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US should lead to end World Bank tradition – Okonjo Iweala

By on April 10, 2012

The United States should take the lead and break the long tradition of an American always heading the World Bank, Nigerian finance minister and a nominee for the top post Ngozi Okonjo-Iweala said on Monday.

Speaking after a “marathon” three-and-a-half-hour interview by the World Bank board, Okonjo-Iweala said the decision on who leads the global development institution should go to the candidate with the best skills for the job.

During her interview with the board, Okonjo-Iweala said she did not ask for the support of countries but pressed them to ensure that the selection process was open and merit based.

Under an informal agreement between the United States and Europe, an American has always headed the World Bank and a European has led the International Monetary Fund since their founding after World War Two.

Rising economic powers such as China, India and Brazil have called for an end to the long-standing tradition and are demanding more influence in global finance institutions.

Okonjo-Iweala, who left a top post at the World Bank last year for a second stint as Nigeria’s finance minister, is up against former Colombian finance minister Jose Antonio Ocampo and U.S. nominee Korean-American health expert Jim Yong Kim.

Ocampo and Kim are set to be interviewed by the 25-member World Bank board on Tuesday and Wednesday respectively.

It is the first time that candidates from developing countries have challenged Washington for the top post.

“Somebody has to break this” agreement, Okonjo-Iweala told an event hosted by the Center for Global Development and Washington Post. “Therefore, who is the leader in this world? The U.S. is looked on for that leadership,” she added.

The board is set to decide through consensus on a new president of the World Bank on April 16. Kim is likely to succeed Robert Zoellick as World Bank president given the U.S.’s large voting bloc and support by European allies.

Okonjo-Iweala dismissed the argument by some U.S. politicians that the United States would stop financing the World Bank if a non-American took the reins of the institution.

She said she would use her “persuasive powers” to convince Congress to keep funds flowing to the World Bank.

“You cannot look at global governance in the same old way and should recognize the changing constellation of powers,” Okonjo-Iweala said. “I do not believe that if we ignore this reality we can really have global governance that works because these countries will not feel valued in the global system.”

Okonjo-Iweala said her vision for leading the World Bank was influenced by her own life story of growing up in a village in Nigeria and her experiences as an international economist.

“It is not good enough to say you know about poverty. You have to live it,” she said.

As head of the World Bank, Okonjo-Iweala said she would focus on job creation, which was a problem facing both rich and poor countries alike.

“Across the globe, policymakers are grappling with one problem, and that is the problem of job creation,” she said, “I have yet to meet a single poor person who did not want the dignity of a job.”

She said her experience as finance minister and as managing director of the World Bank gave her unique insights into the complex problems facing emerging market and developing countries in Asia, Africa and the Middle East.

She said the World Bank should also focus more on helping developing countries build roads, railway systems and power grids to help their economies grow, and it should invest more in education, health and gender issues.

She said complex global problems facing developing countries required a World Bank that could respond quickly and creatively to the needs of the poor.

“We need a Rolodex of experts that we can call on very fast,” she said. “The bank needs to be fast in delivering knowledge. Middle-income countries are no longer willing to wait when they need a question answered.”

While working at the World Bank, Okonjo-Iweala said she compiled a list of 11 issues that frustrated her the most about the institution, which she shared with the board during her interview on Monday.

On her list of frustrations was the lack of data to make vital decisions on poverty reduction in low-income countries.