World Bank names US-nominated Jim Yong Kim as president

Losing candidate Nigerian finance minister, Ngozi Okonjo-Iweala says, 'It's not decided on merit'
President Barack Obama, introduces Jim Yong Kim, as a nominee to become president of the World Bank
President Barack Obama had backed Jim Yong Kim, to become president of the World Bank. Photograph Andrew Harrer/ EPA ANDREW HARRER / POOL/EPA

The World Bank named Korean-born doctor Jim Yong Kim as its new president today amid criticism that the role had once more gone to a US-nominated candidate.

The 52-year-old president of Ivy League Dartmouth College beat Nigerian finance minister Ngozi Okonjo-Iweala to the post, the first time in the World Bank's history that the US candidate has faced a serious challenge.

Kim had been widely expected to clinch the job, as he had the backing of the US, Europe, Japan and Canada, which between them command a majority of votes among the World Bank's executive directors. But sources close to the process claimed there had been "frantic arm-twisting" in a bid to achieve unanimity.

Insiders claimed Okonjo-Iweala was urged to stand down on Sunday night after it emerged she could muster 19% of the votes, because senior Bank decision-makers felt it would expose divisions among its member states. Instead, the Nigerian finance minister insisted on remaining in the race.

Before the announcement, Okonjo-Iweala said: "You know this thing is not really being decided on merit."

Brazilian and South African government officials reiterated their support for her on Monday – potentially representing about 5% of the votes at the meeting. It is understood that there was no formal vote.

Kim, born in Seoul, South Korea, was nominated by Barack Obama in March to replace current president Robert Zoellick. The US president's choice of a public health expert was a surprise: candidates nominated to run the bank usually come from the financial world.

The presidency has gone to a US candidate since the organisation was founded at the Bretton Woods conference at the close of the second world war. The International Monetary Fund (IMF), its sister organisation, has always been run by a European.

The US gave its backing to Frenchwoman Christine Lagarde's nomination to the top role at the IMF last year after the shock resignation of Dominique Strauss Kahn. In return, Kim received Europe's backing for the World Bank job.

In recent years, the organisations have faced growing criticism over their US/European duopoly.

Before Kim was confirmed as bank president, the South African finance minister, Pravin Gordhan, said there was a need to "look beyond the verbiage of democracy and the claims to democratic process and ask whether in substantive terms the institution has met the democratic test".

Although she had always expected her challenge to the US's nomination to fail, Okonjo-Iweala said: "It is voting with political weight and shares, and therefore the United States will get it."

She added: "We have won important victories ... We have shown what is possible. Our credible and merit-based challenge to a long-standing and unfair tradition will ensure the process of choosing a World Bank president will never be the same again. The hands of the clock cannot be turned back."

Welcoming the selection of Kim, Obama said the process had been "open and transparent" and praised the winning candidate as an inclusive leader. "I appreciate the strong support offered to Dr Kim from leaders around the world," Obama said.

A third candidate, Colombia's former finance minister José Antonio Ocampo, pulled out on Friday, calling the process a "political-oriented exercise".

Peter Chowla, co-ordinator of London-based NGO the Bretton Woods Project, said the news meant the "stitch-up between the US and Europe will live on into a seventh decade despite the rise of new economic powers like India, China and Brazil". He added: "European and other rich world leaders chose political convenience over a truly competitive process that would look at the candidates on the basis of their merits and not their nationalities. This will further erode the Bank's legitimacy unless Kim starts listening closely to developing countries and critics of the World Bank, and begins a process of fundamental reform."

Kim is a leading figure in global health and a former director of the HIV and Aids department at the World Health Organisation. He moved with his family to the US at the age of five.

In a statement, the World Bank said: "We, the executive directors, wish to express our deep appreciation to all the nominees, Jim Yong Kim, José Antonio Ocampo and Ngozi Okonjo-Iweala. The final nominees received support from different member countries, which reflected the high calibre of the candidates."

Prof Simon Evenett of the University of St Gallen, Switzerland, a former World Bank official, said Kim's appointment was inevitable: "The Obama administration would almost certainly have withheld support for Lagarde's appointment to the IMF if European nations had not agreed in advance to support whomever was Washington's candidate for the World Bank.

"There was never really a contest. Some developing countries probably figured this out and put up a strong candidate to embarrass the west, hoping this will lead to a more open process in the future. Don't bet on that.

"The west won't give up its hold over these institutions until they need something from the emerging markets."

Folarin Gbadebo-Smith, a director at Nigeria's respected Centre for Policy Alternatives, said a lack of political instinct may have damaged Okonjo-Iweala's chances.

"People don't like to be caught unawares," he said. "Where the US has such a major stake, this is something that clearly should have to be negotiated behind closed doors first. That is the golden rule in the boardroom or in politics.".