World Bank chief resigns prematurely: All you need to know

World Bank President Jim Yong Kim on Monday announced his resignation from his position as the head of the premier anti-poverty institution, that he held for six years. Re-elected for a second term in 2017, Kim’s tenure would have naturally ended in 2022 but his resignation, which comes into force on February 1, 2019, comes 19 months into his sophomore term.

The World Bank on Monday notified the press of Kim’s future plans to join a private firm and “focus on increasing infrastructure investments in developing countries,” although the 59-year-old himself, offered no explanation for stepping down. It reportedly surprised the bank’s stakeholders as a sudden and personal decision.

In a statement, Kim said, “It has been a great to serve as President of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime”.

“The World Bank Group is more important now than ever as the aspirations of the poor rise all over the world and problems like climate change, pandemics, famine refugees continue to grow in both their scale and complexity,” he wrote.

Vacating his post for CEO Kristalina Georgieva to fill in as interim president, Kim’s resignation sent shockwaves across the international aid community.

Nominated for the job by former President Barack Obama in 2012, his unexpected resignation has thrown the position open for the US President Donald Trump to choose his replacement. Trump’s noted towards international development further clouds the future of the Bank.

How are World Bank chiefs appointed?

Formed in 1947 to help rebuild European countries devastated by World War II, the Washington-based World Bank comprises 189 member and has supported infrastructure projects with traditional loans, interest-free credits, and grants across the world.

Historically since the war, United States of America, as the World Bank’s largest shareholder, have always appointed its head, while the International Monetary Fund chief is determined by Europeans. It’s an arrangement that many as anachronistic, says BBC‘s Andrew Walker, but the post-war understanding has worked so far.

Kim’s appointment

To avoid a Trump nominee from filling the position, Kim was hastily re-appointed ahead of the 2016 presidential polls. The 189-member bank is likely to face challenges to its business and banking model once it comes under Trump’s purview, which explains the robust demands to reconsider the American-only criteria for the Bank’s leadership.

Kim, a South Korea-born US citizen, was himself an unusual leader for the Bank, although he was up against Colombian economist Jose Antonio Ocampo Gaviria and Nigeria’s then-Finance Minister Ngozi Okonjo-Iweala, when he was appointed.

A medical doctor by training and profession, Kim holds a Harvard doctorate degree in anthropology, was President of the Ivy League Dartmouth College, and in public health. It was this background which made him an asset to the Bank’s worldwide mission to strike at the roots of the poverty with development programmes.

His contributions

Under his leadership, the Bank adopted the United Nations pledge to end extreme poverty by 2030, funding programmes that aimed at uplifting the bottom 40% of the population in the developing world. The Bank’s International Development Association, which funds programmes in the least developed countries, achieved two record replenishments during his tenure, the last one in 2016 for $75 billion.

Kim pushed the Bank’s cooperation with private corporations, particularly in the areas of climate change and infrastructure. His diametrically opposite policy approach with Trump vis-a-vis climate change was pronounced after the Bank ended its support of coal power projects even as Trump vociferously endorsed the US coal industry. Only last month, Kim said that the would make allocate $200bn to fund action on climate change from 2021-25, and thus help countries adapt to the effects of global warming, while reducing greenhouse gas emissions.

Last April, however, the Bank also increased its capital by $13 billion with the unexpected support of the Trump administration.

In a letter to the staff, Kim explained his decision to switch to the private sector, saying, “The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets.”

Prarthana Mitra is a staff writer at Qrius

Climate ChangeDonald TrumpInfrastructureJim Yong KimpovertyWorld Bank