Economist Jeffrey Sachs upsets World Bank apple cart
- 18 March 2012
- From the section Business
One of the world's key international organisations for fighting poverty is looking for a new leader.
For almost 70 years, the head of the World Bank has been an American, chosen by the US president. The bank's sister organisation, the International Monetary Fund - created at the same time in the wake of World War II - has similarly always been led by a European.
That tradition is not expected to change now, even as the current World Bank chief Robert Zoellick prepares to step down in June and the deadline to propose a new candidate looms this Friday.
But for the first time this closed process, dominated by the US, is being challenged.
For one, poverty campaigner and development economist Prof Jeffrey Sachs is making a very public bid for the nomination.
No-one has ever done this before, and it has created huge media and public interest.
It is not just that Prof Sachs wants the job, he is also openly critical of the outgoing Mr Zoellick and how the bank has been run.
Sitting in his Manhattan townhouse, Bolivian and African art on the walls, Prof Sachs explains that the job of leading the World Bank should be given to a development expert.
"The inside process has produced 11 out of 11 politically-orientated appointments," he says.
"Not one of them has been a development professional… It has been seven bankers, three defence or military officials, and one congressman."
Prof Sachs says that after 27 years dedicated to fighting hunger, poverty and disease in developing countries, he is uniquely qualified to run the World Bank.
Ashead of the Earth Institute at prestigious Columbia University, and as an adviser to the UN and numerous governments, he has "walked the villages of the world".
But he fears "the World Bank, if allowed to continue to drift, would be a huge loss to the world".
And critics - from academics to non-governmental organisations - have long argued that the World Bank is ineffectual and even damaging to developing countries because of its emphasis on free market economics.
Some developing countries, including Kenya, Haiti, Jordan, Malaysia and East Timor, are openly backing Prof Sachs's bid. He says other governments are backing him privately.
Uri Dadush, formerly of the World Bank and now at the Carnegie Endowment for International Peace, says that while the sprawling bank could be better run, it also deserve credit for the explosion of growth in emerging nations over the past 20 years.
Dr Dadush adds that it is in the hands of these emerging powers that change really lies.
For now, there are too many "rivalries" among the big emerging nations of China, Russia, India and Brazil for them to back a unified candidate of their own to challenge the US.
But that may change. The US is not the economic power it was when the World Bank was first created.
The bank certainly does have reach, with 13,000 staff in more than 100 countries, and loan funding expected to reach $26bn (£16bn) this year.
In the meantime, President Barack Obama is under pressure to give the bank direction.
The list of rumoured candidates for the job had included Washington insiders like Senator John Kerry and US Secretary of State Hillary Clinton. Both have firmly taken themselves out of the running.
That leaves possibilities from UN ambassador Susan Rice to economist and former Treasury Secretary Lawrence Summer to - most interestingly perhaps - Indra Nooyi, the Indian-born boss of PepsiCo.
Recent changes to Pepsico's top management have only helped to intensify rumours.
So it seems that, up against these candidates, Prof Sachs is unlikely to get the job. An unnamed White House source told one US newspaper that Prof Sachs was not under consideration even for the short-list.
But Prof Sachs says his energetic campaign is meant seriously. "I don't know that anyone could know me, know anything about what I do, and believe this to be a stunt," he said.
Indeed, even if Prof Sachs fails, it could prove a turning point in what many see as a stale process - even if the opportunity for change does not arise for another five years.