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Exclusive: World Bank's Kim says no country immune from turmoil over inequality
by Staff Writers
Washington (AFP) June 28, 2013

World Bank chief faces challenges as he makes his mark
Washington (AFP) June 29, 2013 - In his first year as president of the World Bank, Jim Yong Kim has tried to refocus the institution on fighting poverty and climate change -- but challenges lie ahead.

The pick of the Korean-American, an academic and doctor by training, marked a radical departure from other recent heads of the Washington-based global body.

Both Robert Zoellick and Paul Wolfowitz -- fellow Americans recruited when George W. Bush was in the White House -- did not have development experience on their resumes.

Less well-known and controversial than those before him, "Doctor Kim" quickly tried to make his mark on the development giant amid competition from new players, such as China, willing to drop large sums, especially in Africa.

"Dr. Kim has been a welcome breath of fresh air compared to some of past World Bank presidents who had no experience in development but we can't yet assess if he will change the bank for the better," said Peter Chowla of the Bretton Woods Project that keeps a close eye on the institution.

But according to an insider at the Bank, people are split on the director's personality and his actions.

"There are those who admire him and others feel he is too focused on talking," the source said.

Under his leadership, the Bank garnered attention when it published a report warning of "cataclysmic" climate change, unfamiliar territory usually occupied by the United Nations.

"I feel that the World Bank has an enormous responsibility to first tell the world about climate change, but then really move our investments in a direction so that we can limit carbon emissions and really slow down the pace of climate change," Kim told AFP in an exclusive interview.

This new approach is not without contradictions.

Intent on helping the 1.2 billion still living without electricity, the Bank continues to finance development projects based on fossil fuels, such as a coal plant in Kosovo -- much to the chagrin of environmentalists.

"It's going to be impossible for us to move right now to a completely fossil free world," Kim acknowledged.

His other big project won't be easy to tackle either.

In early April, he set the goal of eradicating extreme poverty by 2030 by reducing the proportion of people living on less than $1.25 a day from 21 percent to 3 percent.

"We expected that the Bank set a strategy and refocus its mission on reducing poverty. It's already a big success," said Nicolas Mombrial, head of the Washington office of Oxfam International.

It's an admirable goal but the challenge is immense. Going forward, the Bank has to find ways to increase economic growth to reduce poverty without further damage to the environment.

Kim is "in a difficult position," said Lawrence MacDonald of the Center for Global Development. "He's right to sound the alarm on climate but I'm afraid that the poverty goal and climate change could be conflicting."

The president is confident solutions exist but he has to convince the Bank's 188 member countries and some 10,000 employees.

It won't be an easy task.

In a recent internal document obtained by AFP, Kim denounced the "culture of fear" that allegedly curbs initiatives at the heart of the institution and is used to justify inaction.

Certain reactions, published on the Bank's intranet, reflect a climate of mistrust.

"The bank has never been an honest organization, either with itself or with the clients," said one unnamed Bank employee.

"Is the Bank willing to take the risk of offending member nations by telling them that they are corrupt and that many nations are themselves the single biggest obstacle to development?" added another.

No country in the world is immune from unrest arising from poverty and inequality, World Bank President Jim Yong Kim told AFP in an exclusive interview.

The protests in Brazil, Turkey, and elsewhere show that even governments that have made significant efforts already cannot let up in programs to help the poor, he said.

"There's no country in the world that is immune from having this kind of citizen's movement rise up to demand even more," he said.

"It shows that the power of civil society and the power of citizens to rise up is unlike anything we've seen in history.

"We saw the Arab Spring, we're seeing it in Turkey, even in governments that have done so well in terms of paying attention to the needs of the poorest," he said.

Kim, a South Korea-born American who took the lead of the World Bank one year ago, has made fighting extreme poverty the development institution's primary goal.

He said the recent turmoil in Brazil and Turkey shows why governments cannot let up in their efforts to overcome inequality and boost the living standards of the poorest.

In Brazil, protests started over a hike in bus fares but quickly snowballed into a larger movement against corruption, with demonstrators criticizing the billions of dollars the government is spending to host the football World Cup next year.

"We have to recognize how much Brazil has done for the poorest," Kim told AFP on Thursday in the Bank's Washington headquarters.

"Brazil has done a lot but there's still a lot of inequality left.... Brazil really has to think hard about what it needs to do next for the next stage of economic growth."

Kim, a 53-year-old medical doctor, announced earlier this year an ambitious goal to reduce extreme poverty to three percent or less of the world's population by 2030.

He was adamant about setting such a challenge.

"There are still 1.2 billion people living in the world with less than $1.25 a day, and this is a stain on our collective conscience," he said.

"I think high expectations is exactly what we should have."

"We cannot leave anyone behind. We have to think about fragile and conflict-affected areas like Mali and the entire Sahel region," he said.

"That goal is going to give us the sense of urgency that we didn't have before."

Despite recent turmoil, he said emerging economies have been very important for the global economy, propping up world growth while Europe contracts.

"It's important not to overreact to ups and downs in the growth numbers for countries like China and Turkey."

For instance, he said, "Turkey has done a great job in terms of distributing the benefits of economic growth over the years."

"Every country now has to sit back and think about what it needs to do to set the foundations for boosting the long-term growth."

The World Bank itself needs to change the way it works, and act more boldly, to take up the fight to end poverty, Kim said.

An internal document seen by AFP cited a "culture of fear" within the massive organization, with close to 10,000 employees around the world.

The Bank has over the years developed "a culture of extreme risk aversion," Kim admitted.

"I'm trying to change the culture... The bottom line is that development is a risky business," he said.

"We're focusing on encouraging risk-taking."

Under Kim the bank has also stepped up its efforts to combat global warming and its far-ranging effects.

That creates a challenge, as many people believe that economic growth would be held back by restrictions on carbon emissions, claims rejected by Kim.

"Leaders all over the world are saying: we have to find ways to boost growth and reduce our carbon footprints."

"It is possible to uncouple growth from carbon emissions, like in Germany."

He also pointed to Africa's Great Lakes region and the potential of alternative sources of energy there, such as geothermal.

"We think it's possible to find energy sources that will both fuel growth and reduce carbon emissions."

While Kim pursues his ambitious anti-poverty agenda, he will also have to wrestle over his five-year term with pressures to reform the broader structure of the World Bank.

Emerging economies especially want to have more say in the Bank, long dominated by the United States and Europe, but that could require revamping the structure of the bank's board.

"We are going to have this discussion again in a couple of years. I'm not sure what the voting will end up being," he said.

"The debate will be very heated, it will be very contentious. But there's no question that the voices of the emerging countries have gotten much stronger on the board."


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