HomeWorld BusinessThree-way World Bank race seen as deadline looms

Three-way World Bank race seen as deadline looms

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WASHINGTON – The United States faces an unprecedented challenge to its grip on the World Bank presidency, with emerging African economies nominating a candidate on Friday to set up the first contested bid for the top job at the global development lender.

Angola, Nigeria and South Africa endorsed the nomination of Nigerian Finance Minister Ngozi Okonjo-Iweala, a respected economist and diplomat, as a candidate to take over the bank when Robert Zoellick steps down in June.

“The endorsement is in line with the belief that the appointment of the leadership of the World Bank and its sister institution, the International Monetary Fund, should be merit-based, open and transparent,” the three said in a statement.

It was a rare example of unity among countries often at loggerheads as they strive for dominance on the continent.

Less than a day before the deadline to nominate, Washington has yet to announce its candidate — normally a shoo-in and still considered likely to be the appointee.

The United States has held the presidency since the bank’s inception after World War Two, and a European has always headed the IMF.

Brazil would like to nominate former Colombian finance minister Jose Antonio Ocampo, but it can’t do so without Colombia’s support, which now looks unlikely.

While Ocampo had agreed to stand and Brazil was willing to nominate him, Colombian Finance Minister Juan Carlos Echeverry said on Thursday his country was instead focusing on a bid for the presidency of the International Labour Organization.

He said that effort had a greater chance of success than going for the World Bank job because Colombia already held the top post at the Inter-American Development Bank.

Russia, a member of the so-called BRICs caucus of large emerging market economies, has refrained from publicly backing a non-U.S. candidate and instead called for a greater role for them in top management at international financial institutions.

U.S. CANDIDATE A MYSTERY

Although the World Bank board would like to reach a consensus, Washington retains the largest single voting share and could expect the support of European nations and Japan, the bank’s second-largest voting member.

While the Obama administration has said it would nominate someone, its choice remains shrouded in mystery.

Nancy Birdsall, president of the Center for Global Development in Washington, said the delay in naming a U.S. candidate had opened the door for others.

“For the first time there is a competition, or there is at least the initial perception of a serious competition. And, the only way to get open, merit-based and transparent is when there is competition,” she said.

The rise of emerging economies such as China, India and Brazil has put pressure on the United States and Europe to throw open the selection process for both the bank and the IMF.

Last year, all of the bank’s 187 member countries agreed on a transparent, merit-based process to select a president.

Sources familiar with the Obama administration’s thinking have said the White House short-list included Susan Rice, the U.S. ambassador to the United Nations, PepsiCo’s Indian-born CEO Indra Nooyi, U.S. Senator John Kerry, and Lawrence Summers, a former economic adviser to President Barack Obama.

Another name that has surfaced in recent days is Laura Tyson, a professor at the University of California, Berkeley, and an expert on international trade and competitiveness.

While the State Department has ruled out Secretary of State Hillary Clinton taking the job, she remains a viable candidate in the eyes of some observers.

FRIDAY DEADLINE

So far, the only candidate officially nominated is U.S. development economist Jeffrey Sachs, who acknowledges he does not have Obama’s support. His candidacy is backed by smaller developing countries, such as Bhutan, East Timor, Haiti, Kenya, Guatemala and Chile.

The deadline for nominations is 6 p.m. Washington time (2200 GMT). The World Bank board of member countries will then shortlist the names of three candidates and finalize its choice by the time of the IMF and World Bank semi-annual meetings on April 21.

The new head of the bank will be taking over as the euro zone debt crisis slows the global economic recovery, undercutting demand in emerging and developing markets.

The person will have to decide how best to deploy resources in a budget-cutting environment in which large bank shareholders such as the United States are demanding results-based development, more transparency and greater efforts to tackle corruption.

Birdsall said the nomination of a credible candidate such as Okonjo-Iweala “upped the ante for the U.S. to have a really strong candidate.”

“It is a sign that we’re living in a world where the geopolitical landscape is shifting and the U.S. can’t do things by itself,” she said.

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