Signs that U.S. has yet to make World Bank choice

WASHINGTON Tue Mar 20, 2012 4:35am IST

U.S. Ambassador to the United Nations Susan Rice speaks at the White House in Washington, in this February 28, 2011 file photo. REUTERS/Jim Young/Files

U.S. Ambassador to the United Nations Susan Rice speaks at the White House in Washington, in this February 28, 2011 file photo.

Credit: Reuters/Jim Young/Files

Related Topics

WASHINGTON (Reuters) - With just five days to go for nations to put forward nominees to lead the World Bank, there are few signs the United States has finalized its choice to lead the global development lender.

The United States has held the presidency of the Bank since its founding after World War Two, while a European has always led its sister institution - the International Monetary Fund.

But Washington has yet to publicly identify a candidate and some observers think the delay could signal that the White House is having a hard time convincing high-level officials to take the job. The White House and U.S. Treasury Department have declined to comment.

Sources with knowledge of the administration's thinking say the hope was to convince a woman to enter the race to replace Robert Zoellick, who has said he will step down when his term expires at the end of June.

Naming a woman could go some way to address calls from emerging-market nations for a change in the status quo. A woman has never led the bank.

Two sources said Susan Rice, the U.S. ambassador to the United Nations, was a leading contender. However, it is not clear she wants the job. Rice's name often surfaces as a possible candidate to succeed Hillary Clinton as U.S. secretary of state.

When asked last week how she would help South Sudan if she was president of the World Bank, Rice replied: "Ridiculously hypothetical."

U.S. Senator John Kerry and PepsiCo's Indian-born CEO Indra Nooyi had also made an Obama administration short list, according to a source, although Kerry has publicly ruled out the job and another source said Nooyi was no longer in contention.

Another short-list member, Lawrence Summers, a former adviser to President Barack Obama and a one-time U.S. Treasury secretary, has declined to comment. He told Reuters he would leave the selection process to the officials in charge of it.


The delay in identifying a U.S. nominee could leave the door open to a dark-horse candidate from the United States. It has also given other nations time to consider their own nominees.

"It wouldn't be the first time in history that the White House had to scramble a bit," said Whitney Debevoise, a former U.S. director to the World Bank board.

"I think they have lost the opportunity to put a name out there early and make it uncontested," he added. "Usually ... if the U.S. puts a name out there, then nobody else wants to put their name up because they know they don't have a chance."

Emerging and developing countries have been pushing to have more say at both the World Bank and IMF, and have said the decision on Zoellick's successor should be merit-based.

Developing and emerging market economies are currently in consultations on putting forward names of non-U.S. candidates. The dilemma for developing regions, however, is finding candidates willing to come forward in a race in which the outcome is felt to be pre-ordained.

Indeed, the two most talked about names among developing countries are former World Bank Managing Director Ngozi Okonjo-Iweala, now Nigeria's finance minister, and Trevor Manuel, the South African national planning minister. Former Indonesian finance minister and current World Bank Managing Director Sri Mulyani Indrawati, and Mexico's central bank governor Agustin Carstens have ruled themselves out.

World Bank board sources said a possible arrangement could arise in which developing and emerging economies would be assured the top job at the Bank's private-sector lender, the International Finance Corp. IFC CEOs have mostly been European.

The World Bank's 24-member board, which represents all of the institution's 187 member countries, has set a deadline for Friday for nominations to lead the Bank, and has said it would decide on the next president within a month.


U.S. economist Jeffrey Sachs, a professor at Columbia University, is the only formal candidate to have emerged so far. He has been formally nominated by Bhutan and a cluster of developing countries including East Timor, Jordan, Kenya, Namibia and Malaysia.

Sachs picked up support from Chile and Guatemala on Monday, according to his website

"Jeffrey Sachs is a good economist and a very good candidate, but we expect to see the rest of the names and what follows in the process," Mexican Finance Minister Jose Antonio Meade said on Sunday.

Last week, 27 U.S. lawmakers wrote to President Barack Obama to "strongly" encourage him to nominate Sachs. Sachs, whose self-proclaimed candidacy aims to challenge what he sees as a history of political appointments by the White House, acknowledges he lacks the Obama administration's support.

"They're not talking to me," he told Reuters.

With his early nomination, Sachs has had a head start in lobbying for support among developing countries where he has a proven track record on issues such as education, health, climate change and fighting poverty.

"I have spoken with at least a couple of dozen leaders around the world in the last week and believe I have strong worldwide support in every region of the developing countries, and a lot of support in Europe as well," Sachs said.

"For the European countries, they are not surprisingly saying that they are overwhelmingly likely to defer to the U.S. nominee and that they are waiting for that," he added.

Sachs said while the United States was still likely to determine who gets the job, a growing push among developing countries for change suggested that was not a sure bet.

"I don't think it is automatic because of feelings that this is an important institution and an important moment, and I don't think the U.S. has simply the green light to choose anybody."

U.S. officials argued that it is important for the United States to retain the presidency of the bank, otherwise U.S. political support and funding for the institution could erode, given that Congress is focused on budget cutting.

The United States is the World Bank's largest donor.

(Reporting by Lesley Wroughton; Editing by David Brunnstrom)


After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Barack Obama in India

Reuters Showcase

Coal Mining

Coal Mining

India to open coal to commercial mining firms soon, minister says  Full Article 

RBI Loan Rules

RBI Loan Rules

RBI relaxes overseas loan recast rules   Full Article 

E-commerce Firms

E-commerce Firms

Amazon, e-commerce rivals fuel commercial property boom in India  Full Article 

Growth Forecasts

Growth Forecasts

Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll.  Full Article 

Uber is Back

Uber is Back

Uber back in Delhi; govt says must await approval.  Full Article 

Markets at Record

Markets at Record

Sensex rises to record after ECB stimulus programme.  Full Article 

Pharma Sector

Pharma Sector

Ipca Labs hit by FDA ban on plant for standard violations.  Full Article | Related Story 

Forex Reserves

Forex Reserves

India FX reserves at record high as RBI fortifies defences  Full Article 

QE for Euro Zone

QE for Euro Zone

ECB launches 1 trillion euro rescue plan to revive euro economy.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage