(Bloomberg) – Jim Yong Kim has abruptly resigned from his tenure as president of the World Bank more than three years earlier than expected, which could potentially lead to an international dispute over who replaces him. The Trump administration is questioning the purpose of the lender.
Kristalina Georgieva, the second in charge of the bank, will take office as interim president on February 1, announced Monday the bank based in Washington in a statement. In an email to the lender's employees, Kim announced he would join a private company specializing in infrastructure investments in developing countries.
"The opportunity to join the private sector was unexpected, but I concluded that this is the means by which I can have the greatest impact on major global issues such as climate change and the infrastructure deficit in developing countries. emerging markets, "Kim said. .
Kim, 59, began his second five-year term at the bank on July 1, 2017. He helped the lender obtain support from its member countries in April for a $ 13 billion capital increase. after the United States abandoned the World Bank's proposals for restraint. Resources.
President Donald Trump should now propose a favorite US candidate to replace Kim, who has been nominated by Barack Obama. The choice may be controversial if the proposed candidate expresses disdain for international institutions such as the World Trade Organization and NATO.
The President's National Security Advisor, John Bolton, wrote an article in 2016 citing arguments for the privatization of the World Bank, while Undersecretary of the Treasury for International Affairs, David Malpass, said: Is asked why the bank lent so much money to China while the country has already done so. access to global financial markets.
Trump's decision could affect the way the bank deploys its capital at a time when emerging markets are facing increasing tension due to rising US interest rates and trade tensions. The World Bank committed nearly $ 64 billion in loans to developing countries during the fiscal year ended June 30.
The United States is the main shareholder of the development lender, which was designed during the Second World War to finance the reconstruction of Europe. Since then, he has focused on reducing extreme poverty around the world.
An American has run the bank since its inception in 1945. His sister institution, the International Monetary Fund, has always been run by a European, under an unwritten agreement between the Western powers. The former French Minister of Finance, Christine Lagarde, is currently at the head of the IMF.
But some countries have asked for emerging market representatives. The selection process is managed by the bank's board of directors, which represents the lender's 189 member countries.
"It has always been a question of coalitions, and the coalition between the United States and Europe is the largest in 75 years," said Scott Morris, Research Fellow at the Center for Global Development and former sub- Assistant Secretary for Development Finance in the United States. Treasure under Obama. "It's hard to see a solid base to keep holding."
The Trump administration could face resistance from other countries if the president proposed a candidate openly hostile to the bank, he said. "They have to go out and get these votes from other member countries, and nothing is certain."
While the US president traditionally appoints the person who ultimately runs the bank, the lender's board of directors has the last word. The council said Monday that it would immediately begin the process of selecting Kim's successor.
Kim was named in 2012 to succeed Robert Zoellick. Kim was formerly President of Dartmouth College and Head of the HIV / AIDS Department of the World Health Organization. He was born in Seoul and grew up in Iowa. He holds a medical degree and a PhD in anthropology from Harvard University.
Kim's resignation surprised the staff and the board of directors, said a person familiar with the case who requested anonymity. Kim informed the executive council at a meeting Monday morning, after giving little guidance on his intention to leave, the person said.
Kim has a close relationship with Ivanka, Trump's daughter, who works as a White House advisor. In 2017, the bank created a fund to finance women entrepreneurs, an idea developed jointly with the president's daughter. The fund planned to invest more than $ 1 billion to improve women's access to capital.
(Updates with the analyst quote in the 11th paragraph.)
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