Beijing: If Justin Lin Yifu has his way, the World Bank will soon be adopting Deng Xiaoping’s development motto of “crossing the river by touching the stones”.
Lin, the Peking University professor newly appointed as the bank’s chief economist, said on Tuesday he wanted the sort of pragmatism championed by China’s late paramount leader to underpin the Washington lender’s quest to alleviate poverty.
“A developing country or a transition economy needs to become a sophisticated, modern market economy. The goal is clear.
“But once you’ve overcome one set of difficulties, new problems will emerge, and you need a pragmatic rather than an ideological approach to address those new difficulties. That, I believe, is the Chinese experience that is most worth promoting,” Lin told a small group of reporters.
Lin, who replaces Frenchman Francois Bourguignon, is the first economist from a developing country to take the top economics job at the World Bank. He will start on 31 May.
His appointment symbolizes China’s rising economic power, and Lin said he expected more and more Chinese to take top jobs in international organisations.
An expert in rural development in China, he said he hoped his background would give him a greater understanding of the challenges facing farmers in Africa, Asia and Latin America.
Lin said he was greatly influenced by Theodore Schulz, who supervised his doctorate from the University of Chicago and won the 1979 Nobel Prize for his hands-on research work on agricultural economics.
“That kind of approach affected me a lot, and I certainly admire his vision, intelligence and the encouragement he gave me,” Lin said.
Books and Basketballs
As well as being a leading academic, Lin’s experience in advising China’s leaders on rural issues will come in useful in navigating the tricky political waters of the World Bank.
One of the books lining his study, along with Karl Marx’s “Capital” and “Freakonomics” by Steven Levitt, is “Making Globalisation Work” by Joseph Stiglitz, a predecessor as World Bank chief economist whose forthright views made for a turbulent tenure.
Lin, who worked as an intern at the bank in 1986, admitted the job would be a big challenge but thought he would have an easier time than Stiglitz in trying to effect change.
“Increasingly, more and more economists appreciate a more pragmatic and diagnostic approach to solving issues instead of importing some kind of one-size-fits-all policies for different countries. So I think I might be a lucky person to come to the World Bank at the right moment,” he said.
The timing is not ideal in one respect, though: the world economy is going through a rough patch because of a credit crunch touched off by the U.S. subprime crisis.
Lin said the experience governments have gained in tackling past crises would limit the damage from the current slowdown.
“It’s a challenge, but I don’t think it will evolve into a big depression as in 1929,” he said. “I believe it’s a short-term correction.”
Time would tell whether the Federal Reserve’s aggressive interest rate cuts would pay off, but Lin praised Fed Chairman Ben Bernanke for acting decisively.
“The important thing is, you have to make up your mind and choose a course of action, indecisiveness is the worst policy.”
Turning to China, Lin said he expected growth this year of around 10%, down from 11.4% in 2007; inflation was likely to average about 5%, close to last year’s rate of 4.8%.
Lin is well-known in China for having defected from Taiwan in 1979. While serving as an army officer he swam to the mainland from the tiny island of Kinmen off Fujian province.
According to media reports, Lin used basketballs to keep himself afloat during the treacherous crossing.
To this day, he risks arrest if he returns to Taiwan, while basketballs are now banned from Kinmen.
Asked about the story, Lin passed up the chance to deny it.
“There are already enough rumours online,” he said with a broad smile.