TMP editor, Chuka Umunna, ponders who should be appointed to succeed Paul Wolfowitz as president of the World Bank.
So, the arch neo-conservative, Paul Wolfowitz, has been given the boot – sorry, resigned – from the presidency of the World Bank. He supposedly did so with his reputation in tact.
The statement issued by the Board of the bank last week said they accepted that Wolfowitz “acted ethically and in good faith in what he believed were the best interests of the institution”, in the controversy which led to his departure – the promotion of his girlfriend, a World Bank staffer. If that were the case, why did he resign?
The Board went on to say that it was clear “that a number of mistakes were made by a number of individuals in handling the matter”, but they did not actually name Wolfowitz as a culprit. So are we to believe he was not personally at fault? There appears to be somewhat of an inconsistency here.
So now he is off, who should replace Wolfowitz to become the eleventh president of the World Bank?
The bank is primarily made up of two development institutions, the International Bank for Reconstruction and Development, and the International Development Association, which are owned by 185 member countries. It is a vital source of financial and technical assistance to developing countries around the world.
The bank provides low-interest loans, interest-free credit, and grants to developing countries for education, health, agriculture, environmental protection and infrastructure. Ironically, in light of the allegations against Wolfowitz, the bank also works to promote good governance and reduce corruption in the world.
Traditionally, the president of the bank is a citizen of the U.S – the bank’s biggest shareholder – and serves for five year, renewable, terms. Though nominated by the U.S government, the appointment must be confirmed by the bank’s Board. That said, the U.S normally gets its way in this respect, hence the appointment of Bush hard-liner, Wolfowitz, back in 2005.
The attributes required of a World Bank president are pretty ill-defined. The bank’s website, rather unhelpfully, states that the president is chairman of the bank’s Board and president of its constituent organisations, which is a bit like saying the Prime Minister is head of the UK government – the description doesn’t tell us what the occupant of the post does every day or what makes a good Prime Minister. To the extent that there is any agreement on the qualities needed, the consensus appears to be that the World Bank president should at least be a political and, above all, economic heavyweight with some development experience.
Robert Kimmitt, the present U.S Deputy Treasury Secretary, and Robert Zoellick, former U.S Trade representative presently at the investment banking power house, Goldman Sachs, are talked about as front runners for the job. But the bank has somewhat of an image problem and both the aforementioned would compound this. They both fit the stereotype of the middle aged man drawn from the U.S establishment and one who would continue to dish out loans to struggling developing countries with harsh strings attached that make recipient countries poorer (as the interest on the loans suck up money which could be spent feeding the poor).
Last month, Naomi Klein, the acclaimed journalist and writer, listed a catalogue of examples where the bank has been less than forgiving in recent years. She cited the forcing of school fees on students in Ghana in exchange for loans, demands for labour “flexibility” in Sri Lanka in the aftermath of the tsunami and the withholding of $100m from Ecuador after that country spent a portion of its oil revenue on health and education, in support of her argument.
Surely there are plenty of candidates for the job who have the albeit ill defined qualities needed in a president but who could also help the bank address its image problem.
The appointment of a new president gives the bank a chance to inspire people to get involved and take an interest in what it does. It could also send out a powerful message to the world if someone different from, but equally as competent as, the last ten occupants of the post, were appointed. Step forward Dr. Ngozi Okonjo-Iweala.
This formidable woman is the former Finance Minister and Foreign Minister of Nigeria and served in the government there from July 2003 until August 2006. She is one of the few people to have held very high office in Nigerian politics who cannot be described as a “crook” and steadfastly refrained from using that country’s treasury reserves as her own personal bank account.
The Independent described her as “a heroine not just of Nigeria, where she is finance minister, but of the entire continent”, when that newspaper interviewed her last year. Indeed, her achievements are many. The measures she introduced in Nigeria led to a doubling of economic growth to an average of 7.6%, a reduction of inflation from 23% to 11% and exchange-rate stability.
Her stewardship of the Nigerian economy ultimately resulted in her successful negotiation of the cancellation of nearly two-thirds – $18bn – of Nigeria’s $30bn debt. This would not have been possible without the action she took to clamp down hard on corruption in a country that has become synonymous with that concept. This led to death threats against her but she ploughed on.
Also, Okonjo-Iweala is no stranger to the World Bank. She is an economist by profession and, before becoming a Nigerian minister, served for some time as a vice-president and the secretary of the bank.
Okonjo-Iweala is presently ensconced at the prestigious Brookings Institute in Washington, where she is a visiting fellow and works on economic reform issues in Africa, corruption and governance in social sector financing, transparency and accountability, and global health financing issues.
No, she is not a U.S citizen but, then again, neither was Wolfowitz’s predecessor, Jim Wolfensohn. Wolfensohn reportedly took U.S citizenship before becoming the bank’s president, specifically so he could take up post; there is no reason why Okonjo-Weala, who has lived in the U.S since 1972 (except during her stint as a Nigerian minister) could not do the same.
The bank should pluck this star player off the subs bench and put her firmly back on the international field. She has the necessary experience and would not only be the first woman to hold the post, but also the first person of colour.
But there is another compelling reason for her appointment. Many in the West say that aid and debt reduction will not solve the problems of developing countries like Nigeria; developing countries should take responsibility themselves for sorting out their own problems. What more powerful example could be made than by appointing one of the developing countries’ trailblazers to this key international post.
Chuka Umunna is editor of TMP.
