Tonye Princewill

April 27, 2012

The World Bank aftermath: Power matters

The World Bank aftermath: Power matters

By Tonye Princewill
I WOULD have been pleasantly surprised if Finance Minister, Ngozi Okonjo-Iweala, had emerged as President of the World Bank—but still surprised.

If such positions were awarded strictly on merit, Okonjo-Iweala would almost certainly have won over Dr Jim Yong Kim, who is a distinguished healthcare scientist and academician rather than a banker.

She is, after all, a former Vice President of the Bank with related academic degrees from the apex Massachusetts Institute of Technology and proven expertise in financial administration.

In the international arena though, positions of power and prestige are rarely ever awarded on the basis of academic qualifications or work experience alone—that is, on “merit”, as we normally use the term.

Vested interests and the influence of the candidate’s home country are usually decisive factors. In fact, the word “merit” takes on a different meaning entirely at this level. It also connotes political merit.

You see, a person who heads a global important institution, like the World Bank, does not represent only himself or herself. He or she also represents the country of origin whose “qualifications” are considered as well.

I can appreciate the sentiments which Oxfam, the international aid agency, and others have expressed, in denouncing the Board of Directors decision. Indeed, no one would have been happier than I had the vote gone her way.

But, as Dr. John Igbeazien Oshodi, Secretary General of the Nigerian Psychological Association, recently noted in New Nigerian Politics: “It takes more than [a] resume [CV] and experience to get the position. This is a political position that requires more than having a doctorate in economics from Ivy League college”.

He then makes a most interesting and pertinent observation: That being the “United States needs the… [World Bank Presidency] to be able to pilot her international affairs with regards to democratic dispensation and capitalism”.

Considering where Kim comes from, Oshodi’s logic is well nigh impeccable. Though a U.S. citizen, Kim’s country of birth is South Korea–which is not only a minor industrial power, with a vibrant manufacturing sector, but also a highly strategic ally of the USA in the Far East.

As a participant in the Six Party Talks over North Korea’s nuclear ambitions, Kim’s Fatherland confers on him a much more potent and appealing political persona than Nigeria could do for Okonjo-Iweala. Nigeria’s global influence rests mainly on its oil reserves and population.

Actually, the International Monetary Fund, IMF and the International Bank for Reconstruction and Development, IBRD or “World Bank”, are known to place heavy emphasis on merit in the hiring of staff. Between them, they employ thousands of the best minds available, from all over the world.

But the higher appointments have always been political, with the post of Managing Director of the IMF being customarily awarded to Western Europe and the World Bank Presidency going to the U.S.A. In “Bretton Woods Institutions,” Ngaire Woods says the same holds true for lower management positions.

“Lower down…,” Woods writes, in a contribution to The Oxford Handbook On The UN, “similar conventions also continue in force. The Deputy Managing-Director of the IMF is always an American and most senior appointments in both organisations are made after the U.S. view is ascertained”.

New globe financial regime

The IMF and World Bank are known as “Bretton woods” institutions, after the town in the US state of New Hampshire, where delegates from 45 countries met in 1944, under the leadership of America and Britain, to create a new global financial regime.

Ostensibly the objectives were to prevent a recurrence of the Great Depression of the 1920s and ‘30s and to help rebuild war-ravaged Europe.

But a major reason was also to check the westward expansion of Russian-dominated, Soviet communism, which was feeding on European poverty and instability. The Bank, therefore, is partly a creation of global politics.

Although the World Bank and the IMF are technically United Nations agencies, they tend to operate independently—since their revenue comes from investments and lending rather than subscriptions from UN member states.

Power politics is an integral aspect of the World Bank’s governance and lending policies. According to Woods (2006), only eight of its 24 Executive Directors represent individual countries. The others represent groups, called “constituencies”.Thus 22 African member states have a single Director!

Voting power, he reports, is based on “quotas” which, in turn, reflect the economic power and capital contributions of the member states. The industrialised states have more influence because most of the money the Bank lends comes from them–together with Saudi Arabia which has its own Director.

This has nothing to do with Okonj-Iweala’s “merit” or Nigeria’s problematic but much over-flogged “corruption”.

We should stop crying and begging for political charity and commit ourselves to the attainment of economic, industrial and military power.

The positions that come with that will automatically follow. In other words – focus within. As the old African proverb goes: “If the enemy within cannot kill us, the enemy without can do us no harm”.