News Column

US, Developing Countries Vying To Lead World Bank

March 22, 2012

Marco Mierke and Frank Fuhrig

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People in the developing world may have to wait a little longer for one of their own to lead the World Bank.

As usual, a U.S. candidate will almost certainly be the favorite to head the international development lender, after Friday's deadline for member countries to nominate candidates to be World Bank president.

The nominees are to be narrowed to three finalists, who will be interviewed ahead of a vote by the IMF board in late April.

Observers are certain President Obama will not easily relinquish his government's unwritten right to name the successor to World Bank President Robert Zoellick, who leaves in June, as head of the U.N. organization.

Ever since the World Bank and the International Monetary Fund were set up in the 1944 Bretton Woods agreements, a European has always headed the crisis lending IMF, while its sister agency -- and neighbor on Pennsylvania Avenue in Washington -- has been led exclusively by Americans.

Wealthy countries have contributed most of the money to the two international lenders, and hold a majority of the voting shares on their governing boards. Again, this time, all eyes are on the White House's pick.

Emerging economies led by China, India and Brazil have agitated for greater roles in both institutions, receiving increased voting shares while contributing greater resources. And the IMF and World Bank governors have officially declared that their leadership processes are open to nominees from any of their 187 member countries.

When the IMF was forced to make a search for a replacement after managing director Dominique Strauss-Kahn's sudden resignation, Mexican Central Bank chief Agustin Carstens mounted a vigorous campaign for the job. But the demise of the long-standing U.S.-Europe consensus proved greatly exaggerated, and France's then-finance minister Christine Lagarde became the first woman to head the IMF.

But the world beyond the United States and Europe continues to push for change.

Any U.S. candidate at the World Bank will likely face challenges from Colombian former finance minister Jose Antonio Ocampo, reportedly nominated by Brazil, and South African-backed Nigerian Finance Minister Ngozi Okonjo-Iweala.

Ocampo is currently a professor at New York's Columbia University, while Okonjo-Iweala has previously served as a World Bank director.

On the eve of the nomination deadline, the US candidate remains a mystery. The process in the United States has been fraught with difficulty, with dozens of names rolling on and off Obama's possible short list.

Some of the strongest potential candidates don't want the job, and those who are eager are politically problematic.

Prominent figures including Secretary of State Hillary Rodham Clinton, Treasury Secretary Timothy Geithner and US Senator John Kerry, a former presidential candidate, have said they were not interested.

Obama's ambassador to the United Nations, Susan Rice, is also seen as having the necessary diplomatic experience but is light on financial credentials. In any case, she is believed to prefer a chance to succeed Clinton at the State Department, if Obama wins a second term in the November elections.

Indra Nooyi, chief executive of beverage and food giant PepsiCo, has also been mentioned.

Lawrence Summers, a former economic adviser to Obama and treasury secretary under president Bill Clinton in the 1990s, is among the serious contenders, according to the Washington Post. But his standing has been damaged by personal differences with several Washington insiders.

Columbia University economic professor Jeffrey Sachs, known for his role as an advisor to Eastern European governments during their post-communist to free-market reforms, has been campaigning for himself, though it's unclear if he has any White House backing.

"There have been 11 World Bank presidents, and not one of them yet has been an expert in international development," he told the Washington Post.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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