Two of the heavyweights in economic journalism have written editorials criticising the convention that sees the US traditionally choosing the World Bank president. The Financial Times and Bloomberg are not commonly known for their strident calls for justice. If anything their stance illustrates quite how absurdly anachronistic the convention looks today.
Bloomberg says that:
That custom has outlived any semblance of propriety. The White House should think again … This cozy arrangement, always lacking in legitimacy, was once defensible as a practical matter. It’s telling that nobody any longer even attempts such a defense. The arrangement is rightly seen as an affront to Brazil, China, India and the other fast-growing developing economies. It’s also inimical to the very idea of international cooperation on terms of mutual respect — and not just for the countries excluded from any say in the matter.
It rightly observes that even though the most powerful countries at the international financial institutions pay lip service to the idea that this arrangement must change, things stay much the same. Just look at Lagarde. The editorial warns that although the Bank has pledged reforms, “Over the next few weeks you can expect the World Bank to make a display of going through those motions.” It goes on to demand that:
Obama should see this as an opportunity not just to appoint an excellent new leader of the World Bank but also to start a new chapter in global economic governance. A genuinely open, merit-based selection not managed by White House officials would announce a shift from a model in which the U.S. and Europe preside over lesser nations, to one of more equal partnership.
The FT takes a moment to congratulate Zoellick on his tenure:
It then says that in a world where three-quarters of the poor live in middle-income countries Zoellick’s successor must carve out a new role for the Bank. A part of this will be answering the complaints from developing countries who “resent the continued dominance over governance by western powers.” The editorial is then both critical and resigned on the current search for a new president:
It is to be regretted that Mr Zoellick’s departure will not lead to a truly open succession contest. His replacement will be chosen according to the decades old stitch-up between the US and Europe that gives the job to an American.
Is the FT realistic in its resignation? Or will that (hypothetical) Obama who won the Nobel prize for (hypothetical) multilateralism pop up and heed the calls for reform?