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Why Ngozi Okonjo-Iweala Should Lead the World Bank Why Ngozi Okonjo-Iweala Should Lead the World Bank

Why Ngozi Okonjo-Iweala Should Lead the World Bank

by Tim Fernholz

April 6, 2012

In the race to lead one of the world’s most important poverty-fighting institutions, the most qualified candidate is losing while the likely winner is having trouble demonstrating widespread support, raising questions about the United States' role in future international development efforts.

The World Bank was created after World War II to finance economic development; last year it sent $43 billion in loans to developing nations to finance public health projects, infrastructure upgrades, and other projects designed to create long-term benefits in the world’s poorest places. The current president, former U.S. Deputy Secretary of State Robert Zoellick, will step down when his term ends this summer.

While the World Bank’s financial calamity-focused sister institution, the International Monetary Fund, is normally led by a European, the Bank is traditionally led by an American, though the 187 member countries who provide the funding largely dictate the Bank’s policies. Because of its nominating power (and the share of the financial burden it shoulders) the United States’ pick to lead the Bank is guaranteed the stamp of approval.

In recent years, America’s domination of the process has come under pointed questioning: Why should an American lead an organization largely focused on developing nations? And why, in a time of economic rebalancing that has countries like China, India and Brazil rapidly catching up with the U.S. and Western Europe, should Washington be in charge?

So before the President Obama could nominate anyone, other candidates stepped forward, including Ngozi Okonjo-Iweala, Nigeria’s finance minister. Since then, Okonjo-Iweala has gained the approval of developing nations around the world, the financial press, and many influential economists.

Okonjo-Iweala, a Harvard and M.I.T-educated economist, has already spent several years in top positions at the World Bank, but made her name during her first stint as Nigeria’s finance minister in 2003, when she successfully reduced the country’s large debt and side-stepped problems with the country’s corrupt oil industry. She has a specific and credible vision for the Bank’s changing role in the world, and the financial chops and international experience to back it up—not to mention a case to be the first woman and the first minority to head the Bank in its history.

The only reason this icon of the global financial establishment isn’t a shoe-in is that she’s not American. Obama, seeking to keep the World Bank in the family, tapped Dartmouth University President Jim Yong Kim to take charge.

That’s not to say Kim represents more of the same: Born in Korea but an American citizen, he is a physician and activist who helped launch and lead Partners in Health, an NGO that developed methods to deliver health care throughout the developing world. He’s a bona fide public health expert with experience managing large institutions, but he doesn’t have the diplomatic or financial chops you’d expect from someone heading an international bank.

That’s what makes Kim a real outsider: His past experience suggests he’d bring a different approach to the bank—one more focused on health care concerns in the poorest-of-the-poor countries, and one that bridges the gap between the activists and smaller NGOs and the international development institutions. It might be just what the bank needs as some of its previous poster children—India, for example—grow out of its program.

But given his comparatively narrow track focus and lack of experience with the tools the Bank uses, it’s difficult to make the case that Kim would do a better job than Okonjo-Iweala—as Felix Salmon notes, Kim isn’t even making it. Sadly, the Nigerian nominee is unlikely to find herself voted into the World Bank’s top post in the coming months. The United States’ advocacy of Kim is likely to win out if Europe and other important nations fall into line behind the status quo, although there are scenarios where Okonjo-Iweala could see her bid succeed.

The Obama administration’s failure to think outside the box—hemmed in by tradition, conventional wisdom, obligations to its allies and, no doubt, a fear of the domestic political attacks that come with any recognition that we live in a multilateral world—is embarrassing. Part of what makes America’s global brand so strong is its embrace of meritocracy, and for all of Kim’s qualifications, merit isn’t the driving consideration behind his nomination. The World Bank deserves better.

Photo via (cc) Flickr user World Economic Forum

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