A post up at Foreign Exchange about the World Bank leadership competition, and why the Bank ought to select Nigeria’s Okonjo-Iweala over the U.S. nominee, Jim Kim. Short version: she’s a heavy-hitter with the right experience who, critically, solves the Bank’s legitimacy crisis.
By far the most important reason to appoint Okonjo-Iweala is that she has experience on both sides of the table in the international lending negotiations that are the bread and butter of the Bank’s work. As an economist who rose to be the Bank’s Managing Director, she oversaw its lending from 2007 to 2011, helping shepherd it through the global financial crisis. As Nigeria’s finance minister between 2003 and 2006, she represented her government in debt relief negotiations with Paris Club donors, succeeding in reducing the country’s debt burden from $30 billion t0 $12 billion. That remains the only time the Paris Club has allowed a debtor nation to buy back its debt below par.
What’s critical about the experience is that Okonjo-Iweala understood what it meant to face a debt burden that was so beyond repayment as to be punitive, and she worked to have it reduced. But she also understood that the single case of Nigeria didn’t negate the merits of international development lending and she went back to the Bank to provide critical funding to other nations.
She therefore embodies the argument that the Bank desperately needs to make if it is to regain its legitimacy in the developing world: that aid and development lending are powerful forces for good, so long as they are delivered justly. Appointing her turns control of the Bank over to those it serves while re-affiriming the Bank’s underlying mission.
Read it here.