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International relations

Isolated World Bank chief faced heat on cost cuts and China

Jim Yong Kim squeezed by US demands and internal pushback

World Bank President Jim Yong Kim, left, greets Chinese President Xi Jinping and Xi's wife, Peng Liyuan, at a Beijing event in 2017. The Trump administration has been critical of the bank's financing to China under Kim.   © Reuters

WASHINGTON -- World Bank President Jim Yong Kim's sudden decision to resign marks the end of what insiders describe as a tenure caught between the Trump administration's attacks on funding for international bodies and the organization's resistance to cutting costs.

Kim said on Monday he will quit his post on Feb. 1 to take a private-sector job in infrastructure financing for developing countries.

The outgoing chief was under pressure both from the Trump administration and within the World Bank, a senior official at the international lender said.

The Trump administration has squeezed American contributions to international organizations. The World Bank was already under pressure from Washington to cut employee pay and take other steps to restructure.

Unable to ignore the U.S. government as its top stakeholder, Kim prioritized restoring the lender's financial health by slashing such expenses as business travel.

The restructuring that Kim oversaw triggered an internal backlash against the World Bank chief, who also took what a senior official described as steps to cozy up to the Trump administration, such as establishing the Women Entrepreneurs Finance Initiative with the president's daughter and adviser Ivanka.

At the same time, the Trump administration pushed Kim to reduce financing for China. Even as income levels there have approached the mark at which World Bank aid would decline, the country remains one of its main loan recipients. Meanwhile, Beijing has emerged as an increasingly large provider of infrastructure financing in Asia and Africa under its Belt and Road Initiative.

A U.S. Treasury official complained that it is odd for China to increase its foreign lending while raising money from the World Bank.

Kim reportedly faced strong internal resistance to his decision to change financing rules in a way that would reduce funds for development projects in China, one of the lender's stablest borrowers.

The Trump administration has quit international bodies, such as UNESCO and United Nations Human Rights Council, that are not in step with the president's vow to put "America first." It has also threatened funding for the World Bank and the International Monetary Fund, although a senior IMF official calls it inconceivable that the U.S. would pull out of either organization.

Unlike with other international organizations, the U.S. has free rein over both lenders with veto power as their largest stakeholder, the official said.

Americans have traditionally served as World Bank presidents, and the U.S. will lead the selection of the Korean-American Kim's successor.

But Kim faced Nigerian and Colombian competition as a candidate back in 2012. Contenders from emerging markets and developing countries could gain support this time around if opposition to the Trump administration's lack of international cooperation grows.

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