Inclusive multilateralism
Thursday, 6 May 2010
Mahmudur Rahman
World Bank President Robert Zoellick had to choose his words carefully in describing the ambitious combination of voting reforms and capital increase adopted by the bank recently. It was a manifestation of the 'hard' reforms that he had pledged to pursue when he took over the assignment. And while many immediately dived into the policy and approach issues of the bank, Zoellick maintained a fairly low profile in pursuit of his agenda.
The ramifications of the changes are more than significant; it marks the beginnings of an admission that the balance of power in the world does need to change, driven more by economics than anything else. The upshot has been a recognition of China's role at the expense of Japan, whose wings have been somewhat clipped. Zoellick described it as "modern multilateralism at work". Those words come as no surprise given that Japan, while an economic powerhouse is not a nuclear proposition by design of the powers that be. More importantly, the Japanese economy continues to flounder by its high standards. China, on the contrary has proved to the world that even global recession cannot prevent its astonishing march towards prosperity and growth.
It's the words, "Each shareholder gains, and all contribute" that provoke thoughts. Japan has been strangely silent about the move choosing neither to acclaim nor deprecate the decision. Then again considering the "gains" perhaps it isn't all that surprising. A reduction in its stake also means lesser to contribute to new World Bank initiatives, thereby reducing the pressure on its domestic economy hard hit as its is by the export slump. The other prize of course is the widely speculated expectation of a devaluation of the Yuan.
China too has been humility itself in not trumpeting one of their most important diplomatic triumphs. Economically sound and with enviable projected growth figures to savour, they may well have seen fit to agree to the Yuan devaluation. This would further boost exports, especially to the developing world and Africa where they have quietly gone about trade connectivity through a mix of diplomatic and trade initiatives. And the country has shown that it isn't reluctant towards assisting development projects in the rest of the world given the levels of excellence they have achieved in many sectors (read opportunities for their local companies).
Zoellick's farsightedness in somehow assuming an economic crunch in the European Union (EU) and resurgence in developing countries has been the key to the turnaround. If recent trends are anything to go by it could well be Euro zone countries seeking World Bank assistance as the net step after IMF intervention. But it is in his final words "all contribute" that the success or failure of this initiative will depend. (The writer is a former Head of Corporate & Regulatory Affairs of British American Tobacco Bangladesh, former Chief Executive Officer of Bangladesh Cricket Board and specializes in corporate affairs, communications and corporate social responsibility. He may be reached at e-mail: mahmudrahman@gmail.com)
World Bank President Robert Zoellick had to choose his words carefully in describing the ambitious combination of voting reforms and capital increase adopted by the bank recently. It was a manifestation of the 'hard' reforms that he had pledged to pursue when he took over the assignment. And while many immediately dived into the policy and approach issues of the bank, Zoellick maintained a fairly low profile in pursuit of his agenda.
The ramifications of the changes are more than significant; it marks the beginnings of an admission that the balance of power in the world does need to change, driven more by economics than anything else. The upshot has been a recognition of China's role at the expense of Japan, whose wings have been somewhat clipped. Zoellick described it as "modern multilateralism at work". Those words come as no surprise given that Japan, while an economic powerhouse is not a nuclear proposition by design of the powers that be. More importantly, the Japanese economy continues to flounder by its high standards. China, on the contrary has proved to the world that even global recession cannot prevent its astonishing march towards prosperity and growth.
It's the words, "Each shareholder gains, and all contribute" that provoke thoughts. Japan has been strangely silent about the move choosing neither to acclaim nor deprecate the decision. Then again considering the "gains" perhaps it isn't all that surprising. A reduction in its stake also means lesser to contribute to new World Bank initiatives, thereby reducing the pressure on its domestic economy hard hit as its is by the export slump. The other prize of course is the widely speculated expectation of a devaluation of the Yuan.
China too has been humility itself in not trumpeting one of their most important diplomatic triumphs. Economically sound and with enviable projected growth figures to savour, they may well have seen fit to agree to the Yuan devaluation. This would further boost exports, especially to the developing world and Africa where they have quietly gone about trade connectivity through a mix of diplomatic and trade initiatives. And the country has shown that it isn't reluctant towards assisting development projects in the rest of the world given the levels of excellence they have achieved in many sectors (read opportunities for their local companies).
Zoellick's farsightedness in somehow assuming an economic crunch in the European Union (EU) and resurgence in developing countries has been the key to the turnaround. If recent trends are anything to go by it could well be Euro zone countries seeking World Bank assistance as the net step after IMF intervention. But it is in his final words "all contribute" that the success or failure of this initiative will depend. (The writer is a former Head of Corporate & Regulatory Affairs of British American Tobacco Bangladesh, former Chief Executive Officer of Bangladesh Cricket Board and specializes in corporate affairs, communications and corporate social responsibility. He may be reached at e-mail: mahmudrahman@gmail.com)