World Bank accused of lack of transparency after US chief chosen

 

THE WORLD Bank chose Jim Yong Kim, the US nominee, as its next president yesterday, but his leading rival attacked the selection process and said the decision was not made on merit.

Dr Kim, a public health expert and former president of Dartmouth College in New Hampshire, becomes the first World Bank leader with a background in development. Previous presidents have always been bankers or Washington officials.

Dr Kim will have to consolidate his authority after both of his rivals – Nigeria’s finance minister Ngozi Okonjo-Iweala and José Antonio Ocampo, a former Colombian finance minister – said he was a weaker candidate and won only because of US voting and political power.

“You know this thing is not really being decided on merit,” Ms Okonjo-Iweala said in a briefing reported by the AFP news agency. “It is voting with political weight and shares and therefore the United States will get it.”

Mr Ocampo withdrew from contention on Friday, endorsed Ms Okonjo-Iweala, and said the selection process was not fully “open, transparent and merit-based”.

Voting power at the bank is heavily weighted towards the US, Japan and western European countries and, by tradition, the president is always an American.

Emerging economies failed to unite behind a single candidate, with both Russia and Mexico declaring their support for the US candidate.

The first challenge for Dr Kim will be to set out a clear vision for the institution. During the selection process, he called for an “inclusive” development, such as investment in health and education, while nodding to infrastructure, economic growth and “public goods” problems such as climate change. That has led to a backlash from some development economists who fear he will be more focused on palliative actions rather than promoting growth.

“Dr Kim’s appointment was inevitable. Knowing that Zoellick’s term was up this year, in 2011 the Obama administration would almost certainly have withheld support for Lagarde’s appointment to the IMF if European nations had not agreed in advance to support whomever was Washington’s candidate for the World Bank,” said Simon Evenett, professor at the University of St Gallen in Switzerland and a former World Bank official.”

– (Copyright The Financial Times Limited 2012)