Focused search for new World Bank president

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THE sudden resignation earlier this month of Dr Jim Yong Kim as President of the World Bank is leading to a focused search for his replacement, as various interest groups rally to get their own candidate elected.

Kim, who will leave his position on February 1, said in a statement that he was stepping down voluntarily, adding that he was going to join an investment firm with a ‘focus on increasing infrastructure investments in developing countries’.

‘The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets,’ Kim said.

Under Kim, the Bank was engaged in a number of controversial issues such as climate change and funding for development.

Not surprisingly, there have been mixed reactions to the departure of Kim who, in 2013, stopped the Bank from funding the production of fossil fuels, such as coal.

There have been tense meetings at the Bank recently when countries such as Zimbabwe, Nigeria and India have expressed doubts about the Bretton Woods Institution’s fossil fuel policy, which they argued was not lifting people out of poverty.

They backed US President Donald Trump’s call to multilateral development banks to fund clean and efficient fossil fuel production.

Indeed, millions of dollars have been spent on producing clean coal technology that is helping to reduce emissions, they argue.

In London, the Global Warming Policy Forum (GWPF) said it welcomed the imminent departure of Kim, who the lobby group accused of turning ‘the World Bank into a green think tank, betraying its core mission of lifting the world’s most disadvantaged populations out of poverty.’

The GWPF said in statement: ‘Under Dr Kim, the World Bank imposed an almost total ban on the financing of coal-fired power stations, despite coal being one of the most cost-effective means of generating low cost, reliable electricity.

‘Subsequently the financing ban was extended to the upstream oil and gas industries.’

Rupert Darwall, author of the 2017 GWPF report, The Anti-Development Bank: The World Bank’s regressive energy policies, said: ‘Access to low cost, reliable electricity is critical to transforming the lives of those in poverty.

‘During Dr Kim’s tenure, the World Bank lost its way and sacrificed the interests of the poor to green ideology.

‘It is essential Dr Kim’s successor restores the World Bank to its former role as the world’s premier development bank and ceases to pander to the green lobby.’

The GWPF paper said cost-effective policies were no longer adhered to by Kim.

‘He has overruled the cost–benefit estimates of the superiority of coal-based over solar- and wind-based power generation produced by his own economic staff, justifying this by reference to a wish to cut global emissions of greenhouse gases,” said Prof Deepak Lal, former Research Administrator at the World Bank and a member of the GWPF’s Academic Advisory Council.

‘In 2013 the Bank adopted anti-coal funding policies, which, as the paper shows, prioritises the green environmental agenda over its core developmental mission of poverty reduction.

‘I commend this paper to all those who are sincerely concerned with alleviating poverty – particularly in Africa, since China and India no longer need World Bank money or advice – and who are not seduced by the siren voices of the eco-fundamentalists,’ he added.

However, Glada Lahn a senior researcher in energy at London-based think tank Chatham House, commended Kim for his work on countering climate change.

‘Jim Kim has been the most strident of the Bank’s presidents yet in committing the group to climate goals – as befits our times,’ she said.

‘But the coal question remains – while the Bank is not funding coal directly, it has continued to support other commercial banks and corporations that do,’ she added.

Moritz Schröder-Therre, a spokesperson for the German environmental and human rights organisation Urgewald, told London-based Climate Home News: ‘Our research, which will be published for the World Bank’s spring meetings, clearly shows that the bank remains a big funder of fossil fuels through development policy lending and financial intermediary lending.

This means that at the first glance the bank looks better than it is actually performing,’ he said.

World Bank CEO Kristalina Georgieva will step in as interim president until a permanent appointment is made, according to a statement from the Bank’s Board of Executive Directors.

It has announced a nomination period from February 7 to March 14 for candidates interested in replacing Kim, who was first elected in 2012 and secured a second five-year term in 2017.

He is leaving the role with three years left to serve.

The Board is expecting Kim’s replacement to be selected before the Spring Meetings of 2019.

Although the US has traditionally had its choice of candidate appointed, in 2012, Kim, who was proposed by former US President Barack Obama, was strongly challenged by developing countries.

Nigeria’s Ngozi Okonjo-Iweala, who was then the country’s Finance Minister, presented a strong challenge to Kim.

 

 

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