Ocampo: cutting loans on poverty works

'US holding back World Bank'

GMT 00:59 2012 Wednesday ,11 April

Arab Today, arab today 'US holding back World Bank'

Colombian economist Jose Antonio Ocampo
Washington - Arabstoday

Colombian economist Jose Antonio Ocampo Washington - Arabstoday US politics have prevented the World Bank from raising money to expand its poverty-fighting work, Colombian economist Jose Antonio Ocampo said Tuesday as he pitched his candidacy to lead the development lender. Ocampo said the Bank needed to raise capital to expand its operations, but that outgoing Bank president Robert Zoellick had not pushed hard enough to boost funding. The result was a cutback in Bank loans for poverty fighting operations, he said. "The current president was too shy in asking for a capital increase," Ocampo said Tuesday as he vies with two other candidates -- the favored US nominee Jim Yong Kim and Nigeria's Ngozi Okonjo-Iweala -- to succeed Zoellick, a former US diplomat. "All the other development banks got huge recapitalizations, ... The World Bank did not, and I think that's the reason why now the Bank is decreasing its lending significantly," he said. The United States "says it cannot get the money through Congress, but it does not want to lose shares in the (Bank's) capital. So that means we're stuck with a World Bank which is constrained by its major shareholder," he added. "At one point, sooner rather than later, the Bank will have to negotiate a capital increase." Born in Cali, Colombia, and a veteran of numerous economy-related positions in the Colombian government, 59 year old Ocampo currently teaches economics at Columbia University in New York. He was speaking at the Center for Global Development in Washington after undergoing a three and a half hour interview with the Bank's directors over his views of what the Bank needs. Ocampo is widely considered as having little chance to win the post. But, together with Okonjo-Iweala, his candidacy is part of the first-ever challenge to Washington's lock on the World Bank presidency, part of a deal with Europe made at the Bank's launch 67 years ago. Both say the US dominance of the institution has to end if the Bank is to adapt its mission to a much-changed global economy. He said the directors asked him what changes are needed to the culture at global development lender. "The first one is the Bank has to be a client-based organization; the first thing that staff have to learn is that working at the country level is actually an improvement in its role for the Bank, rather than working in Washington," he said. "I think sincerely the problem of (people) working for the World Bank is the sense of superiority. The Bank staff has to be willing to recognize that they're equals."

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