MADRID – With three nominees now in the running to become the World Bank’s next president – Nigerian Finance Minister Ngozi Okonjo-Iweala, former Colombian Finance Minister José Antonio Ocampo, and the United States’ nominee, Dartmouth College President Jim Yong Kim – this is the moment to step back and assess the Bank’s trajectory. Unless the Bank’s next president has a clear vision of the way ahead, and the gravitas to withstand the institution’s internal pressures, he or she will be swallowed up by its complex machinery and unwieldy processes.
Global attention has been focused on weighing the three candidates’ strengths and qualifications, particularly their economic and financial credentials. But the real challenge lies in providing direction for the World Bank that reflects the world as it is, and re-calibrating the Bank’s tools accordingly. Inevitably, the new course hinges in part on recognizing that economics and finance, while integral elements of all areas of the Bank’s activities, are no longer the institution’s main drivers.
The World Bank’s traditional instruments have been (and still are) low-interest loans, interest-free credits, and grants. But the Bank’s core philosophy has rested on lending, with interest, to middle-income countries and channeling the ensuing funds to the poorest countries eligible for assistance. Today, owing to the conditionality of its loans, the Bank is losing competitiveness vis-à-vis the plethora of actors, both public and private, that crowd the development scene. Meanwhile, the Bank is emerging as a vital – indeed, indispensable – source of expertise and technical assistance, as well as a provider of global public goods.
Building on these strengths, the Bank must be willing to understand its client countries’ realities, rather than pontificate, and to balance its country-based work with its global roles. While lending is progressively thinned out and retained only for the poorest countries, the Bank must adopt the lean hub-and-spoke structure of a strategic consultancy or a “knowledge bank.” The organization must reformulate its mission, moving away from the idea of being the “West’s Bank,” the “BRICS’ Bank,” or, for that matter, a bank at all.