After an unprecedented competition, with three official nominees, the World Bank announced on Monday that the board had selected Jim Yong Kim, the Korean-born U.S. nominee, as the next president of the World Bank. My guest on this week’s Wonkcast is CGD president Nancy Birdsall, who discusses why it matters who leads the bank and sets out key challenges for the incoming president.
Why the World Bank and its President Matter
Nancy, who previously was head of the World Bank’s policy research department and later served as executive vice president of the Inter-American Development Bank, says the World Bank’s president is uniquely situated to lead international thinking and action on global development.
“The bank is the only development institution that works on a global level,” she says. “It provides a setting in which all nations at different levels of development can talk, learn from each other, argue, collaborate, fuss and hopefully move forward on the great development problems we face this century.”
Nancy says that the recent leadership selection process was more open and competitive than ever before, though in the end it was less transparent than many had hoped.
CGD invited all three nominees to speak about their vision or the bank at public events hosted jointly with The Washington Post. Jose Antonio Ocampo, the former minister of finance of Colombia, and Ngozi Okonjo-Iweala, minister of finance of Nigeria, both accepted; Kim declined.
“I was initially surprised,” Nancy says of Kim’s decision not to participate. “Kim is charismatic and a good speaker. I think he would have been convincing and compelling in that kind of a forum. But I can empathize with the idea that he wanted to take the time to speak to as many of the major members of the bank as possible, and that meant traveling around to their capitals.”
Challenges Facing Kim and the World Bank
Nancy has written extensively on how the World Bank must modernize to become a more effective contributor to development in the 21st century, work summed up in a recent blog post on Three Questions to Ask the Next President of the World Bank. I ask her: what is the single biggest challenge facing Jim Kim and the bank as he takes leadership in June?
“I think the biggest challenge is to work with the many members of the bank on how to set new directions,” says Nancy. “In particular, how to interact with the dynamic emerging economies like China, India, Brazil, and several others who are now in a position to have influence in the way the bank operates.”
Related to this, she says, is the future of the International Development Association (IDA), the bank’s soft loan window for the world’s poorest countries. Nancy says that a big question for Jim Kim and the bank is what to do as many IDA countries graduate out of the program in the years ahead. Many countries that remain eligible for IDA will be weak and fragile states, often with ineffectual and corrupt governments. How the bank should try to help in these countries, the subject of a newly released CGD report, will be yet another challenge for the new president. Nancy emphasized the need for the bank to change the culture of the bank to allow for experimentation, trying, failing, and adjusting on the basis of evidence in these difficult settings.
Problems of the global commons–those that span national borders, such as climate change, drug resistant pathogens, and the collapse of fisheries—are increasingly important barriers to poor people’s efforts to escape poverty, Nancy says. But because no single country can solve them alone, the bank’s primary instrument, country loans and grants, are not well suited to so addressing them. Nancy suggests that Kim should seek a mandate from the bank’s shareholders to develop new ways to help solve these problems. But not necessarily right away.
“It ought to be on his agenda, but maybe not in the first 100 days,” Nancy Says. “My sense is that because of the controversy surrounding his election, he’ll spend the first 100 days listening, thinking, and deciding about key appointments inside the Bank.”
I’d like to thank Alexandra Gordon for serving as producer and recording engineer, and for helping to draft this post.