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Time for non-American to head World Bank

Last updated on: April 4, 2012 10:50 IST

Time for non-American to head World Bank

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Normally, the appointment of a World Bank president, like the International Monetary Fund head, happens without much debate or media coverage.

The United States puts forward its candidate for the Bank and the rest of the world signs on the dotted line, while Europe gets its way at the IMF.

But this time, the race for the top position at the Bank is really heating up.

The White House wants Jim Yong Kim, a Korean American physician, to be the next president to replace the outgoing head Robert B Zoellick, also an American, but powerful figures in media and business have put Obama administration under pressure by coming out in support of Nigeria's Finance Minister Ngozi Okonjo-Iweala.

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Image: Nigeria's Finance Minister Ngozi Okonjo-Iweala.
Photographs: Siphiwe Sibeko/Reuters

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Time for non-American to head World Bank

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Ngozi, who has been described by a respected blogger as being pretty much perfect for the job, is a globally renowned economist best known for her current role as finance minister and for her work at the World Bank, including several years as one of its Managing Directors. She also briefly held the position of Foreign Minister of Nigeria in 2006.

She has been described by Felix Salmon of Reuters as a whip-smart economist, honest, imaginative, dedicated, expert at navigating the Bank's labyrinthine bureaucracy and politics, and passionate about the way that the Bank can really make the world a better place.

He says she will have a lot of support within the World Bank's board - the body which ultimately will make the decision as to whom to choose.

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Image: US nominee Jim Yong Kim.
Photographs: Issei Kato/Reuters

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The Economist praises her by saying: "She has not broken Nigeria's culture of corruption - an Augean task - but she has sobered up its public finances and injected a measure of transparency."

It argues that the American and European "carving up" for the leadership positions at the World Bank and the International Monetary Fund is outdated, and that the poor qualifications of Kim provides an opportunity to end it.

Unlike Ngozi, Kim is not an economist and hasn't held any position in an international organization but is a physician with a specialty in public health and a development professional.

The Economist also calls on the Colombian candidate Jose Antonio Ocampo, a former finance minister, to withdraw "gracefully" from the race.

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Image: Colombian candidate Jose Antonio Ocampo.
Photographs: David Mercado/Reuters

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Time for non-American to head World Bank

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Mohamed El-Erian, CEO of Pimco, a global investment management firm and one of the world's largest bond investors, argues that it's important to break with tradition and go with a non-American.

"Her appointment would speak to other important initiatives with which Obama has aligned himself, including efforts to fight corruption, strengthen meritocracy, and support gender equality," he said.

According to reports, other hopefuls of the post were US Ambassador to the United Nations Susan Rice, Senator John Kerry and Pepsico's Indian-born CEO Indra Nooyi.

Apart from these, other big names floating around were Secretary of State Hillary Clinton and Harvard University's former president Larry Summers.

But now only Kim, Ocampo and Ngozi have a real shot at the presidency.

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Image: Outgoing president Robert B Zoellick.
Photographs: Brian Snyder/Reuters

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Time for non-American to head World Bank

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But the big question is: Will the US allow a non-American to head the Bank?

If the selection is based solely on merit, then Ngozi is a much more deserving candidate than either Kim or Ocampo. She has the experience, the reputation and the all-important support.

According to conventional wisdom, the president should be an economist with experience in finance and administration - Ngozi is both. She has not only held senior ministerial positions in Nigeria, but also led Nigeria's Paris Club debt negotiations and has considerable experience at the senior level in the Bank.

All in all, she is a Bank insider.

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Image: Pimco's CEO Mohamed El-Erian.
Photographs: Fred Prouser/Reuters

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Unfortunately, when it comes to such high-profile jobs, lobbying, arm-twisting and all kinds of dealings are the deciding factors, not merit or experience.

As always, Europe is the key player in deciding who will head the institution and it looks highly unlikely that it will veto Barack Obama's nominee, especially when Europe is desperately looking for money to deal with its debt crisis.

Another factor that could work against Ngozi is that it's the election year in the US. If Obama agrees to a non-American president then that would give ammunition to the Republicans, who would waste no time in accusing him of bending over and not standing up for the US interests.

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Image: Pepsico's CEO Indra Nooyi.
Photographs: Lucas Jackson/Reuters

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The accusations by the Republicans might not resonate with their base too much, still it could hurt Obama.

On the other hand, if the US does decide to sticks with its nominee, even if the candidate is not qualified enough, it will get its way simply because it has the votes and the weight to get the things it wants.

It is expected that the final candidate will be announced before April 20.


Image: Secretary of State Hillary Clinton.
Photographs: Kevin Lamarque/Reuters
Tags: World Bank , Obama , US

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