World Bank president selection: ‘Gentleman’s agreement’ alive and well

After the unexpected resignation of World Bank President Jim Yong Kim in January, the selection of his successor was subject to considerable scrutiny. Over 150 civil society organisations, academics and other individuals calledon the Board to live up to its commitment following Kim’s departure to an open, transparent and merit-based process. The call was echoed by the demands outlined in a January letter by the Bank’s own staff association. These demands are not new and resonate with long-standing calls to end the so-called ‘gentleman’s agreement’, which ensures that the IMF managing director is a European and the World Bank president a US national. They also reflect the calls made as far back as 2012, not by civil society activists or ‘disgruntled’ governments from the Global South, but by senior Bank staff. Former Chief Economist Joseph Stiglitz and Senior Vice-Presidents François Bourguignon and Nicholas Stern argued in a 2012 Financial Times article that the process is “not only hypocritical, it also destroys the trust and spirit of collaboration needed to manage the profound problems facing the world.”

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Open letter to the World Bank Group Board of Executive Directors

Appointment of the new World Bank Group President

The selection of the new World Bank president takes place amid a crisis of multilateralism reflected in the ascent of anti-establishment and nationalist parties and increased trade tensions. These arise from persistent challenges to the world economy ranging from the growing inequality crisis, the increasing importance of finance, financial markets, and financial institutions in the economy, a looming debt crisis and increased corporate capture that is resulting in the erosion of states’ sovereignty and their ability to meet their human rights obligations. These trends are exacerbated by the quickly evolving climate change crisis, which threatens the livelihoods of the poorest around the globe.

The World Bank requires a leader able and willing to critically assess the role the Bank can play in challenging the failed model that has led us here. The next president must ensure the institution leads by example and uses its privileged position to articulate the need for radical change. More than ever the World Bank requires a president who is qualified to lead what is still the world’s principal public development bank.

It is therefore imperative that the selection process results in the appointment of the best candidate, chosen from a wide-ranging pool of people with the background and experience required.

One thing is certain, at a time when the legitimacy of international institutions is increasingly under attack, reliance on the previous process, where the US and its European allies work behind closed doors to ensure the selection of a US World Bank president in exchange for the European leadership of the IMF will only further erode confidence in the multilateral system. It is of vital importance therefore that the next president has the support of the majority of low and middle-income countries, to which World Bank lending is restricted. Continue reading

‘America First’ Comes to the World Bank

As first reported by Politico on Monday, the US administration has chosen senior Treasury Department official David Malpass as the US nominee for the World Bank presidency. The official announcement of Malpass’s nomination took place earlier today.

With Malpass’s nomination, all eyes now turn to see how the other WBG executive directors respond when formal nominations open on 7 Feb. Will other nominees enter the race? Although an American has held the post of World Bank President throughout the Bank’s existence, a number of voices from civil society, the media and elsewhere, have already encouraged other shareholders to oppose Malpass’s appointment as president (see here, for example), with Justin Sandefur of the DC-based Center for Global Development arguing, “there is no case for Malpass on merit.” Not surprisingly, Malpass’s supporters disagree.

Following Jim Yong Kim’s resignation in January, the World Bank’s Board vowed to undertake a merit-based process of appointing Kim’s successor, but – given that executive directors must nominate potential candidates – the integrity of the process now rests, in the first instance, on other genuine contenders for the presidency entering the race.

Otherwise, the ‘selection process’ risks descending into a farce. Continue reading

The non-Americans: A who’s who of non-US candidates for the World Bank’s top job

Who do you think would be the best non-US candidate? Participate in the poll here

While much of the media coverage since Jim Yong Kim’s resignation has fixated on who the Trump Administration will pick as its nominee for World Bank president (see here for odds of favourites – including US passport holders Indra Nooyi, David Malpass, Ray Washburne, Dame Nemat Minouche Shafik and Dina Powell), the notion that it’s time for a non-American to lead the Bank has increasingly entered the public discourse as the Bank nears its 75th birthday, with a number of op-eds calling for an end to the American monopoly of the Bank’s presidency (for examples, see here, here and here).

Let’s be frank: the odds still favour the appointment of an American nominee. But a less-than-satisfactory US nominee could put pressure on key Bank shareholders who have historically supported the US-backed candidate (namely Japan and European shareholders, with the latter supporting the US nominee in return for a European remaining at the helm of the IMF). Any member of the executive board will be able to nominate candidates from 7 Feb. The lingering question is, will non-US executive directors dare?

Civil society has long favoured an open application process; after Kim’s resignation, the World Bank’s staff also backed this demand. However, as the Board has made clear that candidates need to be nominated by executive directors, this will limit the scope of how ‘open’ and ‘transparent’ the process actually is.

In lieu of a completely open process, the nomination of a large number of qualified candidates by World Bank executive directors is the next best thing; yet, whispers from DC suggest this is unlikely, and that various members of the Board are angling for the ‘least bad’ US nominee. Continue reading