The Wall Street Journal
U.S. Contemplates Appointing First Female President of World Bank
By Josh Zumbrun
24 January 2019
Copyright 2019 Dow Jones & Company, Inc. All Rights Reserved.
The race to select the next president of the World Bank could be shaped by a strong international desire for the institution to have its first female president.
When World Bank President Jim Yong Kim unexpectedly announced his resignation earlier this month, it set off a complex game of chess between Washington—which hopes to preserve its 70-year record of picking the president of the world’s leading development finance institution—and other countries clamoring for a non-American to lead an organization devoted to serving the poorest countries.
“It would help the U.S. if they went with someone pathbreaking,” said Vijaya Ramachandran, a senior fellow at the Center for Global Development think tank and former World Bank senior economist.
The White House hasn’t settled on a pick, but diplomats, former World Bank officials and close observers of the bank agree that were Washington to nominate a woman, it would discourage other countries from challenging the American pick.
Several Americans could fit the bill. The White House has confirmed it is considering former PepsiCo CEO Indra Nooyi, who was born in India and has 12 years of experience running one of the world’s largest international corporations. Another candidate could be Dina Powell, a Cairo-born Goldman Sachs executive who was former deputy national security adviser for President Trump. Neither responded to requests for comment.
“It would be great to have a female president of the World Bank, and given the U.S. is going to nominate someone, these are two really viable candidates,” Ms. Ramachandran said of Ms. Powell and Ms. Nooyi.
The World Bank has 25 executive directors who will formally make the pick after consulting with their capitals. The U.S. controls about 16% of the World Bank’s voting power, the most of any single country.
But blocs of countries have a greater vote share, including the European Union with about 26%, and if the U.S. picks someone deemed either unqualified or overly critical of international institutions like the World Bank, a number of possible candidates from outside the U.S. could pose a credible challenge.
The World Bank and International Monetary Fund were created from a 1944 agreement between the allies in World War II meeting in Bretton Woods, N.H. Ever since, under an informal arrangement, the Europeans have selected the head of the IMF and the Americans have picked the World Bank president.
But the arrangement left out emerging-market economies, many of which want a greater say in how these international institutions are run. The last time the IMF and World Bank leadership was open, emerging markets fielded formal challenges.
Europeans overcame this challenge by appointing Christine Lagarde, an internationally popular former French finance minister to be the first female leader of the IMF. By putting forward a qualified, female and internationally oriented candidate, the U.S. could similarly ward off challengers, said one European diplomat, “It would help if it’s an American woman, if she had a clear multilateral background,”
Mr. Trump has antagonized many other world leaders via aggressive trade policies and has often been critical of the very notion of multilateral cooperation. A candidate too closely associated with this approach could prompt Europeans and emerging-market leaders to consider other candidates.
One potential candidate could be Minouche Shafik, the director of the London School of Economics. Born in Egypt, educated in the U.S. and the U.K., with citizenship in each, Ms. Shafik is a former vice president at the World Bank. She was also a deputy managing director at the International Monetary Fund and a deputy governor of the Bank of England. Ms. Shafik didn’t respond to a request for comment.
Should no viable female candidate emerge for the position, a male candidate could be Suma Chakrabarti, president of the European Bank for Reconstruction and Development. Mr. Chakrabarti, born in India and now a British citizen, has led the London-based EBRD for over six years. The EBRD was originally focused on rebuilding Eastern Europe after the fall of communism and has grown to count 67 countries as members, with projects not only in Europe but in Asia and Africa as well. Mr. Chakrabarti declined to comment and a spokesman said he is focused on his current job.
One popular figure from Europe is the World Bank’s current CEO, Kristalina Georgieva. A Bulgarian and former vice president of the European Commission, Ms. Georgieva is set to become the interim president when Mr. Kim steps down at the end of January.
Some World Bank directors had discussed appointing Ms. Georgieva to serve the remainder of Mr. Kim’s term, according to a former World Bank official familiar with the discussions. It isn’t clear, however, that Ms. Georgieva is seeking that role. One possible compromise between the U.S. and Europe would involve leaving her as the bank’s CEO, acting as a force of continuity under a new American president. Ms. Georgieva didn’t respond to a request for comment.
Two candidates from emerging markets remain under discussion.
Ngozi Okonjo-Iweala, formerly the finance minister and foreign affairs minister of Nigeria, as well as a former managing director at the World Bank, was the leading challenger to Jim Yong Kim when he was nominated in 2012. Some of her supporters last time are encouraging her to formally announce another candidacy.
Finally, there is Indonesia’s finance minister, Sri Mulyani Indrawati, a former World Bank managing director and chief operating officer. Ms. Sri Mulyani chaired the committee of finance ministers that oversees the World Bank over the past two years, and there is much goodwill in the international community following Indonesia’s success hosting the annual meetings of the IMF and World Bank in the fall. Neither Ms. Okonjo-Iweala nor Ms. Sri Mulyani responded to requests for comment.
For now, all eyes are on Washington to make the first move, and these candidates could all stay on the sidelines in the face of a strong U.S. pick.
The White House has confirmed it is also considering David Malpass, the undersecretary of the Treasury for international affairs. Mr. Malpass has been sharply critical of the World Bank, but ultimately the Treasury Department backed a funding increase for the institution in April. Some Europeans are wary of Mr. Malpass because he opposes increasing the IMF’s lending capacity, while most of Europe supports the boost.
The White House has also said it is considering Ray Washburne, the president of the Overseas Private Investment Corp. Mr. Washburne convinced Congress last year to aggressively beef up America’s commitment to development finance. But Mr. Washburne, a Texas restaurateur, real-estate developer and major fundraiser for Mr. Trump, isn’t well-known internationally.
“If a good candidate comes from the U.S., I don’t think there is a feeling that now is the time to push the U.S. out of it,” said Otaviano Canuto, a former executive director of the World Bank.
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