Long before he became president of the World Bank, South Korean physician Jim Yong Kim was on the dusty streets of the working-class Lima neighbourhood of Carabayllo, helping cure local residents of tuberculosis.

His work with the poor and the new approach he is seeking in the World Bank filled experts and officials in South America with enthusiasm during his recent visit to three countries in the region.

Jim Yong Kim at a press conference in Chile’s presidential palace. Credit: Marianela Jarroud/IPS

Kim, president of the World Bank since July 2012, met Saturday with Bolivian President Evo Morales after visiting Peru and Chile. During his Jun. 29-Jul. 7 tour, he also met with the presidents of these two countries, Ollanta Humala and Sebastián Piñera, respectively, putting an emphasis on the changes that the international lender has undergone.

“There was a time in the history of the World Bank, 20 years ago, when the approach looked more like prescriptions,” Kim told IPS after a Jul. 4 press conference he gave in Santiago.

Not giving blanket prescriptions to all countries is one of the biggest changes, he said, “because it doesn’t make sense to force a government into debt over things it doesn’t want,” he had said the day before during a meeting with students and academics at Peru’s Pontifical Catholic University in Lima.

“We come to countries that ask us to work on different kinds of problems,” he added.

Kim said in Santiago that “in the early-1990s when I had just graduated from college, one of the first trips that I made to Washington DC was to be part of a group called 50 Years Is Enough. I was part of a demonstration to try to close the World Bank…because we thought that the prescriptions were too prescriptive: one-size-fits- all, just do these things and everything else will fall into place.”

Kim is right to emphasise the shift seen in recent years in the World Bank, former Peruvian deputy economy minister Carlos Casas commented to IPS. “They are listening more to governments and acting according to their demands,” he said, adding that he himself saw this when he was a government official in 2010.

“His visit could be seen as a confirmation of that new approach,” said Casas, who is head of the economy department in the Universidad del Pacífico in Lima.

The World Bank has no other choice today, because countries like Peru have strong macroeconomic figures and no longer depend as they did before on aid from multilateral lenders, he said.

“Technical assistance in designing reforms of the state is perhaps the most important thing the Bank can provide at this time, because at the level of economic resources its contribution has shrunk in the region,” he added.

In 2009 and 2010, the World Bank Group, which includes the International Finance Corporation, contributed 17 billion dollars a year to the region. The amount has since shrunk to nine or 10 billion dollars a year, according to the Bank’s figures.

According to the vice president of research at the Pontifical Catholic University of Peru, Pepi Patrón, Kim’s background is important when it comes to moving the World Bank towards a kind of assistance that sees the different faces of poverty and its multidimensional nature.

She told IPS that this means a coordinated, multifaceted look at different areas: health, education, adaptation to climate change, public policies with a gender focus, and interculturalism, among other aspects.

“This new president is a doctor, not a banking and finance specialist, who has experience that helps him understand poverty, not only in monetary terms,” said Patrón, who is also a member of the Council of Eminent Persons who advise World Bank chief economist Kaushik Basu.

If only the monetary dimension is taken into account – in other words, the 284 soles (just over 100 dollars) a month that according to official figures put people in Peru over the poverty line – the poverty rate in Peru would be reduced to zero with just two percent of the public budget, Federico Arnillas, vice president of the Mesa de Concertación para la Lucha contra la Pobreza – a public-private partnership against poverty – told IPS.

When Kim lived in Peru, he worked as a doctor in the poor neighbourhood of Carabayllo, supporting the work of Gustavo Gutiérrez, the Catholic priest who wrote the first book on liberation theology, the progressive current in the Catholic Church in Latin America that attempted to respond to the question of how to be a Christian in a poor, oppressed region.

“This testimony is interesting because the challenge we are facing is how to put the option for the poor at the centre of policy-making,” Arnillas said.

Kim took advantage of his visit to Lima to meet with Gutiérrez and two dozen other representatives of civil society.

According to Patrón, who took part in the meeting, Kim said it was possible to avoid the “natural resource curse” and generate development, citing his home country, South Korea, as an example, which has progressed on the basis of technology, without mineral wealth.

Kim said there was no dichotomy between sound macroeconomic fundamentals and social development.

In Santiago, he highlighted experiences in the region that could serve as lessons, like Chile’s copper price stabilisation mechanism.

In La Paz, Kim presented a virtual map of Bolivia showing projects financed by international donors. He also launched a web site for Bolivians to offer suggestions and ideas to public institutions that implement projects or administer public services.

In addition, the World Bank signed a memorandum of understanding with the Bolivian government for the sustainable production of quinoa – a protein-rich seed from the Andean highlands – and other traditional agricultural products. The World Bank has projects worth more than 500 million dollars in Bolivia, South America’s poorest country.

* With additional reporting by Marianela Jarroud in Santiago.

An external review panel is calling on the World Bank to institute sweeping reforms to its widely cited annual “Doing Business” report, including doing away with a controversial ranking of countries on a variety of business-friendliness metrics.

Doing Business is put out jointly by the World Bank and its private sector arm, the International Finance Corporation (IFC), both based here in Washington, and has become one of the bank’s most high-profile publications.

“Over the decade that it has been published, Doing Business has achieved a great deal of influence,” Trevor Manuel, South Africa’s planning minister and chair of the review panel, said Monday at the audit’s London unveiling.

“It is the leading tool to judge the business environments of developing countries, generating huge global media coverage every year. Several countries – such as Rwanda – have used it as a guide to design reform programmes.”

Indeed, reportedly used by some 85 percent of global policymakers, the report has built up particularly outsized influence in the developing world, as government officials have competed to raise their index ranking.

Yet for this reason, critics have for years warned that the report was pushing countries to lower taxes and wages and weaken overall industry regulation, thus potentially endangering the poor.

On Monday, the 11-member panel, appointed in October by World Bank President Jim Yong Kim, offered strong backing for several of these criticisms, even while it stated that the report should continue to be published. Most prominent among these is the recommendation to do away with the aggregated Ease of Doing Business Index, introduced in 2006.

“The decision to retain or drop the aggregate rankings table is the most important decision the Bank faces with regard to the Doing Business report,” the review states.

“Removing it would defuse many of the criticisms levelled against the report, but would diminish the report’s influence on policy and public discussion in the short term. In the long term, however, doing so may improve focus on underlying substantive issues and enhance the report’s value.”

The report also calls for greater transparency within the reporting and evaluation processes, and urges the bank to move the report’s “home” from the IFC to the research department within the bank proper. This latter recommendation could be particularly important given past criticisms that the Doing Business team has been reticent to implementing any major changes.

In an unusual public statement ahead of the review’s publication, President Kim suggested that plans were afoot to make just such a change. Yet he also sketched out a clear stance on the overall importance of both the report and its rankings.

“It is indisputable that Doing Business has been an important catalyst in driving reforms around the world,” Kim said on Jun. 7. (The bank declined IPS’s request for further comment Monday.) “I am committed to the Doing Business report, and rankings have been part of its success.”

Pure knowledge

The Ease of Doing Business Index rankings are based on metrics drawn from 10 regulations and other factors impacting on a country’s business environment. These include permitting and registering, ease of getting credit and electricity, the legal framework for enforcing contracts and protecting investors, how much tax a company must pay and how a government regulates cross-border trade.

These data points are then distilled down to a single score, allowing World Bank researchers to rank all 185 countries the report covers. The 2013 rankings awarded top scores to Singapore and Hong Kong and bottom scores to Chad and the Central African Republic.

Yet the review panel is now warning that such aggregation tends to cloud crucial country-level variations.

“It is important to remember that the report is intended to be a pure knowledge project,” the review states. “As such, its role is to inform policy, not to prescribe it or outline a normative position, which the rankings to some extent do.”

The past year has seen significant pushback against such criticism of the rankings, from prominent voices within the business community as well as certain development scholars.

“I think these rankings really do have fundamental value, as without the rankings the Doing Business report is just one more research exercise among many the World Bank does,” Scott Morris, a visiting policy fellow at the Center for Global Development, a Washington think tank, told IPS.

“It is because of the ranking that this report has unique value to those countries that have a long way to go on economic reform. Think of a small sub-Saharan African country with a reformist government in place – how does it get international leverage for reform or gain global attention for what it has accomplished? The rankings exercise, with its very high profile, is tremendously valuable in this regard.”

Regulatory opportunity

While the Doing Business report has received regular low-level criticism since its introduction, much of this was technical.

Over the past year, however, the issue has become far more politicised, with certain countries – led by China – complaining that the report was biased in favour of capitalist systems. Beijing has wanted the World Bank to halt publication of the report outright.

Meanwhile, humanitarian, labour and other progressive groups have also stepped up calls to reform the report. On Monday, many of these groups found the panel review to be surprisingly in line with their own worries about Doing Business leading to a weakening of regulation.

“After years of working with small and micro enterprises in developing countries, (we) know that helping people to set up and run a business is only half the job,” Christina Chang, lead economist for CAFOD, the Catholic aid agency for Britain and Wales, said in an e-mail to IPS. “Without a conducive regulatory environment, the odds are stacked against their success and many may never even get off the ground.”

CAFOD has actively pointed to problems with scoring on the report.

“Some indicators are linked with a drive to lower labour standards and corporate taxation rates,” the agency states. “These are not ideas that other publications of the Bank endorse, and they should not be in their most influential publication.”

Yet the panel’s recommendations, some groups contend, now offer a potent opportunity.

“The panel’s report is a defining moment for World Bank policy to reflect the needs of working people, and a balanced approach to labour market regulation,” Sharan Burrow, general-secretary of the International Trade Union Confederation, said Monday in a statement. “If adopted, the World Bank has the opportunity to reshape the relationship between working people, business and governments.”

Children in a slum in Dhaka, Bangladesh, earn 44 cents a day cutting used condensed milk cans. Credit: Naimul Haq/IPS

By Gordon Brown
WASHINGTON, Apr 20 2013 (IPS)

“Recall the face of the poorest and weakest man you have seen, and ask yourself if this step you contemplate is going to be any use to him.”

Gandhi’s challenge from 1948 should be uppermost in our thoughts this week at the Washington summit led by U.N. Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, when we examine why progress to meet the Millennium Development Goals (MDGs) has stalled.

Gandhi’s challenge is this: who will speak up for the most marginalised – the out-of-school child, the child slave, the trafficked boy, the girl bride, the street child? Who will speak up for the most vulnerable and the hardest to reach? These are the forgotten millions that the MDGs were to do most to help. And yet the most revealing conclusion of our decade-long anti-poverty crusade is that despite great, and in some cases, outstanding progress, we have done least for those most in need.

This week in Washington, in the presence of Ban Ki-moon and Jim Yong Kim, we are discovering that unless we target resources on the most vulnerable, they will continue to miss out. While the MDG process has made huge strides for universal education, it has been best at plucking the “low hanging fruit” – with some of the most marginalised left high and dry. So there are still 15 million children working full-time when they should be at school, and ten million school-aged girls who get married every year, unlikely to return to education.

For these reasons, but also because of shortages of teachers and classrooms – and often sheer discrimination against girls – a total of 500 million girls growing up today will never complete their schooling.

Unfortunately our failure is no accident: universal goals, which do not explicitly target resources on the most vulnerable, mean that those who are already the most marginalised will continue to go without. Indeed, as we formulate a new set of post-2015 anti-poverty targets, we have to recognise that future MDGs will also fall short on delivery if they do not ensure more resources go to those in need.

Adam Wagstaff of the World Bank concludes from his studies on health as well as on education that: “It’s not actually true that progress at the population level will automatically entail faster progress among the poor. If inequalities in education and health outcomes across the income distribution matter, and if we want to see ‘prosperity’ in its broadest sense shared, it looks like we really do need an explicit goal that captures inequality.”

Our failure to reach those most in need is not just ethically indefensible for anyone who believes in equal opportunities. It is self-evidently bad for the MDGs: we can’t accelerate progress unless we get serious about reaching the poor.

So a new focus on the marginalised is central to new plans put by Ethiopia, Bangladesh, Nigeria, Yemen, the Democratic Republic of the Congo and others to the Washington summit this week. Nigeria is considering extending a World Bank pilot offering conditional cash transfers to girls in northern states who represent the largest group in the country’s ten million out-of-school population.

Ethiopia – which has seen one of the most rapid expansions of education enrolment anywhere in the world – is also now targeting the out-of-school girls in hard to reach rural areas who have so far not benefitted from the country’s progress. The DRC wishes to abolish school fees, which currently deter two million pupils from going to school.

Bangladesh wants to go further. It has also decided more resources are needed for the children of the flood zones and hill areas and the victims of child labour and child marriage – but it is also making an equity goal explicit in order to reach the most marginalised. It has committed to closing the gap in attendance rates between the richest and poorest income groups and to closing the learning gap between the best and poorest performing areas. Bangladesh faces a huge uphill fight to deliver on its new policy of increasing public spending on schools. It simply does not have the money for educational investment – either domestically or from the international community – to fund its new direction.

So while the public justification for all our efforts is to help the poorest, the frailest, the neediest and most vulnerable, we are coming to realise that our focus on universal goals must be matched by extra resources for the most marginalised. Indeed, when the next set of post-2015 MDGs includes more ambitious universal targets for learning outputs and secondary education, we must do more to prevent the most disadvantaged being left further behind. Put simply – as we start to raise the ceiling, we must not forget to finish putting in place the floor.

As Pauline Rose of the UNESCO Global Monitoring Report has concluded: “Unless we have a goal that tracks progress for the poorest and richest…on education access and learning, gaps are likely to remain when we reach the next deadline for goals.”

So one of the lessons to learn from more than ten years of experience in trying to meet the MDGs is that, without corrective remedies, unequal outcomes in one generation conspire with unequal access to resources in the next to make a mockery of genuine equality of opportunity. Here we rely on and are influenced by the original thinking of Indian economist Amartya Sen, who argues that “equivalent freedom” for people who come to the table with unequal advantages requires more resources to turn the right to equal treatment into real opportunity.

Fortunately there is already a growing consensus that without this focus on inequality we cannot meet our ambitions on behalf of the poor. In education we need what Kevin Watkins of the Overseas Development Institute calls “stepping stone” targets for reducing inequalities, with timelines for 2020 and 2025 on the way to our universal goals in 2030. Further commitments are required to reduce the gap in school attendance and completion rates between poorest and wealthiest and between best and worst performing areas.

What makes me convinced that we could gain support for these measures? It is that these forgotten millions that the MDGs were to do most to help are prepared to be silent no more.

Poor rural girls now know that they do not have the freedom to choose to go to school – and that the 2015 goal of schooling for all will not be worth the paper it is written on without a commitment to greater equity. Child labourers know that they have been left behind – and that their human right to education is not being delivered by their governments or the international agencies responsible.

I am struck by the energy, creativity and determination I see in these new civil rights movements, led by Malala Yousafzai. Children are providing leadership lessons from which we can learn.

(END/COPYRIGHT IPS)

Excerpt:

Speaking on Wednesday at his first major public address, new World Bank President Jim Yong Kim said the institution needs to be more flexible and responsive, as well as more open to innovations coming from the developing world.

Anticipation remains high in global development circles over Kim’s election to head the bank, given his widely lauded background in public health. Credit: Public domain

“We have to realise that it may be that it’s the most financially constrained areas where the greatest social innovations come from, that the pressure of those financial constraints can lead to great innovations – we have to be open to it,” Kim said.

“I think that’s the new world: lessons will come from everywhere. It’s not rich countries imparting their lessons on poor countries; lessons are going in every direction.”

A little over two weeks in the job, Kim said he is still “taking the temperature” of the multilateral funder, but offered initial reactions in a wide-ranging discussion at the Brookings Institution, a think tank here.

Anticipation remains high in global development circles over Kim’s election to head the bank, given his widely lauded background in public health.

“As a physician who has worked with the World Health Organisation and nongovernmental organisations to bring health care to marginalised communities, often in developing countries, Kim is the first leader of the bank without a traditional economics or political background,” Jessica Evans, a researcher on international financial institutions with Human Rights Watch here in Washington, told IPS following Kim’s talk.

“This experience should motivate him to lead the World Bank in bridging the false divide between development and human rights.”

On Wednesday, Kim said that “The world has changed and there are many lessons from the developing countries that can be useful.”

He pointed in particular to Latin America, characterising the region as “a fountain of innovation that can be useful all over the world … the model of social protection that has been pioneered in Latin America, we’re taking that to other parts of the world and I think that’s the future.”

With analysis of the impact of the ongoing European economic crisis on the developing world currently taking up significant time at the bank, Kim suggested that potentially key solutions could likewise be found in Latin America.

“We look at how Latin American countries were able to weather the economic crisis fairly well … what did they do?” he asked.

“They opened up their economies; they developed social-protection programmes like Progreso (in Mexico), Bolsa Familia in Brazil; they reduced income inequalities. This is how we can learn from developing and middle-income countries in thinking about responding to the economic crisis.”

He also pointed to the experience in South Korea during the last major international economic crisis, in the late 1990s. At that time, he said, ordinary Koreans started to give away around a billion dollars’ worth of their own gold and jewellery, to contribute to the country’s recovery.

“The issue was a very fundamental solidarity,” Kim said. “It strikes me that solidarity is a major question in the crisis today.”

Europe looming

The World Bank’s response to the economic meltdown in Europe has been of significant concern for development experts for months, amidst worries that the institution is not moving fast enough to halt the danger posed to developing countries.

“Developing countries are now the engine driving the global economy, accounting for around two-thirds of global growth,” Kim said on Wednesday. But “even if the crisis in the euro area is contained, it could still reduce growth in most of the world’s regions by as much as 1.5 percent.”

He noted that a major crisis in Europe could reduce gross domestic product in developing countries by four percent or more, “enough to trigger a deep recession everywhere. Such events threaten many of the recent achievements in the fight against poverty.”

While lauding Kim’s acknowledgment of the issue, Oxfam spokesperson Elizabeth Stuart told IPS in an e-mailed statement on Wednesday, “The World Bank needs to take fast action to protect developing countries from Europe’s debt crisis.”

Stuart notes that as the International Monetary Fund is bailing out Europe, “the World Bank needs to step up efforts to assist poor countries threatened by the euro zone crisis. It’s time for a bold new World Bank that acts in the interests of all its members, but especially those now most at risk.”

The institution’s ability to move nimbly and flexibly has clearly been noted within the bank itself, and appears to be a priority for Kim as he takes over the presidency.

Over the past few weeks, Kim says, he has been asking employees to define what they see as the institution’s best work. The overwhelming response, he reports, has been “when the bank moves quickly”.

“One-and-a-half billion people live in areas affected by fragility and conflict. No low-income fragile or conflict-affected country is on track to achieve even a single Millennium Development Goal,” he said.

“These countries need a World Bank that is far more responsive than it is today, and capable of delivering the right financial and technical support at the right time.”

Arab Spring lessons

Part of ensuring that mix will be a major new focus on partnerships with civil society.

“Growth and development have to be inclusive, ensuring that their benefits are broadly shared. As young people in Egypt and Tunisia have reminded us, even in middle-income countries, development gains have been uneven and incomplete,” Kim said.

Taking heed of “the lessons of the Arab Spring”, Kim announced the mid-June creation of a new initiative, the Global Partnership for Social Accountability, “the first time the World Bank will be allocating specific resources from its income to support a partnership with civil society.”

Human Rights Watch’s Evans told IPS that the onus will now be on the bank to put its weight behind this commitment to civil society, “by pressing countries to protect the rights to freedom of expression, assembly, and association and speaking out when these rights are violated.”

“Kim should lead the World Bank to work tenaciously to open space for civil society and the media,” she said, “and to promote government accountability.”

Incoming World Bank President Jim Yong Kim reported to work on Monday for the first time, telling those gathered at the bank’s headquarters here in Washington that he was “humbled and inspired to take over today as president”.

Jim Yong Kim. Credit: NIH

Kim also made it clear that he recognised that he was assuming the office at a critical time for both the world economy and the bank itself. In a separate statement released Monday, he noted that he was taking over “at a moment that is pivotal for the global economy, and defining for the World Bank as an institution”.

He continued: “The global economy remains highly vulnerable … My immediate priority will be to intensify the World Bank’s efforts to help developing countries maintain progress against poverty in these volatile times.”

Such a focus is directly in line with what many observers have been calling for in recent weeks. Kim, a Korean-American doctor who is widely admired for his work in international public health, takes over the presidency amidst new signs that the fragile global economic recovery might be faltering.

“You have the International Monetary Fund bailing out Europe, but we know that the crisis is already impacting the developing world, with very serious knock-on effects,” Elizabeth Stuart, with Oxfam International’s Washington office, told IPS.

“The World Bank has a very important role to play in shoring up countries that are still suffering from the impacts of the initial financial crisis.”

Oxfam is calling on Kim to take immediate action to protect developing countries from the faltering economies of the eurozone.

In mid-April, many development organisations decried the process by which Kim was selected for the presidency, which extended an unbroken tradition in which the United States’ preferred candidate is installed to head the bank.

Nonetheless, even at that time it was clear that a shake-up was in the works. In the run-up to Kim’s election, two other strong candidates, both from developing countries, were also in the running.

Unlike previous World Bank presidents, however, Kim is not an economist, diplomat or politician. This unorthodox background, coupled with his widely admired development experience, has led many to openly speculate about the possibility of a transformational tenure for his five-year term.

Stuart says it is already heartening to see that Kim’s introductory statement focused on the two key issues of growth and equity, without overlooking the changes that are surrounding the institution.

“He’s right that there’s an urgency both in the wider world and in the bank itself,” she says. “The bank has reached something of a crisis. Countries are cutting their aid budgets, and the bank will have to ask for new replenishment of funds for developing countries. For that, the bank will need to show that it’s getting value for money.”

Stuart cites three areas in which she hopes that a Kim presidency will show results. Within his first term, he could ensure that 15 million more children in sub-Saharan Africa will go to school, that an additional 200 million more people around the world are given access to free healthcare, and that no World Bank agriculture investments result in poor people being pushed off their lands.

A commitment towards these three issues, she suggests, could offer benchmarks for observers to gauge just how transformational Kim’s presidency could be.

Best days still ahead?

For his part, Kim didn’t offer much detail in his public statements Monday.

He emphasised that he would be continuing certain current policies, such as a priority on economic and social safety nets, as started by recently departed president Robert Zoellick, as well as basic income-protection programmes.

In addition, however, Kim’s statement includes a clear tone suggesting an open-mindedness to continued change. In the past the institution he now helms has been criticised for having grown too large and inefficient, and at times continuing to focus on outmoded approaches to poverty alleviation.

Yet Kim clearly recognises that the bank is in the midst of an evolution. He states that the institution “has embarked on an innovative modernization agenda” and notes the importance of “continuing to adapt to a world that is changing profoundly”.

“I believe the World Bank’s best days are still ahead,” Kim says. “The economic success of emerging market economies, the rise of citizen power led by young people and the unprecedented penetration of new technologies are challenging old development paradigms.”

He continues: “A central part of my responsibility in the next five years will be to ensure that the Bank’s distinctive strengths are aligned with the needs of a world in transformation and transition.”

Still, one issue that Kim has yet to officially address is the World Bank’s role and responsibility regarding human rights, a long-time concern for some critics.

In a Washington Post article published on Friday, law professor Galit A. Sarfaty wrote: “Human rights are inextricably linked to the Bank’s mission and critical for the agency’s legitimacy, and yet internal obstacle after internal obstacle has marginalized the issue. In order for the Bank to effectively respond to pressing development challenges abroad, Kim must first show leadership on this challenge at home.

“If Kim gets it right, the collision between new Bank leader and old Bank culture won’t be pretty – but it will set in motion the only organizational shift that could make the World Bank successful at reducing poverty worldwide.”