An ethical bank?

The World Bank tries to reinvent itself.

The World Bank – the globe’s largest anti-poverty agency – has a new chief. Jim Yong Kim, an activist doctor whose five-year term began on 1 July, will have his work cut out for him. Running the 9,000-employee development powerhouse has always been one of the toughest jobs in the world, and a successful bank chief must be in almost equal measures a diplomat, financier and intellectual.

How to lift people out of poverty – the Bank’s main mission – remains one of the enduring mysteries of modern economics. A vast body of research and experience fails to provide any simple lessons. Like his 11 predecessors as Bank president, Kim will need considerable diplomatic poise. The organisation has 188 member nations all wanting a say in how it works. With a loan book of roughly $200bn, it is a formidable financial institution. Last year alone it committed $57bn to developing nations.

As if this were not challenge enough, the World Bank has gone through something of an identity crisis in recent years. Not long ago it was the biggest single source of lending for many poor countries, funding everything from massive dam and road projects to health and education plans. Recently, however, some of its most reliable clients – notably China and India – have become less reliant on its largesse. Meanwhile, the World Bank is left with crisis-ridden states like Sudan and Haiti, some of the hardest nations to assist. As its financial importance shrinks, the World Bank has needed to forge a new role.

At the heart of the Bank’s soul searching is a surprising statistic. Despite a global recession and surging food prices, poverty has been falling in all parts of the globe for the first time since the World Bank started collecting figures in 1981. In 2010 the number of people living on less than $1.25 a day – the Bank’s definition of extreme poverty – was about half the level it was in 1990. As a result, the world hit the United Nations’ target of halving poverty between 1990 and 2015 five years ahead of schedule. The share of the world’s population below the poverty line has plunged from 43 per cent in 1990 to 22 per cent in 2008.

The biggest progress has been made in China. This nation alone has managed to lift 660 million out of poverty since 1981. But China is not the only nation to be making economic progress. Developing nations through Asia, Africa and Latin America have been enjoying far faster rates of economic growth. "The reward has been ready access to international capital markets, which has meant that World Bank money is less important," says Claudio Loser, a former director of the Western Hemisphere for the International Monetary Fund. Last year the Bank’s net funding for middle-income countries, such as Turkey, was a mere $8bn. That compares to $910bn in private inflows into emerging markets in the same year, according to the Institute for International Finance.

 Dr Kim takes over an institution in flux. Its financial heft has failed to keep pace with expanding global capital flows. It is also less likely to be able to boss poor nations around than it did in the past. Nonetheless, the Bank remains the globe’s leading source of expertise on development. While extreme poverty appears to be retreating, over 2bn people still struggle to meet their basic needs. A dynamic World Bank is as necessary as ever.

This article can be read in full in economia.


Jim Yong Kim, Photograph: Getty Images

Christopher Alkan

Photo: Getty
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How the row over Jackie Walker triggered a full-blown war in Momentum

Jon Lansman, the organisation's founder, is coming under attack. 

The battle for control within Momentum, which has been brewing for some time, has begun in earnest.

In a sign of the growing unrest within the organisation – established as the continuation of Jeremy Corbyn’s first successful leadership bid, and instrumental in delivering in his re-election -  a critical pamphlet by the Alliance for Workers’ Liberty (AWL), a Trotskyite grouping, has made its way into the pages of the Times, with the “unelected” chiefs of Momentum slated for turning the organisation into a “bland blur”.

The issue of contention: between those who see Momentum as an organisation to engage new members of the Labour party, who have been motivated by Jeremy Corbyn but are not yet Corbynites.

One trade unionist from that tendency described what they see the problem as like this: “you have people who have joined to vote for Jeremy, they’re going to meetings, but they’re voting for the Progress candidates in selections, they’re voting for Eddie Izzard [who stood as an independent but Corbynsceptic candidate] in the NEC”.  

On the other are those who see a fightback by Labour’s right and centre as inevitable, and who are trying to actively create a party within a party for what they see as an inevitable purge. One activist of that opinion wryly described Momentum as “Noah’s Ark”.

For both sides, Momentum, now financially stable thanks to its membership, which now stands at over 20,000, is a great prize. And in the firing line for those who want to turn Momentum into a parallel line is Jon Lansman, the organisation’s founder.

Lansman, who came into politics as an aide to Tony Benn, is a figure of suspicion on parts of the broad left due to his decades-long commitment to the Labour party. His major opposition within Momentum and on its ruling executive comes from the AWL.

The removal of Jackie Walker as a vice-chair of Momentum after she said that Holocaust Memorial Day belittled victims of other genocides has boosted the AWL, although the AWL's Jill Mountford, who sits on Momentum's ruling executive, voted to remove Walker as vice-chair. (Walker remains on the NEC, as she has been elected by members). But despite that, the AWL, who have been critical of the process whereby Walker lost her post, have felt the benefit across the country.

Why? Because that battle has triggered a series of serious splits, not only in Momentum’s executive but its grassroots. A raft of local groups have thrown out the local leadership, mostly veterans of Corbyn’s campaign for the leadership, for what the friend of one defeated representative described as “people who believe the Canary [a pro-Corbyn politics website that is regularly accused of indulging and promoting conspiracy theories]”.

In a further series of reverses for the Lansmanite caucus, the North West, a Momentum stronghold since the organisation was founded just under a year ago, is slipping away from old allies of Lansman and towards the “new” left. As one insider put it, the transition is from longstanding members towards people who had been kicked out in the late 1980s and early 1990s by Neil Kinnock. The constituency party of Wallasey in particular is giving senior figures in Momentum headaches just as it is their opponents on the right of the party, with one lamenting that they have “lost control” of the group.

It now means that planned changes to Momentum’s structure, which the leadership had hoped to be rubberstamped by members, now face a fraught path to passage.

Adding to the organisation’s difficulties is the expected capture of James Schneider by the leader’s office. Schneider, who appears widely on television and radio as the public face of Momentum and is well-liked by journalists, has an offer on the table to join Jeremy Corbyn’s team at Westminster as a junior to Seumas Milne.

The move, while a coup for Corbyn, is one that Momentum – and some of Corbyn’s allies in the trade union movement – are keen to resist. Taking a job in the leader’s office would reduce still further the numbers of TV-friendly loyalists who can go on the airwaves and defend the leadership. There is frustration among the leader’s office that as well as Diane Abbott and John McDonnell, who are both considered to be both polished media performers and loyalists, TV bookers turn to Ken Livingstone, who is retired and unreliable, and Paul Mason, about whom opinions are divided within Momentum. Some regard Mason as a box office performer who needs a bigger role, others as a liability.

But all are agreed that Schneider’s expected departure will weaken the media presence of Corbyn loyalists and also damage Momentum. Schneider has spent much of his time not wrangling journalists but mediating in local branches and is regarded as instrumental in the places “where Momentum is working well” in the words of one trade unionist. (Cornwall is regarded as a particular example of what the organisation should be aiming towards)

It comes at a time when Momentum’s leadership is keen to focus both on its external campaigns but the struggle for control in the Labour party. Although Corbyn has never been stronger within the party, no Corbynite candidate has yet prevailed in a by-election, with the lack of available candidates at a council level regarded as part of the problem. Councilors face mandatory reselection as a matter of course, and the hope is that a bumper crop of pro-Corbyn local politicians will go on to form the bulk of the talent pool for vacant seats in future by-elections and in marginal seats at the general election.

But at present, a draining internal battle is sapping Momentum of much of its vitality. But Lansman retains two trump cards. The first is that as well as being the founder of the organisation, he is its de facto owner: the data from Jeremy Corbyn’s leadership campaigns, without which much of the organisation could not properly run, is owned by a limited company of which he is sole director. But “rolling it up and starting again” is very much the nuclear option, that would further delay the left’s hopes of consolidating its power base in the party.

The second trump card, however, is the tribalism of many of the key players at a local level, who will resist infiltration by groups to Labour’s left just as fiercely as many on the right. As one veteran of both Corbyn’s campaigns reflected: “If those who have spent 20 years attacking our party think they have waiting allies in the left of Labour, they are woefully mistaken”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.