Former World Bank President Jim Yong Kim - Credit Bloomberg
Jim Yong Kim abruptly resigned as president of the World Bank more than three years before the end of his term.
Tuesday 08, January 2019
(Bloomberg) --The World Bank’s search for a new leader will be the latest test of President Donald Trump’s pledge to put ‘America First’ in the nation’s foreign policy.
Kristalina Georgieva, the bank’s second in command, will take over as interim president on 1 February, the Washington-based bank said Monday in a statement. In an email to employees of the lender, Kim said he’ll join a private firm focused on infrastructure investments in developing countries.
“The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets,” Kim said.
Kim, 59, began his second five-year term at the bank on July 1, 2017. He helped the lender win support from its member countries in April for a $13-billion capital increase, after the US dropped proposals to limit the World Bank’s resources.
President Donald Trump will now be expected to put forward a preferred American candidate to replace Kim, who was nominated by Barack Obama. The choice could prove controversial if the nominee shares Trump’s own disdain for international institutions such as the World Trade organisation and NATO.
Trump’s decision could affect how the bank deploys its capital at a time when emerging markets are facing growing stress from rising US interest rates and trade tensions. The World Bank committed nearly $64 billion in loans to developing countries in the fiscal year ended June 30 last year.
The US is the largest shareholder in the development lender, which was conceived during the Second World War to finance the reconstruction of Europe. It has since focused on alleviating extreme poverty around the world.
An American has run the bank since it was established in 1945. Its sister institution, the International Monetary Fund, has always been led by a European, as part of an unwritten understanding between Western powers. Former French Finance Minister Christine Lagarde is the current head of the IMF.
But some nations have been pushing for a representative from emerging markets. The selection process is managed by the bank’s board of executive directors, which represents the lender’s 189 member countries.