With the nomination of Dr. James Young Kim, Obama wants to rewrite development economics.
There is a rule acknowledged by all who ply their trade in politics that whatever one has written or said in the past easily can be interpreted in the future as having a different meaning than originally intended. Depending on how one desires to be considered currently, this can have either a positive or negative impact. This is the case with James Yong Kim, MD, nominated to be the head of the World Bank Group that has been built around what was originally named the International Bank for Reconstruction and Development (IBRD). Dr. Kim up to now has been the president of Dartmouth College and is the former head of the HIV/AIDS program of the World Health Organization.
It is unusual to nominate someone for this post whose background is in the field of public health rather than in some aspect of economics and/or management. It has been the theme of the Obama administration, however, to emphasize and separate out social concerns from economic issues to the point of judging economic growth by what liberal social benefits it might provide. Dr. Kim and two co-editors published a book in 2000, Dying for Growth. The key element in this book that has brought his nomination into question is found in the introduction: “The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”
Supporters of Dr. Kim have rushed to interpret this key statement as meaning that inequitable distribution of gains (meaning life-style improvement) often occurs in relation to generally calculated economic growth. In simple terms Dr. Kim and his collaborators decided to present arguments to show that advantages gained from major projects subsidized by international organizations — public and private — while possibly raising the computation of “gross domestic product” did not equitably improve life for those on the lower rungs of socio-economic life.
What a shock to learn that in spite of the success of a given project the distribution of that success to the general population is unequal in the underdeveloped world. And everywhere else if the truth be told! The implication that Kim and his friends make is that the principal benefit goes to participating corporations seeking to (horror of horrors) make profits. Apparently there still are people who do not recognize that the experiment in state ownership and direction of all phases of life was proven false with the lesson of the Soviet Union.
The World Bank originally was created for the express purpose of stimulating and investing in major infrastructure projects aimed at a long-term impact. Dams and related hydroelectric projects far too expensive for newly independent nations were made a priority. There are massive electric power grids spread across sub-Saharan Africa and elsewhere in the less-developed world as a result of this investment and development. Translating this essential infrastructure creation into a quantitative advance for the local populations is beyond specific calculation, but every village with electric power for water pumping and minimal lighting knows well the gain.
The real problem is that the host governments do not convert the income they gain from the industries that are created from the major investment projects into the needed social and economic benefit within their country. The pattern of governmental corruption is consistent in most of the developing world. This is neither the fault of the international institutions that have provided the development capital — in whole or part — nor of the extractive and manufacturing industries that provide the expertise and management to build and market the products created.
There is a convenient vocabulary used by the academic element concerned with international economic development. Secretary of the Treasury Tim Geithner, who has had little field experience in the area of economic development, used the well-worn slogan that economies needing to grow require “…expanding opportunities for their people, in healthcare and in education.” He might have added that before such needy economies get to that point, they must root out the ingrained corruption that appears to afflict the political life of not only less-developed areas but also some of the most highly developed.
As with the appointment of the Nobel Prize winner, Dr. Steven Chu, whose work in nuclear physics and molecular biology gave him little background suitable for directing a bureaucratic agency such as the Energy Department, Dr. Kim’s excellent record in HIV/AIDS health care and as president of an elite liberal arts college does not qualify him to head the World Bank. The Obama Administration seems to be entranced with the academic and social credentials more than actual experience in the operational and development aspect of the field they are considering.
Aside from the politically motivated aspect of Dr. Kim’s nomination, there is a convoluted logic in attempting to assess the effectiveness of the World Bank as Tim Geithner has instructed. It is his stated view that what the World Bank has done to promote economic growth in the poorer sectors of the globe should be judged through how productive its projects have been in “expanding opportunities for their people in healthcare and education.”
The job of leading the World Bank requires serious skills and experience in economic development in less developed areas of the world. Such experience and knowledge per force includes subsets of political and social issues, but it does not call for the questioning of whether economic growth sufficiently “and automatically lead to a better life for everyone,” as Kim’s co-editor has written in support of his candidacy for the international banking position.
The reality of investment and development in large-scale projects in the less developed world is that it requires both extensive and hard-headed experience in the field. However, it also demands leadership and diplomatic skills in the rough and tumble of the financial management of a globally oriented multi-billion dollar enterprise. It is doubtful that even Dr. Kim would view himself as qualified under those requisites.
Jim Kim may be brilliant. He may be perceptive of the world’s needs. But he is not qualified to be the leader of the World Bank Group. And neither is anyone else who believes GDP growth and corporate profits work against socio-economic well-being.
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