Jim Kim's resignation sparks questions about the next World Bank president

World Bank President Jim Kim will step down from his role. Photo by: Simone D. McCourtie / World Bank / CC BY-NC-ND

LONDON — World Bank President Jim Kim took the institution’s staff and board members by surprise when he announced his resignation, giving just three weeks notice of his plan to leave three years early, in order to join an infrastructure investment firm.

The shock move, which was announced Monday, raised concerns among some members of the international development community about who will take over when Kim leaves on Feb. 1. Advocacy groups called for the selection process to be more “open, transparent, and merit-based” than in previous years.

A primer on the World Bank president selection process

Here's what you need to know about how Jim Kim’s successor will be chosen.

As the largest shareholder, the United States controls the selection process for the World Bank’s presidency, regularly appointing an American to the role in a tradition that has been criticized in recent years.

 Now, with Trump administration rhetoric that is critical of multilateralism, there are concerns over whom it may nominate to run the world’s largest multilateral development bank.

“It certainly is the case that the state of the relationships this White House has with the world for the most part are not strong, so that’s going to have countries more skeptical than they would be in other times probably,” said Scott Morris, a senior fellow and director of the U.S. Development Policy Initiative at the Center for Global Development. He added there may be concerns that the policy positions of the Trump administration will be reflected in the candidate.

“If the [Trump] administration names someone who is unqualified or who is considered a global provocation, the U.S. risks losing its historical prerogative and risks creating a mutiny among some of the shareholders.”

— Daniel Runde, senior vice president and director at CSIS

Morris pointed to climate finance, where the bank has been active, and said it was plausible that the Trump administration would put forward a candidate that wouldn’t embrace that agenda and would pull the bank back, which would be a hard sell for some countries.

World Bank CEO Kristalina Georgieva will step in as interim president until a permanent appointment is made, and the selection process for a new president will start immediately, according to a statement from the World Bank’s board of executive directors.

“It has been a great honor to serve as president of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime,” Kim said in a statement Monday.

“The work of the World Bank Group is more important now than ever as the aspirations of the poor rise all over the world, and problems like climate change, pandemics, famine, and refugees continue to grow in both their scale and complexity,” he added.

Kim was elected by the bank’s board in 2012 and secured a second five-year term in 2017. He is leaving the role with three years left to serve. While Kim’s time as president has not been without controversy, sources told Devex the decision to step down was voluntary. According to his statement, he is leaving to join an investment firm with a “focus on increasing infrastructure investments in developing countries.”

Kim will be best remembered for securing a historic $13 billion capital increase for the institution in April 2018, a significant achievement considering it was signed off by a skeptical Trump administration.

As the bank’s biggest investor, the U.S. calls the shots on refinancing and dictates who runs the institution. Under an unofficial agreement with major European countries, the World Bank president has been an American while the International Monetary Fund’s managing director has been European.

Some in the development community have expressed concerns about who the Trump administration will put forward as Kim’s replacement, but Daniel Runde, a senior vice president and director of the Project on Prosperity and Development at the Center for Strategic and International Studies, said that it would behoove the administration to pick a strong candidate.

“The U.S. doesn’t have carte blanche to nominate just anyone. If the administration names someone who is unqualified or who is considered a global provocation, the U.S. risks losing its historical prerogative and risks creating a mutiny among some of the shareholders,” he said. “The Trump administration has a historic opportunity to name a strong, qualified American candidate that will be supported by a large group of World Bank stakeholders.”

A spokesperson for the U.S. Treasury said in a statement emailed to Devex: “We appreciate Mr. Kim’s service to the World Bank. The Bank will continue to operate under the capable leadership of Kristalina Georgieva as interim President. The Secretary looks forward to working with his fellow governors in selecting a new leader.”

The leadership selection process has been criticized in the past, and the bank’s board introduced a new appointment process in 2011 designed to address concerns and make the process “open, transparent and merit-based,” irrespective of nationality.

However, Kim’s appointment in 2012, as the preferred American candidate, appeared not to break the mold and ignited a debate around whether it was right for the U.S. to control the presidency of the World Bank.

“I think the momentum behind that debate had already been growing with indifference to who is in the White House. We saw that the last time around with a growing number of countries unsatisfied with the inevitability of an American president,” Morris said, adding that there is opposition to a “preordained outcome.”

Kim’s appointment for a second term at the end of 2016 was more controversial, considering his unpopularity within the institution at the time and the speed with which the reappointment was made. Ironically, this was allegedly done in haste in order to avoid a situation in which President Donald Trump would nominate a candidate when he came to office in January 2017, a former World Bank staffer told Devex at the time.

Nadia Daar, head of Oxfam’s Washington office, issued a statement calling on the bank’s board to ensure there is an “open, transparent and merit-based selection process for Kim’s successor.” “This is particularly important considering the problematic process for approving Jim Kim’s second term,” she added.

Human rights campaign group Urgewald also called for greater transparency in choosing Kim’s successor.

"The new World Bank leader must not be determined by the White House, as it was done in the past. Now, a transparent selection process based exclusively on qualification is needed. This approach should include all stakeholders like states, business and civil society,” Knud Voecking of Urgewald said in an email. Voecking also described Kim’s direct move into the investment industry as a “scandal.”

In an email sent to staff, Kim, who is a medical doctor and former head of Dartmouth College, described his decision to leave the World Bank and join the private sector as “unexpected,” but explained it would enable him to “make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets.”

Kim will also rejoin the board of Partners In Health, a global health organization he co-founded with Paul Farmer.

Adva Saldinger contributed reporting to this article.

About the author

  • Sophie Edwards

    Sophie Edwards is a Reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.