Mohamed A. El-Erian is chief executive and co-chief investment officer of the investment management firm Pimco and author of “When Markets Collide.”
Here we go again.
Officials tend to preach the importance of following a merit-based, open and transparent process in selecting the head of an influential international organization. Until, that is, it comes to a position that has traditionally gone to their own country. Then they immediately revert to an entitlement mentality and, in the process, make a mockery of their argument.
This has been the pattern when selecting the heads of the World Bank and International Monetary Fund (IMF), two important institutions with more than 180 member countries. Due to a “tradition” that dates to the organizations’ founding almost 70 years ago, an American has always served as president of the World Bank and a European as managing director of the IMF.
For at least 10 years, there has been general agreement that this arrangement is outmoded and feudalistic. It speaks to a world long since past, and it is deeply inconsistent with the principles of meritocracy, competition and transparency that both America and Europe pride themselves on. Yet, when push comes to shove, neither is willing to abide by what both constantly advocate for others around the globe.
Almost a year ago, when the then-head of the IMF, Dominique Strauss-Kahn, was forced to resign suddenly, European leaders showed no shame in preempting an open, merit-based system to replace him. Their audacity was so blatant, and their willingness to ignore international attitudes so appalling, that even U.S. officials expressed discomfort and reservations, both in public and in private, with the process.
Ironically, it looks like the United States may now be doing the same thing. Shortly after Wednesday’s announcement that World Bank President Robert Zoellick would step down at the end of June, Washington officialdom quickly signaled that an American should succeed him and thus ensure continued “strong, effective leadership in this important institution.” Not surprisingly, this indication of yet another desire to preempt and derail a proper process immediately provoked negative reactions from several other countries, including China, Brazil and Mexico.
Don’t get me wrong: There is a lot of value in having an American as head of the World Bank. After all, our country is the largest shareholder and the biggest funder of the institution. We also have strong candidates for the post. Yet, to ensure the legitimacy of leadership, how our officials in Washington handle this issue is as important as whom they push.
In today’s global economy, there is no justification for “reserving” for one particular country the leadership of institutions financed by taxpayers from around the world. Not only is this discriminatory, but it also belittles the importance of finding the person that can best do the job, based on his or her qualifications, experience, standing and expertise.
Rather than try to preempt a genuine process, just like the Europeans unfortunately did last year, the United States should set an example. And it is still not too late to do so. Specifically, U.S. officials should:
● Take the lead in gathering broad-based international agreement on a transparent and detailed process that would start by clearly defining the requirements of the World Bank job;
● Specify a nomination period open to candidates from all member countries, during which any political campaigning would be strongly discouraged;
● Ensure that candidates are subject to a thorough due-diligence process, including reference checks and other widely accepted practices that are part of any proper evaluation; and
I suspect that, given strong qualifications, an American would prevail in such a competitive, merit-based and transparent process. And having done so (rather than having been anointed through a feudalistic approach), this person would gain the legitimacy that is so critical to effectively leading the organization toward meeting its important goals.
America should not, and must not, miss this important opportunity to take the lead on an issue that is critical for the integrity of the multilateral system and, therefore, the well-being of the global economy. It is time to signal, once and for all, that both the World Bank and IMF are in no way the exclusive property of their old colonial masters.
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