The World Bank’s Wrong Choice

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NEW YORK – The selection of the American nominee Jim Yong Kim as President of the World Bank, over Nigeria’s finance minister, Ngozi Okonjo-Iweala, who was overwhelmingly regarded as a vastly superior candidate, is impossible to condone but easy to explain. It also points to serious dangers for the unfinished task of development.

The selection process suffered from several inequities and non-transparent features that undermined the United States’ claim to the contrary. Indeed, those claims were of a piece with the linguistic obfuscations that dominate American public debate: just as carpet bombing was called “pacification” during the Vietnam War, today illegal immigrants are called “undocumented aliens.”

Thus, the rollout of the American propaganda machine for Kim, who traveled to many capitals worldwide with US Treasury support and promises of American largesse, surely biased the vote against Okonjo-Iweala. And, after all, the World Bank is a donor institution. So potential borrowers like India and Mexico, which should have voted for Okonjo-Iweala, acted prudently and voted for Kim instead. Her human capital was no match for his financial capital.

In a genuinely open, merit-based contest, the 25-member Executive Board’s deliberations should have been preceded by debates between the candidates. I suspect that Okonjo-Iweala, with her enormous competence and renowned wit, would have gotten the better of Kim. The world would also have seen why so many of us were rooting for her.

Again, the worldwide influence of the powerful liberal media in the US should not be underestimated. While The Economist backed Okonjo-Iweala, The New York Times endorsed Kim. This is an election year in the US: if President Barack Obama had nominated a lamppost, America’s “newspaper of record” would have found it to be possessed of excellent credentials.

Moreover, just as Ralph Nader’s candidacy (and the US Supreme Court) prevented Al Gore from defeating George W. Bush in 2000, one must recognize that Okonjo-Iweala was undercut by the candidacy of José Antonio Ocampo, a former finance minister of Colombia, who was backed by Brazil. His candidacy made Okonjo-Iweala look like a regional “African candidate,” while Ocampo was the “Latin American” candidate.

Brazil should have worked with India, Mexico, and South Africa instead, to produce unified support for Okonjo-Iweala. When Brazil did move in that direction, it was too late to make any difference.

And now one cannot suppress the thought that Kim’s election could turn into a disaster for the cause of development. His tirade in 2000 against the liberal reforms that have transformed countries like India and China into global growth engines, reduced poverty, and benefited marginalized groups shows that he lacked good judgment on fundamental issues. No one recalls any expression of regret by him, which suggests that he persists in such folly – and would use conditionality to turn the clock back on decades of progress in development economics.

But my fear is that Kim would be a disaster even on health-care issues – an area where he has rightly earned credit for his work on AIDS, malaria, and tuberculosis. Thanks to the economic growth that resulted from the reforms that he denounced, countries like India and Brazil now have higher revenues to spend on health care for the poor, among other public goods.

As a result, the public-health questions that Kim will face at the World Bank are very different from the “big” diseases with which he dealt in the past. India, for example, is struggling with the balance between public and private provisions of medical care for routine health problems, and with questions of medical training and availability (that is, should India have “barefoot doctors,” or aim for only fully qualified practitioners?).

Can Kim lead on these and other issues that are beyond his experience? Foreboding is in order.

Copyright: Project Syndicate, 2012.

Jagdish Bhagwati
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Jagdish Bhagwati, Professor of Economics and Law at Columbia University and Senior Fellow in International Economics at the Council on Foreign Relations, is the author of In Defense of Globalization.

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