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April 17, 2012

So the world is a complex system – what should aid agencies do differently?

April 17, 2012

So Jim Kim is the new World Bank president: what's in his in-tray?

April 17, 2012
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Elizabeth Stuart (@ElizStuart), Oxfam’s Bank-watcher in Washington, reflects on the challenges facing the new World Bank president.Liz Stuart pic

To the surprise of precisely no one, the next president of the World Bank is Jim Yong Kim, an American doctor, anthropologist, academic, activist and organizational leader. As lots of commentators including Oxfam have said, the process by which he was chosen was a sham, which is a great shame as the man himself is a development hero. Thumbs-up to the pick, thumbs-down to the process by which he was chosen.

So what kind of leader will Dr Kim be? By all accounts, he has an impressive history of getting things done in complex institutions: he himself has called his alma mater, the WHO, “one of the most complicated bureaucracies in the world”. Sharp elbows will serve him very well in the Bank, a place where management lines are notoriously nebulous, both because of its complex structure of matrices, anchors, regions and hubs, and the difficulties of negotiating the executive board made up as it is of different coalitions and interests (the primary divide on the board is advanced and developing/emerging economies, but often countries split differently on different issues). And then there’s the US Congress – which continues to try to micromanage relatively minor aspects of the Bank’s work – to assuage.

Problem number one is a paradox. Development is complex and multi-dimensional. The World Bank, by its very nature, needs to be across all aspects of development. One of its latest pushes is on road safety for instance, and with good reason: 1.3m people are killed on roads each year, 90% of whom are in developing countries. But this is just another issue to add to the seemingly never-ending list of Bank initiatives. One reason why the institution has not achieved the big development successes that might be expected is its overreach. So how to be an expert on everything without trying to actually do it all?

Another very real dilemma he’ll have to negotiate is infrastructure. Lack of roads, electricity, ports, railway networks etc remains a massive issue for developing countries, and for most of them private sector finance, which often demands double-digit returns, is just not feasible. The BRICs say getting their hands on affordable finance to build what they need to grow it is a key reason for their setting up their own development bank, which could, in part, rival the Washington one. But lending for infrastructure is very hard for the World Bank. How to ensure that the maximum number of people have access to affordable energy, for instance, without harming – often the most vulnerable – populations in the process is a very difficult issue indeed.

Dr JimYong Kim

Dr JimYong Kim

And then there’s the problem of keeping emerging countries engaged, bearing in mind this is where almost three-quarters of the world’s poor live. They’re already looking elsewhere for finance (see above: in future it’s not just going to be Africa that looks to China for cash). How can the Bank compete, especially when it has just given the institutional blow-off to Africa, Latin America and Asia’s choice for president? One solution being proposed by a Center for Global Development working group: expand IDA (the Bank’s very low interest loans and grants) to middle income countries, provided it’s very tightly targeted at fighting poverty.

Let’s hope that he will successfully square these differing and competing demands, as there’s lots to be done. Every organization will have a list of priorities for a Kim Bank, and here are Oxfam’s top three:

1, get rid of health user fees. Poor people can’t afford to pay out of pocket to see a doctor and the World Bank needs to work with countries to make healthcare free

2, stop investing in land grabs which displace poor people, and affect their ability to feed themselves

3, help countries make the transition to low carbon economies

Just a few more demands to add to Dr Kim’s welcome pack.

Elizabeth Stuart is head of Oxfam International’s Washington DC office.

And Chris Blattman perfectly captures the irony of the debate over the ‘contest’ for the job with a tweet from @JustinSandefur: “#WB race = strange bedfellows: free-market economists 4 3rd world democracy vs pub health humanitarians 4 US imperialism?”

Barbara Stocking (my big boss) adds her bit on the FT blog

9 comments

  1. I applaud the appointment of Dr Jim Yong Kim as for too long the World Bank has been dominated by fianciers,economists and bankers.

    At last we have someone who is in touch with the real world and its people. 2 years ago at the IFSW(International Federation of Social Workers) World Conference in Hong Kong I asked for someone from the Wolrd Bank and IMF to attend this years IFSW World Conference in Stockholm to address the world of Social Work on why they use to undermine the world of Social Work who are the best quailified to research what is needed for society…we are social anaylists.

    We look at every aspect of life: the psychological,emotional,social, financial,health,protection and overall well being of the wider society and yet the financial institutions of the world demand Governments to cut social welfare,social aid and reduce Government personnel that are there to serve its citizens.

    So yes bankers watch out as we now have a someone who is not one of the elite but who is on the side of the worlds citizens.

  2. Nice post Elizabeth. He does seem like a genuinely good bloke, and the process that put him there is not his fault.

    Strange to hear Oxfam suggesting that another organisation might be guilty of overreach!! Glasshouses and stones spring to mind…

  3. Jim Kim may be a good guy. That I agree. But in my opinion, the real problem lies in the power relations in which the World Bank is nested in. The power structures inside and outside this institution have made the status quo ‘fixed’ through time. Such a flawed ‘un-democratic’ process to elect the president of this institution symbolizes the inequalities of power in which it is embedded. It hardly legitimizes its agenda. See some reactions on this in http://www.brettonwoodsproject.org/ But furthermore, as Elizabeth has quite rightly pointed out, the World Bank is a complex institution and not even its President can be held accountable for everything. Jim Kim may not have all the individual agency and empowerment to “change from within” the structure and outcomes of the Bank as we would like to think. But then change is also coming from abroad with the BRICs initiating pressure and alternatives. May be we can have Alternative World Banks in the future…

  4. He needs to, and he must quickly understand, address the falling shares of contributions by major shareholders (who after all supported him) contributions to the Bank’s IDA. The US (his nominator) has been dropping their total share of contributions.

  5. The most important thing is that the World Bank start doing very little — it has a badly sick culture, and it needs to start fixing itself before it moves forward. Not as bad as the IMF, of course. DSK, geez.

  6. Neil, Kim has not said a word of what he would do unlike Ngozi IO and JA Ocampo, woh did at the CGD/WPost conference. Being a doctor and health specialist doesnt mean he’s more developmental.

  7. Thanks for the comments everyone. @Jiesheng – it’s a fair point. It’s a shame that he didn’t show at the CGD event and it seems to be a missed opportunity that he’s not going to do a press conference at this week’s Spring Meetings. But I think his experience at the WHO and with Partners in Health have to count for something.

  8. Jim Kim seems more than qualified to be the new World Bank president but as the article states, this will be no easy task due to the amount of pressures from countless organizations and individuals. Most people are in agreement that less developed countries are in need of aid. Most will also agree that it is impossible to please everyone so distributing that aid accordingly will be Jim Kim’s problem. Is it best to send investments through LDCs government or should the World Bank lend to the private sector? Road safety is important considering the deaths per year on the highway. This is definitely a call for government change which means funds should be given to the government in order to restructure their policies. However, I feel like business owners, especially small business owners, manage their money more carefully. This is why I feel lending to the private sector could be very beneficial for development. This would hopefully keep the money out of the hands of a corrupt government.

  9. Oxfam’s top three recommendations come as an anti-climax to a good analysis. Isn’t it just silly to worry about carbon emissions in poor countries? Surely Oxfam isn’t guilty of overeach itself by taking on global problems such as climate change?

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