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The race for president of the World Bank is in full swing with SA and Angola rallying behind the candidature of Nigerian Finance Minister Ngozi Okonjo-Iweala to replace Robert Zoellick when he steps down in June.
President Barack Obama has named Jim Yong Kim, an Asian-American health policy guru and current president of Dartmouth College (an Ivy League school), as his preferred candidate.
Latin America has named Jose Mario Ocampo, former Colombian finance minister, as its preferred candidate. The recent Brics (Brazil, Russia, India, China and SA) summit in New Delhi failed to build consensus on a single candidate from the developing world. Brazil supports Ocampo’s candidature. The other Brics countries seem reluctant to take sides between Pretoria and Brasilia.
Okonjo-Iweala knows the World Bank system well, having served as a managing director. She has impeccable experience in finance, which puts her at a great advantage over her US counterpart. She also has a sound grasp of the global development agenda, especially in the context of emerging markets and Africa. If merit is the main criterion, she should have a good chance over her rival.
Africa and Latin America’s decision to field their own candidates for the role of president of the World Bank heralds a long overdue paradigm shift in Africa and other emerging markets. It is a shift from being passive spectators and followers to being active actors and leaders in global economic affairs and financial governance.
Institutions of global financial governance such as the World Bank and the International Monetary Fund are long overdue for reforms that make them more representative and democratic. If they don’t reform and accept change, we are likely to see increasingly powerful emerging markets forming their own institutions, like the Brics Development Bank and Brics currency which were mooted at their summit in New Delhi this past week. The World Bank must adapt or perish. It risks becoming less relevant.
The gentlemen’s agreement between Europe and the US whereby the former has the monopoly to appoint the IMF managing director and the latter the president of the World Bank is a relic of the past that goes against the grain of a 21st century world in which emerging markets are increasingly centre stage in global economic growth and change.
Pretoria and Luanda should build a broader coalition of support for Okonjo-Iweala across Africa and beyond. President Jacob Zuma is well positioned to lead the charge and lobby the Brics and G20 nations. However, the tendency for developing countries to push for their own national or regional candidates is likely to result in the US candidate winning the post.
Pretoria’s active and prominent roles in Brics, the G20, the UN Security Council and the Commonwealth present ideal opportunities to globalise and extend the universe of support for the first African president of the World Bank.
The key challenge is to unite emerging market countries around one candidate who is an alternative to Washington’s. Meritocracy should be made to prevail above nationality in choosing the President for the World Bank.
SA, Africa, the Brics and other emerging market countries need to leverage their combined growing economic and political influence to drive the agenda for change at the World Bank and other multilateral institutions of global governance.
This requires sufficient consensus underpinned by the political will and commitment to insist that change should happen – now. This campaign should be packaged not as anti-US or anti-European. It has to be seen as part of a logical process of progression and maturity in global affairs.
It is in the enlightened self-interest of the US and Europe to democratise and reform key institutions of global financial governance.
The principle of legitimacy is fundamental in a multipolar world in which there are increasing demands for transparency and inclusiveness. Most multilateral institutions of global governance lack legitimacy. Institutions like the World Bank must move with the times and be agile and adaptable. Their current architecture is largely a product of history and horse trading that happened at a particular conjuncture in global affairs.
Africa is an untapped frontier of opportunity with a wealth of natural resources, increasing access to disposal income, rising middle classes and a youthful population providing a unique competitive edge. As Africa’s economic importance increases, it is almost inescapable that its ambitions to play an elevated role in global affairs should grow.
As Pretoria rallies the world behind Okonjo-Iweala for the presidency of the World Bank, it would be good indeed for President Goodluck Jonathan of Nigeria to actively lobby and rally the continent behind Minister Nkosazana Dlamini-Zuma’s candidature for the role of chairman of the AU Commission.
A strong and effective AU is key to enhancing the continent’s clout and influence in global affairs. The opportunities for Okonjo-Iweala and Dlamini-Zuma are ideal moments for Africa to unite and act in concert in pursuit of Africa’s prominence and greatness.
n Dlamini, the former CEO of Old Mutual Emerging Markets, is a member of the national council of the SA Institute of International Affairs (SAIIA).