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Banker to the Poor

A Conversation With Jim Yong Kim

C
onceived at the 1944 Bretton poverty by 2030 and boosting shared
Woods conference to help prosperity. How are we going to get
rebuild postwar Europe, the there? Generally speaking, it divides
World Bank has expanded over the into three main categories. One is
ensuing 70 years into a global organiza- economic growth. If you look at the
tion dedicated to promoting economic greatest achievements in lifting people
growth and reducing poverty—goals it out of poverty, China, almost through
aims to meet by giving the billions of brute economic growth, lifted 600 million
dollars in gets in contributions from people out of poverty. The second big
developed countries to developing block is investment in human beings.
ones in the form of loans and grants. In other words, making sure that the
In 2012, U.S. President Barack Obama poorest people have some kind of
broke with tradition by nominating income or sustenance to be able to
Jim Yong Kim to serve as the institution’s consume and, potentially, participate in
president. Unlike his predecessors, economic growth. And a third category
Kim came not from the world of finance, is social protection. There are some
economics, or politics but from that of governments that found that even if
public health. Trained as an anthro- you’ve had a tremendous amount of
pologist and a physician, Kim co-founded success, if you have a little bit of a
the nonprofit Partners in Health in 1987, downturn and you don’t have that safety
gaining renown for his work on drug- net in place, people plunge right back
resistant tuberculosis. He then directed into poverty. This happened in South
the hiv/aids Department of the World Korea in the late 1990s.
Health Organization, taught at Harvard If those are the strategies generally
Medical School, and served as the speaking, how can you help countries
president of Dartmouth College. Kim go down that path? In 1990, East Asia,
spoke with Foreign Affairs deputy man- South Asia, and Africa all had the same
aging editor Stuart Reid at the bank’s percentage of people living in extreme
Washington headquarters in June. poverty: 55 percent. Now, East Asia is
reuters / kevin lamarque

at ten percent, and South Asia has gone

What are the major challenges to down to 30 percent. In Africa, it’s still
economic development, and what is 55 percent. Why did we succeed in East
the World Bank doing about them? Asia, and why are we falling behind in
We’ve set two goals: ending extreme Africa? This year, we’re going to be
lending over $60 billion. That seems
This interview has been edited and condensed. like a lot of money, but every year,

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The World Bank president
in Washington, April 2014
Banker to the Poor

sub-Saharan Africa requires about $100 to villages in India or in Africa.” They

billion in new investment in infrastructure. have to ask the question, Where has this
Just the brics countries [Brazil, Russia, been done better than anywhere else in
India, China, and South Africa] need the world? We’ve done that at our best.
about $1 trillion. All official development With conditional cash transfers, pioneered
is about $130 billion. Even all that assis- in Brazil and Mexico, we’ve been able
tance is just a drop in the bucket. So to spread that particular intervention
our most critical role is to say, “Here’s to 40 other places. We want to capture,
what we’ve now learned over 70 years curate, and then spread great solutions
about why countries grow and why that don’t spread on their own.
countries grow in an inclusive way.” Let me give you an example. Probably
the best-functioning health institution
Is one way of figuring out how to I’ve ever seen is based in India. It’s called
spend that money through such things the Aravind Eye Institute. They are the
as randomized control trials? best at doing cataract surgeries and a lot
Absolutely. We have a whole group more. They do it for a tiny fraction of
engaging in randomized control trials. the cost in the developed world, and
But that’s only one part of it. Randomized their outcomes are just as good. There
control trials tend to ask very focused are lessons there for every health-care
questions: In this particular setting, is system in the world, even for the U.S.
this intervention better than that inter- health-care system. Who’s in charge of
vention? These kinds of insights help capturing that experience and making
shape the direction of our lending. But sure that it spreads to other parts of
what we’re doing now is something the world? Universities can’t really do
that’s really quite unique. Every single it, because professors have to do their
time I’ve ever done a project in a devel- studies and publish their papers and get
oping country, I thought someone had tenure. That’s who we want to be.
solved this problem somewhere, but I
didn’t know how to get to them. In the The critique of your reform is that you’re
private sector, companies have experts empowering the issue experts at the
running all over the place figuring out expense of the regional experts. And
the details of how to solve particular when it comes to development for any
problems, and then they share them given country, the most important
with the rest of the organization. But thing is to get the government to buy
in global health, global education, or into the plan. Don’t country experts
global development, that’s been really know better than issue experts what
difficult to do. will work in a given place?
What we’re trying to build at the This is a huge misconception. Our
World Bank is, for example, an energy footprint in the countries has not changed,
group. We brought all the people work- even a little bit. The difference is that
ing on energy together into one technical now, when there are road experts in a
group that can say, “OK, your problem particular country, they’re going to be
is building solar-based or wind-based part of a group that includes every other
micro- or mini-grids to supply electricity road expert in the world. The fear from

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 A Conversation With Jim Yong Kim

the beginning was that all these technical pretty straightforward. We’re going to
experts would parachute in and try to follow the income growth of the bottom
sell their goods. We just had a three- 40 percent and compare that to the
hour meeting this morning where we growth of the entire economy. My own
looked at the situation in each different sense is that the goals are going to
region and asked, “How’s it working? overlap a lot, that we’re going to be
Are people parachuting in?” And believe able to suggest infrastructure investment
me, if the technical folks want to take strategies, for example, that both provide
over the relationship, I will hear about a foundation for strong economic growth
it. We were functioning almost as six but also lead to greater inclusion.
regional banks. It’s very difficult to Let me give you one example. We just
take an organization that was so siloed put out a study that said that if India
and turn it into an organization that builds 1,000 kilometers of bus rapid
collaborates. transit, this would create 120,000 jobs,
save lives from both reduced pollution
Is that why there’s so much grumbling? and reduced road traffic accidents, and
There’s grumbling for lots of other things. contribute to the growth of the Indian
We’re also going through an expenditure economy. We should be the ones who
review, and there’s grumbling about find those twofers or threefers.
parking, and there’s grumbling about
breakfast. But it’s a culture change that How much do you worry about
everyone in the organization told me inequality? If everyone’s better off
was necessary. We’ve got to move from than they were before, why does it
a siloed system, where everyone is afraid matter that some are even better off?
to take risks and everyone pushes the The world has changed. Even very
decision up to the next level because poor people are more empowered and
they don’t want to get in trouble, to demanding more. This is happening
one in which everyone sits at the table everywhere. Even in places like Brazil,
and we actually collaborate. where the last two governments have
been so committed to reducing inequality,
You’ve focused a lot of the World there were protests last summer. It’s just
Bank’s energy on eradicating extreme a political reality for leaders that they’ve
poverty. What about the moderately got to pay attention to inequality.
poor? What’s your strategy for creating Then, we have this phenomenon of
opportunities for them and, more the Thomas Piketty book [Capital in the
broadly, the general process of economic Twenty-first Century]. It’s a 700-page
development? book. But there’s literally one page—
This is exactly the question we’re asking and I’ll give you the page number—in
right now. And that’s why having these which he says there are two forces that
two separate goals is so important: ending have led to decreasing inequality, both
extreme poverty in 2030 but also boost- within and between nations: one, the
ing shared prosperity, specifically, trying diffusion of knowledge, and two, invest-
to make sure that the bottom 40 percent ment in people, especially in training
participate in economic growth. It’s and skills. His policy conclusions—a

September/October 2014 73
Banker to the Poor

global tax on wealth and increasing the We are supposed to be apolitical. In

top tax rates—have been very contro- terms of democracy, the way that we
versial, but there hasn’t been much of a come at it is that we look specifically
real attack on his methods, his conclusions. at how various systems are functioning.
People generally agree that r is greater So we do a lot of work on helping coun-
than g—the return on wealth is greater tries put effective judicial processes in
than the growth of the economy—and place. We spend a lot of time focusing
therefore, those who control wealth will on how governments deliver services.
always get richer, and those who depend We spend a lot of time thinking about
on the growth of the economy and their openness. In terms of democracy itself,
salaries increasing will always be poorer there are different definitions of what
compared to the rich. that means. We, generally speaking, are
But one page suggests that the for rule of law. We encourage govern-
diffusion of knowledge and investment ments to be as open with their data as
in people can actually change the formula. we are. We think it’s extremely impor-
Well, I called Thomas, and I said, “We tant to have lots of feedback and input
only see that on one page.” He said, from civil society organizations. Some-
“We just don’t have a lot of data on thing broad like, Does democracy lead
that, but that seems to be the case.” So to growth?—these are very difficult
I said to Thomas, “Then don’t institutions questions to answer. It’s almost academic.
like the World Bank have an incredibly
important role in boosting greater inclu- So what do you do when a country
sion by ensuring that knowledge diffuses embraces economic reform but not
even more quickly, that we find even political reform? China, Singapore,
better ways in investing in people to Ethiopia, Rwanda come to mind. Should
improve their skills and their productiv- the bank have a mandate to promote
ity?” And he said, “Yes, that is one of democracy?
the potential conclusions of the book.” The great strength of the World Bank
The reality of global market capitalism Group is that no matter the political
is with us. The Chinese Communist situation in a particular country, as long
Party and the Vietnamese Community as they’re in good standing, we try to
Party embraced global market capitalism maintain a relationship so that we can
fully. So if the way to move this seem- continue to work. Part of the thinking
ingly inexorable drive toward greater is this: if, in fact, political instability
inequality is by diffusing knowledge and conflict, for example, are related to
and investing in people, then that is a poverty, then it’s better to try to address
huge part of our role. the problem of poverty even while there
are regimes in place that some of our
Let’s talk about democracy. Do economic members might disagree with.
growth and political openness go hand We’re trying to thread a needle here.
in hand? We’re trying to keep our operations
The Articles of Agreement of the World going because even inside governments
Bank prohibit us from interfering in the that some have critiqued severely, there
domestic politics of another country. are still poor people. There are still needs

74 f o r e i g n a f fa i r s
for infrastructure and there are still
needs for health care and education.
There are countries that are not actively
working with us right now. Venezuela
is not actively working with us right
now. North Korea is not a member of
the World Bank Group. But our role
is to remain ready to work with any
of them, as long as they abide by our The Internship
rules. For example, we keep good Program
relationships with both Ukraine and
Russia right now. The Council on Foreign Relations is seek-
ing talented individuals who are consider-
ing a career in international relations.
Does the World Bank try to protect
Interns are recruited year-round on a ­semester
human rights? basis to work in both the New York City and
Human rights specifically is not part of Washington, D.C., offices. An intern’s duties
our mission statement, as it is written generally consist of administrative work,
right now. But what are the other things editing and writing, and event coordination.
that are part of our values and our mission The Council considers both undergraduate
and graduate students with majors in Interna-
that I work on every day? Gender equality
tional Relations, Political Science, Economics,
is now very much on our agenda. Fight- or a related field for its internship program.
ing discrimination was not necessarily A regional specialization and language skills
in the original Articles of Agreement, may also be required for some positions. In
but it’s something for which I have very addition to meeting the intellectual require-
strong support from my board. You may ments, applicants should have excellent
skills in administration, writing, and re-
have heard about the Uganda case [in search, and a command of word processing,
which the government passed an anti- spreadsheet applications, and the Internet.
gay law]. Not only did I make my own To apply for an internship, please send a
personal view on discrimination known, résumé and cover letter including the se-
but we delayed a specific loan because I mester, days, and times available to work
wasn’t convinced that that loan would to the ­Internship Coordinator in the Hu-
man Resources Office at the address listed
not lead to discrimination or even below. Please refer to the Council’s Web
endangerment of the lgbt community. site for specific opportunities. The Coun-
cil is an equal opportunity employer.
Should you refrain from praising auto-
cratic leaders who have presided over
economic growth?
First of all, the definition of autocratic
leader differs from person to person.
But we have criticized leaders for Council on Foreign Relations
Human Resources Office
choices that they made that we thought 58 East 68th Street, New York, NY 10065
were bad. In the case of Uganda, I was tel: 212.434 . 9400 fax: 212.434 . 9893
pretty specific. At the same time, I have humanresources@cfr.org http://www.cfr.org

praised those same leaders for decisions

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Banker to the Poor

they have made that are good. The ones who have the position they now
important thing for me is to not be seen have don’t want to give it up. The coun-
as politically partisan. Our mandate is tries that are growing rapidly want a
economic growth, ending poverty, greater share. At the end of the day,
boosting shared prosperity. As long as I the decisions have consistently moved
focus on those areas, then I can do a lot. toward giving greater voice to develop-
But the minute I move into the realm ing countries. Will that keep happening?
of deciding whether a leader is auto- I suspect it will.
cratic or not, deciding whether human
rights have been violated or not, I’m Is it time to allow someone who’s not a
actually moving beyond the Articles of U.S. citizen to head the World Bank?
Agreement. I can do that when I become Is it time to allow it? You bet. And
a private citizen, but I cannot do that that’s what actually happened. I know
now. I probably would lose my job. there’s been a lot of talk that this wasn’t
a real election. Well, it felt like a real
Should emerging countries have more election to me. [Then U.S. Treasury
influence in the Bretton Woods institu- Secretary] Tim Geithner told me from
tions, of which the World Bank is a part? the very beginning, “Jim, it’s different
The Bretton Woods institutions were this time. You’re gonna have to get on the
started as a banking cooperative. The road, and you’re gonna have to make
decision early on was that the voting the case.” And I did. I visited 35 countries.
shares would be based on original I went to the African Union. I went to
investment and investments over time. the Ethiopian government. I was
The voice from the developing countries running like crazy from the time of the
is higher in the World Bank Group nomination to the election, and it was
than, say, the imf. The imf is trying to not a unanimous vote. There was an
move in the same direction, but they’ve extremely credible, very accomplished
been thwarted. candidate that I was running against.
But at the end of the day, I feel like I
By the U.S. Congress [which blocked a won the election. You can analyze why I
reform package]. won the election all kinds of different
Well, yeah. But there’s no question that ways, but I have very clear ideas about
the movement has been toward giving what it’s going to take to end extreme
developing countries greater voice. In poverty and to share prosperity. In fact,
the last ida [International Development this is what I’ve been doing my whole
Association] replenishment—our fund life. I feel like I’m here for a reason.∂
for the poorest countries—both China
and India played a much larger role
than they did before in providing these
funds for the poorest countries.
This is something that has to be
decided by our board members. It’s an
intense and difficult negotiation, with
a tremendous amount of jockeying. The

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