Ngozi Okonjo-Iweala for the World Bank

A post up at Foreign Exchange about the World Bank leadership competition, and why the Bank ought to select Nigeria’s Okonjo-Iweala over the U.S. nominee, Jim Kim. Short version: she’s a heavy-hitter with the right experience who, critically, solves the Bank’s legitimacy crisis.

By far the most important reason to appoint Okonjo-Iweala is that she has experience on both sides of the table in the international lending negotiations that are the bread and butter of the Bank’s work. As an economist who rose to be the Bank’s Managing Director, she oversaw its lending from 2007 to 2011, helping shepherd it through the global financial crisis. As Nigeria’s finance minister between 2003 and 2006, she represented her government in debt relief negotiations with Paris Club donors, succeeding in reducing the country’s debt burden from $30 billion t0 $12 billion. That remains the only time the Paris Club has allowed a debtor nation to buy back its debt below par.

What’s critical about the experience is that Okonjo-Iweala understood what it meant to face a debt burden that was so beyond repayment as to be punitive, and she worked to have it reduced. But she also understood that the single case of Nigeria didn’t negate the merits of international development lending and she went back to the Bank to provide critical funding to other nations.

She therefore embodies the argument that the Bank desperately needs to make if it is to regain its legitimacy in the developing world: that aid and development lending are powerful forces for good, so long as they are delivered justly. Appointing her turns control of the Bank over to those it serves while re-affiriming the Bank’s underlying mission.

Read it here.

Economic Peace: Some Thoughts from Barcelona

Returning from a brief (9 days) blogging hiatus with a post at Foreign Exchange. The subject: a panel I was asked to speak on at IESE’s sustainable business conference in Barcelona this weekend. My topic was ‘economic peace and the private sector’s role in fostering political stability.’ An excerpt:

Specifically, the reductive tendency leads us to place emphasis on macroeconomic growth as a cure-all, when as we’ve seen in Obasanjo’s Nigeria or Ben Ali’s Tunisia or Musharraf’s Pakistan, growth can correlate quite easily with increasing political instability and conflict. For one thing, there’s the question of distribution, of how much growth is trickling down the bottom of the economic ladder to those most likely to be embroiled in crime or violence.

But even if ‘economic growth’ is replaced by a genuine focus on job creation and the building of a stable middle class, a critical challenge remains. In a society which has chosen—and this is an ideological choice—to invest its resources in militarism or theocracy but not in education or health care, an angry young man with a steady income still can’t spend it providing for his family: the services he needs aren’t there to be purchased.

Instead, they’re available to him for free from the same crowd of ‘non-state actors’ responsible for his country’s turmoil. In other words, those actors—be they mobsters or terrorists or warlords—aren’t grafting an abstract ideology onto his poverty and rage; they are producing an alternative society, complete with the services the state does not provide. It’s an ideological battle, not an economic one, to transfer a whole society’s focus and collective, public, wealth into building the social structures that make an income valuable. Without those, a little money’s not worth the paper it’s printed on.

You can read the rest here.

One postscript: left to my own devices, I’d probably have parachuted into Barcelona for a day; attended the conference and jetted out. With encouragement and company from qwghlm, I took four whole days off work. I didn’t check Twitter and Google Reader every 5 minutes; I missed thousands of tweets and hundreds of news stories; and when we got back and I caught up, I found that nothing had fundamentally changed on the big stories I’d been following. Gaddafi? Still in power. Raymond Davis? Still in legal limbo. Me? Recharged and ready to report on both.