BRICS need to make a stand

PUBLISHED : Thursday, 29 March, 2012, 12:00am
UPDATED : Thursday, 29 March, 2012, 12:00am


They are very different countries with very varying interests. However, there is one outstanding issue where the BRICS could bring their joint clout together to make a difference. The issue concerns who should take over from Dr Robert Zoellick as the next president of the World Bank in mid-year. For once there is a contest, with three candidates, two of them nominated by BRICS countries.

President Barack Obama made the surprise nomination of Dr Jim Yong Kim, president of Ivy League Dartmouth College, with all the assurance that it is the US president's job to name the bank president.

The US treasury announced this week that candidate Kim, a medical doctor with a PhD in anthropology, who was born in South Korea and migrated to the US at the age of five, will set off on a world tour, going to China, India, Brazil, Japan, South Korea, Mexico and Ethiopia on a 'listening tour' to talk about the World Bank and its priorities. The treasury did not say who was paying for the trip.

It remains to be seen whether the other candidates, Columbia University professor and former finance minister of Colombia Jose Antonio Ocampo, nominated by Brazil, and Nigerian finance minister and former World Bank official Dr Ngozi Okonjo-Iweala, nominated by South Africa, have the wherewithal or luxury of time off from their day jobs to make similar tours.

Washington has hitherto chosen the World Bank president under a cosy deal agreed back in the mid-1940s when the Allied powers set up the International Monetary Fund and World Bank to restore peace and prosperity to a world shattered by war and destruction.

But the development committee, the key committee of the 187 governments that are the shareholders of the World Bank, promised in successive meetings that the next president should be chosen by merit-based open, fair and transparent competition.

The BRICS should insist that this is the case and should define what openness and transparency means, or there will be slithering away to cut back-door deals. Ideally, the candidates should be offered the opportunity to present their manifestoes - and make them public - detailing how they would run the World Bank, what they see as the priorities and challenges, and what changes they would make.

They should then face interview and questioning by the bank executive directors. The sessions should be public, but if the board insists that it operates behind closed doors, at least a transcript should be provided of the relevant questions and answers.

Finally, countries should vote individually and their votes should be recorded to make the process fair and transparent in accordance with the promises. The world, particularly the billions of people who are World Bank customers, deserve no less.

Of course, there are plenty of critics who contend that the World Bank is no longer relevant or has long passed its sell-by date. In the dark days after the second world war, the bank was a vital source of finance for infrastructure and other development projects.

And since then, the bank has lent billions of dollars in Africa, Asia and the Pacific and Latin America to try to eradicate hunger and poverty and promote education, investment and prosperity.

Is it time to consign the glorious days of the World Bank to history and acknowledge that private enterprise can do a better job? After all, global capital flows amount to trillions of dollars, but the World Bank in a good year can put together a small pot of about US$50 billion.

Even so, the World Bank has advantages and can go places where private money cannot - and more to the point will not - go. Its 10,000 staff include probably the world's brightest collection of PhDs in economics and every professional speciality under the sun. This gives the bank an unrivalled platform as 'the knowledge bank' for the world.

The bank therefore has important roles in advising and as a catalytic player in development. Its recent joint report on China 2030 is a case in point, though one that also illustrates the key weakness of the bank - that it is not well-attuned politically, only partly because it is the servant of the governments that are its shareholders. In many of the very poorest parts of the world that are failed and failing states, the bank has been able to make little headway.

In addition, the World Bank should have an important role to play in reporting, advising and lending to protect the global commons, the water, food, energy supplies and environment of this overcrowded, deteriorating and fragile planet.

Running an international institution tackling this wide range of topics, as well as dealing with prickly member governments, demands leadership of the highest order.

There was widespread surprise when Obama named Kim, a university president with no obvious hands-on experience of finance, economics or government and a narrow specialisation in health and particularly HIV/Aids. Cynics said it was a crude attempt to lobby the Asian-American vote on the eve of Obama's trip to Korea.

Jim Kim has already achieved his 15 minutes of fame as a rapper at the Dartmouth Idol contest wearing out-of-this-world shades and dancing spiritedly if woodenly. His supporters say his experience of poverty and sickness at the grass-roots level will lead him to try to turn the World Bank upside down. That would be interesting, if he has a plan, or disastrous.

Similarly, Kim's supporters deride Okonjo-Iweala as too wedded to the status quo, though they probably have not taken on this capable and feisty woman face-to-face or heard her on how to tackle entrenched corruption or the curses of an oil-rich country. For their sakes and for the World Bank and the future of the planet, it is essential that the candidates are heard first. It is hard to see Europe or Japan daring to challenge Obama, so it is up to the BRICS - speak up for the world and show you are more than a catchphrase.