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Mark Weisbrot, Patrick Bond and Elaine Zuckerman discuss and debate Obama’s “surprising” nomination, now head of the World Bank

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington.

When President Obama announced that Jim Yong Kim would be the American nominee to head the World Bank, it was, as everyone said, surprising. This was a man who was considered a leader in global health care reform and not your likely choice to head the World Bank, an institution that’s mostly been known as a lever of neoliberal economics in the development of the—in the developed world. Well, some people have suggested this isn’t more than a change of image, and, as I said, others think it might be a fresh direction.

Now joining us to discuss and debate all of this: starting with Patrick Bond, Patrick joins us from South Africa, where he is the director of the Centre for Civil Society, a professor at the University in KwaZulu-Natal in South Africa. He’s also the editor of a recently released book, Politics of Climate Change: Justice and Durban’s Climate Gamble. And also joining us from Washington, Elaine Zuckerman. She’s the president of Gender Action, which is the world’s only organization dedicated to promoting gender justice in all international financial institution investments. And sitting next to her is Mark Weisbrot. Mark is the codirector of the Center for Economic and Policy Research in Washington. He’s a regular columnist for The Guardian and a regular contributor to The Real News Network. Thank you all for joining us.

So, Mark, let’s start with you. You wrote a piece where you said that the appointment of Kim is really a victory, you said, for progressive forces who’ve been pressuring President Obama to make such an unlikely choice. So what is your take on him? And why do you think this is a victory of sorts?

MARK WEISBROT, CO-DIRECTOR, CENTER FOR ECONOMIC AND POLICY RESEARCH: Well, I think that you could look at it even just from the point of view of U.S. politics. You know. There were many millions of people who voted for President Obama who expected he would make—he would choose at least one person in his cabinet something like Kim, and he didn’t do that. So Kim is a very different type of person than anybody that President Obama has appointed to anywhere.

JAY: What is it about Kim that makes you think so?

WEISBROT: Well, it’s just his track record. I mean, he was a cofounder of Partners in Health, which is a very progressive organization that has done amazing things in a number of countries, including Haiti, in bringing health care and fighting disease in poor countries. That’s how he’s spent his life. If you look at the last 11 presidents of the World Bank, they’re people who spend most of their adult life trying to get rich and getting rich and getting powerful, and they were insiders, and they were there to really pursue a U.S. agenda politically and economically. So, I mean, it may be that Kim won’t be able to change enough to satisfy him in terms of being there. Maybe he’ll have to leave. But he’s definitely a different type of person than the bank has ever had, and different from any kind of appointment that this president has made anywhere.

JAY: Elaine, what’s your take on the appointment?

ELAINE ZUCKERMAN, PRESIDENT AND FOUNDER, GENDER ACTION: I think Kim is a refreshing choice. I’ve always admired his work over decades in promoting public health, serving the poor around the world. I think he’s done a magnificent job of that. I do fear, however, that given that the World Bank professional staff consists of something like ninety-something percent of the staff being neoliberal economists, I do fear that Kim’s voice could be drowned out, that he will not have the language to stand up to the mainstream neoliberal voices in the World Bank. It is a fear. It’s a concern.

I wish I’m wrong. I hope very, very much that I’ll be wrong. I know that in the past Kim has expressed views that were actually quite critical of the World Bank, the kind of critical views that I think all three panelists on this program have made about the World Bank pressing, actually requiring the poorest countries of the world to cut, for example, public health spending, which means that poor people no longer have access to health services that they would’ve had before. So—and that’s just one example. I wish that Kim’s views of the past will prevail in the World Bank. I’m not sure that it’s possible in an entrenched paradigm that has ruled the bank for six decades.

JAY: Patrick, what’s your take?

PATRICK BOND, GLOBAL ECON. PROJECT DIR., INST. FOR POLICY STUDIES: Well, let me amplify those statements, because they’re all correct, simply to add to Mark’s—this thing of his CV accomplishments, that Kim at the World Health Organization joined activists around the world, including from here and South Africa, the Treatment Action Campaign, to make a huge dent in one of the most profound corporate bastions of the recent period, that is, intellectual property rights, because they were able to get antiretroviral medicines to treat AIDS to millions of people who would have paid $15,000 had they had the money or just not got those medicines. And that’s an extraordinary accomplishment that came both from the bottom up as well as from Kim’s role at the WHO, a notoriously bureaucratic organization.

And, I think, to add to Elaine’s concerns, one of the questions of his language is whether he’s quickly trying to forget his prior left-wing critiques of the World Bank. And in The New York Times interview last week, as well as in his own interview at the World Bank, Jim Kim was practically apologetic about his earlier criticism, and claiming, with no real evidence, that the World Bank had changed and was actually pro-poor, colleagues like Paul Farmer and John Gershman added in The Washington Post. And I think this is a travesty. I hope that the search for a job of this sort does not drown out what we know of Jim Kim’s prior commitment to progress and to honesty.

JAY: Well, you actually went so far, Patrick. You wrote very recently that the best thing he could do if he gets this job is resign.

BOND: Well, I think the danger—the reason I wrote that is the danger is that just like Barack Obama coming to power three years ago and forgetting all of his promises and legitimizing the bailouts of Wall Street and ongoing U.S. militarism and the destruction of the U.S. Constitution, we may see Jim Kim relegitimizing the World Bank. And all of those activists around the world and all of the ordinary people who understand that the World Bank has been, really, a policeman for Wall Street, for the City of London, for the big banks all around the world, and the brain of neoliberalism will be terribly disappointed if the momentum we’ve made to critique the bank is suddenly reversed with only a superficial change at the top, someone who is going back on his earlier beliefs for what appear to be opportunistic reasons. That would merit resignation pronto.

JAY: Mark, what’s your take on that, that this is more about image and rebranding than it is about change of policy?

WEISBROT: Well, I’m not really worried about that. I think that, first of all, the civil society groups that have been criticizing the bank will continue to do so. And so that’s not going to change, no matter who’s in charge of the bank. They’re still going to be doing bad things. And so, you know, it will be a struggle, I mean, and Kim will have to fight against the members of the board of directors, the United States and its allies. But I don’t think that that would be a reason for not taking the job.

I mean, every—you know, look at the—you know, if you want a comparison, I mean, look at the governments of Ecuador or Bolivia, for example, left governments in South America. These presidents took control of governments that were corrupt, they were inefficient, they were all kinds—they were neoliberal in every sense, as Patrick’s describing the bank; and they changed some things, and the other things they’re still trying to change. So it’s still definitely worth a try.

JAY: But doesn’t this suggest, then, that there’s been a change of heart of President Obama, in the sense that one would think if he nominates Jim Kim, they’ve talked to each other, and they have some idea, Obama has some idea what Jim Kim plans to do? And, I mean, where do you see any evidence of a change of U.S. policy, in terms of the developed world, in any other international forum or anywhere else where, as far as I understand it, they’re actually fighting many of the developing countries on questions like food speculation and things like that?

WEISBROT: No. Of course not. But I don’t think that’s what happened here. What happened here is that, first of all, President Obama doesn’t care about the World Bank, really, at all. He’s concerned with his reelection. And he was running into a problem and a deadline. And so he wanted to appoint Larry Summers, as we all know, and barring that, he had a couple of other choices that would have been about as bad, and he got stuck because of circumstances. First, Jeff Sachs entered the race by himself, got the support of a number of countries, changed the whole media coverage so that it became very difficult for President Obama to appoint, as had been done in the past, a crony, an insider, somebody that didn’t know anything about development or had no experience also. And so it became—he was really running up against the deadline, and he just found a way out. That’s why it’s so unusual, and it really does stand out against all his other appointments. It was really circumstantial.

JAY: Elaine, what you make of this? This—there’s a suggestion here this is actually somewhat more about rebranding Obama for the sake of the election. Or is it about rebranding the World Bank? Or is it more than just rebranding?

ZUCKERMAN: I think that Kim’s selection is definitely a rebranding at a superficial level, in that, hey, we have this development specialist with decades of experience fighting for the poor heading the World Bank. However, I still feel, besides already having mentioned that those neoliberal economists who prevail in decision-making in the World Bank are still going to have a very powerful voice, in addition, Kim, like every other World Bank president, will get his marching orders from the U.S. Treasury, from Geithner and Geithner’s staff. Really, that’s where the decision-making in the World Bank for the U.S. comes from. And the U.S., as you know, remains the largest voice in the World Bank decision-making process, and that decision-making will come from Treasury.

Also, I’d like to agree with Patrick in having brought up—and Mark—the role of Wall Street and, I’d like to say, multinational, transnational corporations. I’d like to point out that really at the fundamental level of what drives the World Bank in its decision-making, one has to look at the role of transnational corporations who are the winners of the World Bank’s so-called competitive bidding contractual process, who win the bids to build the infrastructure projects, to supply all the goods and services for World Bank loans. They are the real winners, they are the beneficiaries, so far they have been, rather than the poor people of the world. If Kim could reverse that process and really make poor people the beneficiaries—as the World Bank claims they are—of World Bank investments, that would be an amazing change. But I fear with both the U.S. Treasury and corporations behind the World Bank, that’s a very, very great challenge that will be hard to meet.

JAY: Patrick, what would you like to see Jim Kim do to show that this is more than window dressing? I mean, as Elaine just said, he’s actually going to have to almost off the bat start by defying the same people that just appointed him—or nominated him, at any rate. But what would be some objective criteria for you that would say, okay, he’s actually doing something different?

BOND: Well, Paul, defying the 1 percent would be thrilling. And, of course, when he moved into Dartmouth College as president, he had a chance, because there was hazing and brutal sexual harassment there. And he unfortunately just gave it a nudge-nudge, wink-wink. So we don’t really have too much confidence in his willingness to stand up to power.

But if you ask me seriously, I’d say it’s to reverse what Robert Zoellick was doing. Under the guise of making the World Bank a green bank, he was actually financing more coal-fired power plants than at any other time in the World Bank’s history. It went up to over $7 billion a year at peak. And the largest single project loan the bank ever made was here in South Africa, the Medupi coal-fired power plant. And, of course, here in Durban we just hosted the conference of polluters, we call it, the COP17, the UN Climate Summit, in December, and we saw the World Bank actively trying to grab a $100 billion a year potential fund, a green climate fund. And so it’s really reversing the bank’s contribution to the worst killer of all in the future, climate change—180 million deaths anticipated here in Africa this century because of the desperate problems of drought and flooding and all of the temperature and extreme weather event changes that we’re going to have.

And the Kosovo loan, another coal-fired power plant that will probably be on his desk as he takes office in June, is the first thing he should veto. And that’ll be one of the tests. Will he contribute to massive death and destruction? And in Kosovo, coal-fired power plants are going to do terrible damage in terms of local pollution. Or, you know, will he take the chance to actually make the World Bank a leader in opposing rather than contributing to climate change? Let’s see if that’s one of the crucial tests.

JAY: Mark, what would be some test for you that this is more than just optics?

WEISBROT: Well, I think Patrick’s got a very good point. And the trouble with that is he doesn’t control the bank. I mean, he still has the board of directors to deal with. So it’s going to be harder for him to completely change immediately the orientation of the bank’s lending for energy projects. But he can push in that direction.

I think more immediately he might be able to do some harm reduction in the areas of cuts in public health and education, for example, and maybe continue delinking the World Bank from the IMF. There are now a lot of middle-income countries that can borrow from the World Bank, for example, that—without meeting IMF conditions. This wasn’t true ten years ago. There are other countries, though, however, like Jamaica, for example, where the World Bank funding is still dependent on IMF policies. So just separating those two makes a difference, because this kind of cartel over credit has been one of the ways that—really, the most important—for most of the last 30 years it’s been the most important avenue of Washington’s influence on policy in developing countries. So that is breaking down, and he could continue to move the bank in that direction. Again, it would be up to the governments, of course, not to accept loans that had harmful conditions attached to them, but this at least is something they would have more of a choice if the World Bank was more separated from the IMF. And I think you could also steer more money into positive projects in health care and education.

JAY: Right. Elaine, for you?

ZUCKERMAN: I just want to pick up on both Patrick’s and Mark’s comments about the U.S. role in decision-making and Kim’s potential role in decision-making on the board. (Excuse me.) And that is, Patrick suggested that Kim perhaps veto the coal mine in Kosovo when it comes up for board approval. The U.S., in the very undemocratic decision-making structure on the board of directors, is the only country with veto power. It’s always been and it still is. He does have that power, and I very much hope that he’ll wield it. And I think that would be an example of Kim doing the right thing if he vetoed bad investments.

JAY: Well, to do that, he would need Treasury to agree? Or can he do this without Treasury already in agreement?

ZUCKERMAN: He needs Treasury, because Treasury really pulls the strings. He could, theoretically, just himself, but it wouldn’t be permitted.

JAY: But in terms of the legalism, he could.

ZUCKERMAN: Legally, I believe he could, yes.

BOND: Yes. The precedent, if I might jump in, is when James Wolfensohn saw a huge mega dam, a big hydroelectricity project in Nepal in 1995 when he came into the bank, and no matter what the Clinton regime was up to, James Wolfensohn wanted to send a signal that he would respect at least some minimal environmental values, and he vetoed a big Nepal loan. So the president does have power, and also, Paul, ideological power. And that’s where the disappointment about Kim’s retreat from an earlier truthtelling, when he wrote—he co-edited a book, Dying for Growth, would be a chance to bring the question of neoliberal economics and neoliberal development policy back onto an agenda for debate.

It’s a debate that in the United States has been working so well through the public consciousness thanks to Occupy. The Occupy movement, two and a half years after Obama came in, finally got around to taking up the challenge of fighting the 1 percent ideologically. And that should now be the challenge for us at the global scale, to take on Kim and to ask him to return to the truths he and Paul Farmer, John Gershman, the others were telling in the book Dying for Growth, namely, that the kind of growth—parasitical financial growth with austerity is not worth pursuing, especially under ecological conditions we are now facing.

JAY: Okay. Thank you all for joining us.

WEISBROT: Thank you.

ZUCKERMAN: Thank you.

JAY: And thank you for joining us on The Real News Network.


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Patrick Bond is the Director of the Center for Civil Society and Professor at the University of KwaZulu-Natal in South Africa. Bond is the author and editor of the recently released books, Politics of Climate Justice and Durban’s Climate Gamble.

Mark Weisbrot is the co-director of the Center for Economic and Policy Research in Washington, D.C. He is co-author, with Dean Baker, of Social Security: the Phony Crisis and has written extensively about economies of developing countries in Latin America. He is also the founding president of Just Foreign Policy, an NGO dedicated to reforming US foreign policy. He is also a weekly columnist with The Guardian.

Elaine Zuckerman is the President of Gender Action. It is the world's only organization dedicated to promoting gender justice in all International Financial Institution investments.

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C. He is also the author of “Failed: What the ‘Experts’ Got Wrong About the Global Economy” (2015, Oxford University Press).