Wednesday, April 25, 2012

Economy: World Bank: Waiting For 'Other Shoe' To Drop

World Bank: Waiting For 'Other Shoe' To Drop
By Ernest Corea*
Courtesy IDN-InDepth NewsAnalysis

WASHINGTON DC (IDN) - When will the “other shoe” drop? And how? Will it create a reverberating, equanimity shattering thud? Or will it drop with the muted thump of a toddler’s soft toy falling on a plush rug?

With the election process at the World Bank (the Bank) completed, and Dr. Jim Yong Kim, president of Dartmouth College, confirmed as the institution’s twelfth president, questions like these are now likely to be running through the minds of the Bank’s professional staff. These are the men and women on whose efforts the effectiveness of the Bank depends.

They have lived through many changes, and most of them soldier on, adapting to “new directions” that new presidents have launched. Some have been at the Bank long enough to know that many new presidents feel a compulsive urge to impose structural change on the Bank, even if such change does not always seem to be essential or even necessary.

Some are convinced that they know more about development than any new president brings to his job. Kim is no doubt aware of how the Bank has evolved, and he has a few months in which to decide how best to meld his own experience and expertise with those of the Bank.

Meanwhile, there is an important item of unfinished business which the international community needs to consider before the new presidency begins: paying appropriate tribute to current president Robert Zoellick for having rescued the Bank from staff demoralization and institutional decline.

Off the Wall

Zoellick’s predecessor was Paul Wolfowitz who reportedly fared well at the US State Department’s Policy Planning Office, and as ambassador to Indonesia. Much has been written and said about Wolfowitz being the first to suggest a focus on Iraq after the 9/11 attacks on the US. His first recorded mention of the need to go after Iraq was during a meeting at the presidential retreat, Camp David, shortly after the attacks. His views on Iraq turned out to be almost all off the wall. His nomination by Bush for the Bank’s presidency when John Wolfensohn’s term was drawing to a close was met with skepticism but not with outright hostility.

Shortly after he assumed office, however, disquiet grew over his “dating relationship” with a Bank staff member. Some staff felt that as a matter of propriety, he should not have accepted Bush’s nomination. Others argued that the Bank’s board of executive directors had let the institution down by reaffirming the nomination although a cloud of “conflict of interest” loomed over it. The disquiet grew close to calamitous when he engaged himself in securing a secondment to the State Department for his dating partner on terms that were considered extraordinarily favorable to her.

A group of highly respected former senior Bank officials, almost all vice presidents, signed a document suggesting that he should leave. The Bank’s board representing its entire membership was said to be grappling with how best to arrange his departure. Staff morale plummeted, and some Bank vice presidents went from office to office urging staff to remain steadfast and patient because “this too shall pass.”

Not a Dog

Faced with mounting hostility, Wolfowitz did what so many Washingtonians do in such circumstances. No, he did not buy a dog, a course of action recommended by a past US president to officials in Washington in search of a friend. Wolfowitz hired a lawyer. Following much to-ing and fro-ing, Wolfowitz was gone, after two years in office. Reuters news agency reported with British delicacy that Wolfowitz resigned “after a protracted battle over his stewardship, prompted by his involvement in a high-paying promotion for his companion.”

The Bank was jubilant but in disarray. Into this situation came Robert Zoellick, nominated by Bush and accepted without delay by the Bank. Zoellick had served both in public service and in the corporate sector. Early on in his stewardship, Zoellick laid down six priorities for the Bank’s operations to be effective: helping to overcome poverty and spur sustainable growth in the poorest countries, especially in Africa; addressing the special challenges of states coming out of conflict; developing a competitive menu of “development solutions” for middle income countries, involving customized services as well as finance; playing a more active role with regional and global “public goods” on issues crossing national borders, including climate change, HIV/Aids, malaria, and aid for trade; supporting those advancing development and opportunity in the Arab world; and fostering a “knowledge and learning” agenda across the World Bank Group to support its role as a “brains trust” of applied experience.

Much will be written and said in the future about the significance – or lack of it – of these priorities, and of the extent to which they guided the Bank and its operations under Zoellick’s leadership. This much is already clear. Quite apart from his prescriptions for development and for Bank operations, he put the stamp of his own integrity on the Bank in such a manner as to rescue it from the low point it had reached when he began his term in office. The international community is obliged to take note of and respond to this reality.

Weighting for Votes

Come July 1, 2012, Kim will assume duties as the first Bank president of Korean ethnicity – but will do so as an American. This is the compromise that the Obama Administration offered the World Bank in response to increasing discontent over the informal arrangement under which the Bank presidency goes to an American and the parallel position of Managing Director at the International Monetary Fund (the Fund) is awarded to a nominee from Europe.

The arrangement is kept alive not by some mythical respect for unwritten agreements among “ladies and gentlemen” but by the weighted voting patterns established at both the Bank and the Fund from their inception. The current systems of appointment will change when voting arrangements are brought into the 21ist century, with provision for periodic future changes that should be consistent with the changing circumstances of member nations.

The system of one-nation-one-vote was introduced into the United Nations family as a reflection of Western political practice. More recently, many UN institutions have adopted the process of decision making by consensus: the broadest possible convergence of views in the middle ground between contending positions. Both are superior to a system of weighted voting.

Some stirrings towards change might have been felt with the emergence of something approaching competition at the recently concluded election of Kim. As the Nigerian contender Finance Minister Ngozi Okonjo-Iweala told a BBC interviewer who asked whether she was disappointed at Kim’s election: “Absolutely not. Actually, if you are here with us in Abuja, we are celebrating. And many young people all over the continent and older people are celebrating, congratulatory messages are pouring in. Why? Because we feel we've won important victories. The first victory is that we have made this process competitive…..

“We will continue to push for an open merit based and transparent process as was promised by the Development Committee of the World Bank and the G20 two years ago….. we should not be fixated on the geography of where the person comes from. We should be fixated on the talent they bring to doing the job. There is no reason why an American should not lead. But by the same token, there is no reason why a Nigerian should not lead if they are the best qualified.”

Scaling Up

Kim’s interest in major health issues, his real-life experience in this field, and his sense of caring for those excluded from good public health facilities are well known and widely acknowledged. Does this suggest that he will steer the Bank towards an overwhelming emphasis on health issues? That would be counter-productive.

Several aspects of his public life suggest that he is not a one-note player. In addition to being a public health enthusiast and expert, he is a respected academic, an innovator, an experienced manager with a commitment to diversity, a capacity for “thinking outside the box” (pardon the cliché), and a leader who has faith in his colleagues as well in the intended beneficiaries of the programs he has managed.

As Fred Hiatt, editor of the Washington Post’s editorial page describes it: “The mission of the World Bank is to help lift people out of poverty, and Kim will be the first bank leader who has dedicated most of his professional life to working with and for the world’s poor.

“With another pioneering physician-anthropologist, Dr. Paul Farmer, Kim established an organization dedicated to treating poor people in Haiti, Peru, Rwanda and beyond. The founding principle of Partners in Health was that everyone is entitled to first-class health care, no matter where they live or how poor they are.

“The significance of Partners was that it didn’t just declare that as a principle: Farmer and Kim proved, in the face of many doubters and over the course of many years of hard work, that first-class health care can be delivered, respectfully, in the poorest precincts of the poorest countries. One of its key innovations was to enlist the poor themselves into the health system, training community workers to make sure, for example, that patients take their TB or AIDS medicines every day.

“Kim, winner of the MacArthur Genius fellowship in 2003, showed that the Partners method could scale up when, as an executive at the World Health Organization from 2003 through 2005, he helped vastly expand the number of people in Africa receiving treatment for AIDS. Now he will get a chance to scale up another notch.” Or maybe several notches.

In his youth, Kim played quarterback for his high school’s football team (the North American version, not soccer). As the team’s quarterback, a major responsibility was to help move the ball forward until it touched down at its desired goal – while thwarting the opposing side. That’s a talent that will help him as Bank president. [IDN-InDepthNews – April 24, 2012]

*The writer has served as Sri Lanka's ambassador to Canada, Cuba, Mexico, and the USA. He was Chairman of the Commonwealth Select Committee on the media and development, Editor of the Ceylon 'Daily News' and the Ceylon 'Observer', and was for a time Features Editor and Foreign Affairs columnist of the Singapore 'Straits Times'. He is Global Editor of IDN-InDepthNews and a member of its editorial board as well as President of the Media Task Force of Global Cooperation Council.

Copyright © 2012 IDN-InDepthNews | Analysis That Matters

Picture: Dr. Jim Yong Kim, President-elect of the World Bank Group | Credit: Wikimedia Commons