The curtain comes down, but the (same old) show goes on … and on

This morning we had official confirmation from the Bank that Jim Kim will not face any competitors in his bid for his tenure at the Bank to be renewed. With absolutely no intention to reduce this coronation to a farce-like procession, the Bank has indicated they will strictly adhere to the appropriate procedures.

These 2011 procedures are worth quoting:

In response to the DC Communiqués calling for “open, merit-based and transparent selection of the World Bank President,” the Executive Directors have approved a process for selecting the World Bank President as an important part of the governance and accountability reforms.

World Bank President, Jim Yong Kim in Lima, Peru on June 29, 2013. Photo © World Bank/Dominic Chavez

World Bank President, Jim Yong Kim Photo © World Bank/Dominic Chavez

Well, so much for that.

Kim will shortly be interviewed by the board and should that process determine that he is the best candidate in a field of one expect an October announcement confirming Kim’s re-appointment at the forthcoming annual meetings.

Tick-Tock

Tick-tock, tick-tock – that is the sound of time slipping away from the World Bank’s efforts to hold on to whatever remains of its legitimacy as a global development leader that lives by and values its own rhetoric about democratic governance, meritocracy and transparency.

As the minutes of 14 September 2016 slip inexorably away, so does the likelihood that any of the Bank’s shareholders will dare put forth a candidate to compete with the US’ anointed heir to the throne, as today is the deadline for nominations.

Perhaps one should not complain.  Surely a three week nomination period beginning at the height of the summer holiday season is evidently plenty of time for careful and considered discussion and nomination process for the leader of ‘the world’s pre-eminent’ development institution.  It is clear, after all, that the US found plenty of time to carefully consider the various options and to make the necessary calls. Who could possibly disagree – we mean, of those who count, excluding those pesky critics from misguided NGOs or spoiled staff crying over their lattes?

Well, it seems the realm of the misguided and naïve has been expanding significantly, if the letter by former World Bank officials published in the Financial Times is any indication of current trends. Interestingly, the letter was penned by former World Bank officials who would seem protected from charges of ‘the usual and predicable’ staff discontent with difficult re-structuring and lost perks.

As it is unlikely that we will have any last minute nominations to challenge Kim’s coronation and the perpetuation of the US’ monopoly on the presidency of the Bank, it will be quite interesting to see how the Bank will address the concerns raised about the clearly inadequate process by civil society and present and former Bank staff. We will wait with anticipation for what we can only assume will be a very clever and creative justification by the Bank of the clearly inadequate and absurd process.

In the meantime, spare a thought for Bank staff tasked with engaging with borrowers on the merits of good governance, participatory development, transparency and meritocracy….

Deadline nearing

With only about three hours to go before the close of nominations, it looks as if the flawed process is yielding but one candidate, the flawed Jim Yong Kim.

It’s not as if there’s great enthusiasm. Michael Clemens’s article in HuffingtonPost makes a strong case for breaking the US lock on the World Bank presidency. He notes that “Criticism of the Bank’s practice of putting citizenship ahead of merit in the selection of a president has been constant over the years,” as the US share of the Bank has fallen over the decades. This is not 1947.

More devastating was Devesh Kapur’s impassioned piece about the Bank’s rush to irrelevance. He flags Dr Kim’s advantage as the incumbent, ‘…to grant favors to win support: make loans that play to influential shareholders’ pet preferences, promise certain countries spots on the leadership roster, and stamp the Bank’s imprimatur on particular governments’ own domestic initiatives,” concluding that “Given the contents of Kim’s political toolkit, this match was never going to be played on a level field.” Kapur, who speaks with the authority of an ‘inside outsider’, having written the 50 years of the Bank’s history, alludes to how Dr Kim has actually managed the Bank since he took over:

His administration has been marked by authoritarianism and capriciousness, and he has forced out senior managers at unprecedented rates, sometimes requiring the Bank to reach quiet settlements with those affected. In four years, the president’s office has had five chiefs-of-staff, and several of the Bank’s senior women have left, hinting at a capricious leadership culture.

He notes, though, that the lack of interest in emerging markets and in civil society more generally may well reflect another reality

The world’s emerging powers no longer need the World Bank as much as they once did. Having found their own alternatives for most of what the Bank does, their indifference to a second term for Kim suggests that they simply don’t think the Bank matters much anymore.

That’s sad, but broadly accurate; between AIIB and NDB, private investment and better domestic resource mobilization, and knowledge sources of varying reliability (from the web to the McKinsey Institute), the gap between what the Bank’s clients know and can do and what the Bank knows and can advise on has narrowed. On the character side, Kapur doesn’t even mention the tux, the fallen tree, and the chartered aircraft, and the departure of senior women. all of which the Board is happy to say meet the expenditure targets and reflect leadership habits they’re pretending are on course and reflect ‘successful reforms.’ Dr Kim is not Jim Wolfensohn.

As might be expected, former World Bank officials are weighing in. A FT letter signed by 41 retired senior staff demands a longer search process and period. An even more muscular letter to Le Monde makes largely the same point.

So, as Matt McGuire, the US Executive Director, and the Board’s chair (who presided over the defeat of Ngozi Okonjo-Iweala and Dr Kim’s selection four years ago) wait for 6pm ET, there are two questions that remain.

  • If Dr Kim is the only nominee, is the Board prepared to meet to interview him, formally comparing his record and his vision against the five criteria they established in 2011, or is being the only nominee enough to claim the job? Will they seek input from the World Bank Group Staff Association, staff in general, and civil society?
  • Can anyone make a positive case for Dr Kim’s reappointment. One planted op-ed did a poor job, but aside from the Bank’s PR staff saying “the shareholders strongly support his reforms” (?!), would anyone care to write up the case for Dr Kim, for us all to see?

It’s good to be back

As the deadline for nominees approaches, now less than 48 hours away, how can one take stock of a flawed process to make a flawed candidate win?

The United States behaved furtively in the heat of August to push through a hasty process when many Executive Directors and senior shareholder officials were on leave. Caught out by the Staff Association and international media (the FT, the WSJ and CNNI’s Quest on Business), Treasury forged ahead with its plan to have Dr Kim reappointed before the Annual Meetings, 10 months ahead of the end of his term. Shortly after midnight the very day the three-week nomination period opened, Treasury nominated him by email.

Preempting other candidates with this show of force, Treasury then twisted a few more arms, with calls to their World Bank counterparties in various countries, including Pakistan. China, Germany, Japan and France fell in line, as did the UK’s new, green Secretary of State for DfID, with Canada acquiescing in a throwaway remark by its Finance Minister at a G20 presser.

It is no secret in Washington that Treasury Secretary Lew is no fan of Dr Kim, so despite the formal role his office plays in the nomination, all fingers point to the White House. Rewarding golfing buddies is not exactly President Obama’s style, but the fait accompli is nearly done.

So, what’s the next step in this flawed process for a flawed candidate?

If the Board had any sense, it would step back, reflect, and admit there’s no rush. It would set up a proper search committee, charged with finding a suitable list of qualified women and men who could do the job. An executive search firm would help, not just to assess candidates’ records but also to provide reality checks to the committee’s in camera discussions. The search committee would give the Board a long list and recommended finalists in early January.

If the Board has no sense, and prefers to succumb to US threats about an IBRD capital increase (not the Obama Administration’s call, alas, and dependent mainly on who controls Congress), then go through a full process of comparing Dr Kim to the published criteria from the 2011 process. He would not fare well.

Some argue that a Dr Kim, reappointed under heavy criticism and weakened through a more public process of scrutiny by the Board, would be less able to lead the Bank through an IDA Replenishment. Again, that’s not America’s call against a hostile Congress and depleted treasuries in Europe and other donor countries. And a bigger Replenishment will depend on clever financial engineering (more IDA loans) and corporate public relations by an experienced IDA team. These are two areas where Dr Kim has not demonstrated strength.

It’s hard to paint an optimistic future of five more years of Dr Kim, even if you are prepared to ignore his disappointing performance since 2012, and the lack of confidence World Bank Group staff have confirmed in his communication and execution of strategy, and his failure to establish a culture of trust and respect.

Jim Kim’s Meager Harvest

We shall know our prophets by their fruits, and the same is true for World Bank presidents. The first term of President Jim Kim is coming to an end, the Bank’s Executive Directors will decide about his re-election in the coming weeks. In the energy sector, the president’s harvest has been meager indeed.

Jim Kim’s first term coincided with the global breakthrough of wind and solar power. From 2011 to 2015, these technologies accounted for two thirds of all the renewable energy capacity added throughout the world. In 2015, the added wind and solar power capacity for the first time outpaced all other sources of electricity – including fossil fuels and hydropower – combined.

Wind and solar power have not only become cheap and ubiquitous. They can also be deployed quickly, have a low social and environmental footprint, and are effective at reducing energy poverty in rural Africa and South Asia. In other words, wind and solar power are ideal investment opportunities for a development bank.

When Jim Kim took over at the World Bank, he knew that he had to shift his institution out of climate destroying fossil fuels. Yet the new President didn’t have the courage and foresight to prioritize emerging renewable energies. Instead, he personally championed the return of his institution to the mega-dam projects which had been popular in the 1960s and 70s.

In early 2013, Jim Kim started advocating for developing multi-billion dollar dam projects on the Congo, the Zambezi and in the Himalayas. Such projects, the World Bank argued, had the “potential to catalyze very large-scale benefits to improve access to infrastructure projects beyond borders.” In early 2014, the Bank approved a preparatory grant for the Inga 3 Dam on the Congo, the largest hydropower project which the institution had ever funded. Around the same time, the Bank also increased support for the Kandadji Dam, a large hydropower and irrigation dam on the Niger River.

While the world turned to wind and solar power, the World Bank invested over 60% of its renewable energy lending to hydropower projects in the 2011-16 period, compared with only 23% for solar and 4% for wind power. In the Africa region, hydropower accounted for nearly 70% of all lending for the sector.

Jim Kim’s backward-looking bet on mega-dams has not delivered results. The Inga 3 Dam has faced years of delays, and the World Bank suspended its support in July. The Kandadji Dam on the Niger is meanwhile faltering at a spectacular cost. The number of people likely to be displaced has doubled to more than 60,000, and sufficient replacement land for them does not exist. The thousands of people who have already been displaced have not found new livelihoods, and the cost of the project keeps rising.

The mega-dams on the Zambezi and in the Himalayas which Jim Kim has championed have not moved forward either. After years of waiting, the governments of Mozambique and Zambia are now considering developing wind and solar farms instead.

In conclusion, Jim Kim’s embrace of mega-dams has resulted in thousands of people displaced and millions of dollars wasted for no apparent benefit. Just as importantly, millions of poor people are still waiting for access to modern energy services while their governments’ scarce capacity has been absorbed by boondoggles.

This appalling waste of livelihoods, resources and time would not have been necessary in that Jim Kim arrogantly disregarded the lessons of past experience when he re-engaged the World Bank in mega-dams. The report of the independent World Commission on Dams found that complex multi-purpose projects had the highest cost-overruns among all types of dams. Even before taking on Inga 3, the World Bank experienced vast time and cost overruns in rehabilitating the Inga 1 and 2 dams, an infinitely simpler undertaking at the same location. And after a critical evaluation of the experience with large-scale irrigation projects, the director of the Bank’s Agriculture Department warned in 2006 that the institution would only support such projects in Africa again “over his dead body.”

The World Bank’s member governments need to critically evaluate Jim Kim’s track record when they elect the institution’s future leader in the coming weeks. We cannot afford a president under which the Bank has to relearn the lessons of the past every ten years, at a huge cost to the world’s poor.

The case for a feminist World Bank President

Calls are increasing for a first female World Bank President in the current Bank presidential selection that happens every five years. A female Bank President would symbolize the increasing power of women. But a woman President alone will not be enough to right the Bank.

The same can be said for a feminist President although s/he likely would laudably promote Bank policies and investments that equally benefit men and women.  S/he likely would strive to eradicate remaining patriarchal mindsets among some Bank staff and Board members.

Without doubt women’s rights and gender diversity promoters, myself among them, believe the Bank should select a feminist non-American President, preferably a woman of color.  The American male monopoly on the Bank’s top job must end.  The Bank’s non-democratic presidential selection process must end.  The US, the largest Bank shareholder, has hand-picked all 12 past presidents, every one of them an American male.

A New Bank Development Model

Not only should the World Bank have a first feminist President, but even more importantly for achieving the Bank goals of poverty reduction and shared prosperity, its next President must radically transform the Bank’s development model.

Many of the Bank’s current projects are large-scale polluting infrastructure investments that are contributing to our planet’s climate destruction.  These projects usually harm rather than benefit women, men, girls and boys.

Bank leaders have talked the talk on gender diversity and climate change but its policies and investments often do not reflect the talk.  Watchdog reports documenting women’s rights violations in Bank-funded projects include: forced labor by pregnant women in agriculture projects such as in Uzbekistan; project highway construction workers sexually assaulting and impregnating school girls such as in Uganda; and forced homelessness of city slum dwellers and farmers alike whose homes are bulldozed, causing women and girls to turn to sex work to survive such as in Azerbaijan, Cameroon, Georgia, Nigeria, Togo, and other countries.

The Bank’s first feminist President must end this pattern of investments that harm vulnerable women and girls and impoverish communities.

Despite the Bank’s widely-publicized commitment to do its part in combatting climate change, the Bank’s new Environmental and Social Framework (ESF) approved by its Board in August 2016 weakens its longstanding environmental and social safeguards protecting communities from harm.  The ESF will harm everyone but particularly women in low-income countries who depend on forest products and other natural resources for medicine, food and fuel, carry water long distances, and do most farming (an estimated 70 to 80 percent of African farmers are women).  The ESF hardly mentions gender, women and LGBT groups.  It fails to include a freestanding gender safeguard to protect women, girls, men and boys from detrimental impacts.  It guts the Bank’s environmental safeguard policies, which sheltered forests, land, water, biodiversity and indigenous peoples from the negative consequences of forced resettlement and polluting infrastructure investments.

President Jim Kim failed to keep his promise that the ESF would not dilute existing standards.

The first feminist Bank President must ensure that Bank projects stop clearing tropical rain forests for biofuel export crops that dispossess poor farmers, mostly women, of land; halt oil, gas and coal investments that eliminate women’s farming livelihoods and force some women and girls into sex work to survive; and end investments in big dams by instead supporting small local renewable energy sources.

The first feminist Bank President must ensure that the Bank adheres to the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) and other international human rights treaties ratified by the overwhelming majority of member countries.

Selection Process

In 2011 the Bank Board initiated a presidential nomination process by establishing merit-based selection criteria.  Nevertheless the US prevailed in installing Jim Kim in 2012 despite competing Colombian and Nigerian candidates of at least Kim’s caliber.  Now that Kim is serving his final year of a five-year appointment, the Bank Board launched a three week Presidential nomination period that will close on September 14, 2016.  The US has already weighed in for a second Kim term.  As Eurodad’s Jesse Griffiths stated on this website, three weeks is an unreasonably short nomination period.  The US is likely to prevail with a second Kim term unless the nomination period is extended, the selection process becomes transparent, and the voices of key stakeholders — including most Bank staff, global civil society leaders, major media and think tanks — calling for Kim to resign, are heeded.

Stakeholders, reach out to your World Bank Executive Director and/or Ministry of Finance to demand an extended selection process and nominate feminist changemaker candidates from developing countries!

Time for a woman president

Disclaimer: this blog is about the World Bank President, not Hilary Clinton

It’s obviously (well past) time to end the US stranglehold on the job, but surely it’s also time to end the male stranglehold too. Lant Pritchard from the Center for Global Development’s blog notes that he can think of five well qualified women candidates, just among people he’s met.

The UN Secretary General selection process is also going on at the same time, and depressingly, after three rounds of informal Security Council voting, men are in top positions. There’s an active Campaign to Elect a UN Secretary General that’s trying to change this for the UN. Time to start a similar campaign for the World Bank?

Developing Countries must propose their own World Bank candidates

The US government is strongly backing the re-appointment of Jim Kim for a second five-year term as president of the World Bank. Historically, only two presidents in the past few decades have been reappointed (as Paul Cadario notes). Kim’s likely reappointment reflects his backing by the Clintons for his initial appointment, and the likely US president and her husband’s wish to have a personal friend and dependent as president of the World Bank.  The Bank is a very useful organization for the US administration to have privileged access to in late night phone calls.   

Still, US backing reflects surprising nonchalance about the effect of Kim’s rule on staff morale. Staff have complained about every president, and especially at the time of major reorganizations and for several years thereafter (and Kim engineered a very major reorganization). But the anger at Kim and his authoritarian mode of management (“Off with his/her head”) has been exceptional.  It was prefigured by the relief on the part of Dartmouth faculty to see him go (he was president of the college), and surprise that the Bank had taken him.

Kim’s reappointment raises again the systemic question about the US monopoly of the presidency, ever since the founding of the Bank.  Last time, when Kim was appointed, president Obama missed the historic opportunity for the US to support one of two very plausible candidates from developing countries.  One was an African woman with a long track record to top-level management (including in the World Bank itself and as minister of finance in a borrower-country government. 

As the deadline for nominations for who should become president in 2017 draws near, developing country governments should press their own candidates — even if only to make sure that the precedent of having developing country candidates becomes well-established, so that eventually the US government will have to give way (and the Europeans will have to give up their monopoly of the managing-directorship of the IMF). Developing country governments should also step up pressure for a sizable reallocation of quota and votes in their favour, and/or threaten to cut back their participation in the World Bank and boost their participation in regional development banks.  After all, we are no longer in the post-Second World War era, when western governance of the world economy seemed as natural as gravity.

 

 

Robert H. Wade is professor of political economy at the London School of Economics.
Blog corrected 16/9/2016 at 16.08pm

In the news

Reuters: Germany backs U.S. nominee Kim for second term as World Bank president
The Star: Uhuru endorses World Bank President Jim Yong Kim for second term
All Africa: Rwanda and Benin Welcome Nomination of Dr. Kim for Second Term At the World Bank
Center for Global Development: Five Women Who Could Lead the World Bank
The Tribune: US nominates Jim Yong as World Bank chief for 2nd term
Government of the Netherlands: Netherlands supports second term for World Bank President Kim
Devex: Donald Trump won’t choose the next World Bank president
The New York Times: World Bank President Jim Yong Kim Is Nominated for a Second Term
The Wall Street Journal: Obama Administration Moves to Secure New Term for World Bank Chief Jim Yong Kim
U.S. Department of the Treasury: U.S. Nominates Dr. Jim Yong Kim to Lead World Bank for Second Term
Devex: Jim Kim to seek 2nd term at the World Bank
Public Finance International: World Bank rules out change to leadership selection process
Tempo: World Bank Begins President Selection Process
Financial Times: World Bank clears way for Kim’s second term
World Bank: World Bank Board Launches Presidential Selection Process
Center for Global Development: Excuse me, World Bank, This Time Is Last Time’s Next
Financial Times: World Bank staff challenge Jim Yong Kim’s second term

3 week application period – are you kidding?

So, the blog is back, now that the World Bank board has officially launched a selection process for the next World Bank President. A task this big takes a bit of time, right? Not according to the Bank’s board who leave a little over three weeks for accepting nominations. Three weeks! When we’re selecting interns, we leave at least a month, normally 6 weeks to give good candidates the chance to think about it and submit a decent application. But apparently selecting the head of one of the world’s most powerful International Financial Institutions is a less rigorous process…

It’s already clear that the US is trying to stitch up a second term for the US-backed incumbent, Jim Kim. Do we really need to by emphasise that in 2016 it’s not acceptable for the US to choose who gets to be the head of the World Bank – an institution that only operates in developing countries?

What should the correct selection process look like? This is what I wrote last time round:

“If the Board is serious about making the process truly transparent and merit-based, here are the bare minimum things that should happen:

  • Public interviews. It will simply not be credible if the Board selects a candidate behind closed doors with no one else able to see how the candidates stood up to questioning.
  • Manifestos for candidates. Every candidate should be required to set out what he or she think the main challenges facing the Bank are and how they would deal with them as President.
  • Public debates. Candidates should submit themselves for questioning to a variety of forums, including public debates.
  • Transparent voting. All countries should vote individually, not through their constituencies, and should announce who they are voting for and why.

Of course, none of this would prevent the backroom deals that the US will use to ensure its candidate gets in, but at least everyone would be able to judge who the best candidate really is, and learn a lot more about what they stand for. None of these are difficult to organise, and all of them take place routinely at national level for senior public servants.  Why not for the World Bank?”

These seem to me to still be extremely reasonable demands (set out in much more detail in this paper on selecting the IMF boss.)  The first demand we should all be making is a significant extension to the application process: 3 months (or more) would be much more appropriate than 3 weeks.