In openDemocracy, Robert Wade on the World Bank’s long-term problems:
The new president, Robert Zoellick, is a good choice – if the choice had to be restricted to someone in the Bush circle.
Apart from the day-to-day challenges, the biggest challenge for the new team is to find a way out of the bank’s crisis of relevance. Its market has changed fundamentally in the past decade, but the bank continues to operate in much the same way and with much the same products as a decade ago and more. The challenge to reposition itself is almost as big as that faced by the March of Dimes when a cure for polio was found.
The change in the bank’s market was dramatically symbolised in May 2007 when the African Development Bank held its annual meeting not in Africa but in Shanghai – an event which will be looked back on as a milestone in the history of the early decades of the 21st century.
In its traditional products – aid projects and economic policy advice to governments of developing countries – the bank faces an array of new competitors. These include China and Korea, which have become big sources of financial assistance to poorer countries; private consulting firms; private investment banks; and private foundations, like the Bill & Melissa Gates Foundation. But the bank retains a sizeable competitive advantage over these other entities based on three elements: its governmental guarantees, its own revenue base, and its global reach.