment by the American President," he said.
Story First Published: April 15, 2012 11:14 IST