Tuesday June 18, 2019
Home Lead Story After World B...

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

0
//
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.

Trump, U.S.
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.

Also Read- Government Introduces Quota Bill For Upper Castes in Lok Sabha

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)

Next Story

World Bank: Russia Banking Sector Remains at Risk Despite Recent State Costly Bailouts

"The banking sector remains afflicted with high concentration and state dominance," the World Bank said in the report

0
world bank, russia banking sector
A Russian flag flies over the headquarters of the country's central bank in Moscow (file photo) RFERL

The World Bank says Russia’s banking sector is stabilizing but remains at risk despite recent state bailouts of Russian banks totaling tens of billions of dollars.

In a scheduled report dated June 10, the Washington-based lender estimated that state-owned banks now account for 62 percent of all assets at Russian banks following the closure of hundreds of lenders in recent years and the rescue of several major financial institutions.

“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. The warning comes less than a week after the World Bank, the lending arm of the International Monetary Fund, cut Russia’s 2019 economic growth forecast to 1.2 percent from a previous estimate of 1.5 percent because of oil production cuts.

world bank, russia banking sector
“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. Pixabay

While the bank said Russia’s macroeconomic and fiscal buffers were strong, economic growth prospects remained modest. “Downside risks to Russia’s growth outlook stem from the potential expansion of sanctions, deterioration of financial market sentiment, souring global trade environment and a dramatic drop in oil prices,” the report said.

Russia’s business climate faces stiff headwinds for many reasons, including the economic sanctions imposed by the United States, Japan, and European allies for Moscow’s 2014 seizure of Crimea, along with alleged Russian interference in U.S. elections.

ALSO READ: Russia-Backed YouTube Channels Spread Disinformation, Generates Millions of Dollars in Ad Revenue

The World Bank projected annual economic growth for the years 2020 and 2021 at 1.8 percent. “On the upside, national projects aimed at strengthening human capital and increasing productivity, if well-implemented, could positively affect Russia’s potential growth in the medium-term,” the bank said in its report.

Russia’s economy expanded 2.3 percent in 2018, aided in large part by one-off projects, buoyant energy prices, and an influx of tourists for the soccer World Cup. (RFERL)