Succession for World Bank President

February 2019: Traditionally, the President of the United States nominates the president of the World bank. The president of the World Bank exerts considerable influence over the institution’s lending policies, project focus, level of transparency, and accountability. There are growing concerns about the new president potentially reverting the organisation’s focus on combatting climate change and introducing an inclusive lending policy for fossil fuel energy projects.

Information

The President of the World Bank Jim Kong Kim announced his resignation in January, nearly 3 years ahead of the end of his term. As of the 1^st of February, Kristalina Georgieva has taken office as interim president. The World Bank President is influential in determining the institution’s lending policies, project focus, level of transparency, and accountability. For example, under the leadership of Kim the bank shifted its focus to attract more private-sector investments, introduced restrictions for financing fossil fuel projects, and focused on projects to combat the effects of climate change.

Implications & Opportunities

The World Bank’s policy and strategy decision sends strong signals to the finance sector and influences the strategic orientation of global institutions. There is growing concern about the potential appointment of a President that aims to scale back efforts to reduce the effects of climate change, especially concerning the World Bank’s lending policies for energy projects. The President’s decisions on lending policies could impact the World Bank’s reputation and role in realising the UN’s SDG, in particular, and undermine the role of the Bretton Woods ‘twins’ in general.

Limitations

The World Bank is characterised by a strict hierarchical order and its lending policies, project focus, and level of transparency and accountability are generally subject to review by its President, executive directors, and board of governors.

Sources

Güven, A. B. (2017). Defending supremacy: how the IMF and the World Bank navigate the challenge of rising powers. International Affairs, 93(5), 1149–1166. doi:10.1093/ia/iix167 

Sovacool, B. K., Naudé Fourie, A., & Tan-Mullins, M. (2018). Disequilibrium in Development Finance: The Contested Politics of Institutional Accountability and Transparency at the World Bank Inspection Panel. Development and Change. doi:10.1111/dech.12427 

The Wall Street Journal. (2019). U.S. Contemplates Appointing First Female President of World Bank. Retrieved from

https://www.wsj.com/articles/u-s-contemplates-appointing-first-female-president-of-world-bank-11548327601