Jim Yong Kim has announced he is stepping down as the head of the World Bank, in a move that sent shock waves through the international aid community.
He will leave by 1 February, three and a half years before the expiry of his term in 2022.
The Washington-based organisation is one of the largest donors to developing world countries and while many of its policies have proved controversial, it has been credited with supporting huge infrastructure projects across Asia, Africa and South America since its creation after the second world war.
Kim’s decision to quit for the private sector was described by sources close to the bank as a sudden and “personal decision” that surprised its shareholders – the 189 nations that support its work.
Kim said: “It has been a great honour to serve as president of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime.
“The World Bank Group is more important now than ever as the aspirations of the poor rise all over the world and problems like climate change, pandemics, famine and refugees continue to grow in both their scale and complexity.”
However, in a letter to staff that is likely to be seen as veiled criticism of the organisation, the 59-year old said: “The opportunity to join the private sector was unexpected but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets.”
Only last month Jim Yong Kim said the organisation would make about $200bn (£157bn) available to fund action on climate change from 2021-25, helping countries adapt to the effects of warming and reduce greenhouse gas emissions.
US presidents have traditionally appointed the head of the World Bank, while European governments normally decide the managing director of the International Monetary Fund. President Barak Obama chose Kim in 2012 to fill the shoes of Robert Zoellick, a former US government official.
Jim Yong Kim’s abrupt resignation leaves Donald Trump with the opportunity to appoint a successor. He could turn to Bulgarian national Kristalina Georgieva, the bank’s chief executive, who will take over as interim president when Kim leaves. The much-respected official was a European Union commissioner and EU finance chief before moving to Washington.
Before Jim Yong Kim took over, the bank laid down a series of criteria for appointing future presidents, which was designed to prevent officials with little experience of running large organisations or who lacked relevant experience, especially in the developing world.
However, Trump is expected to use his effective power of veto to make sure a close adviser or a sympathetic political figure takes over.
A senior official at an international charity, who asked to remain anonymous, said he was concerned that the World Bank’s aid efforts could be badly affected if the appointment became a political football.
“It is a US appointment that is not necessarily meritocratic. It is something that the Trump administration controls and that has to be a source of concern,” he added.
Jim Yong Kim said his achievements included persuading countries on the governing council, including the US, to boost the bank’s capital budget last year by a record $13bn. He said poverty across the world had fallen and the bank was on target to reach its goal of eliminating extreme poverty by 2030.
However, last year the bank was forced to admit that progress has slowed and efforts would need to be intensified to reach the goal. Poverty in large parts of sub-Saharan Africa also increased as aid efforts failed to cope with a dramatic increase in population across the region.
Meanwhile, critics of the institution have pointed out that much of the reduction in global poverty levels over recent decades is largely down to domestic policies in communist China.
Critics have also accused the bank of following a business-friendly agendathat allowed western companies to make profits from developing world countries without paying a fair share in tax in those states.