The global financial crisis threatens to erase years of progress in poor countries. By 2009, the crisis had already driven more than 50 million people into extreme poverty. The World Bank has therefore raised its lending to developing countries to unprecedented levels -- $57 billion in 2011, more than double what it committed in 2008.
Given all this, news that Bank president Robert Zoellick won't seek a second term should be an occasion for these countries to have a say in choosing the leader of an institution which can spell the difference between their progress and more poverty.
In all its 66 years, the World Bank head has always been an American -- the quid pro quo of a European International Monetary Fund (IMF) chief. This is the remnant of a "gentlemen's agreement" set up when the institutions were founded after World War II. There have been 11 IMF managing directors, all European and all men (save Christine Lagarde) and 11 World Bank Presidents, all American men. Yet this is a now a very different world, powered by emerging economies who rightly demand a voice in these institutions and a seat at the table.
Let's be clear. This isn't akin to suggesting customers of a main street bank choose the bank manager. That's a business decision -- although at least there the job presumably goes to the most qualified rather than the best-connected. The World Bank, while a giant cash dispenser, has a say in how developing countries spend that money. It is also supposed to be a beacon of collaboration and cooperation, an open, accountable institution that in turn helps countries improve the way they manage their own governance systems. Instead, the starting point -- its leadership -- is a stitch-up.
The Bank is alive to its governance problem, or what is euphemistically termed "voice reform." Zoellick himself has spoken eloquently about the need for a new World Bank for a new world. The Bank's governors have repeatedly committed to open, merit-based appointment process for future leaders. Yet with Zoellick out, the conversation once again is turning to which American will now be appointed.
As things stand, the list of nominated candidates will be held in confidence by the Bank's Board, until they agree a shortlist. The interviews will be behind closed doors. Criteria used for selecting the new president will not be made known. A new president will then be approved, again in camera, to a five-year renewable term. The United States, the Bank's largest shareholder, will decide who replaces Zoellick.
The Bank's presidency should not be treated as a done deal in this way. The second wave of global economic crisis is going to start hitting poor countries very hard, very soon. The World Bank needs to be fit for purpose and geared to respond with credible, legitimate leadership in place. Europe's stranglehold on IMF leadership is not acceptable, and neither is American dominion over the World Bank. The idea that developing countries need the U.S. and Europe to tell them what to do with their budgets is ludicrously paternalistic. And the longer the Bank and the IMF hold on to the idea that they can call the shots in developing countries, the more out of touch they seem.
It would make a nice change to have the next president come from a developing country, although accountability of course demands that the process be open, competitive and merit-based. In other words it should go to the best woman or man for the job. Anyone should be able to apply, with open voting procedures based on a majority of countries, not just a majority of shares. A clear job description and required qualifications should be set out. Criteria should include a strong understanding and experience of the particular problems facing those countries. And the new President should be chosen by a majority of World Bank member countries.
For their part, developing countries should seize this opportunity to forge a Bank that serves them, the clients, who must live with World Bank policies and programs. They have an interest in forcing a genuine contest. And if the Bank is unwilling to change, they can and should go elsewhere for money and advice.
More:World Bank President American World Bank World Bank President Robert Zoellick Imf President New World Bank President
How will Donald Trump’s first 100 days impact YOU? Subscribe, choose the community that you most identify with or want to learn more about and we’ll send you the news that matters most once a week throughout Trump’s first 100 days in office. Learn more