FacebookTwitterGoogle+RedditEmail

A New Start for the World Bank?

by MARK WEISBROT

The opening up of the contest for World Bank president is a historic change whose significance has not been fully appreciated. This is not surprising, given the widespread misunderstanding of the Bretton Woods institutions (the IMF and World Bank).

The IMF’s loss of power over most middle-income countries, which has occurred since the late 1990s, is probably the most important change in the international financial system in the past 40 years. Yet it has gone largely unnoticed in the press. The Fund had been Washington’s most important avenue of influence in developing countries. It pressured governments to adopt “neoliberal” policies, sometimes known as the “Washington consensus.” These included abandoning state-led industrial and development strategies, tighter (and often pro-cyclical) fiscal and monetary policies, and often indiscriminate opening to international trade and capital flows. In Latin America especially (but also in many other countries) these policies coincided with a collapse of economic growth and therefore a drop-off in poverty reduction.

The World Bank has been part of a “creditors’ cartel” with the IMF, together pressing for neoliberal policy changes in many countries. This is still true today in some countries, but fewer, because so many middle-income countries no longer borrow from the IMF.

President Obama’s choice of Jim Yong Kim for World Bank president represents a huge break with the past. Even though the Korean-born Kim is an American citizen, he is not a politician or banker, as all of the past 11 presidents have been. Even better, he has spent most of his adult life working to improve public health. He is co-founder of Partners in Health, one of the most successful and progressive public health organizations in the world.

Mark Weisbrot is an economist and co-director of the Center for Economic and Policy Research. He is co-author, with Dean Baker, of Social Security: the Phony Crisis.

This article originally appeared in Folha de São Paulo (Brazil).

Although Kim would still be the U.S. “choice” – thus continuing an indefensible 68-year unwritten rule – he is not really Washington’s choice at all, and is as unlikely as anyone of any nationality to do Washington’s bidding. It is well known that President Obama wanted to appoint Larry Summers or some other political crony. A radical change in the U.S. choice was caused by a number of factors, including oppositionfrom governments and civil society; and a reframing of the debate in the media, which began to accept the demand for an “open, merit-based selection.” Economist Jeffrey Sachs’ insurgent candidacy also played an important role in moving the debate, and Obama was looking to avoid any unnecessary controversy in an election year.

Brazil has nominated Jose Antonio Ocampo — one of the most interesting, knowledgeable, and experienced (he headed the UN Economic Commission on Latin America and the Caribbean and also its Department of Economic and Social Affairs) economists in the hemisphere. He is also a prominent critic of neoliberal policies. And Ngozi Okonjo-Iwealanominated by African countries, is Nigeria’s finance minister and a former Managing Director of the World Bank.

The new president will still face tough battles with the U.S. and its allies on the Bank’s Board of Directors. But Washington’s loss of control over the World Bank is a huge change that will benefit many millions of people.

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

More articles by:
June 30, 2016
Richard Moser
Clinton and Trump, Fear and Fascism
Pepe Escobar
The Three Harpies are Back!
Ramzy Baroud
Searching for a ‘Responsible Adult’: ‘Is Brexit Good for Israel?’
Dave Lindorff
What is Bernie Up To?
Thomas Barker
Saving Labour From Blairism: the Dangers of Confining the Debate to Existing Members
Jan Oberg
Why is NATO So Irrational Today?
John Stauber
The Debate We Need: Gary Johnson vs Jill Stein
Steve Horn
Obama Administration Approved Over 1,500 Offshore Fracking Permits
Rob Hager
Supreme Court Legalizes Influence Peddling: McDonnell v. United States
Norman Pollack
Economic Nationalism vs. Globalization: Janus-Faced Monopoly Capital
Binoy Kampmark
Railroaded by the Supreme Court: the US Problem with Immigration
Howard Lisnoff
Of Kiddie Crusades and Disregarding the First Amendment in a Public Space
Vijay Prashad
Economic Liberalization Ignores India’s Rural Misery
Caroline Hurley
We Are All Syrians
June 29, 2016
Diana Johnstone
European Unification Divides Europeans: How Forcing People Together Tears Them Apart
Andrew Smolski
To My Less-Evilism Haters: A Rejoinder to Halle and Chomsky
Jeffrey St. Clair
Noam Chomsky, John Halle and a Confederacy of Lampreys: a Note on Lesser Evil Voting
David Rosen
Birth-Control Wars: Two Centuries of Struggle
Sheldon Richman
Brexit: What Kind of Dependence Now?
Yves Engler
“Canadian” Corporate Capitalism
Lawrence Davidson
Return to the Gilded Age: Paul Ryan’s Deregulated Dystopia
Priti Gulati Cox
All That Glitters is Feardom: Whatever Happens, Don’t Blame Jill Stein
Franklin Lamb
About the Accusation that Syrian and Russian Troops are Looting Palmyra
Binoy Kampmark
Texas, Abortion and the US Supreme Court
Anhvinh Doanvo
Justice Thomas’s Abortion Dissent Tolerates Discrimination
Victor Grossman
Brexit Pro and Con: the View From Germany
Manuel E. Yepe
Brazil: the Southern Giant Will Have to Fight
Rivera Sun
The Nonviolent History of American Independence
Adjoa Agyeiwaa
Is Western Aid Destroying Nigeria’s Future?
Jesse Jackson
What Clinton Should Learn From Brexit
Mel Gurtov
Is Brexit the End of the World?
June 28, 2016
Jonathan Cook
The Neoliberal Prison: Brexit Hysteria and the Liberal Mind
Paul Street
Bernie, Bakken, and Electoral Delusion: Letting Rich Guys Ruin Iowa and the World
Anthony DiMaggio
Fatally Flawed: the Bi-Partisan Travesty of American Health Care Reform
Mike King
The “Free State of Jones” in Trump’s America: Freedom Beyond White Imagination
Antonis Vradis
Stop Shedding Tears for the EU Monster: Brexit, the View From the Peloponnese
Omar Kassem
The End of the Atlantic Project: Slamming the Brakes on the Neoliberal Order
Binoy Kampmark
Brexit and the Neoliberal Revolt Against Jeremy Corbyn
Doug Johnson Hatlem
Alabama Democratic Primary Proves New York Times’ Nate Cohn Wrong about Exit Polling
Ruth Hopkins
Save Bear Butte: Mecca of the Lakota
Celestino Gusmao
Time to End Impunity for Suharto’’s Crimes in Indonesia and Timor-Leste
Thomas Knapp
SCOTUS: Amply Serving Law Enforcement’s Interests versus Society’s
Manuel E. Yepe
Capitalism is the Opposite of Democracy
Winslow Myers
Up Against the Wall
Chris Ernesto
Bernie’s “Political Revolution” = Vote for Clinton and the Neocons
FacebookTwitterGoogle+RedditEmail