26th March, 2012
Ngozi Okonjo-Iweala, Nigeria’s finance minister and super minister, who has the endorsement of her country, South Africa and Angola for the vacant World Bank presidency job, has opened her campaign via an interview published today by Reuters. She said emerging economies must be given a fair shot at leading the institutions at the heart of global finance or they will end up going their own way.
“The balance of power in the world has shifted and emerging market countries are contributing more and more to global growth – more than 50 percent – and they need to be given a voice in running things. If you don’t, they will lose interest.”
Okonjo-Iweala, 57, hopes to lead the poverty-fighting institution when its current president Robert Zoellick steps down in June.
Also nominated for the post are Jim Yong Kim, a Korean-American health expert whose name was put forward by U.S. President Barack Obama on Friday, and former Colombian finance minister Jose Antonio Ocampo, who was nominated by Brazil.
It is also the first time the post has ever been so hotly contested.
Under an informal agreement between the United States and its allies in Europe, Washington has laid claim to the top post at the World Bank since its founding after World War Two, while a European has always led the International Monetary Fund, its sister Bretton Woods institution.
Okonjo-Iweala said fast-growing emerging economies were becoming too powerful and influential in the world economy to continue denying them the leadership posts at global financial bodies.
Leaders of the so-called BRICS nations China, India, Brazil, Russia and South Africa will meet at a summit in India next week to discuss the world economy and closer coordination.
“I’m telling you, the BRICS are already talking about forming a bank among themselves to deal with infrastructure,” she said. “Why do you think they’re doing it? If they can’t get a leg in to be allowed to run some of these institutions, they will look elsewhere.”
A respected economist and diplomat, Okonjo-Iweala painted the nominating convention as a vestige of a bygone era. “We’re not asking the U.S. not to compete, we’re just asking for a level playing field where candidates can be evaluated on their merits. America can join the competition,” she said.
A former World Bank managing director known for her colorful African head wraps and dresses, Okonjo-Iweala contrasted her experience with that of Kim, who made his mark fighting disease in some of the poorest corners of the world. She noted that she has hands-on experience running one of Africa’s largest economies, as well as a proven track record at the World Bank helping nations in Asia, Africa and the Middle East to tap financial markets and fund development.
“I don’t have a learning curve because I know how the institution works and I know what needs to be done to make it work better and faster for developing countries,” she said. “I know what its strengths are, its weaknesses and importantly I know what policymakers need. I’ve actually done it.”
ASKING FOR LEVEL PLAYING FIELD
U.S. Treasury Secretary Timothy Geithner told Reuters over the weekend that he was confident that Kim, president of Dartmouth College, would win global support for the job. Through his work in fighting HIV/AIDS, tuberculosis and getting healthcare to the poor, Kim had shown an ability to get things done in tough environments, Geithner said.
Okonjo-Iweala acknowledged that if the United States – the country with the largest World Bank voting bloc – and Europe held together, her candidacy would be doomed. But she expressed hope the World Bank’s 187 members would hold true to their pledge for an open, merit-based process.
“We are not just going into this saying to ourselves we are already defeated,” she said, speaking by telephone from Abuja. “We are hoping that the Bretton Woods institutions and their shareholders will keep their word.”
“My biggest hope is that this will be a fair contest.”
Okonjo-Iweala, who was named by Forbes magazine last year as one of the world’s 100 most powerful women, said African leaders would be discussing her nomination with other developing and emerging economies including China, the World Bank’s third-largest shareholder.
Jonathan backed Okonjo-Iweala’s nomination after calls from South African President Jacob Zuma and West African countries led by Ivory Coast’s President Alassane Outtara, himself a former IMF deputy managing director.
“Several African leaders called my president and asked for my name to be put forward because they felt they have someone really qualified to do this job,” she said, adding that she remains deeply committed to Nigeria.
FOCUS ON JOBS
Last year, Okonjo-Iweala was behind a World Bank plan to create so-called diaspora bonds to raise money from the estimated 23 million Africans living abroad, who hold more than $30 billion in savings. The money would be used to help African countries fund essential services and fight poverty.
She was also instrumental in launching an emergency fund to for poor countries hit by a record jump in global food prices in 2008, and was pivotal in creating an infrastructure facility for roads, railways and power grids in developing countries. In Nigeria, she secured a deal with the Paris Club of creditor nations in 2005 that wiped out $30 billion in the country’s debt, in the second-largest Paris Club debt relief deal ever.
Okonjo-Iweala said a critical issue for many developing countries is job creation, especially among unemployed youth. High unemployment, corruption and political oppression sparked the “Arab Spring” protests that toppled leaders in such countries as Egypt, Tunisia, Libya and Yemen, she noted.
“If we do not come to terms with this problem, we’re not going to have (just) the Arab Spring, we will have many other Springs,” she said. “This is a very important challenge that demands us to go beyond the usual poverty eradication and fighting tools to ask ourselves what is needed.”
While the World Bank’s main mission is to fight poverty, it has increasingly sought ways to help emerging economies that need policy expertise more than money, and Okonjo-Iweala said it had to become more nimble in this task.
“Emerging market countries … need the bank to be a provider and intermediator of knowledge from one country to another,” she said. “To do that we need to organize the experts from the bank in a much smarter and faster fashion.”
“When you are a policymaker and you have a question facing you, you don’t have three weeks to wait for a (World Bank) mission to arrive.”