The Future of Power in the World Bank
By Laura Wenzel
At the start of January, World Bank President Jim Yong Kim unexpectedly resigned. Appointed by the Obama administration in 2010 and reappointed in 2016, he has left his position nearly three years early to join a private infrastructure investment firm. President Trump now has the power to appoint a new president, which has many people in the international community concerned. Many of the World Bank’s priorities clash with the view of the Trump administration, like climate change and foreign aid. In the past, President Trump has openly expressed skepticism of multilateral institutions.
This has led to debate over whether the United States should have the power to appoint the president of the World Bank, without the say of the 189 member states. According to the World Bank Charter, the president is voted in by a simple majority of the 25 member states on the executive board, who solicit nominations from all the countries. However, since the creation of the World Bank at the Bretton Woods Conference in 1944, a gentleman’s agreement was made that the United States chooses the president in exchange for European countries getting to choose the president of the International Monetary Fund. This gentleman’s agreement has never been broken.
Some argue that this gentleman’s agreement is unfair, and undermines the representation and wishes of all the other member countries. Especially now, there is worry that President Trump's choice will be underqualified or will act against the World Bank’s goals. Others, however, argue that since the United States contributes the most money and holds more voting power (16 percent) than any country, they are entitled to choose the president.
World Bank CEO Kristalina Georgieva is set to take over as interim president until a new selection is made. It is possible that a majority of countries can stall the selection process if they are nervous about the Trump administration's new candidate. However, breaking the gentleman’s agreement and selecting a nomination from a different country could have major implications. Daniel Runde, senior vice president and director of the Project on Prosperity and Development at the Center for Strategic and International Studies, said, “it is not realistic for the U.S. to continue to support the World Bank at current levels if it loses the World Bank presidency.” The Bank could potentially lose millions of dollars of funding as result.
The resignation of Jim Yong Kim has shocked the international community, and has opened dialogue to discuss and critique the selection process of the World Bank's president. It will be interesting to see how the member states react to Trump’s nomination, and how this incident will impact the future of U.S. involvement in the World Bank.
Laura Wenzel (NHS ’20) is an undergraduate studying global health with a minor in biology and is a student fellow with the Global Health Initiative.