(FILES) This file photo taken on June 1, 2016 shows World Bank president Jim Yong Kim as he speaks during a conversation entitled Preventing The Next Pandemic at the Center for International and Strategic Studies (CSIS) in Washington. World Bank President Jim Yong Kim effectively won a second five-year term after nominations to lead the global development bank closed Wednesday with no other candidates proposed. The World Bank executive board said in a statement that, following official procedures, it would formally meet with Kim as a candidate

Jim Yong Kim is heading for another five-year term as president of the World Bank after no other candidates emerged during a hurried nomination process.

But critics warn that both Mr Kim and the World Bank’s legitimacy risk being further damaged by the US’s decision to speed through the Korean-born American’s reappointment before President Barack Obama leaves office early next year. They also argue that the lack of other candidates is a symptom of how many big emerging economies such as China are turning away from the Washington-based lender to focus on their own new institutions.

“As a US citizen I am really chagrined by this process. The US, I think, is putting the long-term relevance, effectiveness and legitimacy of the World Bank at risk, which is not a good thing,” said Nancy Birdsall, a former senior bank official who leads the Center for Global Development, a think-tank.

A medical doctor and anthropologist by training plucked from the prestigious Dartmouth College by Mr Obama in 2012, Mr Kim has drawn criticism for pushing through a vast restructuring of the bank that has caused years of turmoil and questions about whether it has delivered a promised $400m in cost savings. 

In a letter last month the World Bank’s influential staff association complained of a “ crisis of leadership” and asked the bank’s board to conduct a global search for a replacement for Mr Kim, a call joined by a group of former bank officials who have been lobbying for shareholders to find a replacement.

“He has completely failed in the past four years to establish any legitimacy as the leader of the World Bank,” said Lant Pritchett, a Harvard professor and former senior bank official who was part of a group that this week demanded the bank’s board extend the reappointment process in response to criticism of Mr Kim. 

The US and other major shareholders have ignored such calls, arguing for urgency and for a move before November’s US presidential election and a possible victory by Donald Trump, the Republican candidate running on a largely isolationist platform.

Mr Kim was the only nominee put forward for the World Bank’s presidency by the end of a three-week nomination period that closed on Wednesday.

His rapid reappointment, which is expected to be confirmed formally by the board before next month’s annual meetings of the bank and the International Monetary Fund, contrasts with the competition that preceded his original appointment in 2012, when Mr Kim faced off against former Nigerian finance minister Ngozi Okonjo-Iweala. 

Critics say it also marks a step away from the US’s promise, made at the time of Mr Kim’s original appointment, to shift to a more open process. Traditionally, an American has led the bank and a European sat at the head of its sister organisation, the IMF.

Both organisations have in recent years faced pressure to move away from that tradition as a result of the rise of China, India and other emerging powers. Partly in frustration at the slow progress of such reforms, China has pushed for the creation of new rival institutions such as the New Development Bank, or Brics bank, and the Asian Infrastructure Investment Bank, which earlier this year announced its first projects.

“The fact that the big emerging markets . . . are relatively indifferent [to the World Bank presidency], I don’t think that should be a surprise,” Ms Birdsall said. “It’s just easier for them to move on and create their new institutions.” 

Mr Kim has responded by studiously courting the leadership in Beijing and other emerging capitals and vowing to work with those new institutions. That has helped him win the backing of big developing economies including China, India and Brazil for a second term.

Homi Kharas, a former World Bank economist now at the Brookings Institution, said Mr Kim would have to quickly face at least two major challenges in a second term at the bank. 

Firstly, by the end of this year he must solicit donors to raise $75bn or more for the International Development Association, the bank’s donor-funded pool of money used for low-cost loans to poor countries. Secondly, he will quickly have to make the case for a capital increase of the World Bank itself — something he began to do last year. 

Get alerts on World Bank when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article