Finance and development experts praise Kim nomination
By Jenny Che, The Dartmouth Staff
Published on Thursday, March 29, 2012
In an increasingly global economy, the World Bank needs a leader who will go beyond policymaking and simply providing loans to countries, experts interviewed by The Dartmouth said. College President Jim Yong Kim’s unique background in public health delivery could provide a new perspective to the development organization, according to the experts.
With the decline of its lending flows and the emergence of alternative aid sources, the Bank is losing relevance in international development, according to Domenico Lombardi, president of the Oxford Institute for Economic Policy and a former executive board member of the World Bank Group and of the International Monetary Fund. As a result, there is increased expectation for the new president to ensure that the World Bank does not lose ground as the leading development institution.
“The World Bank is clearly used to a context where aid donors are all state actors or NGOs, and now it’s changed,” Lombardi said. “There are these new entities — like philanthropic actors and private organizations and donors like [rapidly developing countries] — who are becoming more active and are able to convey significant financial resources.”
Experts widely acknowledged that Kim’s background in health delivery sets him apart from the other candidates. Kim is one of three people — along with Jose Antonio Ocampo of Colombia and Ngozi Okonjo-Iweala of Nigeria — nominated for the presidency.
“Having someone who’s been working in the trenches in developing countries providing something as important to development as basic health care is a whole new ball game,” Deborah James, the director of International Programs at the Center for Economic and Policy Research, said.
As a physician, Kim offers an “element of discontinuity” to the face of the World Bank, the previous leaders of which were predominantly senior policymakers or bankers, according to Lombardi.
“Many stakeholders wonder what the implications of this can be — maybe greater emphasis on social policies in developing countries and on health care policies on which he has a distinct advantage,” Lombardi said.
As a result of a 2008 G-20 agreement about competitive elections for global institutional heads, this is the first year that the election is contested.
“In the past, the U.S. president would nominate the World Bank president,” Vice President for Communications and Policy Outreach at the Center for Global Development Lawrence MacDonald said. “If the board disapproved, the president would have to find another candidate.”
Lombardi said that the new election procedure presents a bigger intrigue than the nomination of a health expert for World Bank leadership.
“Dr. Kim will have to prove that he has the vision to deliver this institution,” Lombardi said.
Ocampo and Okonjo-Iweala are strong candidates for the position. Still, it is largely expected that the directors will back the American nominee, Lombardi said.
Kim’s multilateral experience in health will work to his advantage, James said. As a former director of the HIV/AIDS division of the World Health Organization, Kim has played a crucial role monitoring best practices and delivering aid and medicine to those in need. Kim also co-founded Partners in Health, an international health organization that brought him in direct contact with those he was helping. James said she anticipates Kim placing more emphasis on health care if he is selected as president.
“I can also see him taking a second look at other types of loans that the World Bank provides — Dr. Kim might look at health impacts while providing infrastructure for economic growth,” James said. “And [he might] call on colleagues on economic policymaking, health education and providing clean drinking water.”
Kim’s challenge as he tackles the Bank presidency, should he be confirmed, lies in applying his experience in health delivery to other areas.
“There are also difficult choices to be made in allocating resources across competing planes — in education or environment, in roads or health — these are decisions the World Bank president has to make,” MacDonald said. “I think that’s where a sound background in economics and finance will be helpful. I think it’ll be interesting to see if Jim Kim will rise to the challenge of making these decisions.”
Under former President Paul Wolfowitz, the World Bank experienced significant turmoil, and it was not until the arrival of his successor Robert Zoellick in 2007 that the situation stabilized, according to MacDonald.
“Zoellick opened up the bank’s data stores and made them freely available internationally, but he did not address the core question of what the bank should do in the 21st century,” MacDonald said. “The bank is a very technocratic institution, it has highly trained and capable staff, but its main activity of making loans to needy countries is no longer as important as it used to be.”
The current question is what the World Bank will do when private capital markets meet market demands for finance, according to MacDonald.
“One suggestion is to focus on the global commons, or global public goods, that no one country is going to do by itself — and the bank does a lot of that now, addressing problems like climate change, [research and development] for agriculture, cross-border problems, things like surveillance for pandemic diseases and conventional pollution,” MacDonald said. “But it doesn’t really have a mandate or tools to tackle those problems. I would like to see the next leader of the World Bank deal with these and do more than country loans.”
MacDonald said it was unclear from Kim’s background what his first moves would be as World Bank president but said he “looked forward” to Kim explaining his plans both to the board and public forums.
Dartmouth economics professor Eric Edmonds said that he hopes Kim will employ more scientific analysis in global development.
“Because of his medical background, [Kim] appreciates the importance of large-scale randomized control trials for learning how to treat diseases,” Edmonds said in an email to The Dartmouth. “I hope he will demand analogous attention to scientifically valid evidence on how to fight the diseases of poverty.”
Obama’s choice of Kim to head the Bank over other political figures like former Sen. John Kerry, D-Mass., and economist Larry Summers became less surprising when economist Jeffrey Sachs’ name entered the competition, according to James. When Sachs nominated himself for the position, it became difficult to contradict the idea that the head of the Bank should be a development leader.
“[Sachs’] candidacy made it very difficult for Obama to nominate someone like Summers, who was a shoo-in candidate until Kim was nominated,” James said.
James said that the interview dates for the candidates have been leaked, with Ocampo’s on April 4, Okonjo-Iweala’s on April 9 and Kim’s on April 11. The new president will be chosen on April 19, while the current president will officially step down on June 30.