TWN Info Service on Finance and Development (Apr12/01)
9 April 2012
Third World Network

More than 100 economists endorse Jose Antonio Ocampo

More than 100 economists endorsed Jose Antonio Ocampo, one of two developing country contenders for the World Bank Presidency, in a letter addressed to World Bank governors.

The letter comes as the World Bank prepares to choose its new chief this month among three candidates currently under consideration, Nigerian Finance Minister Ngozi Okonjo-Iweala, former Colombian Finance Minister Jose Antonio Ocampo and US-nominated Dartmouth College President, Jim Yong Kim.

The petition in support of Jose Antonio Ocampo expresses strong support for his potential role as World Bank President, and demonstrates how his professional career and policy positions proves his capability for the job.

The letter was coordinated by Kevin Gallagher, Professor in the Global Development Policy Program of Boston University and Stephany Griffith-Jones, Financial Markets Program Director at the Initiative for Policy Dialogue in New York.

It is signed by over 100 economists, including Prof. Yu Yongding of the Chinese Academy of Social Sciences, Dr. Y Venugopal Reddy, Former Governor of the Reserve Bank of India, Alicia Barcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, Andrés Bianchi, Former Governor of the Central Bank of Chile and current Vice President of the Credit and Investment Bank of Chile and Jerzy Osiatyński, Former Finance Minister of Poland.

The petition states that Dr. Ocampo is well-suited for the position of World Bank President for three reasons. First, he has had a distinguished career in his own country, where he was a highly successful and professional Minister of three portfolios: Finance, Agriculture and Planning. Therefore he has a deep understanding of policy challenges in developing and emerging countries.

Second, he has had an impressive international career as an international civil servant at the highest level. He was Executive Secretary of ECLAC for five years, the UN Commission for Latin America and the Caribbean; later he became Under-Secretary General for Economic and Social Affairs at the UN for four years. In both institutions, his intellectual leadership and commitment to development led to significant improvements in these institutions contribution to development thinking and to development policy design.

Third, he is respected as one of the foremost development economists in academia. He is a Professor at Columbia University, where he works on research about a wide range of development and macroeconomic topics.

The petition letter concludes that Dr. Ocampo’s wide ranging experience at the highest levels of leadership within the international system, as well as within an important developing country, makes him exceptionally well suited for the position of President at the World Bank.

The petition is available at: http://ase.tufts.edu/gdae/OcampoWBPetitionwithsignatures.pdf

Jose Antonio Ocampo has also published his own statement, titled “What Should the World Bank Do” on the Project Syndicate website, on the development principles and priorities he stands for and how he would lead the world’s leading development institutions if elected.

Ocampo states that he has been “honored by World Bank directors representing developing countries and Russia to be selected as one of two developing-country candidates to become the Bank’s next president.”

He explains that “development is a comprehensive process that involves economic, social, and environmental dimensions – the three pillars of sustainable development.”

His myriad professional experiences in government, the United Nations, regional economic associations and academia has taught him that “successful development is always the result of a judicious mix of market, state, and society.” Trying to suppress markets leads to gross inefficiencies and loss of dynamism. Trying to do without the state leads to unstable and/or inequitable outcomes. And trying to ignore social actors that play an essential role at the national and local levels precludes the popular legitimacy that successful policymaking requires.

Indeed, the specific mix of markets, state, and society should be the subject of national decisions adopted by representative authorities. Ocampo stresses that the implication of this balanced mix is that it is “not the role of any international institution to impose a particular model of development on any country – a mistake that the World Bank made in the past, and that it has been working to correct.”

Because no “one-size-fits-all” strategy exists, the Bank must include among its staff the global diversity of approaches to development issues.

On his concerns with the World Bank’s track record in recent decades, he says, “And, frankly, I have concerns about some of the World Bank’s views and priorities.. For example, while the Bank has made important contributions to the nurturing of deep financial sectors, it still has much to learn about financial inclusiveness and the role that well designed development banks have played in fostering sustainable and inclusive growth in countries around the world.”

“We should never forget, in this regard, that the World Bank is itself a global public-sector development institution. The Bank contributed significantly in its early decades to the development of high-quality physical infrastructure, a critical area that, unfortunately, was later marginalized. The return of this issue to the center of the Bank’s focus is a welcome development.”

Dr. Ocampo specifies that above all, “economic development should be viewed as a process of persistent structural change, which, if successful, supports constant technological upgrading of production and trade.”

While this approach was central to the World Bank’s activities up to the 1970’s, it is still far from being incorporated into the Bank’s operations.

“The goal of development is greater and more equitable human welfare. Human development is about much more than the generation of human capital: it is essentially about expanding the scope of human freedom. And that can be achieved only with universal education, health care, and social protection,” he says.

The concept of the “social protection floor,” recently proposed by the Bachelet Report (produced by the International Labor Organization under the leadership of former Chilean President Michelle Bachelet) provides better intellectual grounding, Dr. Ocampo says.

“Equity and inclusiveness require placing the advancement of the poor and other marginalized groups at the center of development specialists’ concern. In particular, gender equality deserves special attention, an approach that the World Bank today rightly characterizes as smart economics.”

Dr. Ocampo argues that economic policymaking must place at its center “the creation of fulfilling jobs and well-developed welfare institutions,” as well as a respect for the role of cultural diversity in economic development.

“This approach also applies to the environmental pillar of development: intervention to counter damage generated by the economy is not enough. Environmental concerns must be fully assimilated into economic policymaking – that is, into the incentive structure that drives decisions. Only then can economic development be made compatible with the contributions that developing countries must make to mitigating climate change and preserving our planet’s remaining natural forests and biological diversity.”

“The World Bank’s capacity to contribute to achieving these goals depends on it remaining a true global institution with a special responsibility vis-à-vis the world’s poorest countries and a commitment to helping middle-income countries face their own challenges.”

Ocampo concludes by emphasizing global governance, saying that the World Bank must count on the vision of all nations as a part of the system of global governance, “strengthening its cooperation with other multilateral organizations, in particular those in the United Nations system and regional and subregional development banks.”

The full statement is available at: http://www.project-syndicate.org/commentary/what-should-the-world-bank-do-