Last chance for a new World Bank
Mohamed El-Erian
March 23, 2012
Last chance for a new World Bank
Years ago, a simple chant united millions of Latin Americans in their desire to move away from dictatorship: cambia, todo cambia or everything changes. Well, the monopolistic, feudal and entitlement-based approach to appointing the president of the World Bank appears to be finally giving way to a more open, competitive, transparent and merit-based system.
As we count down to the official deadline on Friday, three highly credible professionals are on the verge of being nominated as official candidates to replace former president Robert Zoellick, namely José Antonio Ocampo from Colombia, Ngozi Okonjo-Iweala from Nigeria and Jeff Sachs from the US.
All three have strong developmental qualifications. Their track records are both solid and of direct relevance to the position.
Mr Ocampo is a professor at Columbia University, a former UN under-secretary-general, and former finance minister of his native Colombia. Ms Okonjo-Iweala is Nigeria’s finance minister, a position that she excelled at earlier before a stint as a managing director at the World Bank. And Mr Sachs, a respected professor and practitioner of development economics, is the director of the Earth Institute at Columbia University and a special adviser to Ban Ki-moon, UN secretary-general. Crucially, all three have already secured the backing of some of the Bank’s member countries, as well as endorsements from knowledgeable and credible observers.
This constitutes by far the biggest challenge ever to the US government’s automatic entitlement to the presidency of the World Bank. Due to these individuals’ courage, this year could mark the end of the outdated and harmful tradition of selecting the leader of the world’s premier developmental institution based, not on merit and qualifications, but on nationality, internal politics and bureaucratic largesse. And, with that, the International Monetary Fund is sure to follow suit when Christine Lagarde eventually steps down, thereby relaxing Europe’s stronghold on that international institution.
Mr Sachs led the way by boldly launching a public campaign on March 1. He put forward credible proposals for strengthening an institution that can, and should, play an even larger role in alleviating poverty and in helping developing countries achieve their potential. And he argued forcefully why he is best placed to implement the required changes.
His move opened the way for other credible candidates to express interest or be encouraged to do so. Those likely to be nominated on Friday include two from the developing world, confirming what many already know: that neither America nor Europe hold a monopoly on talent, qualifications and experience for the top jobs at the international financial institutions.
The US is yet to announce its official nominee. And when it does, this person will, for the first time in almost 70 years, actually have to compete to secure the post.
This is not to say that the US administration will not get its way. It could well do so, especially if the Europeans provide overwhelming support. After all, they would have the votes needed . But in order for this to materialise, the US must first come up with a highly credible candidate given the quality of the other candidates.
Once the nomination period closes, the Bank’s executive board is committed to conducting a thorough assessment process. In delivering on this important pledge, they should have no hesitation in running appropriate background checks and collecting whatever information is needed for a proper and fair evaluation – again something that is essential for good governance and yet appeared to have been lacking in prior episodes.
The world has waited a very long time for a more suitable and defensible system for selecting the leaders of the two most important international financial institutions. It could well be on the verge of getting it due to the courage of talented individuals, and the perseverance of many advocates for this sensible and overdue change. It is now up to the Bank’s executive directors to step up to their responsibilities.
The writer is the chief executive and co-chief investment officer of Pimco
As we count down to the official deadline on Friday, three highly credible professionals are on the verge of being nominated as official candidates to replace former president Robert Zoellick, namely José Antonio Ocampo from Colombia, Ngozi Okonjo-Iweala from Nigeria and Jeff Sachs from the US.
All three have strong developmental qualifications. Their track records are both solid and of direct relevance to the position.
Mr Ocampo is a professor at Columbia University, a former UN under-secretary-general, and former finance minister of his native Colombia. Ms Okonjo-Iweala is Nigeria’s finance minister, a position that she excelled at earlier before a stint as a managing director at the World Bank. And Mr Sachs, a respected professor and practitioner of development economics, is the director of the Earth Institute at Columbia University and a special adviser to Ban Ki-moon, UN secretary-general. Crucially, all three have already secured the backing of some of the Bank’s member countries, as well as endorsements from knowledgeable and credible observers.
This constitutes by far the biggest challenge ever to the US government’s automatic entitlement to the presidency of the World Bank. Due to these individuals’ courage, this year could mark the end of the outdated and harmful tradition of selecting the leader of the world’s premier developmental institution based, not on merit and qualifications, but on nationality, internal politics and bureaucratic largesse. And, with that, the International Monetary Fund is sure to follow suit when Christine Lagarde eventually steps down, thereby relaxing Europe’s stronghold on that international institution.
Mr Sachs led the way by boldly launching a public campaign on March 1. He put forward credible proposals for strengthening an institution that can, and should, play an even larger role in alleviating poverty and in helping developing countries achieve their potential. And he argued forcefully why he is best placed to implement the required changes.
His move opened the way for other credible candidates to express interest or be encouraged to do so. Those likely to be nominated on Friday include two from the developing world, confirming what many already know: that neither America nor Europe hold a monopoly on talent, qualifications and experience for the top jobs at the international financial institutions.
The US is yet to announce its official nominee. And when it does, this person will, for the first time in almost 70 years, actually have to compete to secure the post.
This is not to say that the US administration will not get its way. It could well do so, especially if the Europeans provide overwhelming support. After all, they would have the votes needed . But in order for this to materialise, the US must first come up with a highly credible candidate given the quality of the other candidates.
Once the nomination period closes, the Bank’s executive board is committed to conducting a thorough assessment process. In delivering on this important pledge, they should have no hesitation in running appropriate background checks and collecting whatever information is needed for a proper and fair evaluation – again something that is essential for good governance and yet appeared to have been lacking in prior episodes.
The world has waited a very long time for a more suitable and defensible system for selecting the leaders of the two most important international financial institutions. It could well be on the verge of getting it due to the courage of talented individuals, and the perseverance of many advocates for this sensible and overdue change. It is now up to the Bank’s executive directors to step up to their responsibilities.
The writer is the chief executive and co-chief investment officer of Pimco
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