Daily Archives: March 5, 2012

This year’s session of the National People’s Congress takes on added significance with the impending anointment of the next generation of senior leaders. China would seem to have many reasons to be self-satisfied given the strong prospects for a “soft landing”, a mountain of foreign assets that Europe is eager to tap, and an expanding regional presence that the US has had to take notice of.

Yet the leadership recognises that the country faces daunting economic, social and environmental challenges including vulnerabilities created by past excessive credit expansion. Wen Jiabao, China’s premier, warned on Monday that growth is set to slow this year.

But these are likely to be seen as technicalities among those gathered in Beijing. Far more worrisome for the political elite is the question of how to deal with rising social unrest. This was underscored by the global attention given to the Wukan village land-related protests that pushed provincial leaders to support more open local elections. Other disturbances such as recent unrest by migrant workers at Foxconn reflect the tensions stemming from decades of widening social inequality that seems out of place for a regime that originated from egalitarian ideals.

If the incoming senior leadership wants to deal with the systemic issues that have spawned rising social unrest, it needs to rethink some of the unintended consequences of its current growth driven model. Paramount is to reshape China’s economic institutions and control over basic resources in ways that moderate, rather than exacerbate, disparities. 

As it begins the search for a new president of the World Bank, the Obama White House risks repeating the very same mistakes that all too often in the past have led to the wrong person being appointed. Every time this process begins, those in charge ponderously – and mendaciously – announce it will be “open, transparent and merit-based”. They know this is not true, as some of the best candidates are automatically disqualified: only US citizens connected to the occupant of the White House at the time are considered and the process is closed, and only tenuously determined by merit.

So how does this flawed process work be reformed? In the past, it has led to the appointment of candidates who knew little about the bank. The consequences were confusion over its mission and obstacles in the way of providing assistance to countries in need. This is partly the result of the fact that those in charge of making – or influencing – the decision often base it on wrong notions about the ideal background of the Bank’s president.

Mr Obama should look for a professional who already knows this field, its ideas, players and traps, who has a vision for the World Bank rooted in practical experience with development and who has already run successfully a global, organisation. This is not the time or the place for ‘on-the-job-training’. Nor for paying back political favours.