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Obama taps public health expert for World Bank

By Lesley Wroughton

WASHINGTON (Reuters) - President Barack Obama on Friday nominated a Korean-American known for his work in fighting disease in impoverished countries to lead the World Bank, a job emerging economies are contesting for the first time.

Jim Yong Kim, 52, is president of Dartmouth College, an Ivy League school in New Hampshire, and former director of the Department of HIV/AIDS at the World Health Organization.

Despite the challenge from emerging nations - Nigerian Finance Minister Ngozi Okonjo-Iweala and former Colombian finance minister Jose Antonio Ocampo were also nominated - the United States is expected to maintain its grip on the job, which it has held since the bank was founded after World War Two.

"He's worked from Asia to Africa to the Americas - from capitals to small villages," Obama said. "His personal story exemplifies the great diversity of our country and the fact that anyone can make it as far as he has as long as they're willing to work hard and look out for others."

The choice came as a surprise.

Washington's past picks for the World Bank presidency have had more standing in political circles and Kim's name had not surfaced in several media reports on potential nominees.

Okonjo-Iweala, a respected economist and diplomat, is likely to draw support from many emerging nations that want to see the bank focus more on helping their economies develop and less on traditional poverty-fighting aid. Her backing by Angola, Nigeria and South Africa was a rare example of unity among countries often at loggerheads.

Ocampo's nomination by Brazil also signaled the desire of emerging markets to have a competitive process as they move to try to upend the tradition of always having an American lead the World Bank and a European lead the International Monetary Fund.

The bank's current president, Robert Zoellick, steps down at the end of June.

"You will see more of a debate, an assessment of the merits of the different candidates and the direction of the bank," said Arvind Subramanian, a former IMF official. "It is not a slam dunk. It is not an obvious choice," he said of the U.S. nominee.

Washington, however, retains the largest single voting share at the World Bank and can expect the support of European nations and Japan, the bank's second-largest voting member.

Paul Farmer, a co-founder with Kim of the non-profit Partners in Health, which serves some of the world's poorest countries, said the nominee would bring to the post a real world understanding of poverty and a sense of purpose.

"A lot of people who live in poverty in the world today feel that the World Bank has stalled and needs new vision," Farmer, the chairman of the Department of Global Health at Harvard University, told Reuters in Kigali, Rwanda. "One of his qualities is that boldness of vision."

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NARROWING THE FIELD

U.S. economist Jeffrey Sachs, who had been put forward for the job by a group of small countries, withdrew and threw his support to Kim. He had cast his uphill candidacy as an effort to break Washington's penchant for political appointments.

A Canadian government source said Canada would back Kim and South Korea, his boyhood home, also signaled its support. But India said it wanted to consult the other so-called BRICS countries - Brazil, Russia, China and South Africa - before deciding, and Mexico also said it was keeping an open mind.

The rise of emerging economies such as China, India and Brazil has put pressure on the United States and Europe to throw open the selection process for both the bank and the IMF. Last year, all of the bank's 187 member countries agreed on a transparent, merit-based process.

The World Bank board of member countries has promised to make a decision by the time of the IMF and World Bank semi-annual meetings on April 21.

U.S. Secretary of State Hilary Clinton and Treasury Secretary Timothy Geithner advocated for Kim's nomination, White House spokesman Jay Carney said, adding that a number of candidates were considered, but not all were interested.

CHALLENGES AHEAD

The new World Bank chief will take over at a time when the euro zone's debt crisis is weighing on the global recovery, undercutting demand in the poorer nations that often rely on funding from the bank.

He or she will have to decide how best to deploy resources in a budget-cutting environment in which large bank shareholders, such as the United States, are demanding results, transparency and greater efforts to tackle corruption.

In the end, the choice may come down to political horse trading. Russia has refrained from publicly backing a non-U.S. candidate and has instead called for a greater role for emerging market countries in other top positions at global financial institutions. World Bank board sources have said a deal could arise in which developing and emerging economies win the top post at the bank's private-sector lender.

Kim, who holds both an M.D. and a Ph.D. from Harvard University, led a World Health Organization initiative that is credited with providing access to HIV treatment to millions of people in developing countries.

Dartmouth faculty gave Kim generally high marks, saying he dealt ably with the school's impaired balance sheet in the wake of the financial crisis. However, in February, 105 faculty called on him to do more to combat hazing after a student detailed abusive practices.

Some students faulted Kim for focusing too heavily on post-graduate programs to the detriment of undergraduate studies and using Dartmouth as a platform for higher aspirations.

"From the first year he got here there was a pretty general consensus that he was using Dartmouth as a stepping stone to get to something bigger," said Kurt Prescott, a 21-year-old senior.

(Writing by Lesley Wroughton and Tim Ahmann; Additional reporting by Stella Dawson, Mark Felsenthal and Glenn Somerville in Washington; Choonsik Yoo in Seoul, Stella Mapenzauswa in Johannesburg, Randall Palmer and David Ljunggren in Ottawa, Jason McLure in Hanover, New Hampshire, and Graham Holliday in Kigali, Rawanda; Editing by Timothy Ahmann, Leslie Adler, Dan Grebler and Andre Grenon)

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