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After World Bank’s Head Quits, Donald Trump Likely To Determine The Successor

China, though a part of the World Bank, has thrown a challenge to it by setting up its own development banking institutions

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Trump, U.S.
Donald Trump. VOA

World Bank President Jim Yong Kim has announced that he is stepping down as the head of the premier anti-poverty institution putting the likely choice of its future leadership in the hands of US President Donald Trump, a sceptic of international development.

Trump’s role is expected reinvigorate challenges to Washington’s monopoly on appointing the Bank’s head.

Announcing his decision on Monday, Kim said in a tweet: “It’s been the greatest privilege I could have ever imagined to lead the dedicated staff of this great institution to bring us closer to a world that is finally free of poverty.”

Kim, 59, who is dropping out 19 months into his second term on February 1, would be joining a private company and focus on infrastructure investments in developing countries, the Bank said.

The Bank’s CEO Kristalina Georgieva will become the interim president till a successor to Kim is appointed.

As the largest share-holder, the US by tradition appoints the head of the Bank, while Europeans determine the chief of the International Monetary Fund.

Kim was nominated for the job by former President Barack Obama in 2012.

Before Trump’s election, Kim was hastily re-appointed in September 2016 to a second term that began in July 2017 with an eye on pre-empting a possible Trump nominee getting the job.

Now, however, Trump will get an opportunity to nominate the Bank’s head.

Trump’s role will resurrect and strengthen challenges to the post-World War II model of the leadership of the 189-member bank that has always been determined by the US .

Already the US nominee was challenged for the first time in 2012 by two contenders.

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World Bank head quits, Trump likely to determine successor. VOA

Colombian economist Jose Antonio Ocampo Gaviria eventually withdrew from the race, while Nigeria’s then-Finance Minister Ngozi Okonjo-Iweala lost when the Bank’s directors rubber-stamped Kim’s appointment.

Now there will be robust demands for reconsidering the US leadership of the Bank and stronger non-American contenders for the job.

Kim, a South Korea-born US citizen, was an unusual leader for the Bank: He was a medical doctor by training, a specialist in public health and an academic with a Harvard doctorate in anthropology who had led the Ivy League Dartmouth College.

But his background in health was a plus for the Bank’s mission of fighting poverty and promoting development.

Under his leadership, the Bank adopted in tandem with the UN the goal of ending extreme poverty by 2030 and focusing on the bottom 40 per cent of the population in the developing world.

The Bank’s International Development Association, which funds programmes in the least developed countries, achieved two record replenishments during his tenure, the last one in 2016 for $75 billion.

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Last April, the Bank also increased its capital by $13 billion with the unexpected support of the Trump administration.

Kim also pushed the Bank’s cooperation with the private sector for financing development in the developing world, particularly in the areas of climate change and infrastructure.

China, though a part of the World Bank, has thrown a challenge to it by setting up its own development banking institutions.

The Asian Infrastructure Investment Bank (AIIB), founded in 2016 is one of those institutions and several countries including India, Germany, Britain and South Korea have joined it. (IANS)

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Economy to Overcome Other Issues in 2020, says Trump

President Donald Trump is hoping that simple message in 2020 will help foil his eventual Democratic Party challenger. 

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President Donald Trump
U.S. President Donald Trump attends a Keep America Great Rally at the Rupp Arena in Lexington, Kentucky, U.S. VOA

“It’s the economy, stupid” has been a catchphrase of U.S. presidential politics since the 1992 campaign, when Bill Clinton unseated incumbent George H.W. Bush. Nearly three decades later, U.S. President Donald Trump is hoping that simple message in 2020 will help foil his eventual Democratic Party challenger.

Trump — in tweets, at political rallies and in remarks to reporters — constantly emphasizes the performance of the U.S. economy, stock market surges, low unemployment rates and his tax cuts to boast he is doing a great job as president.

Economists and political analysts are divided on whether that message will enable the incumbent to stay in office beyond January 2021.

Culture war, partisan split

Ever since Clinton, “we’ve all kind of assumed that should be true. And I think for the most part, it is,” said Ryan McMaken, senior editor and economist at the Mises Institute, a politics and economics research group in Alabama. He cautioned, though, that Trump finds himself on one side of a culture war that his predecessors did not have to confront, as well as a deep partisan divide on consumer confidence.

Walmart Supercentre
Balo Balogun labels items in preparation for a holiday sale at a Walmart Supercenter, in Las Vegas. Black Friday once again kicks off the start of the holiday shopping season. But it will be the shortest season since 2013 because of Thanksgiving falling on the fourth Thursday in November, the latest possible date it can be. VOA

Policy analyst James Pethokoukis at the Washington-based American Enterprise Institute, a public policy research group, also is cautious about the economy prevailing over all other issues.

“Just having a strong economy is not going to guarantee you re-election,” he said. “People often point back to the 2000 election, which occurred after a decade of tremendous economic growth any way you want to measure it — gross domestic product, jobs and wage growth. And yet, [Clinton’s vice president] Al Gore still lost that election to George W. Bush.”

McMaken questioned whether voters in key swing states — such as Wisconsin, Michigan, Pennsylvania and Ohio — who cast ballots for Trump in 2016 were experiencing enough of the touted economic performance to vote again for the president.

Overall, however, “it’s not a bad economy to run on if you’re Donald Trump,” said Pethokoukis.

Trump, said to have concerns about the direction of the economy ahead of next November’s election, will likely push for more tax cuts, passage of a renegotiated North American trade pact and continued pressure on the country’s central banking system, the Federal Reserve, to lower interest rates.

A LB Steel LLC's employee manufactures a component
A LB Steel LLC’s employee manufactures a component for new Amtrak Acela trains built in partnership with Alstom in Harvey, Illinois, U.S. VOA

Trouble ahead?

There are rumblings of economic storm clouds on the horizon. The impact can be seen in Trump’s trade war with China, which has hurt U.S. farmers and raised prices for consumer goods. It’s also reflected in the Institute for Supply Management’s Manufacturing Index, an underperforming U.S. Private Sector Job Quality Index and a ballooning record national debt, in addition to the worrying level of money owed to creditors by middle-class Americans.

“We’ve actually been in a sort of a manufacturing recession, seen a shrinkage of factory jobs, the exact kinds of jobs that I’m sure that people voting for the president thought would be a lot better now,” said Pethokoukis.

So far, none of this has prompted a major stock market correction.

“There seems to be a lot of adaptations in the markets to Trump’s America. That may work to his advantage,” said the Mises Institute’s McMaken.

Analysts note a lack of emphasis on economic platforms so far by the leading Democratic U.S. presidential candidates seeking to oust Trump next year.

But such a platform is likely to be touted when the opposition party holds its convention next July in Milwaukee and picks its campaign ticket. Pethokoukis suggested the Democratic Party should devise a plan with a goal to boost American worker productivity, which has flatlined for years.

The great divide

McMaken pointed out that the widening chasm between the well-off and those struggling economically in the United States makes Trump vulnerable — something emphasized by left-leaning Democratic presidential contenders such as Bernie Sanders and Elizabeth Warren.

Donald Trump says the economy isn't doing well
Tents and tarps erected by homeless people are shown along sidewalks and streets in the skid row area of downtown Los Angeles, California, U.S. VOA

“On the ground level, I would say just in general, the economy isn’t doing as well,” concluded McMaken.

ALSO READ: Greed For Power May Demolish The Democracy

Amid an impeachment drive by the Democrats, Trump is repeatedly hammering on a specific message to those questioning his suitability for office while being impressed with the performance of their pension accounts during his presidency.

“Love me or hate me, you’ve got to vote for me,” Trump said at a rally in New Hampshire in August, warning that Americans’ investments portfolios would go “down the tubes” if he lost next year’s election. (VOA)