The World Bank is at a turning point, and India has a major voice in deciding its future. The serious candidates (Finance Minister Dr. Ngozi Okonjo-Iweala of Nigeria and Dr. Jim Yong Kim of the United States) present the 180 countries who sit on the Board of the World Bank with a clear choice between visions of the World Bank.
Two visions
Vision One is the World Bank as a full-service development institution that provides loans and grants and development advice to promote economic development through capable administration that allows governments to carry out their core functions — economic management, law and order, education, infrastructure, regulation and environmental management. This is the role that the Bank has played over decades in India and a role that continues to evolve as India's financial capacity grows and its development needs change. This is similar for other growing countries — during my time as World Bank Country Director for Brazil, the Bank's focus was that of a partner assisting Brazil address what now-President Dilma Roussef defined as “helping address the paradigmatic challenges” (which included finding a balance between development and conservation in the Amazon, building a platform for inclusive growth in the poor northeast and modernising the public sector). To lead an institution with this vision, the qualifications for the President are clear: exposure to the breadth of development issues in a wide variety of countries, experience in setting economic and financial policy, and experience in managing a multi-cultural large organisation.
Vision Two is that of the World Bank as an aid agency implementing the vision of “the anointed” in rich countries. In the U.S. this means the vision of domestic charities, which care little about or are hostile to economic growth but see development as being focused on health rights for the poorest, and see NGOs as the central delivery mechanism for these services. This vision is manifest in the appointment of the Administrator of USAID – a young physician whose main working experience is in the Gates Foundation — who champions the social sectors, and who opposes a role for USAID in critical areas like infrastructure development.
The candidates
The beauty of the contest for the President of the World Bank is that there are two serious candidates, one aligning with each of these visions. On the one hand is Minister Ngozi, who is the former Foreign Minister and also former number two in the World Bank, a woman with deep experience throughout the developing world, who is widely respected for her courage and demonstrated capability in diplomacy, strategy and management.
On the other hand is the U.S. nominee, Dr. Jim Yong Kim, an academic physician who has done fine work on complex medical issues (like tuberculosis) and who helped found an NGO which gets funds from rich people to help address the health needs of the poor in Haiti and Rwanda. Aside from his first five years in Korea, he has not lived in a developing country, has no experience in development issues in countries which have grown out of poverty, has no experience in finance, economics, business or regulation, and has a world view (as shown in Dying for Growth , his only published non-medical work) that economic growth leads to more poverty. His writings and work show no interest in the road followed by countries that have escaped from poverty (like his native Korea), and no grasp of the development choices by these countries.
President Obama is sending Dr. Kim on a road trip to seven countries, including India. If India is to be true to its claimed and proper role in the world, it will (a) define the qualifications it sees as necessary for the job (b) objectively assess Minister Ngozi and Dr Kim against these qualifications. If this process is followed, the outcome is obvious. In the words of fellow Harvard Professor and former World Bank economist Lant Pritchett “(Kim's nomination) is an embarrassment to the U.S. You cannot with a straight face say this person is the most qualified to lead the World Bank.” However, there is no doubt that the Obama administration, which will not want the embarrassment of facing accusations of “who lost the World Bank?” in an election year, will strong-arm countries into acquiescing with its frivolous choice. This is a time for India to stand up and be counted.
( The writer is Professor at Harvard University and former World Bank Country Director for Brazil .)
An editing error in the last sentence of the third paragraph has been corrected.
