Gordhan questions World Bank appointment processes

(Image: GCIS)

Gordhan told a function on Monday that while developing countries welcomed the opening of the World Bank President candidacy to every country, they were concerned about whether or not the appointment process was "merit based."

The governance of multilateral institutions should change to reflect the changing global dynamics and new centres of global growth, Gordhan said.

The World Bank had "passed the test of openness", Gordhan said, by allowing every country to nominate a candidate. The second test the World Bank would be judged by was the transparency of the process.

"From what I'm hearing, there are serious concerns about the levels of transparency," the minister said.

World Bank executive directors earlier concluded interviewing two candidates for the job - Nigerian Finance Minister Ngozi Okonjo-Iweala and US nominee Jim Yong Kim, a Korean-American health expert.

Okonjo-Iweala, a former World Bank managing director, had the backing of most African countries and some developing economies.

Jim Yong Kim has since been appointed World Bank President.

Calling appointments processes into question

It was highly likely that the process to find a new World Bank president did not meet the merits based criteria, according to Gordhan.

"The world will be waiting to see whether the World Bank has improved its legitimacy, and the extent to which established powers are willing to concede on criteria that all of us decided in September 2009 through our leaders at a G20 meeting in Pittsburgh that future appointments of the World Bank and the IMF will be transparent, open and merit-based," he said.

Colen Garrow, economist with Brait, said that emerging markets were today playing a bigger role in the global economy.

"It is only equitable therefore that they have greater say in decision making bodies, like the World Bank, UN, and many others," he said.

"However, it needs to be highlighted that decision-making is one thing, but it needs to be complemented by greater financial contributions to these donor organisations as well."

SA needs to be more active

Garrow suggested that SA itself needed to become an even more active participant in global developments.

"On balance, South Africa should stop being scared of itself and take greater responsibilities in these bodies. It has the largest economy on the continent, and has a greater degree of political stability than a country such as Nigeria, often mooted as taking over SA's position as gateway to Africa. I would disagree with that assessment," Garrow said.

On local economic developments, Gordhan said that economic growth was reasonably stable while the outlook was slightly more positive.

"What we still look forward to is a far more clear set of actions coming from the European countries which will give the markets the certainty they require and the understanding that the firewalls are now secure enough not to allow the domino effect to go any further," the minister noted.

The uncertainty had the potential to damage growth and employment prospects both in the South African context and globally, Gordhan said.