It will be helpful to provide a little bit of history about the selection process for the World Bank presidency. This will set the context for the proper basis for selecting a president other than from USA.
The World Bank, established in 1944 through the Bretton Woods Meetings, has by convention been led by a US citizen. All the 10 presidents so far have not only been US citizens nominated by the US government, but also they were men. Some presidents have done very well in providing leadership to the institution and achieving good development outcomes. The most prominent among them was Robert McNamara.
Performance of some others was lacklustre and even destructive, notably Paul Wolfowitz who pushed this key development institution to its lowest ebb. For the first time in the history of the institution the staff revolted. I am delighted to acknowledge that I was a part of that revolt. Thankfully, the World Bank's Board of Executive Directors recognised the damage and moved to arrest the downward slide by forcing Wolfowitz to resign.
The experience of uneven performance by previous World Bank presidents illustrates the need for a change in the selection process. This was indeed recognised during the replacement of Wolfowitz. The board announced a selection process on merit but the outcome still was the selection of the US nominee.
This result is almost guaranteed by the selection process where votes by the executive directors are weighted by country share holdings. The US has the largest percent of votes, presently 15.8 percent, followed by Japan (9.4 percent), Germany (4.9 percent), France (4.4 percent) and UK (4.4 percent). Together this Group of 5 (G5) holds a whopping 39 percent of the voting rights. Along with the convention that a European will lead the IMF, the sister organisation of the Bretton Woods institutions, internal agreements between the US and European member countries along with support from Japan, Australia and Canada almost always guarantee that the US nominee irrespective of merit will get selected.
Without a change in the voting system the idea of a competitive selection is futile, especially if the US is really keen to get its candidate selected. What then could be the rationale for proposing other names including that of Professor Yunus?
I will answer this question in two steps. First, let us look at the candidacy of Professor Yunus.
The World Bank's primary objective is to help member countries reduce poverty. His track record of contribution to poverty reduction and economic development is unquestionable as indicated by the seal of approval from the Nobel Committee. It is difficult to think of a second person who would likely get nominated for the World Bank presidency and who has done more for poverty reduction with ideas, organisation and personal leadership than Professor Yunus.
The person leading the World Bank must be visionary. Professor Yunus has an impeccable track record of innovative ideas and forward thinking. The idea of borrowing without a collateral based on physical asset and instead using human capital as collateral is a revolutionary idea for a developing country that was conceived and institutionalised by Professor Yunus more than 30 years ago.
Targeting women instead of men for entrepreneurship was a similarly innovative idea. In most developing countries, female participation in labour force is woefully low and entrepreneurship dismal. The idea of harnessing these under-utilised resources by providing credit paid off handsomely as the record shows.
A related idea that worked very well was the need to reduce risk of failure and non-performance through group lending, technical assistance and social mobilisation. The latest work on social business is yet another example of the visionary Professor Yunus.
The candidate aspiring to be the next World Bank's president must have demonstrated leadership qualities for building institutions and leading teams. Most competition will pale in significance to Professor Yunus when measured by this criterion. The development of the Grameen Bank and the Grameen Foundation from scratch into first rate global institutions of service for the poor speaks hugely about the talents of this institution builder that is hard to match by a competitor.
Similarly, Professor Yunus's track record on team building and team leadership has few parallel. He has inspired multi-talented individuals to come and work for the Grameen Bank even with fairly low level of personal compensation. The managers and staff of Grameen Bank are not there just to do a job and earn a living; they are there because they all believe in the cause and the mission. Imagine the effectiveness of a World Bank staff and management team that is inspired by the institution's mission rather than by only compensation and promotions!
Finally, the World Bank leader must be able to mobilise external support for the cause of the institution. The work of Professor Yunus has been hailed globally. He has inspired both world leaders as well business leaders to mobilise around his ideas and leadership in providing substantial amount of financial as well as personal support. It is no wonder that even though coming from a poor country like Bangladesh he has been welcomed by the top leaders of the world and he can count people like Bill and Hillary Clinton as amongst his best friends. This ability to reach out to external constituencies will serve the needs of the World Bank much better than that of any other potential candidate I can think of.
Ok, I have made a strong case for Professor Yunus I hope. But so what? The selection process in place will never allow this candidacy to materialise. Short of a brand new selection process that is truly a competitive process -- which is most unlikely at this time -- the only way that could ensure this outcome is if the US were to endorse his candidacy based on merit.
This is not a pipe dream. If Bill and Hillary Clinton were to endorse the candidacy of Professor Yunus they could convince the Obama administration to endorse him. President Obama himself is a renaissance man and would probably welcome this innovative idea.
There is speculation that Hilary Clinton might herself be a candidate. If so, then that will be a great nomination and I am sure even Professor Yunus would support her candidacy. She will not only be a great leader for the World Bank but also the first women president to lead the organisation and as such would be a welcome development.
But if Hilary is not a candidate and if Professor Yunus is willing to lead the institution, then one could hope that she would give this idea of endorsing Professor Yunus some serious attention and effort. With her strong support a real change in selecting the next president of the World Bank on merit will be possible.
Sadiq Ahmed is the vice chairman of Policy Research Institute of Bangladesh. He can be reached at sahmed1952@live.com.
The Daily Star, 26 February 2012
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