27 July 2012

World Bank on a New Course

Written by 
Jim Yong Kim, president of the World Bank, speaks at the opening session of the International Aids Conference in Washington on 22 July. Photograph: Jacquelyn Martin/AP Jim Yong Kim, president of the World Bank, speaks at the opening session of the International Aids Conference in Washington on 22 July. Photograph: Jacquelyn Martin/AP http://www.guardian.co.uk/global-development/2012/jul/25/world-bank-jim-yong-kim-eradicate-poverty

Writing for a site “passionate about peace and human flourishing,” I want to celebrate the new president of the World Bank, Dr. Jim Yong Kim. In Earth, Empire and Sacred Text, I had decried some of the misdeeds of an overly ideological World Bank in the 1980s and 1990s, and how its neoliberal one-size-fits-all approach to fixing the struggling economies of the developing world only increased the numbers and plight of the “absolute poor,” while creating even more social unrest (for a summary of the issues see, “Was that ‘Free’ or ‘Fair’ Trade?”).

To be fair, some of these problems started to be tackled in the late 1990s, and the core mission of the World Bank, poverty alleviation (and not maximizing the profits of western banks and multinational corporations, by the way), has truly been its focus in the last few years.

That said, this is the first president who is not a banker or an economist, but a theoretician and practitioner of development. Kim has worked as a physician and international public health official (he’s a former director of the Department of HIV/AIDS at the World Health Organization), attempting to untangle the related problems that bedevil the poor around the world – disease, pollution, poor infrastructure, governance and economic growth.

Some criticized his nomination by President Obama on the grounds that he had co-authored a book in the 1990s, Dying for Growth, that in part criticized the World Bank’s approach to development. In an interview, he explained why:


“That book was written based on data from the early and mid-1990s. Our concern was that the vision was not inclusive enough, that it wasn’t, in the bank’s words, ‘pro-poor.’ The bank has shifted tremendously since that time, and now the notion of pro-poor development is at the core of the World Bank.”

 

What is needed, he continued, is to leave behind the obsession with economic growth while ignoring the actual needs of people in particular places. Too, we need to cast aside rigid ideologies – like thinking that all economic problems can be solved through market forces. Indeed, investment in the private sector is crucial, but only if it is balanced with the ability of the state sector to provide the kind of setting in which it can flourish. This means good health care, educational opportunities, and a solid infrastructure.

The British newspaper The Guardian has a useful blog called “Poverty Matters.” It recently interviewed the World Bank’s Director of External Affairs, Cyril Muller, right after Jim Yong Kim was appointed president. The author was impressed to learn “how keen the Bank seems to be to move on from its hubristic and ideological past.”

His main question to Muller touched on the issue of privatization versus nationalization. Muller answered that the Bank had no preference for either approach. In 2010 it has committed itself to reduce costs and increase effectiveness by aiming at three interconnected issues: results, openness and accountability. Whatever actually reduces poverty in a given location, that is what we will support, he said.

So for instance, the World Bank reprimanded Argentina for nationalizing the Spanish company Repsol, but only because the process had been less than transparent and fair. Yet in Bolivia, it supported the nationalizing of another Spanish company, Red Electra, because it carried out the project in a way that benefited the people more widely.

This is a big shift. One study in 2007 showed that 71% of loans and grants came with the condition that the recipients initiate reforms in the direction of privatization and liberalization. This may seem technical, but it does have concrete repercussions for the poor:

 

“In the past decade, to access World Bank finances, Burkina Faso was required to promote private-sector participation in the energy sector to secure money; Mozambique, Ghana and Tanzania were required to implement a strategy to privatise national banks; Benin had to show progress in the privatisation of its cotton ginneries, telecoms and energy sectors; Rwanda was required to negotiate privatisation of its telephone system and tea factories; Mali had to privatise its textile development company and national bank.”

 

The interviewer, however, pointed to changes taking place (note: British spelling):

 

“The privatisation of Zambia's copper mines was totemic of all that was wrong with aid conditionality, both in terms of process and content, leading to vast revenues being foregone as the copper price soared. The World Bank now appears to be saying nationalisation is a perfectly reasonable option for Zambia and other countries, as long as it is pursued fairly.”

 

Now, back to Jim Yong Kim and to what prepared him for this influential job. For one thing, he may be more sensitive and passionate about issues of poverty since he was born in 1959 in a Korea still suffering from dire shortages and poverty. Many Koreans were doing their utmost to emigrate.

Once in the US, this bright student certainly made the most of the opportunities before him. In 1991 he obtained his medical doctorate from the Harvard Medical School and two years later finished his PhD in Anthropology from Harvard University. In the 1980s he had co-founded Partners-In-Health (PIH), an acclaimed non-profit that runs community-based programs for the poor. Later, as a professor at the Harvard Medical School he helped launch and lead the Global Health Delivery Project, gaining him lots of attention -- which eventually led him to his job at the World Health Organization.

No doubt Dr. Kim is well suited for this high level post. He’s known as a consensus-builder, yet as someone who can make tough decisions too (he was President of Darmouth University until June 2012). But the World Bank was dealing with three candidates who were neck-in-neck until the end: the Columbian mwo4mé Antonio Ocampo with a long career at the UN and a Nigerian woman who has done wonders as the Minister of Finance of her nation, Ngozi Okonjo-Iweala. The Economist published an editorial arguing that Ngozi was by far the best choice.

Now, you might be asking, what is this about the American president nominating someone to head a global institution? Did this have anything to do with the Bank’s choice? If it did, isn’t this a blatant show of colonialism?

The truth is, we don’t know the inside story. Traditionally, US nominees have always been chosen. It’s an unspoken rule, however, that was seriously questioned this time around. I’m guessing Kim might be the last US president of the Bank for a while. Still, if he succeeds in instilling this more pragmatic, technocratic, and even compassionate and culture-sensitive ethos throughout the institution, then we can rejoice.

The picture above this blog is that of Dr. Kim addressing the International Aids Conference in Washington at their opening session. That day he said in another interview:

“I want to eradicate poverty. I think that there's a tremendous passion for that inside the World Bank.” Then he explained some of the pieces of the puzzle that had to come together for that to happen:

 

“The evidence suggests that you've got to do a lot of good, good things in unison, to be able to make that happen. The private sector has to grow, you have to have social protection mechanisms, you have to have a functioning health and education system. The scientific evidence strongly suggests that it has to be green – you have to do it in a way that is sustainable both for the environment and financially. All the great themes that we've been dealing with here have to come together to eradicate poverty from the face of the Earth.”

 

If you’ve read my other blogs on poverty and ecology, you know that this holistic vision is music to my ears. I hope it inspires you too! Not just to cheer on the various actors who seek to lift a billion and a half people out of brutal poverty, whether states, global institutions like the World Bank, NGOs and so many community groups. But also to tap the energy and inspiration of your own religious faith so as to find concrete ways to make a mark in this vast effort underfoot. Indeed, we are trustees of God’s good creation, and He will hold us accountable for the way we’ve used our resources to serve “the least of these.”