Guest post from Nadia Daar, head of Oxfam’s Washington DC office
Preparing for an interview is often traumatic – by this point I’ve done a few and believe me, Oxfam doesn’t make things easy! And I’ve heard the World Bank doesn’t either. Yet for the position of president, there is a widespread feeling that Jim Kim’s upcoming interview with the Board of Directors this week is just a formality. There are no other contenders for the position after all, and many of the Board members have already put forward Kim’s name as their candidate of choice. It needs to be a lot tougher than that – the Board needs to seek some firm commitments from Kim when he appears in the hot seat.
Four years ago, the Bank broke decades of tradition by holding an actual process to pick its new president and the fact that there were other candidates being considered gave many of us hope that the status quo had been upended. While an American still ended up with the job, that process gave Jim Kim a certain credibility.
This time around, things have unfortunately gone backwards. Although perhaps this process could be justified as technically “open, transparent and merit-based,” as promised, few would say the intention behind those words was followed. For the sake of the Bank’s credibility, it is really incumbent on the Board to put in place a clear, predictable process ASAP and well before the next presidential selection.
So now what? Frankly, Kim is starting with a credibility deficit – he needs to show leadership now more than ever. The Board can play its part by demanding a strong commitment from him that will set the Bank on a path of development relevant to today’s world, that is responsible and accountable, and that places poverty and inequality reduction at the core of an action plan for the years to come.
Early on in his first term, Kim set two goals for the Bank: reducing absolute poverty and boosting shared prosperity. This was the right thing to do for an institution that had for too long focused myopically on economic growth. Now Kim needs to take more decisive action on this agenda:
- Development that truly benefits poor communities and women
A second Kim presidency should focus on reducing economic (and gender) inequalities by doing more to help countries improve the quality of their public service delivery and remove financial barriers such as user fees in health and school fees in education. Kim has come out strongly against out-of-pocket payments in health, which the Bank promoted for many years, rightly calling them “unnecessary and unjust” and the Bank has taken important leadership on Universal Health Coverage, but it can do much more to support countries to abolish user fees in public health facilities. We want to see more programs like this one which provides free antenatal care in Nigeria, and a more institutionalized commitment to this approach. The Bank can also do more to help countries mobilize the domestic resources to finance such policies by providing support for the progressive reform of country tax systems.
- Development that doesn’t inadvertently do harm
While many – including us – wanted to see a different outcome for the Bank’s new Safeguards regime, the true test
will be in implementation and the actual environmental and social outcomes of its operations, particularly in cases of displacement where the Bank has a troubling record. The Bank’s new safeguards mark a change from a “do-no-harm” approach to a risk management one and it will therefore have to improve how it tracks, monitors and supervises its development operations. It needs to resource and recruit highly-trained social and environmental specialists, as well as support countries to improve their own environmental and social frameworks, which the Bank will increasingly rely on. This will be an acid test for Kim’s second term.
- Development that is responsible, transparent and accountable
A case that demands urgent reform is the Bank’s lending through financial intermediaries (FIs). Over half of the portfolio of its private sector arm, the International Finance Corporation is invested in FIs that our research has shown often invest in areas that the Bank wouldn’t dare touch directly. This is a highly risky approach with huge loopholes in tracking development outcomes, addressing climate change, and ensuring accountability. In the post-SDGs, post-Paris, post-Addis, era, with new international banks like the AIIB and the BRICS Bank coming online as competitors, pressures are mounting for the World Bank to take risks and to be more innovative with financing. The Board should ask Kim how he intends to manage these pressures while keeping the Bank accountable and responsible.
The interview should cover a lot more than what I can fit in a blog post, but overall, to the Board my message is: demand action from your interviewee, and for Kim: commit to that action plan and put in place the necessary systems to make that happen, including making sure that operations are consistent with the twin goals, allocating resources appropriately, and reforming incentives to make sure staff are prioritizing this agenda.