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Three-way World Bank race seen as deadline looms

March 23, 2012

WASHINGTON: The United States faces an unprecedented challenge to its grip on the World Bank
presidency, with emerging economies poised to nominate at least one candidate today to set up the first contested bid for the top job at the global development lender.

Less than a day before the deadline to nominate, Washington has yet to announce its candidate. South Africa is set to confirm the candidacy of Nigerian Finance Minister Ngozi Okonjo-Iweala, a respected economist, diplomat and former World Bank managing director.

However, it is unclear whether Brazil will be able to move forward with plans to nominate former Colombian finance minister Jose Antonio Ocampo. Brazil could not nominate Ocampo without
Colombia’s support, which now looks unlikely.

While Ocampo had agreed to stand and Brazil was willing to nominate him, Colombian Finance Minister Juan Carlos Echeverry said yesterday that Colombia was instead focusing on a bid for
the presidency of the International Labour Organisation.

He said that effort had a greater chance of success than going for the World Bank job, because Colombia already held the top post at the Inter-American Development Bank.

“The Colombian government has to concentrate exclusively on a candidate that has possibilities of success,” he said.

Unspoken is the likelihood that whoever the United States puts forward will get the job.

US candidate a mystery

Although the World Bank board would like to reach a consensus agreement, Washington retains the largest single voting share and could expect the support of European nations and Japan, the bank’s second-largest voting member.

The United States has held the presidency since the bank’s inception after World War Two, and a European has always headed its sister organisation, the International Monetary Fund.

While the Obama administration has said it would nominate someone to replace Robert Zoellick when he steps down in June, its choice remains shrouded in mystery.

Nancy Birdsall, president of the Center for Global Development in Washington, said the delay in naming a US candidate had opened the door for others.

“For the first time there is a competition, or there is at least the initial perception of a serious competition. And, the only way to get open, merit-based and transparent is when there is competition,” she said.

The rise of emerging economies such as China, India and Brazil has put pressure on the United States and Europe to throw open the selection process for both the bank and the IMF.

Last year, all of the bank’s 187-member countries agreed on a transparent, merit-based process to select a president.

Sources familiar with the Obama administration’s thinking have said the White House short-list included Susan Rice, the US ambassador to the United Nations, PepsiCo’s Indian-born CEO Indra Nooyi, US Senator John Kerry, and Lawrence Summers, a former economic adviser to President Barack Obama.

Another name that has surfaced in recent days is Laura Tyson, a professor at the University of California, Berkeley, and an expert on international trade and competitiveness.

While the State Department has ruled out Secretary of State Hillary Clinton taking the job, she remains a viable candidate in the eyes of some observers.

Deadline

So far, the only candidate officially nominated is US development economist Jeffrey Sachs, who acknowledges he does not have Obama’s support. His candidacy is backed by smaller developing countries, such as Bhutan, East Timor, Haiti, Kenya, Guatemala and Chile.

The deadline for nominations is 6pm Washington time (2200 GMT). The World Bank board of member countries will then shortlist the names of three candidates and finalise its choice by the time of IMF and World Bank semi-annual meetings on April 21.

The new head of the poverty-fighting institution would be taking over as the euro zone debt crisis slows the global economic recovery, undercutting demand in emerging and developing markets.

The person will have to decide how best to deploy resources in a budget-cutting environment in which large bank shareholders such as the United States are demanding results-based development, more transparency and greater efforts to tackle corruption.

Birdsall said the nomination of a credible candidate such as Okonjo-Iweala “upped the ante for the US to have a really strong candidateā€.

“It is a sign that we’re living in a world where the geopolitical landscape is shifting and the US can’t do things by itself,” she said.

- Reuters


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