It is not whether you win but how you play the game. This old sports refrain can be felt after Monday’s announcement on the selection of Jim Yong Kim, the US nominee, as the next president of the World Bank. Yet it will only prove meaningful if Dr Kim now leads all sides to complete the reform of the Bank’s feudal appointment process – a long overdue step that has repeatedly eluded the international community both here and at the International Monetary Fund.
There is no doubt that this contest for the presidency of the World Bank was indeed different and ”better played.” For the first, three qualified and talented individuals were nominated and interviewed by the Bank’s Executive Board. Their expertise and experience were widely discussed in the media. All three took pen to paper to describe their qualifications and their vision for the institution. And two of them – Jose Antonio Ocampo and Ngozi Okonjo-Iweala – even participated in an open question and answer forum.
Stunningly, it took almost 70 years for these basic steps to occur. While they speak to better governance, they only materialized because of the courage and perseverance of a few brave individuals, most importantly Mr Ocampo and Ms Okonjo-Iweala.
Yet all is not good. Once again, overt political considerations trumped the more legitimate dominance of experience and expertise. And, once again, the deliberations of the Executive Board proved excessively mysterious and overly secretive.
Now that the selection is behind them, the major parties are expressing satisfaction, albeit less than complete. American officials are comforted that they retained their nationality-based entitlement to the presidency of the World Bank, just like their European peers did at the IMF last year. Yet even they are aware of the cost to their credibility and that of the Bank. The emerging countries that backed the two non-American candidates have welcomed the more competitive process, though their enthusiasm is restrained by the blatant persistence of nationality as the overriding selection criterion. And World Bank insiders, led by the Executive Directors are rallying behind the new President, noting that the institution is much more important than any particular individual.
It is important to remember that some similar feelings were in play on previous occasions, most recently after last year’s nationality-based appointment of Ms. Lagarde as head of the IMF. Moreover, in one of the previous rounds at the Fund, a senior European official had even acknowledged that the time had come to end the nationality-based entitlements to the leadership of these multilateral institutions.
Yet, every time push came to shove, attempts to crystalize this into proper reform repeatedly failed. And this will happen again if Dr Kim does not immediately spearhead certain changes when he assumes his new responsibilities on July 2.
During his first 100 days in the office, the new president has a golden opportunity to earn the respect of the world by ensuring that the next selection of the World Bank is indeed open, transparent and merit-based. To this end, he should take proposals to the Board that would hard wire much of the ad hoc approach that characterised the partial competitive elements of his selection, and reinforce them by a comprehensive due diligence process.
The IMF would find it very hard not to follow Dr Kim’s lead. Thus both organizations would be able to announce the much-delayed reforms in October at their annual meetings in Japan.
Don’t under-estimate the importance of such a step. With so many people watching around the world, renewed failure to move forward with reforms at this critical juncture would accelerate the gradual disengagement from the two institutions by a growing number of countries. It would also undermine their standing in the court of public opinion at a time when both need to be viewed as “trusted advisors” and respected promoters of the global public good.
The reform of the appointment process at the IMF and World Bank is not an option. It is an obligation for all those that believe that the credibility and well-functioning of these institutions are central to the wellbeing of the global economy.