Sunday, March 25, 2012


JYK, NOI& Jose Ocampo

The race for the job of the World Bank president has made international politics interesting for various reasons. First, this is a position that is traditionally held by a US citizen and is a routine appointment by whomever is the US president.  The North challenged by the global South and has agreed to a merit based and open selection of the new WB president last year.  Second, a woman is vying for the position (If she wins, the top 2 IFIs would be headed by women.Christine Lagarde heads the IMF). Third, the front runner has stepped down. Thus, it is a three way race between three minorities- Jim Yong Kim (An Asian-American), Ngozi Okonjo- Iweala (An African woman) and Jose Ocampo (A Columbian)
. Why should we care about who heads the World Bank? We should care because World bank policies affect countries like ours. Over the years, the IMF and the World bank have been criticized for proposing policies that harm developing countries economically. Their policies are considered harmful not necessarily because they are evil but because they fail to consider local factors in their policy recommendations and conditions for aid. Consequently, their policies negatively affect the economies of developing countries – remember SAP.

Bretton Woods policies also tend to benefit the global North rather than South- the classic example of this is trade liberalization and its effect on developing nations.
I do not know a lot about Bob Zoellick’s positions and legacies at the World Bank  but I know that in the last few years the institution has been involved in open data and project mapping in Africa. That is a good thing because it promotes transparency.
The World Bank Article lists the criteria for a World Bank president as:

  1. a proven track record of leadership
  2. experience managing large organizations with international exposure, and  familiarity with the public sector
  3. ability to articulate a clear vision of the Bank’s development mission
  4. a firm commitment to and appreciation for multilateral cooperation, and
  5. effective and diplomatic communication skills, impartiality and objectivity
Considering the level of development and urbanization that would occur in the global South in the following years, now is the time for the institution to be headed by someone who knows the business and who can direct the bank so that its development objectives are achieved.  There have been calls for an “unconventional” president that would transform the organization in the areas of its goals and internal structure. Three candidates have been nominated for the position. They are:
•                     Mrs Okonjo- Iweala (NOI). She is a favourite for the position and she is eminently qualified for the job. However,  her disconnect with the realities of her country may mean that her leadership of the institution may not translate into positive changes for developing countries. Secondly, Mrs Iweala’s country of origin may be third world but her ideals are similar to that of an American or European- If one listens to NOI, her policies and proposals seem elitist.
•                     I never heard of Jim Yong Kim until this afternoon. He also has very  credentials that put him in good stead for the job.  He is also an unconventional candidate because he is an outsider- he is not an economist. However, he needs to be accepted by developing  countries even if it is only for legitimacy purposes.  His lack of financial and economic experience may work against him but hey, he is a university president. He surely knows a thing or two about administration   
•                     Jose Antonio Ocampo Columbia’s former finance minister and academic is a well liked candidate that lacks the support of his country but was nominated by Brazil and Dominican Republic. He is also eminently qualified and has served IFIs in various capacities.

The question is: which of these candidates is capable of transforming the Bank and repositioning the global institution to achieve the goal of poverty reduction? Answer: I can’t tell because all three meet the criteria but I submit that JYK would win because 1) historically, the WB head has been a US nominee. 2) Even though the North has pledged to an open and transparent system for choosing the new president, the North holds majority of the voting bloc and decides who wins the presidency.
Not to sound pessismistic, the individual that would emerge as the next WB President seems a done deal but I would welcome any surprises.
May the best man win.

1 comment:

  1. I for one has lost all confidence in both the World Bank and the IMF on issues related to the development of Africa. Matter of fact, I think the fear of both institutions is the beginning of wisdom, knowledge and understanding for any African country. Why did I say so? SAP is one example. It also seems as if whenever the leaders of these institutions visit an African country trouble seems to start after their departure. For example Christine Lagarde visited Goodluck on the 19th of December 2011 and praised him for his economic policies (including the then impeding oil subsidy removal), trouble broke out the first week of January 2012 over oil subsidies.

    It's not as if the policies of these institutions are completely detrimental to the development of African countries (at least not all of them), the problem is, the policymakers in these institutions lack a fundamental understanding of the extent of our underdevelopment and the dynamics of the political and socio-economic workings of African countries. All these policymakers see are just data and that's what they go off of when making decisions.

    Take for example, the case of Nigeria spending a big chunk of its revenue subsidizing oil; the oil which the importers then turn around and sell in other countries like Ghana. It certainly seems rational to any outside or impartial observer to say the subsidies should be removed. Heck it seems rational to me and I'm not an outsider or a wealthy Nigerian by any means. However, I understand that to remove the oil subsidies, certain infrastructure and amenities needs to be put in place to relieve the hardship the removal will cause on the common populace. It just makes sense to me that in a country where virtually every facet of life is currently dependent on generators, you may want to fix the electricity problem before contemplating raising the price of the gas these generators run on.

    The World Bank and the IMF's policymakers don't have this insight that I have on the oil subsidy removal policy or any other policy for that matter (at least it seems like judging by their track record). As I mentioned earlier, all they see is data and remember that data by itself can be interpreted in many ways. This is why the World Bank and IMF's policies have been terrible for African Countries. These institutions don't really understand us so they cannot craft policies that can really help us. What they do is to propose "one size fits all" policies that seem rational at face value but detrimental because of where we are developmentally as a nation or continent.

    Now which of the candidates can fix these issue? I really don't know. Iweala and Ocampo I think have the best chance because they grew up in developing countries. Even though Iweala has views in line with the policies of these institutions as you said, I don't think it's necessarily a weakness in her candidature as far as we the developing nations are concerned. The issues is, does she understand the inner-workings of these developing nations? Going by her role in the oil subsidy debacle, she may not and that makes me lean towards Ocampo (at least till I discover he doesn't understand either).

    Even with all I've discussed however, I still say Iweala should become the next World Bank President. It's good for the image of Nigeria, Black women and Nigerians. Also, the real questions is whether the World Bank and the IMF are really the saviors we've been waiting for? I say they are not. Like Obama said, "we are the saviors we've been waiting for". We need to solve out problems ourselves and if we are waiting on these institutions to solve them for us, we'll wait a long time and perhaps our future is doomed.