The World Bank announced on April 16 the selection of Dr. Jim Young Kim, currently president of the prestigious Dartmouth College and the co-founder of highly respected Partners in Health, as its next president. In theory at least, Dr. Kim was one of the three candidates for the position – the other two being Ngozi Okanjo-Iaewala, the Nigerian Minister of Finance and previously a Managing Director of the World Bank, and Jose Antonio Ocampo, a former Colombian Minister of Finance and high-ranking UN official. But in the end, Dr. Kim’s US citizenship was the decisive determining consideration. Few countries were willing to buck the United States’ nominee. On July 1, Dr. Kim will become the twelfth successive American to hold the office.
Doubts about the selection process, however, should not detract from Dr. Kim’s impressive qualifications for the job. Partner in Health, an organization that he co-founded with Paul Farmer some ten years back has been a pioneer in fighting for improving health outcomes around the world. And he is widely admired for his leadership of the prestigious Dartmouth College. He will need to muster all his leadership skills to deal with the major challenges facing the World Bank.
The World Bank today faces a markedly different world than what it did at its formation in 1945. The developing world in this period has gone from being overwhelming very poor or poor at the time, to being predominantly middle-income (with per capita incomes of over US$1,000) today. There has been a significant decline in world poverty, including in the last ten years also in many countries in Sub-Saharan Africa that had previously lagged behind. Moreover, more than seventy percent of the absolute poor today are in middle-income countries that should be much better placed to devote their own national resources for poverty alleviation. This reduces significantly the demand or need for the Bank’s financial resources for poverty alleviation. The World Bank’s global knowledge sharing function would take on much more importance, particularly for a growing number of its middle-income clients.
On the political front, linked with economic progress, there are now developing countries who have to be considered as significant world powers in their own right. This includes the so called BRICS – Brazil, Russia, India, China and South Africa – but also countries like Turkey, Indonesia, and Mexico. This raises issue of their appropriate role in the governance of the World Bank. The question is whether these emerging powers can be energized to play a greater role in shaping the Bank’s future or will they continue to be passive shareholders looking after their narrow parochial interests.
Finally, the world today faces many challenges solutions to which would require global cooperation and action. Climate change is one such area. But there are also issues of conserving and water resources, financial sector oversight, trade, health, among others. The World Bank has so far not played a significant role in addressing these challenges.
Internally, the World Bank is a considerably weakened institution. Various internal studies point to a worrisome trend of a substantial loss of technical skills. Its management is weak as nationality and political considerations became the dominant considerations in senior appointment, an ill that the Bank had eschewed successfully in the first 50 years of its existence. The debate about the open and competitive selection process of the president completely overlooked the importance of an open and competitive process of the next layers of senior managers who may in reality have a much bigger impact on the World Bank’s effective functioning. After having eschewed nationality considerations in senior appointments for much of its history – in contrast with the practice of most other international organizations – regrettably recent World bank presidents abandoned it in an attempt to please various constituencies. Dr. Kim has an opportunity to put the debate in a broader context and prevail on the shareholders to allow him a truly merit-based selection of his key lieutenants.
These are but some of the major challenges Dr. Kim will have to confront. He will need to take swift and decisive action, without which the World Bank is surely headed into irrelevance and oblivion. We can only hope that he has the will and ability to do so.