On Friday, President Obama announced that he is nominating physician and Dartmouth College President Jim Yong Kim to lead the World Bank. This likely appointment was greeted with approval by many long-time critics of corporate globalization. And it came after an unprecedented level of debate about who should be the institution’s next president
By tradition, the World Bank president has been a political appointee named by the White House. Europe has agreed to go along with this arrangement, with the tacit agreement that a European, in turn, would be named as director of the International Monetary Fund. As for the rest of the world...well, the IMF and World Bank haven’t traditionally put too much weight on what the global South thinks.
This year things have been a bit different. For the first time, there’s been a concerted—and effective—effort to intervene in the nominating process and prevent a crony coronation. To this end, a variety of developing countries and progressive leaders got behind the candidacy of economist Jeffrey Sachs, who in recent years has refashioned himself as an anti-poverty crusader.
But other critics of the status quo were skeptical of this pick. Although Sachs now tries to highlight his anti-poverty credentials, he was previously known as a neoliberal “doctor shock,” advising on “stabilization” programs in countries such as Bolivia, Poland, and Russia in the 1980s and 90s. This history earned him a place as a leading villain in Naomi Klein’s The Shock Doctrine.
Sachs has never been big on apologizing. And many followers of Latin American politics, including me, find his lack of remorse for his role in Bolivia to be a big problem. But, in a debate hosted at the Nation (in which John Cavanagh and Robin Broad made the case against Sachs), progressive economist Mark Weisbrot—an outspoken defender of Latin America’s “New Left”—wrote in the nominee’s defense. Weisbrot contended:
"Sachs has a reform agenda for the Bank, including having the Bank focus more on treatment and prevention of infectious diseases, support for small farmers, education and primary health care, and renewable energy (as opposed to fossil fuels). He also has a track record of having fought for debt cancellation, an end to the World Bank’s policies of imposing user fees for primary health care and education, for the Global Fund to Fight AIDS, Tuberculosis and Malaria (which has saved millions of lives), increased access to essential medicines, and having been outspoken against war and other abuses by the US government."
Weisbrot and others also made a few arguments on the strategic level. First, they contended that Sachs was far preferable to Larry Summers, who was seen prior to the Kim announcement as Obama’s likely pick. (I can hardly argue with them on that point.)
Second, they emphasized that putting forth a credible opposition candidate would throw open what is usually a closed process and pave the way for more progressive candidates in the future. Indeed, as the Sachs nomination gained steam, two candidates from the global South also entered the fray: Colombian José Antonio Ocampo, a former finance minister and UN official, and Nigerian Ngozi Okonjo-Iweala, also a finance minister of his country and a former managing director at the World Bank.
In the end, Obama did not nominate Summers. And, ultimately, Jim Yong Kim might be a better pick than anyone for whom critics of the World Bank could have realistically hoped. Kim’s main progressive credential—and it’s a compelling one—is having served as executive director of Partners in Health (PIH), co-founded by Paul Farmer. If you haven’t picked up Tracy Kidder’s excellent book about Farmer, Mountains Beyond Mountains, there’s no point in delaying any longer. Farmer’s work is remarkable by all accounts and, grounded in liberation theology, it shows a deep preference for the world’s poor against the Washington Consensus.
Kim has been lower-profile than Farmer. But there are some good signs that he will bring a very different perspective to the job of World Bank president than his predecessors. One is the fact that Kim is now drawing heat from the right for writing in a 2000 book, Dying for Growth, that “the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”
Then again, the Wall Street Journal writes, “Over Dr. Kim’s three years at Dartmouth he has proved to be higher education’s Paul Ryan. He decisively resolved the school’s financial problems that he inherited on taking office—with real budget cuts, over the objections of the faculty.”
I called up Mark Weisbrot to talk more about the Kim nomination, about the debate around Sachs, and about what difference having a new World Bank president might make. Some edited excerpts from our conversation follow:
Engler: Are you happy with the nomination of Jim Yung Kim?
Weisbrot: Yes, I think it’s great. To have somebody who cares about health issues is completely different. Look at the past eleven presidents. They’re all bankers, war criminals—not the kind of people I’d want to run my restaurant.
Engler: By “war criminals,” you’re referring to…
Weisbrot: McNamara and Wolfowitz. I don’t know if Wolfowitz is technically a war criminal, but he was one of the architects of the Iraq War. Can you imagine? This is what annoys me when leftists complain about Sachs.
Engler: I’m one of those people who complains about Sachs. True, he’s not as bad as Larry Summers. But I was surprised to see you get behind him.
Weisbrot: Well, do you ever vote in elections?
Weisbrot: I respect the position that the World Bank should just be abolished. I think that’s an argument that people can make. But if you’re going to have a World Bank, there’s more of a difference between Sachs and anybody that Obama was going to appoint than there is between, I don’t know, [former Brazilian President] Lula [da Silva] and his predecessor. There’s a huge difference between Sachs and Summers. That’s what I go by.
Engler: Especially as someone who watches Latin America, as you do as well, I’ve felt that Sachs is inadequately repentant for his past.
Weisbrot: I really don’t care about his immortal soul. That’s for the Pope to judge or whoever else wants to judge that. That’s not my job.
Engler: How much of a difference do you think the World Bank president makes?
Weisbrot: That’s an interesting question. We don’t know because we’ve never had a president there who was anything but a crony. We’ll see what he can change. He has a bully pulpit too if that’s something he wants to use. That’s something I think Sachs would have used a lot, and it would have been hard to fire him. I don’t know if Kim is going to do it.
Engler: What are some of the things that you see a more independent World Bank president promoting, using this bully pulpit?
Weisbrot: The Bank publishes Global Economic Prospects, and they comment on the world economy. So the World Bank president could speak out on the big economic questions that the G20 is dealing with: how to handle the next global economic crisis; how to handle the European crisis, because it affects the developing world. They could speak out on spending priorities for the Bank itself.
But if Kim wants to change anything, he’s going to have to fight. He’s still going to have the Bank’s board [of directors] to deal with. And that board is dominated by the United States and its allies.
It’s not just a question of votes. It’s the fact that developing countries don’t fight. They just don’t fight within the IMF and World Bank the way they do within the World Trade Organization (WTO). In the WTO they form blocks, they fight, and they win. And they’re going to have to get used to doing the same thing in these two institutions.
I think that was a positive part of developing countries supporting Sachs. There were about a dozen of them by the end. That made a difference. I’m not sure the other nominations would have happened if Sachs hadn’t gone in there first. He was the one who busted up the normal process.
Engler: In your mind, what would be a desirable set of spending priorities for the Bank?
Weisbrot: I want them to do more about the things that they can do, like disease prevention and treatment. Kim will do that. And if he does nothing else, that’s still a huge improvement. I think [people at the Bank] can do more in education. They can do more to support small-scale agriculture.
But once you get into their economics, their economics are usually bad. One of the Financial Times reporters today asked me, “What if Kim doesn’t know that much about development economics?”
I said, “I don’t think that’s a handicap. I don’t think the Bank should be involved in that anyways. Let them do what they can do, because they usually get the economics wrong.”