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….

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!

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

The more things change… We’re back

It is true that Kim’s term does not expire for nearly another year, so what compelled the return of everyone’s favourite blog covering the latest developments on the coronation, er… we mean nomination of the next World Bank president just now?

The impetus for the revival of the blog was the World Bank Board’s announcement last week that it had opened a three-week nomination process for its new president. The nomination process closes on 14 September and the Board has pledged to take a decision within weeks of that date. The US administration nominated Dr. Kim for a second term within the first few hours of the opening of the process in a move that the NY Times noted was “intended to discourage would-be rivals”.

The Board has thus ignored long-standing calls from global civil society, and also recently from the Bank’s staff association, for a transparent, merit based selection process for the selection of the next World Bank president. The Financial Times reported in early August that the Bank’s staff association had sent a letter to the Board stating “We preach principles of good governance, transparency, diversity, international competition, and merit-based selection. Unfortunately, none of these principles have applied to the appointment of past World Bank Group Presidents … Instead, we have accepted decades of backroom deals which, twelve times in a row, selected an American male. This must change.” 

To be honest, when the blog went into hibernation in 2012, we had hoped that during the next selection process for World Bank president, the blog would be used by contributors to debate the relative merits of various well-qualified candidates proposed by a number of the Bank’s members. We had, perhaps foolishly, hoped assurances of a new merit-based process that finally did away with the perpetual American monopoly on the post would have been in place.  We had hoped this forum could contribute to a debate about the qualifications of a suitable list of candidates, including various contenders from the Global South, that would be evaluated against well defined parameters through a transparent process. The blog would therefore make an important contribution to  a  selection process based solely on the merits of the various contenders, versus, by way of random example, the person’s nationality…

Alas, as it is said, ‘the more things change, the more they stay the same’… So, here we go again… At the closing of the blog in 2012 we noted that “the final word goes to the G24 group of developing countries at the World Bank.  This is from the communiqué they issued …

We recognize that for the first time in the history of the World Bank there was an open process for the selection of the President that involved a debate on the priorities and the future of the institution.

Future selection processes must build on this process, but must be transparent and truly merit-based.

It seems a very opportune time, given what we know about the proposed process for the selection of the next World Bank president, to consider how well it meets the requirement outlined above.

Let the discussions begin…

We look forward to a repeat of the lively discussions and exchanges that took place during the previous selection processes and invite you to contribute by writting posts or comments and to share any information that you think relevant.

Jim Yong Kim’s statement after his appointment

From Lima, Jim Kim has been gracious and forward-looking in his official statement after his appointment was announced.

Let’s hope that the owners and the World Bank’s board will not again waste five years trying to forget what they did wrong this time in the appointment process, so that progressive voices will not have to again sit out a fulsome and reasoned discussion of the candidates’ merits.

But let’s not spend the next two years whining about this process.  Even a flawed process can have a good outcome.

Why Jim Kim should consider resigning as World Bank president-designate

The situation for the many constituencies hopeful about Jim Yong Kim’s ‘election’ as World Bank president is comparable to early 2009.

Recall, Barack Obama entered a US presidency suffering institutional crisis and faced an immediate fork in the road: make the changes he promised, or sell out his constituents’ interests by bailing out Wall Street and legitimizing a renewed neoliberal attack on society and ecology, replete with undemocratic, unconstitutional practices suffused with residual militarism. As president-elect, surrounding himself with the likes of Larry Summers, Tim Geithner, Paul Volcker, William Gates, Rahm Emmanuel and Hillary Clinton, it was obvious which way he would go. Continue reading