Percy S Mistry has, in an article in The Financial Express, bemoaned the decline of the World Bank and pointed to the lightweight nominees put up for the choice of its next president. He also asks why India and China don’t have nominees. To sharpen our thinking, we can float a list of the best possible names globally (even if the choice this time is a foregone conclusion), and also spell out how the bank needs to reinvent itself. Mistry correctly notes that Robert McNamara’s stewardship marked the golden age of the bank. The former US defence secretary, after becoming the lightning rod for global anger over the Vietnam War, went on to reinvent himself by rendering historic service at the bank.
Looking back, no modern-day Indian could have filled the role better than I G Patel. After successively heading the Department of Economic Affairs, the Reserve Bank of India and the London School of Economics, he became one of a group of wise men who were repeatedly called upon to draw the contours of a better world. Manmohan Singh, whose career ran in tandem with Patel’s, would have been a formidable nominee had he been available and younger.
As Mistry has pointed out, the next president of the bank should be an easily recognisable global figure who would have the ear of world leaders. A big name is Tony Blair, the UK’s long-serving prime minister, who had everything going for him till he became George W Bush’s poodle over the Iraq war. Blair’s ability to organise and lead is phenomenal. His development credentials rest on Britain’s initiatives on Africa during his tenure; he is currently seeking to foster a dialogue in West Asia. McNamara and Blair were great generals who made a major mistake in their careers; Blair, too, will want a second chance.
If Blair is still too controversial, it is worth looking at Michael Bloomberg, the distinguished mayor of New York City (he has transformed it) and eponymous owner of the top-ranking financial data services firm. He is conservative, but not in the unredeemable Tea Party mould. Having built Bloomberg, he should know what it takes to energise a large organisation. President Obama periodically meets him, ostensibly to secure bipartisan endorsement for his re-election.
But perhaps the most fabulous name, striding the worlds of business and philanthropy, is Bill Gates. He built Microsoft ruthlessly and successfully; has a sense of equity (children should not inherit too much); and the Bill and Melinda Gates Foundation, the largest philanthropic outfit in the world, runs like a large efficient corporation. The only minus is he will likely not be available.
Perhaps the weightiest name in today’s world of emerging Asia and its coming global clout is Chinese Premier Wen Jiabao. He is a pragmatic moderate in today’s China and has talked about the unsustainability of China’s present system without political and economic reforms. He has been the human face of China’s top leadership, who has been repeatedly sent to all the hot and disaster spots in the country that need solace and public support.
Why look at such big names? One of the Bretton Woods twins (along with the International Monetary Fund, or IMF), the bank was set up when mankind, ravaged by repeated wars, wanted to idealistically build a better world, with the invaluable advice and architectural support from the intellectual giant John Maynard Keynes. Today, the world is at a similar crossroads, ravaged by the financial crisis and the setbacks to the developed economies which brought on the Great Recession. There is a need to begin anew to build a better world.
The face of global poverty has changed in the last 60 years. Income poverty has been successfully challenged across geographies but the unfinished agenda remains encapsulated in the unmet millennium development goals. Despite higher incomes, any reasonable measure of well-being eludes many. Also, two macroeconomic challenges loom: freely floating exchange rates have not delivered and global imbalances abound.
An enormous intellectual effort by credible organisations with the right research departments will be needed to understand what is wrong with individual economies, be it Greece or Portugal, devise structural adjustment regimes, supervise them, benchmark and periodically adjust exchange rates and create global financial backups to defend them. This is too big a job for one IMF. You need a second opinion. If the IMF prepares country reports with cold rationality, the bank can prepare them with a human face. The world needs the bank, which must rejuvenate and grow the skills that reside in it, and the bank needs a great leader who is at least half the giant that Keynes was.