FacebookTwitterGoogle+RedditEmail

A New Start for the World Bank?

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.

More articles by:

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).

September 25, 2018
Kenneth Surin
Fact-Finding Labour’s “Anti-Semitism” Crisis
Charles Pierson
Destroying Yemen as Humanely as Possible
James Rothenberg
Why Not Socialism?
Patrick Cockburn
How Putin Came Out on Top in Syria
John Grant
“Awesome Uncontrollable Male Passion” Meets Its Match
Guy Horton
Burma: Complicity With Evil?
Steve Stallone
Jujitsu Comms
William Blum
Bombing Libya: the Origins of Europe’s Immigration Crisis
John Feffer
There’s a New Crash Coming
Martha Pskowski
“The Emergency Isn’t Over”: the Homeless Commemorate a Year Since the Mexico City Earthquake
Fred Baumgarten
Ten Ways of Looking at Civility
Dean Baker
The Great Financial Crisis: Bernanke and the Bubble
Binoy Kampmark
Parasitic and Irrelevant: The University Vice Chancellor
September 24, 2018
Jonathan Cook
Hiding in Plain Sight: Why We Cannot See the System Destroying Us
Gary Leupp
All the Good News (Ignored by the Trump-Obsessed Media)
Robert Fisk
I Don’t See How a Palestinian State Can Ever Happen
Barry Brown
Pot as Political Speech
Lara Merling
Puerto Rico’s Colonial Legacy and Its Continuing Economic Troubles
Patrick Cockburn
Iraq’s Prime Ministers Come and Go, But the Stalemate Remains
William Blum
The New Iraq WMD: Russian Interference in US Elections
Julian Vigo
The UK’s Snoopers’ Charter Has Been Dealt a Serious Blow
Joseph Matten
Why Did Global Economic Performance Deteriorate in the 1970s?
Zhivko Illeieff
The Millennial Label: Distinguishing Facts from Fiction
Thomas Hon Wing Polin – Gerry Brown
Xinjiang : The New Great Game
Binoy Kampmark
Casting Kavanaugh: The Trump Supreme Court Drama
Max Wilbert
Blue Angels: the Naked Face of Empire
Weekend Edition
September 21, 2018
Friday - Sunday
Alexandra Isfahani-Hammond
Hurricane Florence and 9.7 Million Pigs
Andrew Levine
Israel’s Anti-Semitism Smear Campaign
Paul Street
Laquan McDonald is Being Tried for His Own Racist Murder
Brad Evans
What Does It Mean to Celebrate International Peace Day?
Nick Pemberton
With or Without Kavanaugh, The United States Is Anti-Choice
Jim Kavanagh
“Taxpayer Money” Threatens Medicare-for-All (And Every Other Social Program)
Jonathan Cook
Palestine: The Testbed for Trump’s Plan to Tear up the Rules-Based International Order
Jeffrey St. Clair
Roaming Charges: the Chickenhawks Have Finally Come Back Home to Roost!
David Rosen
As the Capitalist World Turns: From Empire to Imperialism to Globalization?
Jonah Raskin
Green Capitalism Rears Its Head at Global Climate Action Summit
James Munson
On Climate, the Centrists are the Deplorables
Robert Hunziker
Is Paris 2015 Already Underwater?
Arshad Khan
Will There Ever be Justice for Rohingya Muslims?
Jill Richardson
Why Women Don’t Report Sexual Assault
Dave Clennon
A Victory for Historical Accuracy and the Peace Movement: Not One Emmy for Ken Burns and “The Vietnam War”
W. T. Whitney
US Harasses Cuba Amid Mysterious Circumstances
Nathan Kalman-Lamb
Things That Make Sports Fans Uncomfortable
George Capaccio
Iran: “Snapping Back” Sanctions and the Threat of War
Kenneth Surin
Brexit is Coming, But Which Will It Be?
FacebookTwitterGoogle+RedditEmail