WTO DG Meeting High Expectations

Ngozi Okonjo Iweala

Profile March 3, 2021

She a master of detail yet sustains a grand vision of securing a multilateral approach to cross-border issues that affect nearly all. An enviable political astuteness and the ability to come up with fresh solutions to tired problems have propelled Ngozi Okonjo-Iweala to ever greater heights, shattering countless glass ceilings in the process.

Mrs Okonjo-Iweala gets results where others consistently waver, give up, or just fail. In the early 2000s, during her first stint as finance minister of Nigeria, she successfully concluded a renegotiation of the country’s massive debt with the Paris Club of major creditor countries, wiping $30 billion off the books, including $18 billion in outright debt cancellation. In 2006, at the end of her term, Mrs Okonjo-Iweala had added $60 billion to the reserves, deposited $38 billion in the excess crude fund, and stuck another $5 billion in Nigeria’s sovereign wealth fund – even as oil prices hit rock bottom during her tenure.

The new director-general of the World Trade Organization (WTO) enjoys a well-earned reputation for toughness and perseverance. However, her appointment – the product of a rather complex electoral process involving considerable geopolitical powerplay and multiple voting rounds – did not go off smoothly.

Election

Though Mrs Okonjo-Iweala received the backing of the European Union just ahead of the final vote, the United States threw a spanner in the works by expressing a clear preference for South Korean Trade Minister Yoo Myung-hee. Only after he withdrew his candidacy in close consultation with the Biden Administration, on February 5, did the US agree to support the Nigerian nominee after which Mrs Okonjo-Iweala was unanimously chosen by the WTO’s 164 member states.

Earlier, the Trump Administration had argued that Mrs Okonjo-Iweala lacked the professional experience to lead the organisation. However, her resumé – both long and impressive – features a quarter century at the World Bank where she started her professional career as a development economist and worked her way up to managing-director, the second highest slot in the organisation.

From that lofty position Mrs Okonjo-Iweala ruled over the bank’s $81 billion operational budget for Africa, Europe, and South and Central Asia. She also chaired the International Development Association’s (IDA, part of the World Bank Group) replenishment drive which in the early 2010s raised almost $50 billion in grants and soft credit for the least developed countries.

In an article published in the Financial Times, only days after being installed as WTO director-general, Mrs Okonjo-Iweala admitted that the Corona Pandemic has added to the organisation’s many woes, or as she described it: ‘acute challenges’. She noted that the viral outbreak wreaked havoc on global trade but that a strong rebound is imminent. The IMF forecasts that global trade volumes are set to increase by eight percent this year and grow an additional six percent in 2022.

In her first policy statement, Mrs Okonjo-Iweala surprised many by vowing to assume a ‘more forceful’ role in ensuring the equitable distribution of vaccines and the removal of export restrictions and other barriers that derail medical goods supply chains. She also said that a ‘third way’ must be explored and found for intellectual property to encourage research and innovation whilst promoting licensing agreements that help scale-up global production. On her first day in office, Mrs Okonjo-Iweala moreover called for a wholesale transfer of covid-19 vaccine technology.

Credibility

The new WTO director-general hopes to make her mark quickly and return a level of credibility to the much-maligned organisation by getting its members to agree on meaningful reform. A first test is the upcoming meeting of trade ministers on ocean sustainability. The WTO proposes to eliminate all fisheries subsidies and so reduce the number of fishing vessels to match the oceans’ dwindling stocks. Mrs Okonjo-Iweala is keen on a robust fisheries deal – already twenty years in the making – which may add to the WTO’s standing.

“The world is leaving the WTO behind. It cannot be business as usual. Leaders are impatient for change and we have to move from debating to delivering results.” Mrs Okonjo-Iweala needed all of five minutes to signal the arrival of a new dawn at the organisation’s Geneva headquarters and signalled a complete break with her predecessor’s cautious and soft-spoken approach. President Christine Lagarde of the European Central Bank said she expects the new WTO chief to ‘rock the place’. Mrs Okonjo-Iweala is not likely to disappoint.

The first woman and African to hold the post, the Nigerian economist enjoys a reputation for getting things done and for untying gordian knots – deploying her iron will without much fanfare. After unceremoniously shaking up the guardians of power in Nigeria, she was nicknamed ‘Okonjo the Troublemaker’ – a badge of honour of sorts. During her second stint as finance minister (2011-2015), she stepped on so many toes that her mother was briefly kidnapped as a warning of what might happen should she insist on rooting out corruption.

In Nigeria, Mrs Okonjo-Iweala set up the Youth Enterprise with Innovation programme to support small businesses and help create jobs. She also led the initiative to re-base the country’s gross domestic product which resulted in Nigeria becoming Africa’s largest economy.

More recently, Mrs Okonjo-Iweala has travelled the world as a special envoy for the African Union to rally international support for the continent’s efforts in containing the spread of the novel coronavirus and dealing with covid-19. Earlier this year, she co-chaired the High Level Independent Panel on financing the global commons for pandemic preparedness and response set up by the G20 during its recent meeting of finance and central bank deputies.

Wooing the US

Considered a power broker in global finance, but a trade outsider, Mrs Okonjo-Iweala, is uniquely poised and qualified to tackle some of the tough issues facing the WTO such as forging an agreement on the $26 trillion global online marketplace. The prospect of a comprehensive e-commerce deal offers a way for the WTO to re-engage the United States whose big tech companies face mounting legal hurdles as governments try to collect taxes on trade and operations spread over multiple jurisdictions. It is, by all means, a Herculean task. Mrs Okonjo-Iweala is, however, optimistic that she can bring all parties to the negotiating table and lay the groundwork for a basic deal that may, over time, be expanded upon.

Mrs Okonjo-Iweala admits that she is guided by the sage-like wisdom her father, a Nigerian king, lived by: Never allow anyone to intimidate or blackmail you. That advice – and plenty perseverance – has proved exceptionally useful and helped Mrs Okonjo-Iweala survive and prosper in Nigerian politics and work her way up the World Bank hierarchy. She has now the most challenging job of all: to find common ground between the richest and poorest countries of the world and serve the interests of all without getting lost in conflicting interests. If anyone can rescue the WTO from irrelevance, it is Mrs Okonjo-Iweala. Great things are expected of her and she has a name for delivering.

Cover photo: The new director-general of the World Trade Organization (WTO) Ngozi Okonjo Iweala.