Dr. Jim Yong Kim takes over the presidency of the World Bank with impeccable credentials as an expert in health. These credentials will serve him well. Dr. Kim will face many challenges as World Bank president and his leadership skills from serving as the head of a major U.S. university will certainly come handy. We congratulate Dr. Kim on his appointment and he deserves our support.
Dr. Kim’s appointment marked the beginning of a number of firsts for the World Bank. Since the inception of the two Bretton Woods institutions, it has been the tradition that the International Monetary Fund is headed by a European and the World Bank is headed by an American. This tradition has remained unchallenged since 1944, when the two institutions were created.
In many respects, the financial stake held by the United States and the Europeans justifies their monopoly on the leadership positions. It is a simple corporate governance model in which the largest shareholders carry most weight in making the critical decisions about leadership.
As a result, the leadership of these institutions has largely gone unchallenged by representatives of other regions. As a Korean-American, Dr. Kim will be the first head of the institution with a non-U.S. background. Korea is the first country developing country to graduate into a middle-income and advanced economy and is now a donor to the World Bank.
This is also the first time that the World Bank president selection process has been contested by well-qualified candidates from the developing world. The executive board at the bank acted appropriately by interviewing the candidates, even if the outcome was never in doubt. Given the predetermined selection process, there should be an independent review of governance procedures to ensure that going forward they are equitable, inclusive and transparent.
Times have changed—while it is true that during the 1940s the main international players were America and Europe, this is no longer true. Now we have China, India and Brazil and other emerging economies that are influencing global political and economic dynamics, and these changes need to be reflected at the highest levels of the World Bank and IMF.
Another major first during this last World Bank president selection was the fact that a woman was considered a leading candidate in the process. A number of American women reportedly were on the shortlist and an African woman supported by leaders of the continent put forward her candidacy. It gave Africa the chance to showcase the best it has to offer and also provided a credible case for changing the governance processes of the institution.
What the American President Must Do
President Obama must work to change the governance of the World Bank. He would be well-served to appoint a high level advisory panel to not only spearhead reform of the World Bank leadership selection process but also to assess the institution’s mission. The panel should have a year to report on its recommendations. There is a palpable sense that the World Bank is drifting along on an outdated set of priorities and the institution needs a “reset.” This kind of initiative would help respond to the calls for a new, transparent and merit-based governance framework that was raised by many during the selection process. It could also help the World Bank increase its relevance as the premier multilateral development institution leading on new and emerging issues ranging from climate change to gender to conflict and security. Such an outcome could also help the Obama administration shape a positive legacy out of a process that left many disappointed.