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Why Jim Kim Should Resign From the World Bank

by PATRICK BOND

The situation for the many constituencies hopeful about Jim Yong Kim’s ‘election’ as World Bank president is comparable to early 2009.

Barack Obama entered a US presidency suffering institutional crisis and faced an immediate fork in the road: make the change he promised, or sell out his constituents’ interests by bailing out Wall Street and legitimizing a renewed neoliberal attack on society and ecology, replete with undemocratic, unconstitutional practices suffused with residual militarism. As president-elect, surrounding himself with the likes of Larry Summers, Tim Geithner, Paul Volcker, William Gates, Rahm Emmanuel and Hillary Clinton, it was obvious which way he would go.

Unlike the corporate-oriented politician Obama, by all accounts Jim Kim is a genuine progressive, a wunderkind Harvard-trained physician and anthropologist with a terrific track record of public health management and advocacy, especially against AIDS and TB. So unlike predecessor Robert Zoellick, who in the service of power broke everything he touched since the late 1980s,[1] Kim spent the last quarter century building an extraordinary institution, the Boston NGO Partners in Health, and improving another by working at its top level, the ultra-bureaucratic World Health Organisation in Geneva.

Accomplishing spectacular AIDS and TB breakthroughs required making alliances with grassroots activists, including South Africa’s Treatment Action Campaign, to win an historic fight against Big Pharma and the World Trade Organisation’s Intellectual Property rights protections in 2001. The payoff was provision of generic and discounted AIDS medicines to several million poor people at an affordable price, whereas a decade earlier those medicines cost $15,000/patient/year. It was one the greatest recent victories against corporate-facilitated oppression, ranking with the demise of apartheid in 1994 and the rise of Latin America’s centre-left governments since the late 1990s.

For these reasons, Kim should be proud to come under fire from die-hard, unreconstructed economists like Bill Easterly[2] and Lant Pritchett,[3] who is forever famous (with plagiarist Summers) for using an internal World Bank bully pulpit to advocate the dumping of toxic waste on low-income people, since after all, Africa “is vastly under-polluted”.[4] Alleges AIDS activist Gregg Gonsalves, “Pritchett has vociferously complained about the provision of Anti-Retroviral Therapy in the developing world as a prime example of palliative humane development and misguided philanthropy.”[5]

So balance surely requires that instead of just being attacked from the wickedly anti-social and anti-environmental right, Kim receives a constructive critique from the left?

Indeed we will soon learn whether Kim’s commitment to progressive change is as strong as his record suggests, or whether he will instead repeat his deplorable role in the notorious Dartmouth fraternity hazing scandal where as the College president apparently intimidated by rich alumni and bolshi ‘vomelette’-making students, he did nothing at all, deploying the bizarre excuse, “One of the things you learn as an anthropologist, you don’t come in and change the culture.”[6]

We might learn most by watching what happens to the Bank’s fossil fuel portfolio and culture of wanton climate change. The first test is a huge, irrational Kosovo coal-fired powerplant loan he will probably sign off on in his first few weeks on the job. His new underlings are, after all, the main financiers of coal-fired electricity, including their largest project loan ever ($3.75 billion), which was here in South Africa exactly two years ago.[7]

The contradictions will be spectacular. The scholar who co-edited the great anti-neoliberal book Dying for Growth will be compelled to actively ignore data (from Christian Aid) which suggest 185 million African deaths in the 21st century will be due to climate change, in addition to immediate coal-related health problems.

Scientists working for the Environmental Defence Fund found that “between roughly 6000 and 10,700 annual deaths from heart ailments, respiratory disease and lung cancer can be attributed to the 88 coal-fired power plants and companies receiving public international financing”.[8] Furthermore, writing in Geotimes on “Health Impacts of Coal,” three other scientists observe the rise in cancers, bone deformation, black lung and other respiratory diseases, sterilization, and kidney disease associated with coal. And they point out, “In the 13th century, the dense, sulfurous air in London attracted the attention of the British royalty, who issued proclamations banning the use of coal in London.”[9]

For Kim to catch up to eight-century old preventative healthcare is going to be impossible given the balance of forces amongst Third World elites in sites like South Africa, within the fossil-addicted World Bank itself, and a few blocks away at the White House and Treasury where mega-energy interests hold enormous sway. This is what multinational capital requires of Kim: a revitalized image for a crucial subsidized financier of coal-fired power plants and carbon markets when both are in extreme disrepute.

The sickening signs of Kim’s retreat in the face of power were unmistakeable beginning in early April, just after his nomination was announced by Obama. Kim’s book Dying for Growth questioned neoliberalism in part because Washington’s model didn’t actually create broad-based growth, but instead austerity and parasitical finance-oriented GDP ‘growth’.

But Kim tried running away from that uncontroversial conclusion, telling an uncritical New York Times journalist, “That book was written based on data from the early and mid-1990s. Our concern was that the vision was not inclusive enough, that it wasn’t, in the bank’s words, ‘pro-poor.’ The bank has shifted tremendously since that time, and now the notion of pro-poor development is at the core of the World Bank.”[10]

This is nonsense, of course, as was the follow-up article in The Washington Post last week hyping his candidacy by his co-editors Paul Farmer and John Gershman: “In the 1990s, when the book was researched and written, too many of the world’s poorest had been left behind by the growth of the global economy” but “Thanks in part to Kim’s trailblazing work, development approaches have changed.”

Huh? Farmer and Gershman provide no evidence of real change, only of rhetoric, using a throwaway line in a 2006 World Bank World Development Report: “We now have considerable evidence that equity is also instrumental to the pursuit of long-term prosperity in aggregate terms for society as a whole.” But such banal phrasing can be found in Bank reports right through neoliberal era, as Bank economists regularly wrote left (putting a ‘human face’ on structural adjustment) so they could walk right.

Farmer and Gershman brag of “greater investments in areas such as health and education, which help countries grow.” But the week before they made this emollient claim, the Organisation for Economic Cooperation and Development reported a 3 percent decline in Overseas Development Aid by rich countries in 2011.[11]Reflecting on such cuts, the Brookings Institute produced a major study last August, concluding that “The future of bilateral aid to basic education is at risk, placing the educational opportunities of many of the world’s poorest girls and boys on the line.”[12]

As the Education for All Global Monitoring Report blog complained in early April, “the World Bank, the most important donor to basic education, massively decreased its support after a boost in 2009 and 2010” – whereas the poorest countries actually need “$16 billion in aid annually to meet their basic education goals by 2015” (of around $5 billion in aid to education, they presently only get $2 billion). The Bank’s website shows that its own highly-subsidised loans for basic education to the poorest countries fell from $1.3 billion in 2010 to $400 million in 2011, a level last seen a decade earlier.[13]

As for health, the Global Fund to Fight AIDS, Tuberculosis and Malaria ashamedly conceded last November that it would offer no new grants through 2014 because of funding shortfalls.[14] Obama is to blame, in large part, for these aid cuts.

I’ve met both Farmer and Gershman, and like everyone else, I immensely respect their traditional role: haranguing powerful institutions to do less harm. What they did in the Washington Post was the opposite, offering excuses for the World Bank and its status quo ideology because their friend is about to take over.

What might Kim do to change the Bank? As he told Bank directors who interviewed him last week, “The Bank is an unparalleled resource for its members, not only for financing but also knowledge and convening power. These strengths were apparent in the Bank’s timely response to the recent financial crisis. The Bank must remain an effective partner in strengthening the foundations and fairness of the global economy, and in ensuring that the benefits of growth are widely shared.”[15]

It is just too tempting to rearrange these words to get a more honest view, one Kim probably would have agreed with not long ago: “The Bank is an unparalleled force of social and ecological destruction, not only in its financing on behalf of multinational capital, but also its lack of real development knowledge and its overweening power. These flaws were apparent in the Bank’s surprised response to the recent financial crisis, which it helped cause by increasing indebtedness, vulnerability and financial deregulation through decades of loan conditionality and an ideology of financial liberalisation. The Bank has systematically weakened the foundations and fairness of the global economy, and ensured that the benefits of growth are enjoyed only by the top 1%.”

In his interview, Kim went on to argue, “The World Bank has taken steps to realign voting power to increase the voice and responsibility of developing countries in the governance of this institution.”[16]

But what kind of steps, and who got stepped on? The last time such realignment happened, in April 2010, the watchdog Bretton Woods Project noted that Africa’s vote rose less than 0.2 percent, and domination by the rich North remains formidable: “In reality then, high-income countries will cling onto almost 61 per cent of the vote, with middle-income countries getting under 35 percent, and low-income countries on just 4.46 percent.”[17]

Kim’s distortions are disturbing, because in the global justice movement, the now common-sense analysis of imperialism’s multilateral institutions is that because efforts to reform them over the past quarter century consistently failed, they are better off decommissioned, as part of what Walden Bello has termed ‘deglobalization’.[18]

If instead, Kim relegitimizes the World Bank the way that Obama has done US imperialism, and if it is apparent he and his otherwise trustworthy friends Farmer and Gershman stoop to fibbing in defense of his career, then we have a great step backwards to contemplate.

In Obama’s case it took 30 months before the Occupy Movement finally sprang up to contest his reactionary economic policies and ultra-rich beneficiaries. It better not take so long to mount a struggle against Jim Kim’s World Bank, for too many lives depend upon weakening that killer institution. The only constructive thing Kim can do at this stage, I suspect, is immediately tender his resignation and start a run on the Bank.[19]

Patrick Bond directs the Centre for Civil Society in Durban: http://ccs.ukzn.ac.za

[18] Bello, W. (2005), Deglobalization, London, Zed Books.

[19] Defunding through a World Bank Bonds Boycott is the argument in a decade-old book, http://ccs.ukzn.ac.za/files/Bond%20Against%20Global%20Apartheid%202ndEdn.pdf, and it still holds.

Patrick Bond has a joint appointment in political economy at the Wits University School of Governance in Johannesburg, alongside directing the University of KwaZulu-Natal Centre for Civil Society in Durban. His latest book is BRICS: An Anti-Capitalist Critique (co-edited with Ana Garcia), published by Pluto (London), Haymarket (Chicago), Jacana (Joburg) and Aakar (Delhi).

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