Wednesday, October 29, 2014

WAKE UP BUREAUCRATS

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What do you expect is usually a fair question to ask.

And it couldn't be more appropriate when you put an infectious disease specialist in charge of a huge bureaucratic organization like the World Bank.

Open the curtains and let the saga begin. Doctor Jim Yong Kim, the Iowa-born Korean former president of Ivy League Dartmouth College took over the bank's presidency a little more than two years ago, an unlikely choice to many at the time, given Kim's apparent lack of credentials in this area.

But who among either his supporters or detractors saw the Ebola virus turmoil coming? It just goes to show the only real expected certainty is the unexpected. Even before the recent Ebola uproar, Dr. Kim started a funding program for those areas with the virus by pledging $200 million from the bank's special humanitarian crisis fund, a sum recently increased to $400 million, according to the Financial Times.

World Bank economists calculate the Ebola outbreak could whack west Africa for $32 billion by the end of next year as fear fuels the fallout to much of the rest of Africa as tourists and others cancel their plans to travel there. Think business conferences and such.

What comes to the fore in the debate about the World Bank's unusual response to what is seen as a health crisis, not the usual fare on the WBO's menu, is it a one time thing in a clear-cut time of crisis or something else again?

At a time when global central banks with their stress tests and so forth have been trying to gauge the financial system strength to withstand future calamity, Dr Kim noted:

"We really have to look carefully at these downside risks to the global economy that only come to our attention in these kinds of disastrous moments."

Should the Ebola crisis spread significantly outside Africa's borders, $32 billion will be a pittance of the real global costs.

To be sure, Ebola is not just an individual health risk. Out of control it's a global economic risk.

So wake up bureaucrats.





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