Former World Bank vice-president wants trade body to focus on raising living standards in the wake of the pandemic
William Wallis FEBRUARY 12 2021
Taking on apparently insurmountable challenges is something of a habit for Ngozi Okonjo-Iweala.
In 2003, when she left her job as vice-president of the World Bank to return to Nigeria as finance minister, her country was mired in debt. Its people were bitterly divided and a once proud civil service had become a glorified mob. Everything needed to be fixed. Yet, the tools at the disposal of the elected government had been blunted to near destruction over decades of military misrule.
Surveying the wreckage on her first day in office she thought: “My God, this is crazy, you made the worst mistake,” Okonjo-Iweala later recounted in an interview with the FT. “I had to get a hold of myself, and say, ‘If you have all these problems . . . you have to prioritise which ones to solve and which will have the biggest impact.’ ”
A task just as daunting, if very different, now awaits the 66-year-old in Geneva, where she is set to take up the role of director-general of the World Trade Organization after Joe Biden’s endorsement last week cleared the final obstacle to her appointment.
The WTO’s 159-member countries may agree that this determined African woman, with a global network of highly placed contacts, is the right person for the time. But they are divided on almost everything else.
Resurgent nationalism and Donald Trump’s assault on the rules-based global order have unleashed a new era of protectionism. At the same time, the WTO’s dispute settlement court, its main instrument for easing tensions, has been paralysed by strategic rivalry.
The WTO’s grander ambitions all but evaporated under the cautious leadership of outgoing Brazilian director, Roberto Azevêdo. More than 20 years have passed since it concluded a round of trade negotiations successfully. Meanwhile, the pandemic has exposed glaring inequalities around the world that the WTO was partly set up in 1995 to address.
Okonjo-Iweala sees an opportunity for the organisation to rediscover some of its original purpose of raising living standards across the board and to bring its outdated rule book up to date at a time of accelerating change.
“We need this organisation to be stronger again, to help lift up every boat,” she says by phone from Washington, where she has lived on and off for decades with her neurosurgeon husband and three children.
Okonjo-Iweala’s friends and supporters believe her 25 years at the World Bank, where she rose to become managing director and deputy to Robert Zoellick between 2007 and 2011, and her time running Africa’s largest economy, give her the wherewithal for the task.
As a teenager, Okonjo-Iweala was witness to the horrors of the Nigerian civil war before studying development economics at Harvard and MIT. As finance minister, her less celebrated reforms paved the way for bigger victories, such as securing the write down of $18bn in foreign debt.
She risked her reputation when she returned to Nigeria a second time as coordinating minister for the economy in 2011. Detractors accused her of lending respectability to a government that presided over industrial scale looting of oil revenues.
But she showed grit in facing down vested interests where she could, despite death threats and the kidnapping of her 82-year-old mother. Her experience of driving a development agenda through such murky waters served her well later at the World Bank.
“What endears her to many people is how seamlessly she could identify with the problems she was encountering — whether in south-east Asia, in other parts of Africa, or in eastern Europe. She was able to because of lived experience,” says Vera Songwe, executive secretary of the UN Economic Commission for Africa, who worked with Okonjo-Iweala at the World Bank.
Her most immediate challenge is the WTO director-general’s job itself. Without a defined mandate, the nature of the role has tended to shift according to the character of its incumbent. Some have served as a kind of “super-secretary” beholden to member states. Others have tried to set their agenda more forcefully, according to former WTO head Pascal Lamy.
“I cannot see Ngozi as a super-secretary. She needs to be somewhere in between,” he says. Striking the right balance will be a prerequisite if she is to make progress on some of the global economy’s biggest challenges, not least how to reconcile market capitalism and China’s model of state capitalism.
Okonjo-Iweala believes that small victories will pave the way to bigger ones, as they did in Nigeria. If the pandemic has a silver lining, she says, it is in underscoring the need for a multilateral approach to defeat enemies that know no borders.
“I would like us to find areas where there is common ground, where the WTO can have successes and begin to rebuild that trust between its members,” she says.
In past roles, Okonjo-Iweala has managed to combine political astuteness with a keen mastery of detail. Baroness Shriti Vadera, former UK minister and banker, thinks this will stand her in good stead. “She can see the big outcomes and understands how to tweak the details in order to achieve them.”
Being a WTO outsider could also be an advantage, Vadera believes. “Ngozi’s stage is bigger and the existential threat to the WTO is bigger.”