Until next time!


As Ajay Banga takes office today as the 14th president of the World Bank, and despite our efforts to push for an open, democratic and transparent selection process that includes all voices and is merit-based, our blog says goodbye.

However, our energy and willingness to keep fighting are still much alive.

In the meantime, and while we get ready for the next process, if you have any questions, suggestions or requests, please email Isabel Alvarez (Bretton Woods Project communications manager) at iavarez@brettonwoodsproject.org

Keep fighting the good fight!
The World Bank Prez blog team.

Bye bye reform and human rights, welcome private sector. Unfortunately we will be back!

by Joe Athialy, Center for Financial Accountability

In another week, on June 2, Ajay Banga will take over as the 14th president of the World Bank Group, the all-men’s club, except for Kristalina Georgieva, who had become World Bank’s acting president briefly for a few weeks in 2019.

Banga’s nomination (not democratically elected) by the US administration, who otherwise is keen on promoting democracies around the world, and appointment by the Bank’s board of directors under the gentleman’s agreement comes at a time when the institution is facing a credibility crisis. 

Its leadership to tackle the climate emergency is under question with findings revealing that the Group has financed over $15 bn to fossil fuel projects since the Paris deal. The Bank’s lack of transparency in the climate finance flows, amounting to $17 bn in FY20, must be “hiding discrepancies and allowing for dubious claims.”

A champion of the ‘shared prosperity’ theory since a decade back, the Bank has witnessed the inequality levels soaring, with the richest 1 per cent capturing around half of all new wealth during this period. The self-appointed anti-poverty lender’s own admission shows an increase in global poverty rates, that in 2021, 828 million people lived in hunger, making the nearly 8-decade-old ambitious agenda to “reduce poverty and expand prosperity” a bit too tardy.

The fraud exposed in the Ease of Doing Business rankings, where countries were arm-twisted to dilute their environmental and forest protection laws as well as labour standards drastically to jump up the ladder of rankings and usher in private corporations, resulted in the Bank junking the rankings. The then chief economist had to apologise to Chile and later resign. The Bank is currently repackaging this fraudulent practice in the name of B-Ready.

Tall talks of accountability fell flat with the Group refusing to own up to the findings of its accountability mechanism, the Compliance Advisor Ombudsman in the Tata Mundra case, even after a decade, making a mockery of the policies and mechanisms, put in place ostensibly to protect people and planet from any harm.

In a case filed by a bunch of fishworkers from Gujarat, India, when the Bank wanted to hide behind the veil of immunity to deny the people their rightful demands, the Supreme Court of the United States ruled out absolute immunity to the World Bank Group, allowing communities around the world to legally challenge the World Bank Group in any court.

It’s against this background that Banga is taking the reins of the Bank. 

Despite several powerful groupings of different countries in the Global South, be it BRICS, ASEAN, SAARC, BIMSTEC and many others, allowing the United States to unilaterally nominate the Bank President (and allowing Europe to nominate the IMF Chief) is an insult to the democratic process nearly all of these southern countries are subscribed to, at least on paper, and some of them even call themselves the Mother of Democracies. Without a transparent, merit-based and democratic process of selection, the President is bound to prioritise the interests of the powers that have installed him on the throne. 

“Neither private equity, nor MasterCard, nor Citigroup, nor PepsiCo, nor Nestlé, nor Dow promote shared prosperity. They all do vastly more to exacerbate inequality than to fight it,” Jeff Hauser, of the Revolving Door Project said in a statement.

A champion of private capital, having no previous experience in public banking and having been associated with some of the corporations responsible for heinous corporate crimes, the Bank will find it difficult to find a redeemer in Banga to restore its credibility. 

His past associations make Banga believe that “there is not enough money without the private sector,” and Bank should involve in “sharing of risk (of) mobilizing private capital.” As a beneficiary of tax holidays, corporate tax waivers, tax evasions, free or subsidised access to natural resources and public banks taking risks of their business expansion, all at the cost of welfare measures for common people, depriving them of affordable public health facilities, education, housing, food security etc, Banga will find it hard to reckon that the private entities amassed their wealth at the cost of people and planet, that they are part of the problem and not the solution.

With a perspective and outlook representing the ones who caused and aggravated the crisis that countries like India are facing, he certainly does not represent India or her concerns. 

Looking at the crises the world is staring at – whether it is the climate emergency is here and now, and the threat of global warming likely to breach 1.5C threshold is a reality, where inequality has touched unprecedented levels, poverty levels have reached newer heights, unemployment rates are high in many countries in the Global South, price rise has pushed the poor to the brink, food scarcity is a reality staring at us – the Bank needs a visionary who can pioneer a radical change in the way Bank functions, humble enough to accept the past mistake and learn from it, and sensitive enough to listen and understand the concerns of the poor and the marginalised. 

World Bank has a different legacy in India, from where Banga originally hails from. The infamous Narmada dam project, which the Bank approved a loan in 1985, two years before India’s environment ministry approved it, says a lot about how much the Bank cares about domestic laws. Findings of the Morse Commission, which led to the formation of the Inspection Panel at the Bank, led to Bank quitting the project ignominiously.

The communities at the IFC-funded Tata Mundra project, which we discussed briefly earlier, successfully challenged Bank’s immunity and they continue to fight for their rights.

World Bank, along with its co-financier Asian Infrastructure Investment Bank, had to withdraw from the Amravati Capital City Project over the grave violations of social and environmental laws, financial nonviability and massive land-grabbing of fertile land, which the people were fighting against.

A decade after communities filed the first complaint on a Financial Intermediary (FI) project of the IFC, a few months back the IFC announced it will stop FI clients from funding new coal projects.

The above instances reiterate that people will never give up their fight when their livelihoods are snatched and they are deprived of their natural resources. That, people will not wait for the Bank to reform and reinvent itself, but will force the change, together with other communities fighting similar fights from around the world. A neo-liberal developmental pathway, favouring private capital and profits, and not people and planet, will lead to more disasters as evident from the climate change induced major catastrophes witnessing around. 

Banga has the option to learn lessons from these as he is readying himself to step into the H Street building.

Ajay Banga and predatory financial inclusion

Newly appointed World Bank President Ajay Banga at the World Economic Forum in Davos, January 18, 2017. Credit: World Economic Forum / Sikarin Thanachaiary

By Nick Bernards, Associate Professor, University of Warwick

On Wednesday, 3 May, former MasterCard CEO Ajay Banga was confirmed as President of the World Bank. The appointment, driven by the Biden administration, has rightly raised controversy with civil society groups around the continuation of the ‘gentlemen’s agreement’ whereby the US effectively unilaterally appoints the Bank’s President, while Europe nominates the Managing Director of the IMF. 

One significant reason behind Banga’s nomination is his track record of ‘financial inclusion’ initiatives during his time at MasterCard. One typical summary of Banga’s qualifications for the Presidency suggests that Banga ‘has been widely praised for his management skills at MasterCard, as well as his establishment of financial inclusion programs at the firm’.

Financial inclusion, meaning the extension of a range of financial services to impoverished people, has been a priority of the Bank’s for much of the last two decades. As the most recent World Development Report puts it succinctly: ‘Access to financial services is essential for resilience and economic recovery. Digital payments, savings, credit, and insurance allow businesses and individuals to manage risk, smooth expenses, and invest.’ This is a neat ‘win-win’ story — poor people get new means of managing the many risks with which they are faced on a daily basis, banks and other financial institutions get new sources of profit.

In practice, things haven’t worked out so well. There is a marked tendency for banks and new digital lenders to, in Phil Mader’s words, ‘cherry pick’ the aspects of the ‘financial inclusion’ agenda they want to participate in — mainly, high interest loans to ‘less poor’, predominantly urban borrowers. Another potentially lucrative area, which has proven to be of interest to some financial services firms, is the digitization of payments.

On this point, Banga’s MasterCard has been at the forefront. MasterCard participated in a number of pilot projects, predominantly in sub-Saharan Africa, aimed at rolling out biometric payment cards to ‘unbanked’ people. Notable projects in Nigeria and South Africa — the latter with significant support from the World Bank — administered state pensions and social grants using accounts linked to cards embedded with biometric data about recipients. 

Towards the end of his MasterCard tenure, Banga would tell an interviewer at Bloomberg that ‘I think the biggest realisation… was to define our competition—not other payment networks, but as the wider environment of cash. That just changed everything; how we approach the market, how we approach technology, how we approach financial inclusion and our commitments to financial inclusion over the years.’

Banga was quite happy to make himself the face of these projects. Interviewed in 2013 about MasterCard’s biometric programmes as part of a glowing profile in the Washington Post, Banga rhapsodized the benefits of biometric payment cards. Cashless transactions were cheaper and more efficient, both for recipients of social payments and for governments. Not only would the elimination of cash help reduce fraud, tax evasion and crime, but biometric data would give to the hitherto ‘unbanked’ a basic sense of personhood that cash payments could not provide. At the same time, the digitization of social payments in particular was clearly identified as a potential growth area for MasterCard. Banga told his interviewer, that while biometric projects would ‘do good’, ‘I’m not a philanthropy. I’m not a United Nations agency. I run for shareholders. I have to do well. I believe you can do both.’

With the benefit of ten years of hindsight, the picture is decidedly less rosy. For one, MasterCard-linked projects targeting the ‘unbanked’ seem primarily to have served as means of experimenting with technologies to be subsequently rolled out for more affluent markets. MasterCard eventually piloted its first biometric credit card in South Africa in 2017, shifting its gaze from social grant recipients to more affluent middle-class consumers. MasterCard has subsequently piloted a project with retailers in Brazil in 2022, with an eye to eventually deploying biometrics in Europe and North America. As MasterCard’s direct involvement in ‘financial inclusion’ initiatives has seemingly slipped onto the backburner, it’s hard to escape the conclusion that social grant recipients in Africa have been used as guinea pigs to test out products and technologies which MasterCard ultimately intends to deploy in more lucrative markets.

Moreover, the wider digitization of social payments has not had the kind of unalloyed development benefits Banga seemed to anticipate in 2013. We can see this especially clearly in South Africa where MasterCard’s involvement with the payment of social grants was notably heavily supported by the World Bank through loans by the Bank’s private-lending arm, the International Finance Corporation, to MasterCard’s partner bank, Net 1. Net1’s role in administering the social grants quickly became increasingly controversial, both because of irregularities in the tendering process, and because it was linked to facilitating exploitative lending practices. Net1 leveraged its near monopoly control over the distribution of social payments in order to aggressively market loans to transfer recipients. Net1 then used its position managing the flow of social transfers into recipients accounts to deduct loan payments from transfer payments directly. As Erin Torkelson puts it, ‘Funded by the state, Net1 turned social grantees into a lucrative and risk-free market’.

Ajay Banga’s track record with ‘financial inclusion’ projects, then, effectively boils down to making himself a figurehead for some of the most predatory and exploitative elements of a wider development agenda whose actual benefits have proven unclear at best. We should probably be cautious of overstating the influence of the President over the day-to-day operations of the Bank. However, Banga’s appointment is a worrying sign of what’s to come in the Bank’s approach to poverty, especially given that the particularly predatory take on ‘financial inclusion’ fostered during his time at MasterCard is being proffered as evidence of his suitability for the Presidency.

It’s perhaps notable in the context of Banga’s appointment that digitizing social payments has been identified as a policy priority for the World Bank in recent years, particularly post-pandemic. The Bank has launched twin initiatives around Identification for Development (ID4D) and digitizing ‘Government to Person’ (G2P) payments (G2Px). These projects carry with them a heavy emphasis on using social transfers primarily as mechanisms for expanding the use of digital finance by impoverished recipients, and on initiatives for targeting and fraud prevention. They also amount to a kind of ‘privatization by stealth’ of social transfer systems, as significant chunks of their administration are contracted out to private banks and payment firms like MasterCard. 

Given his MasterCard history, Banga’s appointment seems a worrying signal that projects like the MasterCard-Net1 debacle in South Africa will gain prominence and priority in coming years. 

The case for a heterodox feminist World Bank President 

By Elaine Zuckerman, Gender Action

As the World Bank is not closing its doors anytime soon and a new Bank President will take command in mid-2023, many Bank-watchers are demanding a first-ever merit-based selection process. Since the Bank’s 1944 establishment, the United States has maintained a neocolonial stranglehold on the position. As soon as current climate-denying Bank President David Malpass announced plans to resign, the US immediately nominated another American citizen – Indian-American Ajay Banga. 

A global civil society outpouring has condemned Banga’s nomination for reasons including:

  • The time is long overdue to end the US neocolonial prerogative to fill the World Bank presidency. The Bank’s other 188 shareholder countries should not allow the US nominee to become the 15th American President.
  • While the Bank must end its continuing support for fossil fuels and the fossil fuel industry’s capture of the Bank, Banga’s positions on corporate Boards supporting fossil fuels undermines confidence that he will robustly tackle climate change.
  • Banga’s record promoting the private over the public sector suggests he would likely consolidate the Bank’s overzealous global privatization of infrastructure and services, thereby continuing to deepen rising class inequalities that hinder achieving the Bank’s dual mission to end extreme poverty and achieve shared prosperity. 

Hopefully nominees who outshine Banga will be put forward during the remainder of the unacceptably short three-week nomination process that closes on March 29. Such nominees should be feminist heterodox leaders, preferably from the Global South, who oppose the Bank’s long-time neoliberal orthodoxy.

A heterodox feminist World Bank President: Some stakeholders call for a first female World Bank President who would symbolize the increasing power of women. But a woman President alone will not be enough to right the Bank. What the Bank needs is a heterodox feminist President: 

Why Heterodox? The Bank needs a heterodox economic proponent who would promote expansionary rather than contractionary public spending. To do so, they would end the Bank’s privatization and austerity requirements that reduce poor women’s, men’s and sexual and gender minorities’ (SGMs’) access to public services while rendering privatized services unaffordable. 

A recent Action Aid report shows that 85 per cent of the world’s population was expected to live under austerity measures in 2022. These austerity measures include cutting or freezing the wages and numbers of teachers, health workers and other public sector workers, the majority of whom are women, and undermining health and education outcomes.

The next Bank President must prioritize public financing for public investments and services, reverse the austerity wave and promote a fair resolution to borrower countries’ sovereign debt distress, including through debt cancellation.

Why Feminist? The Bank needs a feminist female, LGBTQ or male President, preferably from the Global South, who would: (1) promote public-sector policies and investments that benefit women, men and SGMs; (2) end investments in and policy support for fossil fuels that are destroying our planet and the health, homes and livelihoods of everyone, especially vulnerable women and SGMs; and (3) strive to eradicate patriarchal mindsets remaining among some Bank employees and Board members. These destructive practices persist despite Bank rhetoric promoting gender diversity and clean climate measures.

The first feminist Bank President must ensure the Bank’s forthcoming gender strategy update will no longer promote gender issues in a vacuum isolated from overarching austerity, privatization, and vicious debt cycles. 

A new 2023 report titled IFIs’ Rhetorical Gender & Climate Promises, by Gender Action, Friends of the Earth and Urgewald, which scores and ranks the strength, adequacy or weakness of over a dozen International Financial Institutions’ (IFIs) gender policies and the gender sensitivity of their Environmental and Social Frameworks (ESFs), found the World Bank gender strategy and ESF’s gender sensitivity ranked at the bottom of the stack.

To improve Bank gender priorities, the first heterodox feminist Bank President must ensure that Bank projects stop: (1) facilitating project conditions that force some women and girls into sex work to survive; (2) removing farmers, especially women, from land and homes to build many types of infrastructure including unacceptable fossil fuel facilities that contribute to planetary destruction; and (3) clearing tropical rain forests for biofuel export crops that also dispossess poor farmers, mostly women, of land, livelihoods and homes.

The first heterodox feminist Bank President must ensure that the Bank adheres to the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) and other international human rights treaties ratified by an overwhelming majority of member countries and uses human rights language to frame its work.

Recapping key recommendations:

  • The next Bank President must end the Bank’s explosive neoliberal austerity and privatization-of-everything practices.
  • The next Bank President must completely end all support for fossil fuel-related activities.
  • The Bank must end its non-democratic presidential selection process and the American male presidential monopoly.  

We cannot let another five-year Bank presidential term elapse while global and local climate, debt, food security and other crises deepen and gender equality remains 300 years away. The Bank needs a heterodox feminist President to tackle these issues now.

Out of the frying pan, into the fire? Malpass’s departure, Banga’s likely arrival, and the rebirth of the ‘Billions to Trillions’ zombie as climate saviour

Credit: DisobeyArt / Shutterstock

Few in the civil society community that works on the World Bank Group will shed tears at the early departure of the World Bank’s outgoing president, David Malpass, who announced last month that he will step down by 30 June.

After being nominated by US president Donald J Trump in February 2019, and appointed in April of that year, Malpass has spent much of his four years at the helm of the world’s largest development finance institution as a walking cautionary tale of the negative repercussions of the gentleman’s agreement – an informal pact among the Bank’s most powerful shareholders that has seen the US handpick every Bank president to date.

While Malpass’s history of climate change scepticism – including at a September New York Times event when he repeatedly refused to confirm he accepted the scientific consensus on climate change, when pushed by NYT reporter David Gelles – rightly received strong condemnation, the issues with his presidency went much deeper.

Malpass opposed the TRIPS waiver for Covid-19 vaccines, despite the lethal health and other dire consequences of massive corporate profiteering by pharmaceutical companies during the Covid-19 pandemic and the fact that the vast majority of the Bank’s member countries supported it. Under his leadership, the World Bank’s flagship Doing Business Report (DBR) – which promoted corporate-friendly reforms – was discontinued, with lingering questions about when Malpass became aware of alleged data manipulation by Bank staff in the report. Whatever the case, Malpass was clear that despite DBR’s demise, his support for the Bank’s efforts to promote a pro-business ‘enabling environment’ in its borrower countries remained undimmed.

Although Malpass rarely mentioned climate change in his first year in charge, when he belatedly warmed to the topic as the 2020 US presidential elections approached, it was very much through the lens of what economist Daniela Gabor has dubbed the Wall Street Climate Consensus, where the role of the state is reduced to ‘de-risking’ private sector investments. Malpass enthusiastically engaged with the notion of creating ‘investable project pipelines’ for the private sector as a means of greening World Bank client country economies, and met with BlackRock CEO Larry Fink to discuss the topic at the 2021 Annual Meetings.

In this regard, at least, Malpass – a Wall Street veteran, including an ill-fated stint as chief economist for Bear Stearns, which was one of the high-profile casualties of the 2008 global financial crisis – shares an uncomfortable level of similarity with his likely successor, US nominee Ajay Banga, a former CEO of Mastercard – whose qualifications for the job, according to the Biden Administration, include “forging public-private partnerships”.

Banga’s nomination coincides with a World Bank ‘evolution’ process where all signs point to a potential deepening of the World Bank’s Billions to Trillions approach, which has been variously referred to as the Cascade, Maximising Finance for Development, and – in the post-Covid-19 era – Green, Inclusive and Resilient Development.

However, promises that the Billions to Trillions agenda would bring private finance at scale to development initiatives have thus far rung hollow, even in the relatively more favourable environment prior to the outbreak of the pandemic.  

The World Bank evolution roadmap takes this policy paradigm in a potentially even more counterproductive direction, via proposals to securitise World Bank projects and sell them off to institutional investors.

Advait Arun warned of the dangers of such an approach in a February piece in Phenomenal World, noting, “While securitization may free up balance sheets in the short term, in the long run this is yet another financial “innovation” that will put private investors in the drivers’ seat of the green transition―likely at considerable cost to everyone else.”

While comparisons between Banga and Malpass may seem imprecise, another World Bank president who promotes the Wall Street Consensus raises the possibility of policy reform discussions being dominated by more vain, and developmentally illiterate, efforts to crowd in private finance from the very institutions that have helped finance the climate crisis in the first place and remain heavily exposed to the fossil fuel bubble – which itself represents a potentially destabilising feature of the current, financialised global economy.

It’s difficult to see how ‘private-sector solutionism’ will facilitate ‘green’ economic transformation in World Bank ‘client’ countries that is rooted firmly in a human rights-based approach, rather than Wall Street profit motives.

What is desperately needed are strategies to mobilise public finance at scale and a greater role for the developmental state in allocating green finance, in order to avert the worst impacts of the climate crisis.

Such a world is possible, but not if corporate finance continues to rule the day.