World Bank Chief Jim Yong Kim Abruptly Announces He Is Stepping Down

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Jim Yong Kim, president of the World Bank Group, speaks at the International Monetary Fund and World Bank Group Group Annual Meetings in Nusa Dua, Bali, Indonesia, on Oct. 12, 2018. MUST CREDIT: Bloomberg photo by SeongJoon Cho

Jim Yong Kim is stepping down as World Bank President after more than six years, sparking a succession process that development officials say is likely to be more contested than in years past, when the U.S. traditionally chose the bank’s leadership.

Kim is leaving Feb. 1 to join a firm involved in infrastructure investment in developing countries, the World Bank said.

Kim, a physician and former president of Dartmouth College, informed the bank’s board on Monday of his decision to leave, surprising bank officials, employees said.

The bank, funded by countries around the world to lend money to developing nations, said Kristalina Georgieva, chief executive of the bank’s two main lending arms, will become interim president.

The World Bank’s directors, who represent donor countries, have the right to nominate new candidates for the president’s job, and will vote on a winner.

By an unwritten tradition since the bank’s founding in 1944, the board has always chosen Washington’s nominee. The Europeans in turn have determined the head of the International Monetary Fund.

Other countries began to challenge this arrangement in 2012, just before Kim was selected for his first five-year term, lobbying for Nigeria’s then finance minister, Ngozi Okonjo-Iweala, and Colombia’s former finance minister, Jose Antonio Ocampo.

Kim “had opponents for the first time in the World Bank selection process,” said Scott Morris, senior fellow at the Center for Global Development and former deputy assistant secretary for development finance and debt at the Treasury Department.

“I have no reason to think that won’t be the case this time,” Morris said. “This is not 1944, where the U.S. is sort of the acknowledged architect, financier and no question the leading power in this institution. It really is seen as a global institution today, with a global membership,” he said. And it “becomes more and more frustrating to have this unbroken chain of American presidents,” Morris added.

Keeping the World Bank presidency in American hands may be even tougher given the Trump administration’s rocky relations with some European allies. “I think it’s going to be a fight,” said Clay Lowery of Rock Creek Advisors, who served as assistant treasury secretary for international affairs under President George W. Bush. “It’s going to be a lot harder to get the Europeans to sign off this time.”

The Trump Administration has questioned the value of multilateral institutions including the United Nations and the World Trade Organization. But it supported a funding increase for the World Bank last year, which raised $13 billion from member countries.

Development officials credit Kim with helping convince the administration to back the funding increase.

In exchange, the Trump administration got the bank to agree to reforms, including a review of the salaries of board members and staff, which Washington in some cases viewed as excessive. Senior managers this year received no salary increases, according to a bank official who declined to be named to discuss sensitive matters.

The World Bank chief also cultivated ties with the president’s daughter, Ivanka Trump, working alongside her in 2017 to establish a $350 million fund to support female entrepreneurs in developing countries.

“We appreciate Mr. Kim’s service to the World Bank,” the Treasury Department said in an emailed statement. “The Secretary looks forward to working with his fellow governors in selecting a new leader.”

In a speech last month, Secretary of State Mike Pompeo said the administration was pushing the World Bank and IMF, to “halt lending to nations that can already access global capital markets – countries like China.”

Kim oversaw an expansion of the bank’s work into fighting climate change, which the bank did by providing loans to combat coastal erosion and expand sustainable agriculture, home-building and water management.

Early in his tenure he also undertook a restructuring and cost-cutting effort that caused upset among bank staff, some employees said.

“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. “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.”

The World Bank said Kim will rejoin the board of Partners in Health, a group he helped found that provides health care in poor countries.

 (c) 2019, The Washington Post · Jeanne Whalen, David J. Lynch 

{Matzav.com}

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