World Bank chief's exit could give Trump lever over development lending
However, he will likely face many challenges if he wants an American in the post
However, he will likely face many challenges if he wants an American in the post. PHOTO: ONLINE
WASHINGTON:
The surprise early departure of World Bank President Jim Yong Kim potentially hands US leader Donald Trump a key lever over development lenders with whom his administration has been at odds.
After reshaping the US presidency, traditional alliances, trade relations and the US Supreme Court, Trump now could have a chance to influence how countries like China access concessional lending.
But if Trump wants an American in the post, he will need to pick a candidate who can win the support of most shareholders, and will likely face many challengers.
As the biggest shareholder, the United States has sway over the selection of the new World Bank president, a post for 75 years always filled by an American, with the backing of European nations.
But having uprooted those alliances in his two years in office, Trump will find it difficult to simply submit a nominee for acclamation, especially as there have been growing calls for the institution to be guided by someone from the countries it serves.
"This White House has a pretty challenging path ahead if they think they want to install a candidate," said Scott Morris, a former US Treasury official who worked with the World Bank and the International Monetary Fund (IMF).
World Bank President Jim Yong Kim announces resignation
The unspoken agreement to have an American lead the World Bank and a European at the IMF has come under fire in recent years, and both institutions have seen candidates from Nigeria and Mexico challenge the current leaders.
And given a "very unpopular" American president, there are certain to be challengers in the process to replace Kim, said Morris, of the Center for Global Development.
Kim, who became the bank's president in 2012, announced Monday he would step down February 1, not even halfway through his second five-year term, to accept an "unexpected" opportunity in the private sector, he told bank staff.
With the US attitude toward the bank's goals of reducing global poverty ranging from neglect to active attacks, Kim may find working with a private organisation will allow him to effect change more quickly than at a major multilateral institution.
World Bank cancels $250m emergency relief loan
In a note to staff, Kim said, "It's time for me to take on new challenges and fully focus my efforts on leveraging private finance for the benefit of people around the world."
As Trump and his trade team have focused on aggressive trade negotiations, especially with China, the US Treasury Department has regularly, though with less fanfare, criticised the World Bank, for allowing relatively well-off countries like China to borrow from the development lender.
In one of Kim's signature achievements he led negotiations to convince shareholders - especially Washington - to agree early last year to a "historic" $13 billion increase in the bank's lending capacity.
But since the US has not even named a representative to sit on the World Bank board, it remains to be seen whether Trump will want to fight for the leadership.
The surprise early departure of World Bank President Jim Yong Kim potentially hands US leader Donald Trump a key lever over development lenders with whom his administration has been at odds.
After reshaping the US presidency, traditional alliances, trade relations and the US Supreme Court, Trump now could have a chance to influence how countries like China access concessional lending.
But if Trump wants an American in the post, he will need to pick a candidate who can win the support of most shareholders, and will likely face many challengers.
As the biggest shareholder, the United States has sway over the selection of the new World Bank president, a post for 75 years always filled by an American, with the backing of European nations.
But having uprooted those alliances in his two years in office, Trump will find it difficult to simply submit a nominee for acclamation, especially as there have been growing calls for the institution to be guided by someone from the countries it serves.
"This White House has a pretty challenging path ahead if they think they want to install a candidate," said Scott Morris, a former US Treasury official who worked with the World Bank and the International Monetary Fund (IMF).
World Bank President Jim Yong Kim announces resignation
The unspoken agreement to have an American lead the World Bank and a European at the IMF has come under fire in recent years, and both institutions have seen candidates from Nigeria and Mexico challenge the current leaders.
And given a "very unpopular" American president, there are certain to be challengers in the process to replace Kim, said Morris, of the Center for Global Development.
Kim, who became the bank's president in 2012, announced Monday he would step down February 1, not even halfway through his second five-year term, to accept an "unexpected" opportunity in the private sector, he told bank staff.
With the US attitude toward the bank's goals of reducing global poverty ranging from neglect to active attacks, Kim may find working with a private organisation will allow him to effect change more quickly than at a major multilateral institution.
World Bank cancels $250m emergency relief loan
In a note to staff, Kim said, "It's time for me to take on new challenges and fully focus my efforts on leveraging private finance for the benefit of people around the world."
As Trump and his trade team have focused on aggressive trade negotiations, especially with China, the US Treasury Department has regularly, though with less fanfare, criticised the World Bank, for allowing relatively well-off countries like China to borrow from the development lender.
In one of Kim's signature achievements he led negotiations to convince shareholders - especially Washington - to agree early last year to a "historic" $13 billion increase in the bank's lending capacity.
But since the US has not even named a representative to sit on the World Bank board, it remains to be seen whether Trump will want to fight for the leadership.