Hard-hitting help
October 10, 2013
World Bank head Jim Yong Kim will face a challenge when finance ministers and federal banking heads for 188 countries meet in Washington for the annual meeting of the International Monetary Fund (IMF) and the World Bank.
The World Bank always stands in the shadow of its sister organization - and Kim in the shadow of its chief, Christine Lagarde. That's not a big surprise, as the IMF acts as the United Nations' firefighters, jumping in and pouring money onto financial crises - of which there have been plenty in past decades.
The World Bank, on the other hand, makes far fewer headlines. Founded by the United Nations after World War II to finance the rebuilding a decimated Europe, the institution is now tasked with providing development aid. Through financial help, consultation and technical assistance, the World Bank is supposed to help developing countries combat poverty.
Do good, loudly
The World Bank works in a tough business that only makes headlines when money falls into the wrong hands or when large projects are threatened with failure. Kim, a Korean-American medical doctor who's headed up the bank for a little over a year now, wants to change this: He wants to do good, and he wants people to know about it.
More than $100 billion in World Bank loans are currently circulating for around 700 development projects in more than 100 countries. But not all these projects make sense. Critics have questioned, for example, loans to India's national banks, or if countries like Poland or Turkey, which have barely been affected by the financial crisis, really need millions from the World Bank.
Help for fragile states
Kim wants to change this. He wants to make the World Bank more hard-hitting and efficient, and concentrate new projects into states that really need it: states that have fragile governments and institutions, or that have recently emerged from violent conflict.
The countries of the Arab Uprising seem particularly important to Kim. He said he wants the World Bank group to confront challenges in these fragile states: "When we have the opportunity to build institutions, infrastructure and human capacity in fragile states, or when we can put together a deal that brings in desperately needed private sector investment, we must seize it."
Kim does not see it as a coincidence there were periods of economic growth in many of the countries that saw protests related to the Arab Uprising. But the problem, he said, is that the growth was not evenly distributed, fueling discontent and excluding many people from stable employment and prosperity.
"When a million people poured into Tahrir Square in Cairo in 2011 to protest their government, the children of the protesters held protests of their own classrooms - they demanded better instruction," Kim said. "This is what happens when prosperity is reserved for a selected few. All of those left out feel deeply the burn of inequity."
Post-conflict states are the most effective lever with which to combat poverty - this seems to be Kim's credo. About 20 percent of the world's population still has to live off of less than $1.25 per day. Kim wants to halve this percentage, then halve it again, then eliminate it altogether. And he wants to do all this within a single generation - by 2030. He just needs to convince the bankers and politicians of this at the annual meeting.