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World Bank Presidential Race Heats Up

For the first time, the US's chosen candidate may not be a shoe-in.
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Ngozi Okonjo-Iweala (right), a candidate in the election for the president of the World Bank, talks to Nigerian Central Bank Governor Sanusi Lamido Sanusi (left) and IMF Managing Director Christine Lagarde (centre). Photograph by IMF.

On Monday, the leadership race for the presidency of the World Bank will end with the bank’s 25 executive directors selecting their preferred candidate. The winner will lead an institution that lent a total of $57 billion to governments and development agencies last year.

Washington’s favoured candidate has historically been a shoe-in for the role of Bank president. But this year, for first time, American supremacy is being challenged. In particular, it is the nomination of Nigerian Minister of Finance Ngozi Okonjo-Iweala that has shaken up the race with not only African leaders, but senior figures in the global finance community rallying behind her candidacy.

Okonjo-Iweala, former Managing Director of the World Bank and current Nigerian Minister of Finance, is seen by many as the best candidate for the job based on merit and experience. Yet the tacit agreement between Europe and America, whereby an American heads the World Bank and a European heads the sister institution, the International Monetary Fund, may scupper her chances.

Europe and America have a combined voting share of approximately 50% whereas Africa represents less than 6%; Okonjo-Iweala will therefore still have to attract votes from European and American executive directors if she is to win.

The candidate backed by U.S. President Barack Obama and the current frontrunner is Korean-born U.S. citizen Jim Yong Kim, a distinguished physicist with a background in global health and development, who is currently president of Dartmouth College.

The third candidate Jose Antonio-Ocampo is a well-known economist and former Colombian Minister of Finance. But, lacking the support structure and active endorsements Kim and Okonjo-Iweala have managed to garner, the election looks to be a two-horse race.

Who is Okonjo-Iweala?

57-year-old Ngozi Okonjo-Iweala was born in a pre-independence Nigeria and hails from the Umu Obi Obahai Royal Family of Ogwashi-Ukwu. This privileged upbringing, which was interrupted by the Nigerian civil war, in which her father was a brigadier on the Biafran side, afforded her the educational opportunities rarely available to girls in Nigeria at the time. She studied at Harvard University and holds a doctorate in economics from the Massachusetts Institute of Technology.

Okonjo-Iweala’s career at the World Bank spanned more than 25 years before accepting the invitation from Olusegun Obasanjo, then President of Nigeria, to join his cabinet as the Minister of Finance in 2003.

Okonjo-Iweala represented Nigeria in debt relief negotiations with the Paris Club, which led to the reduction of the country’s debt burden from $30 billion to $12 billion. Her first stint as Minister of Finance (2003-2006) also witnessed a dramatic rise in Nigeria’s foreign reserves with over $40 billion saved in the central bank.

In 2007, however, rumours of an internal power-play and her forced relocation to the Ministry of Foreign Affairs led her to resign from government and accept the position of Managing Director at the World Bank. Four years later in July 2011, Okonjo-Iweala returned to her role as Minister of Finance to work under the current president Goodluck Jonathan.

Broad support

Okonjo-Iweala’s candidacy for the role of World Bank President has received support from many quarters including those in the African Union (AU). The AU gave her a resounding endorsement as Africa’s sole candidate, stating “the impeccable credentials of Dr Okonjo-Iweala make her the best candidate for the position”.

Further support has come from former World Bank officials led by one-time chief economist Francois Bourguignon. In a letter sent to the bank’s members, 39 former managers cited Okonjo-Iweala’s “deep experience in international and national issues of economic management” and emphasised their belief in her ability to increase the bank’s effectiveness.

On the domestic front, Nigerian President Goodluck Jonathan issued a strong statement last week in favour of his Finance Minister. He said: “We firmly believe that Dr Ngozi Okonjo-Iweala’s knowledge and expertise, as well as the depth and breadth of her experience make her the best candidate to lead the World Bank”.

The rise of economic powers such as China, India and Brazil may also of increasing relevance in this year’s race. The growing prominence of these economies has begun to shift the US’ economic dominance and power over the institution. Some believe or hope Okonjo-Iweala’s victory would further signal such change.

The perfect candidate?

Okonjo-Iweala unveiled her three-point agenda for her candidacy at an event hosted by the Centre for Global Development and Washington Post Live in which she listed job creation, investing in the human capital of the poor, and building institutions as the most pressing challenges to be tackled. She also promised to ensure the bank would respond faster to clients’ requests and pointed to the changing nature of global finance. "You cannot look at global governance in the same old way and should recognise the changing constellation of powers” she said.

Having guided the World Bank through the global financial crisis as Managing Director between 2007 and 2011, and with her wealth of experience on a global stage, Okonjo-Iweala arguably embodies what the bank needs at this time if it is to regain its legitimacy – the bank has long been accused of being ineffective in helping the poor, of defending corporate interests over those of vulnerable people, and of possibly even causing harmful to the environment. Most importantly, Okonjo-Iweala can see issues from both sides having worked both at the World Bank and in a developing nation's government.

Okonjo-Iweala does not have a completely untarnished record however. Her domestic popularity has been shaken following the hugely unpopular fuel subsidy removal and the meat of her economic agenda is yet to be fully fleshed out.

If she wins, it may prove more symbolic than anything else. She may not be able to, or indeed inclined towards, radically shaking up the bank. And as President, her orthodox economist's approach is unlikely to please World Bank critics. But it will be a signal of the increased power of the developing world and this is promising. Seeing an African woman as the head of a major global institution could have positive effects outside of development. After Barrack Obama won the US presidency, black students in the US performed better in school. Sometimes symbolism means more than action. And with her distinctive dress and style, some symbol it could be.

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Comments

Wishing Dr Okonjo Iweala gooluck.