The Jakarta Post
Several names have been mentioned as potential candidates to replace World Bank President Jim Yong Kim, who is set to step down from the position in February, and Indonesia’s source of pride, Finance Minister Sri Mulyani Indrawati, is one of them.
Since its creation at the end of the Second World War, an American has always led the World Bank, while a European has led the International Monetary Fund (IMF) – the Bank’s sister institution – as part of a gentlemen’s agreement between the two economies.
Kim, who had been handpicked by then-US president Barack Obama in 2012 to lead the Bank, abruptly announced last week that he would leave, more than three years before his tenure ends. He will join private equity firm Global Infrastructure Partners. World Bank CEO Kristallina Geogieva will act as interim president until Kim’s successor is appointed by the Bank’s executive directors.
The Washington-based lender said in a statement that it was committed to an “open, merit-based and transparent selection process”. The Bank would accept nominations for its new president between Feb. 7 and March 14 and was expected to select a new president before its Spring Meetings later this year.
Mark Sobel, a former US executive director with the IMF, commented that it was time for developing countries to challenge the decades-old convention, saying the “changing global economic landscape makes the convention outdated”.
In his comment published through the Official Monetary and Financial Institutions Forum (OMFIF) – an independent think tank, Sobel said it was time for a non-American to lead the bank, and he recommended Sri Mulyani as well as former Nigerian Finance Minister Ngozi Okonjo-Iweala, both former managing directors at the World Bank, to hold the top position at the international lender.
Sobel added that Sri Mulyani’s “tremendous expertise” at the World Bank as well as her reputation across the globe made her an ideal candidate to lead the Bank.
Sri Mulyani Indrawati short bio (JP/Sandy)
Gadjah Mada University economist A. Tony Prasetiantono said it would be “fantastic” if both the World Bank and the IMF were led by women. French citizen Christine Lagarde is the top person at the IMF right now.
He said Sri Mulyani had the right attributes to succeed Kim. “She was one of the World Bank’s [former managing] directors, a good Finance Minister and comes from a developing country, which allows her to understand the problems of development in the developing countries,” said Tony.
However, Tony said the prospect of Sri Mulyani leading a prestigious multilateral institution such as the World Bank was a dilemma for Indonesia’s economy, considering her recent achievement in safeguarding the 2018 state budget.
United States President Donald Trump has yet to name Kim’s successor, while the Financial Times reported that several names had been considered, including former US ambassador to the UN Nikki Haley, the head of the US Agency for International Development (USAID). US Treasury official David Malpass as well as Ivanka Trump, the president’s daughter, were also touted for the position.
On Monday, however, Jessica Ditto, the White House deputy director of communications, said Ivanka Trump would instead help President Trump choose the Bank’s president.
University of Indonesia (UI) economist Ari Kuncoro said the appointment of Sri Mulyani would help the World Bank keep itself relevant in the current economic situation. Sri Mulyani, he said, would be a perfect candidate.
“The World Bank needs to have a leader with an academic background who has an understanding of banking, the financial system as well as development economics,” said Ari.
Finance Ministry spokesman Nufransa Wira Sakti said despite the talk about his boss being touted as the Bank’s president, Sri Mulyani was committed to managing Indonesia’s financial affairs, as mandated by her current position in the government.
Coordinating Maritime Affairs Minister Luhut Pandjaitan expressed doubt that a non-American would lead the Bank. "I am not sure that she could be appointed as the president, since the bank has been led by a US citizen ever since its establishment," Luhut said. (das)