July 06, 2012A physician takes the helm at World Bank
The assumption of office by a new chief at the World Bank is always an important occasion because his ideas and experience could change the direction of policies of the largest single source of lending to the developing world.
The taking over by Korean-American physician Jim Yong Kim from Robert Zoellick has an added significance this time since unlike the past when bankers, diplomats and economists had been at the helm. Kim has a good background in medicine and vast experience in fighting diseases like HIV/AIDS and tuberculosis in poor countries.
His last job was as head of Dartmouth College, a small but prestigious university and due to his different background, his nomination to the post by President Barack Obama had come as a big surprise to many people. He had competed against Nigeria's Finance Minister Ngozi Okonjo-Iweala for the World Bank presidency.
While taking over the office on 2nd July, 2012, Dr Kim, as usual, maintained a low profile and gave little hint about any new directions he might articulate for the Bank. Entering the World Bank building in Washington on his first day at the job, he said: "I am humbled and inspired to take over today as President.
I have spent most of my life working in some of the poorest communities in the world." He pledged continuity in the Bank's mission to help the poorest countries get on their feet, without giving any hint of changes to the work pattern set by his predecessor, Robert Zoellick. However, he stressed that the World Bank would continue to do its work with innovation, analytic rigour and great passion, in partnership with governments, civil society organisations, the private sector, and most importantly with the people living in poverty.
Although, Dr Kim has so far not revealed his real agenda or intentions, one could guess certain changes which could be his priority due to his background and Obama's preference for a humanitarian over a stereotyped technocrat. It seems that the main focus of the World Bank with Kim as chief could now change somewhat from project lending/macro-economy to poverty alleviation and fighting diseases in developing countries.
For such a transition to take hold, however, Dr Kim has to engage and take on board a major percentage of Bank's staff consisting of as many as 9,000 economists and policy specialists. Also, he has to prevail on the Board Members of the World Bank to agree to such a move. It must be recognised, nonetheless, that the change in emphasis would not be easy because, contrary to the project lending, end results of lending for humanitarian purposes or for projects yielding qualitative improvements are usually not very tangible or considered noticeable by a large majority of member countries.
As such, they are not very attractive for show purposes. Also, the chances of wastage or squandering the money could be higher in such projects as opposed to the conventional projects. However, the most immediate challenge to Dr Kim would be to ensure that the eurozone debt crisis does not set back the reform process in various countries and poverty-fighting efforts of multilateral financial institutions including the World Bank.
This is particularly so because the European countries now engaged desperately to keep their economies afloat would have much less inclination to assist the poorer economies of the world.
As it is, the role of the Bretton Woods institutions has always been shaped mainly by the degree of assistance and co-operation from the highly developed countries of the world.
Other than this, Dr Kim would be facing the usual squabbling between the member countries of his organisation over various issues and required to play his role in a constructive manner to reconcile various interest groups. For instance, developing countries have always been clamouring for a greater say in running the affairs of the World Bank.
The demand from certain emerging economies such as India and Brazil to accord them a bigger role in decision-making is now much more intense and to a large extent justified due to their increasing economic strength. Also there is now a strong resistance to the arrogated right of the US to nominate the World Bank chief and the exclusion of other countries from such a decision which is of vital interest for every member country.
We could only hope that Kim would in his own quiet way use his talents to reshape the policies of the World Bank to mitigate the present risks to the world economy, help enhance development assistance to the less developed countries and further the cause of humanity besides restructuring his organisation in accordance with emerging realities.
Last but not least. Although, Zoellick restored the institution's image and helped it adjust quickly to the financial crisis that erupted in the US, he left his successor with a burning controversy as he departed: on last Friday the Bank cancelled a $1.2 billion infrastructure loan to Bangladesh citing strong evidence of "high-level" corruption in the project and the lack of authorities in investigating it.
Dr Kim is therefore greatly expected to perform strictly in accordance with Bank's recent 'mission' statement that "the World Bank cannot, should not, and will not turn a blind eye to evidence of corruption."
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