By OMOH GABRIEL, Business Editor
WITH the withdrawal of Colombian ex-finance minister, Jose Antonio Ocampo, from the World Bank Presidency race last Friday, the die is now cast between Dr. Okonjo-Iweala of Nigeria and Jim Yong Kim, a Korean-American.
Kim who is politically backed by US, Europe and Japan which control about 54 per cent of the votes to be cast today in Washington DC. From the look of things, the deal has been sealed by Europe and US with the support of Japan and Canada.
But all the same the rest of the world whose finance ministers and the Central Bank governors will meet over the issue has the rest of the votes. Brazil, India, Russia, China and South Africa are considering block vote also for their own candidate, Dr Okonjo Iweala. This thinking was what probably informed the decision of Ocampo to withdraw from the race to brighten Okonjo-Iweala’s chance.
Emerging market nations
With the board of the World Bank to meet today to pick a new president, Ocampo said he hoped emerging-market nations would rally behind Nigerian Finance Minister Ngozi Okonjo-Iweala in a race that he said had turned highly political.
Okonjo-Iweala, a former World Bank Managing Director, is now the sole candidate from developing nations in a race against U.S. nominee Jim Yong Kim, a Korean-American health expert who appears almost certain to secure the post by block vote from US, Europe and Japan. Ocampo, who was nominated by Brazil, said his candidacy had been “handicapped” by a lack of support from his own country. Colombia said last month it was focusing on a bid for the presidency of the International Labor Organization, where it had a greater chance of success.
If Dr Okonjo Iweala does not win it is not because she is not the right person but because of international politics involved in the process of selecting the World Bank President which often times sacrifices merit on the altar of international political alignments.
Ocampo puts it clearly thus: “It is clear that the process is shifting from a strict merit-based competition, in which my candidacy stood on strong grounds, into a more political-oriented exercise. In this process, I stand on weaker grounds due to the lack of open support from the government of my home country, Colombia.”
Ocampo, now the director of economic and political development at Columbia University in New York, said he did not believe the selection process had been conducted in a fully open, transparent and merit-based fashion, but it had established a strong precedent.
If the process is not transparent what signal is America and Europe which claims to champion merit based appointments in a democratic systems? What morals will the US and the rest of advanced democracy have against those they call despots in other parts of the world?
What right will America and Europe have to condemn flawed election in Africa? Will this show of naked power weaken the World Bank? Will developing and emerging economies muster courage to ask the West to take their World Bank and set up something for themselves?
However, Ocampo’s decision to leave the race does not mean all developing countries will support Okonjo-Iweala in a straw poll today when the World Bank board tries to find consensus on a successor to Robert Zoellick, who is departing in June. Indeed, the promise of a united front from emerging markets evaporated on Friday when Russia said it would support Kim, becoming the first major emerging economy to do so.
Russia in a statement on Friday said: “Taking into account Mr. Kim’s considerable professional qualities, as well as his experience and knowledge, the Russian Federation will support the candidacy of Jim Yong Kim during the voting by the bank’s board of directors.” Under an informal agreement, the World Bank has always been headed by an American and the International Monetary Fund by a European.
Emerging-market nations have been seeking to challenge U.S. leadership at the bank to increase their influence in global economic institutions long dominated by rich nations. While Kim is still the favourite to win the World Bank presidency due to backing from the United States and European countries, a rigorous challenge from developing countries could put them in a stronger position to extract concessions.
This challenge also increases their chances of winning senior jobs coming open in the next few months, including chief economist and head of the International Finance Corp, the World Bank’s private-sector lending arm. Okonjo-Iweala thanked Ocampo and said his presence had helped to further a shared goal of an open selection process.
“I am proud that Dr. Ocampo and I have helped make history by changing the way that World Bank presidential elections are contested,” she said in a statement. Last week the Board of Executive Directors of the World Bank conducted interviews for the three nominated into the position. Dr. Mrs Ngozi Okonjo-Iweala was first to be interviewed, followed by Jose Antinio Ocampo and Jim Yong Kim
Mr. Jim Yong Kim is a US national and President of Dartmouth College, New Hampshire. The Korean-born Kim, 52, according to USA Today represents a break from the financiers and bureaucrats who have run the World Bank. This Mr. Uri Dadush, director of international economics at the Carnegie Endowment for International Peace in Washington and a former World Bank Director of economic policy says is both strength and a weakness.
“This is a very smart man and has many of the characteristics that you would look for in a World Bank president. He is going to have a major challenge to overcome a characterisation as being too focused on the health and education agenda and to develop a deep understanding of the broader development agenda of the bank.”
Experts agree that Mr Kim lacks experience in boosting economic growth, a key part of the bank’s mission yet he is favoured to be selected today as the President of the World Bank. Dr Ngozi Okonjo-Iweala, a Nigerian national and Coordinating Minister of the Economy and Minister of Finance, 57, is a respected economist and diplomat, the mother of four children. She has spent more than two decades in numerous positions at the World Bank.
Ordinarily, Dr. Okonjo-Iweala who until recently served as the Bank’s Managing Director would be expected by experience to pick up the job. But the President of the World Bank as described by Ocampo is made out of choice of convenience by the super powers. It is a known fact that when Europe has its citizen as Managing Director of the International Monetary Fund, the United States of America will produce the President of the World Bank and it is this old order that emerging economies are out to correct, but will they succeed?
Singing a discordant tune
The United States under President Barak Obama will not want to lose face this year being an election year. The Yankees will boot out Obama if he fails to deliver the World Bank President to the United States. This is why the White House has gone all out to ensure that its allies in Europe and Asia are on its side. The Americans have penetrated the BRICS and Russia is already singing a discordant tune from the rest.
“Mr. Kim the America nominee has been going round the globe to take American message to the rest of the world to vote for the America nominee. Nigeria has not done the same apart from the fact that AU and ECOWAS have endorsed Okonjo-Iweala. The rest has been noise from those who do not matter in the issue at hand. Those who will vote today are the ministers of finance of the various member countries. They will vote according to their country’s decision.
If Okonjo-Iweala does not get the job it is either because the US, as usual, insists on having its way to safeguard Obama’s reelection, or because Nigeria did not do enough to garner support for her. Mr. Kim is a distinguished figure in global health and development, noted for his innovative work fighting the spread of AIDS and tuberculosis in developing countries which some believe makes him a strong candidate to lead the World Bank.
Okonjo-Iweala’s entry into the race is in line with the belief that the appointment of the leadership of the World Bank and its sister institution, the International Monetary Fund, should be merit-based, open and transparent. It was a rare example of unity among Africa countries often at loggerheads as they strive for dominance on the continent. The United States has held the presidency since the bank’s inception after World War Two, and a European has always headed the IMF. That leaves the contest between Nigeria’s candidate and that of the United States.
Although the World Bank board would like to reach a consensus, Washington retains the largest single voting share and could expect the support of European nations and Japan, the bank’s second-largest voting member. The rise of emerging economies such as China, India and Brazil has put pressure on the United States and Europe to throw open the selection process for both the bank and the IMF.
Transparent merit based process
Last year, all of the bank’s 187 member countries agreed on a transparent, merit-based process to select a president. If that is followed the chances are that Dr. Ngozi Okonjo-Iweala would be selected on merit. But if the United States insists on voting by shareholding volume, as the single largest share holder, it will vote for its own candidate and would expect its allies in Europe and Japan to support its candidate. If that happens, the US as usual will have its way and Jim Yong Kim would become the next World Bank President. This is more of politics and diplomacy than mere qualification and experience. If the Nigerian Government had pushed far enough Russia, China, Brazil, India and other African countries would support Okonjo-Iweala. Besides, this is the first time a woman will be coming forward for the top World Bank job.
Even if all these efforts were made, with the US, Europe and Japan holding 54 per cent of the votes, the decision has been made, the odds are against Okonjo-Iweala but a strong message has been sent to US and Europe, it will not be business as usual in the selection process. For the very first time the United States has faced an unprecedented challenge to its grip on the World Bank presidency, with emerging African economies nominating a candidate to set up the first contested bid for the top job at the global development Bank.