Much ado about Nooyi’s World Bank chances

AN overly appreciative tweet from Ivanka Trump about former Pepsico chief Indra Nooyi has got the Washington gossip mills speculating about her possible nomination as the World Bank chief after the Korean-American incumbent (Jim Yong Kim) set his eyes on greener pastures. In India, the possibility of Nooyi helming the World Bank set off the familiar waves of warm acknowledgement of India’s progress on the global stage.

This feeling of taking ownership of an individual who left Indian shores for lack of opportunities decades back and serves a set of interests of a developed nation or an MNC different from those of India is widespread. The same excited oohs that followed Sundar Pichai’s $200-million salary from Google are now serenading Nooyi while overlooking the institutions helmed by them. An Indian at the top did not stop Google’s predation of data from developing countries on the back of rudimentary data protection laws, resulting in what then Australian Communications Minister Stephen Conroy described as “the single greatest breach in the history of privacy”.

Nooyi, like the admittedly supremely talented Pichai, belong to a tribe of global citizens who live in a self-contained bubble, many of them flitting from one country to another while retaining similar surroundings and value systems. Other countries have also understood this Indian soft spot. Over the past decades, Indian-origin envoys have occupied the chanceries of the US, Australia and Canada. This tactic, though, is the preserve of Western nations because of their easy admittance laws. Chinese and the Russians must have mulled this option to get close to Indian heartstrings, but were hampered because of their aversion to giving citizenship to non-Hans and non-Slavs, respectively. But make no mistake. Whether it was Peter Varghese, the Australian spymaster who was fielded as the Indian High Commissioner, or former US attorney Preet Bharara (in the Devyani Khobragade episode), there is no free pass for India or naturalised Indians because of the similarity in ancestry.

The same story is likely to be repeated with the World Bank’s top post. Developing nations have been attempting to ease the stranglehold of the developed world over global governance and financial institutions for years with little success. As a result, the Asian Development Bank chief is mostly from Japan, a European heads the International Monetary Fund (IMF) and an American the World Bank. If at all Nooyi will make the cut, it is because she will first and foremost uphold Washington’s interests. The movement among developing countries to loosen the grip of the North over the Bretton Woods institutions will continue to remain divided and unfocused while the person at the helm will never try to lend a helping hand.

The success that developing countries registered at the election of the World Trade Organisation Director General is instructive. A naturalised Brazilian, Roberto Azevêdo, was up against the trans-Atlantic alliance’s proxy candidates from the Asia Pacific — a Kiwi and a Korean. The initial support from BRICS nations provided the momentum that became unstoppable. Today, Azevêdo is serving his second term, but only because all countries, big or small, have one vote each.

The two Bretton Woods institutions — the World Bank and the IMF — are ripe for a reworking of power equations after the global balance of economic power decisively shifted towards developing countries. In tune with the West’s penchant for hiding its intentions behind altruistic motives, the control of the World Bank is predicated on a public formula: GDP (50 per cent), openness (30 per cent), economic variability (15 per cent) and international reserves (5 per cent). Each country gets a quota based on the weight from this formula. Technically, quotas are reviewed every five years. Yet the process of redistribution of quotas decided in 2010 began after nearly six years because of political stalling by the US. The US Congress did not approve a shift of 6.2 per cent of quota shares towards emerging and developing countries until December 2015. Even that is unfair and too less as developing and transition countries account for almost half the global GDP. It is doubtful if Nooyi as an Indian-origin corporate honcho can be instrumental in speeding up the enhancement of voting share of developing countries.

Ever since the Bank was set up on the rubble of World War II, the five largest shareholders — US, Japan, Germany, France and China — have the right to nominate their own executive directors. India, as the sixth largest economy, is yet to savour this privilege and has to throw its hat in the electoral ring to send a representative to the World Bank high table, thus perpetuating the dominance of West Europeans and Americans on the Executive Board.

Nooyi may be supremely gifted, but the leadership of the World Bank and the IMF is not merit-based. She has the potential to make the cut not because American-Indian brotherhood has taken wings. Rather, the nomination is a ‘gentlemen’s agreement’ between the US and the overrepresented Europe. That enabled Christine Lagarde’s re-election as the IMF MD without a competitor. The others knew it was futile to contest because of the tilted electoral arena despite the fact that their timely repayments keep both institutions humming.

At a recent event in Chandigarh, a newly-elected provincial assembly member from Canada was fielded by doting relatives and fond friends as an example of the Left’s success. The vivacious and cheerful legislator-elect held forth on the universality of the Left's appeal. But none asked her why she couldn’t make a mark in Left politics in India. The answer would most probably lie in the difference in objective conditions in both countries. So it is with members of the Indian-origin community who strike it big in public affairs. The common cultural connect does evoke empathy, but there is no harmony of interests.

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