Wednesday, February 22, 2012

A non-Western representative for World Bank chief

By Bernie Quigley

For The Hill on 2/20/12

When Singapore’s Lee Kuan Yew brought his country from Third World to be the most prosperous country in the First World, he first had to deal with the West: “I had to come to terms with American power without a British buffer,” he has written. “The British enforced their will with a certain civility. The Americans were different, as I could see from the way they dealt with South Vietnamese leaders . . .”

Lee was likely referring to the assassination of Ngo Dinh Diem, president of South Vietnam, in 1963, but as the World Bank chief position opens up again today, it might be asked if, in Lee’s words describing that period, America still had “bulging muscles and a habit of flexing them.”

Possibly more than any other global body World Bank has become pretext for what is called NGO imperialism. And like the Academy Awards “life work” awards, it has come to glorify an individual once the diva has become irrelevant. Hillary Clinton, who during her run for the presidency, said she had no use for “elitist economists,” is contender today and Treasury Secretary Timothy Geithner and former Treasury chief Larry Summers have been suggested.

Traditionally, the Bank president has always been a U.S. citizen nominated by the United States. But The Manila Bulletin reports that China, the world's second-largest economy, wants the next World Bank president to be selected on merit, “going against a tradition that dictates the bank's head is an American.”

The Economic Times agrees that a non-American should take the helm: “The world might have changed dramatically since 1945 when the Bank was established, along with its Bretton Woods twin, the International Monetary Fund (IMF) . . . China is now the second-largest economy and emerging economies account for close to 55% of world GDP measured in terms of purchasing power parity. But, for the Bank and the Fund, it is as though nothing has changed. The result is the unwritten pact between the US and Europe, that has seen Americans at the helm of the Bank and Europeans at the Fund, continues to hold sway.”
The emerging economies, they write, especially the Brics, must come together on this and agree on a candidate from amongst them.
If World Bank and the IMF are not to go to the way of the court of Louis Quatorze, and the arbitrariness of appointments like those of the universally despised Paul Wolfowitz to World Bank and the prancing French aristocrat Dominique Strauss-Kahn to IMF suggest they are heading in that direction, they should try to rise to relevance.
Harvard’s Niall Ferguson reported recently on Bloomberg that had it not been for China, we today would now be in a Great Depression. It seems a relevant observation, but denial of Asian economy and power rising and having already arrived seems still the dominant theme in these appointments.

Legendary investor Jim Rogers, who lives in Singapore, complains that there has never been a Nobel Prize for economics given to an Asian working economist, in a period when the rise of China and the other Eastern economies is the economic story of the century.
Singapore’s Lee Kuan Yew may be seen as this age’s sage and master. And Hu Jintao’s China brought stabilization in a time of global turmoil. The appointment of a non-Western chief would bring Americans psychological acceptance of the rising century and bring status and relevance once again to the World Bank.

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