The job description sounds enviable: president of a $300
billion-in-assets lender, no pesky Dodd-Frank constraints,
extensive travel, frequent meetings with global leaders, photo
ops with Bono and a tax-free salary of more than $400,000.
All true, yet theres a curious lack of candidates to
become the next World Bank president.
After Robert Zoellick announced last month that he would
stand down when his term expires at the end of June, there was
some immediate speculation that the Obama administration would
nominate former Treasury secretary Lawrence Summers or perhaps
secretary of state Hillary Clinton for the post. Then, nothing.
Radio silence. No hints from the White House. Even more
surprising, no parade of contenders from emerging-markets
countries asserting that its their time for the top job,
as happened last year when Dominique Strauss-Kahn suddenly
resigned from the International Monetary Fund. Officials say
barely a peep was heard about the post at the G-20 meeting,
normally a hotbed of speculation, in Mexico City late last
month. Only one person Jeffrey Sachs, the development
economist who heads the Earth Institute at Columbia University
has formally declared his candidacy.
The curious standoff, if thats what it is, says a lot
about the Bank and the current state of geopolitics, according
to longtime observers of the international financial
institutions (IFIs). First, the Bank has lost some of its
luster. The institution is arguably as important as ever: It
made a record $70.9 billion in lending commitments in the past
two years as part of global efforts to combat the effects of
the financial crisis. And in December 2010, Zoellick won
agreement from member governments for a record $49.3 billion
increase in funding for the Banks main lending vehicle,
the International Development Association. Yet the Bank is
still regarded as the junior partner to its neighbor across
Washingtons 19th Street. The IMF, after all, has the
power to decide whether Greece lives or dies, financially
speaking; that explains why the Europeans were so determined to
have Christine Lagarde succeed Strauss-Kahn last
Second, and more important, no country seems ready to
challenge Washingtons lock on the job. At first glance
this seems counterintuitive. Emerging-markets nations have
grown increasingly critical of the long-standing arrangement
whereby the U.S. has controlled the World Bank presidency and
the Europeans have led the IMF, and Mexicos central bank
governor, Agustín Carstens, campaigned actively for the
IMF post last year against Lagarde. Yet Americans are not
Europeans. The U.S. is not overrepresented at the Bank and the
Fund the way that European countries are. The U.S., in spite of
its troubles, remains the only superpower capable of exerting
economic, political and military influence around the globe.
And in a U.S. election year, outsiders interested in the smooth
functioning and financing of the Bank may think twice about a
move that would almost certainly draw fire from the U.S.
Congress. No one will dare challenge the U.S., says
Domenico Lombardi, president of the Oxford Institute for
Economic Policy and a former executive director of the Bank.
The absence of campaigning and complaining signals that
members will go ahead and support the U.S. candidate, he
The final reason that non-Americans are not yet angling for
the World Bank job lies with the emerging-markets countries
themselves. They may chafe at U.S. and European hegemony at the
IFIs, but they share no vision of how to replace it. The IMF
succession last year showed that the BRIC countries are more
apt to compete with one another than to unite behind a common
candidate. The emerging economies are not a politically
cohesive group, says Lombardi.
Thats a shame, because there are a number of
well-qualified people from developing countries who would be
great candidates, says Nancy Birdsall, head of the
Washington-based Center for Global Development and a former
Bank staffer. She cites Ngozi Okonjo-Iweala, the highly
regarded Nigerian finance minister who served a stint as World
Bank managing director under Zoellick from 2007 to 2011, and
Nandan Nilekani, co-founder of IT giant Infosys, who is now
leading an Indian government effort to develop a biometric
database for its citizens. The Banks current managing
director, former Indonesian finance minister Sri Mulyani
Indrawati, as well as its chief economist, Justin Lin of China,
also boast strong credentials.
Columbias Sachs, an American with strong experience
and contacts in the developing world,
put himself forward late last week. He told
Institutional Investor he would sharpen the World
Banks focus on achieving the Millennium Development
Goals, a United Nations program aimed at reducing extreme
poverty. This is what I do for a living, says
Sachs, a special adviser to UN secretary general Ban Ki-moon.
Given his background, Sachs could potentially satisfy
Washington and developing countries. He says he has talked with
senior Obama administration officials about his candidacy and
he expects to win support from a number of other countries.
Treasury secretary Timothy Geithner has said the U.S. will
put forward an experienced candidate for the post by the March
23 deadline for nominations and insists the U.S. favors an open
selection process. Birdsall says its vital that other
countries take him at his word. The key is that there is
a competitive process that ensures that whoever wins has
legitimacy, she says.
Just dont expect anyone outside the U.S. to make the