Pretty good so far, what’s next? Jim Kim’s first year at the World Bank

July 2, 2013

     By Duncan Green     

By Nicolas Mombrial, head of the Oxfam International’s Washington officephotoNicolasMombrial

A year ago today, the World Bank got a new chief. In all its 66 years, the bank head has always been an American, and Jim Yong Kim was president Obama’s pick. We’ll never know if Jim Kim was the best person for the job, we said at the time, because despite some interview process theatrics, it wasn’t open to a non-American.

But. As we’ve also said, Jim Kim has a record as a development hero. He has done some remarkable things this year, and if he makes good in his second year on the vision he’s laid out, there will be good reason to celebrate.

The causes for optimism:

1. Jim Kim has put together a vision for wiping out extreme poverty by 2030, and promoting ‘shared prosperity’ – bank-speak for fighting inequality. The bank’s mission was always supposed to be ending poverty, but as we know, its structural adjustment policies through the 1980s and 90s – cutting social spending, hiring freezes on doctors and teachers, attaching fees to basic healthcare – harmed poor people in many countries. We wish Kim’s vision was more ambitious: rather than the bank only “monitoring” the growth of the bottom 40%, it should find ways to ensure the income of the bottom 40% grows FASTER than the rest. But the plan to re-focus the bank on its core mission, and the acknowledgement by this major international institution that inequality is a major impediment to ending poverty, is an important shift.

2. Kim’s powerful statements at the World Health Organization annual meeting in May signaled very important changes in the bank’s approach to health policy. He committed the bank to pursuing universal health care and condemned user fee policies as ‘unjust and unnecessary’. Until now, the bank had not tackled head-on the politically thorny truth that poor people in developing countries will only get full access to health if it’s free of charge. On the contrary, it actively promoted user fees.

INDIA/Dr Charles Clift of the Centre on Global Health Security noted that Kim praised Thailand’s adoption of Universal Health Coverage policies, noting that they had been introduced in spite of fiscal concerns raised by the bank. Subtext: his message was directed at his own staff as much as at the WHO.

3. Under Kim, the bank has thrown much more weight behind efforts to combat climate change. In a major report last year, the bank warned that a 4-degree rise in the planet’s temperature would have devastating impacts and plunge more people into poverty. The report has been very influential – many in the development community and beyond cite it, and many have been agreeably surprised that Kim has put climate at the core of his speeches and vision.

4. The bank’s leaked new energy strategy is also promising. It is great to see the bank acknowledging that failing to move away from fossils fuels will have enormous environmental costs that ultimately will be born by the poorest and most vulnerable. If the strategy survives, it could provide a major boost in transitioning from fossil fuels to renewable energy sources, in a way that prioritizes the interests of poor people.

5. Millions of small-holder farmers in the developing world need land tenure security. Without land, they can’t grow food, and without the right to food, poverty can’t be ended. Despite this, land eight times the size of the UK was sold off globally in the last decade, enough to grow food for a billion people. More than two-thirds of foreign investments in farmland between 2000 and 2010 were in developing countries with serious hunger problems – with investors planning to export everything they produce on the land.

The bank’s investments in agriculture have increased by 200 per cent over the last decade, and it is in a unique position as both an investor in land and an adviser to developing countries, so we’ve been pushing the bank to introduce more robust policies to stop land-grabs. Kim’s recent statement and acknowledgement of the importance of land tenure security is therefore welcome.

But as the bank’s own refrain goes, results are what count, and that is what Jim Kim will be judged on: the results he can deliver for the poorest in the world. He has laid out a progressive vision and made a lot of promising statements but as one of my colleague likes to say “the proof of the pudding is in the eating” – the details of practical implementation are yet to be seen. Success or failure will hinge on whether he can mobilize the institution and its shareholders behind his vision. Not easy in an institutional behemoth, seamed with entrenched ways of working and old-era thinking. But that is what will make the difference between empty promises and a true change at the bank.

Part of this will require reforming the way the bank operates. Its clients – developing and emerging countries – are still largely shut out of bank governance, and they’re rightly demanding a seat at the decision-making table.

So, a good first year, but in terms of Jim Kim’s impact on the world’s poor, I’m afraid the jury is still out….

July 2, 2013
Duncan Green