The Economist has strongly endorsed Nigerian Finance Minister Ngozi Okonjo-Iweala for the presidency of the World Bank. The March 31st editorial 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and European “carving up” for the leadership positions at the World Bank and the International Monetary Fund is outdated, and that the poor qualifications of President Obama’s nominee, Dr. Jim Yong Kim provides an opportunity to end it. It also calls on the Colombian candidate José Antonio Ocampo, a former finance minister, to withdraw “gracefully.”
In the United States, and probably many other places, The Economist is a must-read for policy makers. Its endorsement of Ngozi Okonjo-Iweala is significant.
The Economist reflects a growing consensus that the American and European monopoly on the leadership of the international financial institutions is outmoded. But, in an election year, I think the Obama administration will hang tight on keeping to the World Bank presidency. To do otherwise would hand the Republicans a readymade campaign issue, even if it is not one that is likely to resonate widely among the general public. As I have blogged before, I think the Obama administration will have the votes to prevail. But, if not, it will be a significant defeat for the Obama administration in the international arena.
The Economist’s editorial cites the conventional qualifications for the World Bank presidency: an economist with experience in finance and administration. It points to Okonjo-Iweala’s two stints as Nigeria’s finance minister, her leadership of the renegotiation of Nigeria’s Paris Club debt, and her time in a senior leadership position at the World Bank. She is very much a World Bank insider. On the other hand, President Obama’s nomination of Dr. Kim, a physician with a specialty in public health and a development professional not part of the inner circle of international finance, raises the possibility of significant change in a very conservative institution. It should also be noted that Dr. Kim is currently the president of Dartmouth College, an indication that he probably knows something about leading complex institutions.