April 16 (Bloomberg) -- Jim Yong Kim was chosen to be president of the World Bank, becoming the first physician and Asian-American to head the lender after emerging markets failed to rally around a challenger to the U.S. monopoly on the job.
The World Bank board of directors said today it chose Dartmouth College President Kim to succeed Robert Zoellick, whose term ends June 30. A specialist in HIV/AIDS with a Ph.D. in anthropology, Kim, 52, faced rival bids from Nigeria and Colombia.
The candidacies “enriched the discussion of the role of the president and of the World Bank Group’s future direction,” the board said in an e-mailed statement. “The final nominees received support from different member countries, which reflected the high caliber of the candidates.”
Kim, a graduate of Harvard Medical School, breaks the mold of World Bank presidents, who have been drawn from government and finance. Kim, who was born in Korea and grew up in the U.S., has pledged to be a bridge between developing and advanced economies at the poverty-fighting institution, which committed $57 billion last year on everything from building roads to taking stakes in companies in emerging economies.
His expertise on health and development issues, as well as his experience at Dartmouth, “puts him in a prime position to initiate a much-needed reorientation of the World Bank’s role in global development,” said Eswar Prasad, a senior fellow at the Brookings Institution and a former official at the International Monetary Fund.
Russia and Mexico threw their support behind Kim, shunning Nigerian Finance Minister Ngozi Okonjo-Iweala, who received Brazil’s endorsement. Former Colombian Finance Minister Jose Antonio Ocampo withdrew from the race last week and endorsed Okonjo-Iweala. Japan, Korea and Canada had publicly backed Kim.
The failure of emerging markets to unite behind a candidate is reminiscent of the contest to head the IMF last year, when Mexican Central Bank Governor Agustin Carstens lost to then-French Finance Minister Christine Lagarde. The IMF has always been headed by a European.
The bank’s approval of Kim “reflects how global governance continues to lag behind changing economic realities,” Prasad said. “Emerging-market economies are increasingly dominant in global trade, finance and output, but the advanced economies continue to maintain their positions of privilege at major international financial institutions.”
South African Finance Minister Pravin Gordhan, whose country nominated Okonjo-Iweala, today criticized the bank’s selection process, saying it “falls short” for not being transparent or merit-based.
“By our participation, we have won important victories,” Okonjo-Iweala told reporters in Abuja today. “The process of choosing a World Bank president will never be the same again.”
Kim will take over as financing to developing economies is increasingly provided by private investors as well as large emerging markets such as China, which is challenging the bank with its own lending programs in Africa and Latin America.
“He will need to better engage China and” other countries such as India, Russia and Brazil “to contribute more funding through the bank as opposed to bilateral channels,” said Bessma Momani, a political science professor at the University of Waterloo in Canada.
Kim, who is in Peru, said in a statement today that he would seek to realign the bank “with a rapidly changing world,” promising to “foster an institution that responds effectively to the needs of its diverse clients and donors.”
His focus on health and social projects and a lack of experience in economic policy or financial markets has raised questions about his capacity to head an institution with expertise ranging from infrastructure to climate change.
“It’s a legitimate concern, not because he couldn’t learn and have good advice once in office, but because that may take some time,” said Nancy Birdsall, president of the Washington-based Center for Global Development and a former World Bank official.
Kim, the son of a dentist, grew up in Muscatine, Iowa, where he played high school football, basketball and golf. He graduated from Brown University in Providence, Rhode Island, in 1982 and went on to receive degrees in medicine and anthropology at Harvard University, in Cambridge, Massachusetts.
In 1987, while at Harvard, Kim co-founded Partners in Health, a nonprofit organization that has opened clinics in countries including Haiti and Peru. Working for the group in Peru, he helped develop a treatment program for multidrug-resistant tuberculosis.
“His innovations in health-care have helped to save numerous lives,” Zoellick said in a statement today. At Dartmouth, “Jim has had to take tough managerial and financial decisions while running a large, multidisciplinary organization. His rigorous, science-based drive for results will be invaluable for the World Bank Group as it modernizes to better serve client countries in overcoming poverty.”
In a statement to the board of directors last week, Kim described himself as a good listener with no ideological approach, whose experience at Dartmouth would help safeguard the lender’s financial model.
“You would find in me someone who asks hard questions about the status quo and is not afraid to challenge existing orthodoxies,” he said.
The World Bank was created at the end of World War II as part of the postwar global economic order, along with the IMF. Set up to rebuild war-ravaged Europe, it later shifted its focus to providing financing for projects such as power plants and dams in developing countries.
As private capital becomes more available, it’s now counting on the technical expertise that comes with its loans to attract clients.
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