Jan 11, 2019

Kim's resignation could tee up non-U.S. leadership at World Bank

World Bank President Jim Yong Kim. Photo: Chip Somodevilla via Getty Images

Jim Yong Kim suddenly stepped down Monday as president of the World Bank, 3 years ahead of the end of his second 5-year term. Kim’s resignation is expected to spark a heated debate over leadership of the World Bank.

The big picture: At issue is whether the presidency should reflect the needs of donors or recipients. While the U.S. candidate has always been picked as president — an informal tradition since the bank's founding in 1944 — the board of directors, made up of donor countries, is likely to challenge a U.S. candidate because of growing opposition to historical U.S. dominance of the institution. Given that Sub-Saharan Africa is one of the largest recipients of bank funds, the timing could be ripe for an African leader.

Between the lines: An African president would better understand the finance needs of Sub-Saharan Africa.

  • Over the next three fiscal years, the World Bank has earmarked $57 billion for the region, with three-fourths of the funds coming from the International Development Fund (IDA), which is dedicated to the world’s poorest countries.
  • Over half of IDA funds are expected to flow to Sub-Saharan Africa.

Why it matters: Economic growth in Sub-Saharan Africa, the world’s least-developed region, has especially great geopolitical implications. As long as economic opportunity remains scarce on the continent, Africans will migrate elsewhere, particularly to Europe. Rising migration levels have led to the rise of populist parties in Hungary, Austria, Germany and elsewhere, undermining liberal democracy and posing an existential threat to the EU.

In the years to come, demographics and climate change could further exacerbate migration flows:

  • Africa’s population is predicted to surge, doubling in size to reach 2.5 billion by 2050, making it the youngest population in the world.
  • Unpredictable weather patterns and environmental degradation resulting from climate change in the arid Sahel and Horn will worsen food insecurity and jeopardize livelihoods.

What’s next: The race for the World Bank presidency will be hotly contested in the coming months, with many donor and recipient countries rallying against a Trump appointee. Sub-Saharan African countries will push to advance a candidate who is receptive to their needs.

Paulo Gomes is the founder of Constelor Investment and a co-founder of New African Capital Partners.

Go deeper

The race to catch Nike's Vaporfly shoe before the 2020 Olympics

Illustration: Aïda Amer/Axios

Four months ago, on the very same weekend, Eliud Kipchoge became the first human to run a marathon in under two hours, and fellow Kenyan Brigid Kosgei shattered the women's marathon record.

Why it matters: Kipchoge and Kosgei were both wearing Nike's controversial Vaporfly sneakers, which many believed would be banned because of the performance boost provided by a carbon-fiber plate in the midsole that acted as a spring and saved the runner energy.

Go deeperArrow26 mins ago - Sports

Reassessing the global impact of the coronavirus

Illustration: Aïda Amer/Axios

Economists are rethinking projections about the broader economic consequences of the coronavirus outbreak after a surge of diagnoses and deaths outside Asia and an announcement from a top CDC official that Americans should be prepared for the virus to spread here.

What's happening: The coronavirus quickly went from an also-ran concern to the most talked-about issue at the National Association for Business Economics policy conference in Washington, D.C.

Tech can't remember what to do in a down market

Illustration: Rebecca Zisser/Axios

Wall Street's two-day-old coronavirus crash is a wakeup alarm for Silicon Valley.

The big picture: Tech has been booming for so long the industry barely remembers what a down market feels like — and most companies are ill-prepared for one.