Donald Trump won't choose the next World Bank president

By Michael Igoe 25 August 2016

The World Bank headquarters in Washington, D.C. Photo by: Michael Foley / CC BY-NC-ND

The World Bank’s presidential appointment process unveiled this week points to a second term for Jim Yong Kim; it will also likely bar any possibility that Donald Trump, were he elected U.S. president, would influence who runs the world’s largest multilateral development bank for the next five years.

In a board meeting on Tuesday, the bank’s executive directors approved a timeline, which is likely to result in the appointment of the bank president before the U.S. elections in November — and well before the next administration takes office in January. The World Bank maintains this year’s process is in keeping with past timelines. But a well-connected source who has not previously spoken out about the bank’s appointment process told Devex the current president is using the looming U.S. election to motivate the bank’s board to move faster.

“Jim Kim has been basically lobbying ... saying, ‘oh, you better choose [me] now before Trump might win and name somebody from his side.’ The entire process has been timed and planned … to finish before November,” said former World Bank staffer Hafed Al-Ghwell, citing conversations with members of the bank’s board of directors.

Al-Ghwell left the bank in 2015 after 16 years. He served most recently as adviser to the dean of the board of executive directors, a position that gave him a front-row view into the presidential appointment process in 2012, which ushered Kim into his current role. Now Al-Ghwell has joined a growing list of former World Bank officials who criticize Kim’s tenure — and the process that is likely to reappoint him.

“This flies against precedent, flies against the courtesy that has always been there for the next U.S. administration and the next U.S. Treasury secretary to decide who’s the president that he’s going to be working with,” Al-Ghwell said.

“It also flies against … what is happening in the bank now. There is a serious revolt going on in the bank by the staff. And they’re trying to pre-empt all of that,” he added.

Kim has overseen the first major restructuring in two decades at the World Bank, an institution many agree had become burdened by bureaucracy and was in need of reforms. Kim sought to make the bank’s expertise flow more freely across regions of the world, to undertake a “strategic staffing exercise,” and to reposition the bank with respect to emerging financial powers such as China. Kim has described the internal dissent he’s faced as the inevitable consequence of a major change effort — and he has urged staff to keep their eyes on the bigger picture goals of ending poverty and boosting shared prosperity.

His renomination suggests the U.S. government is confident enough in Kim’s management of the change process to support his bid to see the reforms through.

Republican presidential nominee Donald Trump has issued frequent remarks about withdrawing U.S. support from international institutions — and his supporters often attack “globalism,” the idea that an international political agenda might subvert U.S. national interests. The Republican nominee’s positions have raised concerns among global development professionals about what his presidency would mean for the global architecture of international cooperation that has evolved since World War II, of which the World Bank Group is a central part.

While Hillary Clinton would also not technically appoint the next World Bank chief, the man likely to win a second term, Kim, landed the position in 2012 largely thanks to Clinton’s support.

Clinton’s support for Kim has been one of his selling points to World Bank board members, Al-Ghwell said. Kim has been, “citing what he claims is his strong friendship with Hillary Clinton and her total support for him as a way to convince board members that he is the right guy for the job.”

A spokesperson for the U.S. Treasury Department, which manages the government’s relationship with the bank, declined to say whether the administration has sought approval of Kim’s re-nomination from either the Clinton or Trump campaigns.

In an unofficial agreement with European countries, the U.S. government, as the bank’s largest shareholder, traditionally selects the World Bank president. Clinton was a driving force behind Kim’s nomination in 2012, after other potential nominees — including economists Jeffrey Sachs and Larry Summers — failed to pan out. Kim, a medical doctor and co-founder of the NGO Partners in Health, shared a history of humanitarian work in Haiti with the Clinton family, and on at least one occasion urged Clinton to visit Dartmouth College, during his tenure there as president. He is also reportedly close to President Obama.

An email released from her time as secretary of state shows that Clinton inquired with Cheryl Mills, Clinton’s chief of staff at the State Department, about whether Mills had contacted Kim two days before his nomination was publicly announced. “ Did you ever reach Jim Kim?” the subject line reads. Mills responded: “Yes —  grateful, overwhelmed, talking tomorrow for longer.”

An email sent by Hillary Clinton to her chief of staff, two days prior to Kim’s nomination.

The bank maintains that Kim’s 2012 appointment was the result of an open, merit-based process — principles the bank’s board of directors agreed to unanimously in 2011 — and they say the 2016 appointment process will reflect the same commitments.

In some respects, 2012 did break from tradition. The bank saw its first-ever contested election, with two nominees from developing countries: Ngozi Okonjo-Iweala, the former Nigerian finance minister, and José Antonio Ocampo, the former Colombian finance minister. These two nominees participated in public debates, presented their prospective programs for consideration, and Okonjo-Iweala secured near-unanimous support among the bank’s developing country shareholders — known as the G-11.

At the time, few of the executive directors were familiar with Kim, whom the U.S. had nominated shortly before the close of the nomination period, Al-Ghwell said. Next to two eminent economists, Kim seemed an unlikely nominee, and that reflected in the amount of support he initially received.

“There was sort of an informal vote that was taken right in front of me — and I was actually the guy who counted it — of where everybody stands. It came in as 99 percent for Ngozi. Not one single vote for Kim,” Al-Ghwell said.

The one G-11 vote that wasn’t for Okonjo-Iweala went to Ocampo. But when Brazil’s executive director informed Ocampo of the result, he agreed to drop out of the race and support Okonjo-Iweala, Al-Ghwell said.

But the next day something happened.

“[U.S. Treasury Secretary Tim] Geithner made his phone calls to Russia, China and these countries,” Al-Ghwell said. “Russia was the first country to fold … immediately after that was the Chinese and others. It becomes a tumbling game.”

The dean of the board, for whom Al-Ghwell served as advisor, was among those to change his vote, and Kim became the 12th American man in a row to serve as president of the World Bank.

“For me it was just a personal disgust, honestly, that this institution that I’ve served all these years, is going around the world … lecturing world governments on the importance of transparency, good governance, accountability … that this is the institution that is willing to play these games, and in a very blatant kind of way without anybody really batting an eye,” Al-Ghwell said.

He is dismayed by what he sees as a similar process playing out in 2016, but with the possibility for even less genuine competition. “I find it really insulting,” he said.

Al-Ghwell is not alone in voicing criticism of the recently approved nomination process — or of Kim’s fitness to serve a second term.

“It’s a short process. The Americans want the renomination, so the incentives for really getting quality people to put their name in a process that looks to be predetermined is not very high. So the competitiveness dimension of the process is not likely to be met,” said Jean Louis Sarbib, a former World Bank senior vice president and the current CEO of Development Gateway.

Devex reached out to Okonjo-Iweala for comment on the nomination process and whether she would seek another nomination to challenge Kim, but did not receive a response.

Sarbib served as an advisor to World Bank President James Wolfensohn, whose reappointment in late September 1999 the bank points to as evidence that their current timeline is not out of step with the past.

He told Devex that those inside Tuesday’s board meeting where Kim’s nomination was announced reported that it was attended by a large number of junior staff, who were filling in for executive directors still on summer leave.

“This rushed process, given the fact that there’s still a lot of time left in Dr. Kim’s first term, is odd … It certainly does not give much time to come up with credible candidates, unless it is the intention of the Americans to propose more than one name,” Sarbib said.

While it might be difficult for other countries to field candidates in time for the deadline, Sarbib thinks the U.S. should consider doing so — if the administration is going to nominate someone likely to fulfill the selection criteria set by the bank’s board of directors.

“I’m afraid that Dr. Kim does not meet many of them based on his performance in his first term,” Sarbib said.

According to Sarbib, U.S. Executive Director Matt McGuire cited Kim’s performance and the Obama administration’s support as reasons for his renomination in the Tuesday board meeting.

Kim, in an emailed statement after Tuesday’s meeting, also defended his record and championed an open appointment process.

“Together, we have accomplished so much over the past four years, and I would be proud to carry on this important work. The board is committed to an open, transparent process, and I fully respect the selection principles adopted by our executive directors in 2011 and followed in 2012,” he said.

The window for nominations opens Thursday, Aug. 25 and closes Wednesday, Sept. 14. Consideration of candidates will take two to three weeks, according to a bank release.

Update, August 29, 2016: The World Bank today provided the following official statement in response to this article after its publication. "Your report contains a number of serious inaccuracies, and several claims with no basis in fact. In particular, the characterization of closed-door conversations among our shareholders in 2012 and 2016 do not accord with the first hand recollections of those who were present. Additionally, at no point has the president of the World Bank invoked the issue of elections or individual candidates in any shareholder country – during this process or at any other time. The claim is a fabrication.”

Editor’s Note, August 25, 2016:  An earlier version of this article indicated that U.S. Executive Director Matt McGuire cited “the strong personal support of the U.S. president” as one reason for Jim Yong Kim’s nomination. Further inquiry suggests McGuire referred to the Obama administration’s support in general, not the personal support of President Obama. We regret the earlier characterization, which we were unable to corroborate with other sources.

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About the author

Igoe michael 1
Michael Igoe@AlterIgoe

Michael Igoe is a senior correspondent for Devex. Based in Washington, D.C., he covers U.S. foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider's perspective.


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