Is Jim Kim Destroying the World Bank — or Saving it From Itself?

The good doctor Kim is out to salvage the bank’s global relevance. But his radical reforms have critics calling for his head.
APRIL 27, 2016
In a shantytown perched in the hilly outskirts of Lima, Peru, people were dying. It was 1994, and thousands of squatters — many of them rural migrants who had fled from their country’s Maoist guerrilla insurgency — were crammed into unventilated hovels, living without basic sanitation. They faced outbreaks of cholera and other infectious diseases, but a government austerity program, which had slashed subsidized health care, forced many residents to forgo medical treatment they couldn’t afford. When food ran short, they formed ad hoc collectives to stave off starvation.

A Catholic priest ministering to a parish in the slum went looking for help, and he found it in Jim Yong Kim, an idealistic Korean-American physician and anthropologist. In his mid-30s and a recent graduate of Harvard Medical School, Kim had helped found Partners in Health, a scrappy nonprofit organization whose mission was to bring modern medicine to the world’s poor. The priest had been involved with the group in Boston, its home base, before serving in Peru, and he asked Kim to help him set up a clinic to aid his flock. No sooner had Kim arrived in Lima, however, than the priest contracted a drug-resistant form of tuberculosis and died.

Kim was devastated, and he thought he knew what to blame: the World Bank. Like many debt-ridden nations, Peru was going through “structural adjustment,” a period of lender-mandated inflation controls, privatizations, and government cutbacks. President Alberto Fujimori had enacted strict policies, known collectively as “Fujishock,” that made him a darling of neoliberal economists. But Kim saw
calamitous trickle-down effects, including the tuberculosis epidemic that had claimed his friend and threatened to spread through the parish.

So Kim helped organize a conference in Lima that was staged like a teach-in. Hundreds of shantytown residents met development experts and vented their anger with the World Bank. “We talked about the privatization of everything: profits and also suffering,” Kim recalls. “The argument we were trying to make is that investment in human beings should not be cast aside in the name of GDP growth.” Over the next half decade, Kim would become a vociferous critic of the World Bank, even calling for its abolition. In a 2000 book, Dying for Growth, he was lead author of an essay attacking the “capriciousness” of international development policies. The “penalties for failure,” Kim concluded, “have been borne by the poor, the infirm, and the vulnerable in poor countries that accepted the experts’ designs.”

Kim often tells this story today, with an air of playful irony, when he introduces himself — as the president of the World Bank. “I was actually out protesting and trying to shut down the World Bank,” Kim said one March afternoon, sitting on a dais before a conference audience at a hotel in Maryland’s National Harbor complex. “I’m very glad we lost that argument.”

The line always gets a laugh, but Kim uses it to illustrate a broader story of evolution. As he dispenses billions of development dollars and tees off at golf outings with Barack Obama — the U.S. president has confessed jealousy of his impressive five handicap — Kim is a long way from Peru. The institution he leads has changed too. Structural adjustment, for one, has been phased out, and Kim says the bank can be a force for good. Yet he believes it is only just awakening to its potential — at a precarious moment, no less.

Last year, the percentage of people living in extreme poverty dropped below 10 percent for the first time. That’s great news for the world, but it leaves the World Bank somewhat adrift. Many former dependents, such as India, have outgrown their reliance on financing. Others, namely China, have become lenders in their own right. “What is the relevance of the World Bank?” Kim asked me in a recent interview. “I think that is an entirely legitimate question.”

Kim believes he has the existential answers. During his four years at the bank’s monumental headquarters on H Street in Washington, he has reorganized the 15,000-person workforce to reflect a shift from managing country portfolios to tackling regional and global crises. He has redirected large portions of the bank’s resources — it issued $56 billion in loans and other forms of financing last year — toward goals that fall outside of the institution’s traditional mandate: stemming climate change, stopping Ebola, addressing the conditions driving the Syrian exodus.

Yet many bank employees see Kim’s ambitions as presumptuous, even reckless, and changes undertaken to revitalize a sluggish bureaucracy have wrenched it. There have been protests and purges, and critics say Kim’s habit of enunciating grandiose aspirations comes with a tendency toward autocracy. The former bank foe now stands accused of being an invasive agent, inflicting his own form of shock therapy on his staff. “The wrong changes have been done badly,” says Lant Pritchett, a former World Bank economist.

Pritchett argues that, beyond issues of personality and style, Kim’s presidency has exposed a deep ideological rift between national development, which emphasizes institution-building and growth, and what Pritchett terms “humane” development, or alleviating immediate suffering. Kim, however, sees no sharp distinction: He contends that humane development is national development — and if the bank persists in believing otherwise, it could be doomed to obsolescence.

Kim likes to say that as a doctor with experience treating the poor, his humanitarian outlook is his strongest qualification for his job — an opinion that probably vexes critics who point out that he knew little about lending before arriving at the bank. “Finance and macroeconomics are complicated, but you can actually learn them,” he says. “The hardest thing to learn is mud-between-your-toes, on-the-ground development work. You can’t learn that quickly. You can’t learn that through trips where you’re treated like a head of state. You have to have kind of done that before.”Read more: FP