Elizabeth Stuart (@ElizStuart), Oxfam’s Bank-watcher in Washington, reflects on the challenges facing the new World Bank president.
To the surprise of precisely no one, the next president of the World Bank is Jim Yong Kim, an American doctor, anthropologist, academic, activist and organizational leader. As lots of commentators including Oxfam have said, the process by which he was chosen was a sham, which is a great shame as the man himself is a development hero. Thumbs-up to the pick, thumbs-down to the process by which he was chosen.
So what kind of leader will Dr Kim be? By all accounts, he has an impressive history of getting things done in complex institutions: he himself has called his alma mater, the WHO, “one of the most complicated bureaucracies in the world”. Sharp elbows will serve him very well in the Bank, a place where management lines are notoriously nebulous, both because of its complex structure of matrices, anchors, regions and hubs, and the difficulties of negotiating the executive board made up as it is of different coalitions and interests (the primary divide on the board is advanced and developing/emerging economies, but often countries split differently on different issues). And then there’s the US Congress – which continues to try to micromanage relatively minor aspects of the Bank’s work – to assuage.
Problem number one is a paradox. Development is complex and multi-dimensional. The World Bank, by its very nature, needs to be across all aspects of development. One of its latest pushes is on road safety for instance, and with good reason: 1.3m people are killed on roads each year, 90% of whom are in developing countries. But this is just another issue to add to the seemingly never-ending list of Bank initiatives. One reason why the institution has not achieved the big development successes that might be expected is its overreach. So how to be an expert on everything without trying to actually do it all?
Another very real dilemma he’ll have to negotiate is infrastructure. Lack of roads, electricity, ports, railway networks etc remains a massive issue for developing countries, and for most of them private sector finance, which often demands double-digit returns, is just not feasible. The BRICs say getting their hands on affordable finance to build what they need to grow it is a key reason for their setting up their own development bank, which could, in part, rival the Washington one. But lending for infrastructure is very hard for the World Bank. How to ensure that the maximum number of people have access to affordable energy, for instance, without harming – often the most vulnerable – populations in the process is a very difficult issue indeed.
Dr JimYong Kim
And then there’s the problem of keeping emerging countries engaged, bearing in mind this is where almost three-quarters of the world’s poor live. They’re already looking elsewhere for finance (see above: in future it’s not just going to be Africa that looks to China for cash). How can the Bank compete, especially when it has just given the institutional blow-off to Africa, Latin America and Asia’s choice for president? One solution being proposed by a Center for Global Development working group: expand IDA (the Bank’s very low interest loans and grants) to middle income countries, provided it’s very tightly targeted at fighting poverty.
Let’s hope that he will successfully square these differing and competing demands, as there’s lots to be done. Every organization will have a list of priorities for a Kim Bank, and here are Oxfam’s top three:
1, get rid of health user fees. Poor people can’t afford to pay out of pocket to see a doctor and the World Bank needs to work with countries to make healthcare free
2, stop investing in land grabs which displace poor people, and affect their ability to feed themselves
3, help countries make the transition to low carbon economies
Just a few more demands to add to Dr Kim’s welcome pack.
Elizabeth Stuart is head of Oxfam International’s Washington DC office.
And Chris Blattman perfectly captures the irony of the debate over the ‘contest’ for the job with a tweet from @JustinSandefur: “#WB race = strange bedfellows: free-market economists 4 3rd world democracy vs pub health humanitarians 4 US imperialism?”
Barbara Stocking (my big boss) adds her bit on the FT blog