At the time, Obama was an ambitious young senator from Illinois with a keen interest in foreign affairs. Okonjo-Iweala was Nigeria’s blunt-speaking finance minister, traversing the globe to convince the world’s wealthiest nations that they should ease her country’s debt burden.
“Everybody was saying that this could never be done . . . that it would never happen,” Okonjo-Iweala recounted at an April event in Washington. “We went up to the Hill and there was a certain senator, Barack Obama” — long deadpan pause — “who was among those who were skeptical.”
Eventually, Obama — and the rest of the world — would agree with her. Nigeria paid $12 billion up front to win a further $18 billion in debt relief, and while questions still linger about how good a deal Nigeria got, it removed a major obstacle to the country’s economic growth. She cites the episode as an example of her “persuasive powers.”
Seven years later, that young senator is president, and Okonjo-Iweala, now 57, is using her powers on an even more far-fetched idea. She’s making a bid to lead the World Bank, which last year loaned $57 billion to help poor countries develop. But by tradition, the presidency has always gone to the U.S. nominee, and Obama has made his pick: Dartmouth College president Jim Yong Kim. As the bank’s board of directors prepares to make a final decision next week, it’s clear that selecting a woman from Africa would be unprecedented.
Yet Okonjo-Iweala hasn’t relented. She insists that she is, by far, the most qualified candidate, having worked at the World Bank for decades, including a stint as its second in command. She has adoring fans — there’s a #TeamNgozi Twitter hashtag — and has garnered support from opinion leaders such as the editors of the Economist and PIMCO head Mohamed El-Erian. The New York Times editorial board, which has called for a more open selection process, urged the World Bank’s board to “take a serious look” at Okonjo-Iweala.
What’s perhaps most surprising about Okonjo-Iweala’s insurgent campaign, however, is that she isn’t proposing an overhaul in how the Bank does business — apart from the way in which the president is selected. One senior bank official calls her “the consummate insider.” Unlike Kim, who has a long history of public health activism, Okonjo-Iweala seems more content to propose modest tweaks to the institution.
In many ways, then, the most radical thing about Okonjo-Iweala’s candidacy is the fact of the candidacy itself.
The details of Okonjo-Iweala’s biography go a long way toward explaining why she generates such enthusiasm. She was born in 1954, when Nigeria was still under British colonial control, and reportedly learned English by reading books such as “Treasure Island.”
After the British left in 1960, her life grew tumultuous. In 1967, the southeastern provinces of Nigeria, including Okonjo-Iweala’s home Delta State, declared independence as the Republic of Biafra. A bloody, three-year civil war ensued, leaving 1 million dead. Her father, a distinguished economist, joined the Biafran army and her family subsisted through the war, she said, on one meal a day. In a 2005 interview with the Guardian, Okonjo-Iweala recounted how, when she was 15, she carried her malaria-stricken 3-year-old sister four miles to find a doctor.
“I know what it means to go to the stream to fetch water . . . what it means when people are poor and don’t have enough to eat. It’s not enough to say you know about poverty,” Okonjo-Iweala said recently, explaining why she should lead the World Bank. “You have to live it.”
When she was 18, Okonjo-Iweala moved to the United States to study economics at Harvard and MIT. She went on to join the World Bank in 1982, climbing through the ranks by shifting between jobs and across regions: as an agricultural economist focusing on Africa; country director for Mongolia, Malaysia, and Cambodia; and deputy vice president for the Middle Eastern region.
Most World Bank affiliates who have spoken out publicly on Okonjo-Iweala’s behalf — including 39 former staffers who wrote an open letter praising her “deep experience in international and national issues of economic management” — know her from this period. Among other things, she co-authored an influential report on how the bank should operate in fragile states that have been racked by conflict (known as “low-income states under stress”), where the bank’s government partners were either dysfunctional or nonexistent.
Economists say that Okonjo-Iweala comes at development from a fairly mainstream perspective. “Many international organizations, like the United Nations, take a very state-centric view of development,” said William Easterly, a development economist at New York University and former bank staffer. “But the World Bank tends to see a more balanced role for markets and states, and I’d associate Okonjo-Iweala with this view.”
Okonjo-Iweala’s best chance to put her views into practice outside the bank came in 2003, when Olusegun Obasanjo, then president of Nigeria, asked her to work as his finance minister. (Obasanjo had been impressed with a brief she wrote about economic reform.) At the time, Nigeria had just emerged from a three-decade military dictatorship that had racked up $35 billion in debt and transformed the country into what the anti-corruption group Transparency International deemed one of the most corrupt places on Earth. Okonjo-Iweala’s task, in addition to crafting the country’s budgetary priorities, was to clean up the wreckage.
By most accounts, she threw herself into the task, sifting through lists of civil service workers to cull phantom employees from the government payroll, firing officials, and unlinking the nation’s budget from the price of oil, Nigeria’s main export. Okonjo-Iweala could claim modest success. By the time she left Obasanjo’s administration in 2007, Nigeria was ranked 147th of 179 countries on corruption — moving ahead of Bangladesh and Togo, but still behind countries such as Russia and Yemen.
On economics, meanwhile, her record received mixed reviews. Western economists praised her efforts to kick-start Nigeria’s private sector. Domestic critics were often less patient: Nigerian columnist Sonala Olumhense, for instance, recalls Okonjo-Iweala’s unfulfilled promise, in 2005, to create 7 million jobs. “It was the original 419,” Olumhense scoffed, referring to the code for Nigerian e-mail scams.
“The minister of finance job is one of the toughest in any country,” said Lant Pritchett, a development economist at Harvard University. “You’re spending all day telling people no.”
For many World Bank watchers, that ability to prioritize is a key requisite to lead the organization. “As president, you’re constantly trying to divvy up scarce funds and focus on the world’s most pressing needs,” Easterly said. “You’re fundamentally making decisions that are guided by economics.”
Such decisions can often be wrenching. In 2006, Okonjo-Iweala was moved to a different post by Obasanjo, then left a year later to serve as managing director of the World Bank. But Nigeria’s next president, Goodluck Jonathan, asked her back in 2011 to resume her old Finance Ministry job. She arrived as Nigeria was preparing to repeal its fuel subsidies — a decision she supported — and bore the brunt of the anger from the Occupy Nigeria protests that followed. In the end, the government backed down and partly restored the subsidies.
An inside track
In many ways, Okonjo-Iweala isn’t looking to shake up the World Bank the way she tried to shake up Nigeria. Her top priority, she has said, is “job creation” — leveraging the bank’s loans and technical expertise to help countries alleviate the sort of mass unemployment that ignited the Arab Spring.
At a recent event in Washington, she held up a notebook and said she had written down 11 things she thought needed to change at the institution. Many of them were relatively small-bore — for instance, that the World Bank needed to be quicker in offering technical assistance. She noted that, as a Nigerian official, she had to turn to the International Monetary Fund to connect the country with needed tax experts, because the World Bank was too sluggish.
Yet her critics wonder why she didn’t address many of these problems as managing director at the bank. “You had nearly four years to change all this,” said one senior bank official, who wished to stay anonymous. “What were you doing then?”
For others, Okonjo-Iweala’s familiarity with the labyrinthine bank and its 10,000 employees is a strength. Jean-Louis Sarbib, a former bank staffer who worked with Okonjo-Iweala, said that with the global economy still in a fragile state, it would be an asset to have a leader who doesn’t need to squander time getting oriented. Past World Bank presidents, such as James Wolfensohn and (famously) Paul Wolfowitz, often struggled to get much done in their first year or two while trying to learn the ropes of the place.
And, Sarbib pointed out, Okonjo-Iweala has a relationship with the board of directors, an important asset given that the board has frequently clashed with past presidents. She also has a working relationship with Christine Lagarde, the president of the IMF, from their days negotiating Nigeria’s debt deal. (Lagarde was France’s finance minister at the time.)
The key question, then, is whether that competence and familiarity is more important than changing the World Bank’s direction. At the moment, many people both inside and outside the organization agree that it needs to shift focus. The bank’s long-standing focus on development in the world’s least-developed countries is becoming increasingly outmoded now that nearly two-thirds of the world’s poorest reside in middle-income countries such as China and India.
“We spent a decade on human development, on gender, health, education, and now we have all these middle-income countries that also need modern infrastructure to advance their economies and continue to move up,” said Paul Cadario, a longtime World Bank staffer. “Do we have the credibility on that? And what are we going to do to engage on safety nets, on impediments to doing business, on making these countries less vulnerable to financial shocks, too?”
Part of the logic of Kim’s candidacy is that he is an outsider, a pioneer of a new model of public health who helped push the World Health Organization in a new direction. But he’s also, in that respect, a bit of an unknown — Easterly, for one, worries that Kim could be a “Sarah Palin figure,” out of his depth at the bank.
Okonjo-Iweala, by contrast, is the safer bet, but also less likely to drastically reorient the institution. When asked recently, for instance, if she would pay more attention to climate change and rethink the bank’s controversial support for building coal-fired power plants, she gave a judicious answer: “I think the World Bank should be helping [countries] to find affordable alternatives,” she said. “But where this is not possible, then using the best technology possible to try and use this coal.”
In any case, Okonjo-Iweala’s views on where to take the bank may be moot. When its board of executive directors makes its pick next week, Kim is very likely to be its selection. After all, Washington has gotten its way on this matter for 60 years. The board’s voting powers are allocated according to financial support from wealthy donor nations, and Japan and European countries appear ready to side with the United States.
Which means that the real radicalism of Okonjo-Iweala’s candidacy may be less about what she wants for the bank and more the fact that, for the first time, she has made it possible to envision a non-American leading the institution. Along with former Colombian finance minister Jose Antonio Ocampo, Okonjo-Iweala has helped create the bank’s first-ever competitive race for the presidency.
That’s no small matter in a world where China and India are wielding significant economic clout and demanding reform of international financial institutions. Okonjo-Iweala has warned that those rising powers could lose interest in these long-standing institutions if they don’t have a chance to be represented.
“You know, the bank has been around 60 years,” Okonjo-Iweala has said, speaking of the process by which the president is chosen. “That’s quite a bit of inertia. So you have to have the courage to say, look, certain things that we’ve always done this way, they have to go.”