Appointment of the new World Bank Group President
The selection of the new World Bank president takes place amid a crisis of multilateralism reflected in the ascent of anti-establishment and nationalist parties and increased trade tensions. These arise from persistent challenges to the world economy ranging from the growing inequality crisis, the increasing importance of finance, financial markets, and financial institutions in the economy, a looming debt crisis and increased corporate capture that is resulting in the erosion of states’ sovereignty and their ability to meet their human rights obligations. These trends are exacerbated by the quickly evolving climate change crisis, which threatens the livelihoods of the poorest around the globe.
The World Bank requires a leader able and willing to critically assess the role the Bank can play in challenging the failed model that has led us here. The next president must ensure the institution leads by example and uses its privileged position to articulate the need for radical change. More than ever the World Bank requires a president who is qualified to lead what is still the world’s principal public development bank.
It is therefore imperative that the selection process results in the appointment of the best candidate, chosen from a wide-ranging pool of people with the background and experience required.
One thing is certain, at a time when the legitimacy of international institutions is increasingly under attack, reliance on the previous process, where the US and its European allies work behind closed doors to ensure the selection of a US World Bank president in exchange for the European leadership of the IMF will only further erode confidence in the multilateral system. It is of vital importance therefore that the next president has the support of the majority of low and middle-income countries, to which World Bank lending is restricted. Continue reading
As first reported by Politico on Monday, the US administration has chosen senior Treasury Department official David Malpass as the US nominee for the World Bank presidency. The official announcement of Malpass’s nomination took place earlier today.
With Malpass’s nomination, all eyes now turn to see how the other WBG executive directors respond when formal nominations open on 7 Feb. Will other nominees enter the race? Although an American has held the post of World Bank President throughout the Bank’s existence, a number of voices from civil society, the media and elsewhere, have already encouraged other shareholders to oppose Malpass’s appointment as president (see here, for example), with Justin Sandefur of the DC-based Center for Global Development arguing, “there is no case for Malpass on merit.” Not surprisingly, Malpass’s supporters disagree.
Following Jim Yong Kim’s resignation in January, the World Bank’s Board vowed to undertake a merit-based process of appointing Kim’s successor, but – given that executive directors must nominate potential candidates – the integrity of the process now rests, in the first instance, on other genuine contenders for the presidency entering the race.
Otherwise, the ‘selection process’ risks descending into a farce. Continue reading
Ute Koczy, World Bank campaigner at Urgewald, comments on the nomination of US Treasury Under Secretary David Malpass as the next President of the World Bank Group, which was reported by insiders:
“This way of determining the next World Bank President perpetuates an unfortunate tradition: ruthlessly and exclusively in the interest of the US government. The selection committee is already useless before it could even begin with interviewing possible candidates. By nominating Malpass, US President Trump wants to lift a follower of his ‘America First!’ approach to the top of one of the key multilateral institutions. That would be a disaster for the World Bank. It could put an end to initiatives of the World Bank to get out of fossil finance.
For the World Bank shareholders outside the USA, it is time to take a stance against this sort of power politics. The times should be over when the USA and Europe could decide over the World Bank and the IMF top position single-handedly. Large shareholders like Germany now must step up and show courage in the World Bank’s Board of Directors. They must insist on the selection benchmarks they have set out publicly. This is the only way to prevent multilateralism from suffering further serious damage. The haggling over posts at the expense of developing and emerging countries must stop.”
The official nomination deadline for the successor to World Bank President Jim Yong Kim, who unexpectedly resigned at the beginning of the year, is due to begin on Thursday. As it became known from media reports, US President Donald Trump wants to try to create facts the day before by nominating the US Treasury Under Secretary and Economist David Malpass. Until shortly after the outbreak of the global financial crisis in 2008, Malpass was chief economist at the investment bank Bear Stearns, which could only be saved from bankruptcy by a takeover. Shortly before the meltdown of the US real estate market, he described the housing market as a long-term growth factor of the US economy. In various articles, Malpass presented himself as a critic of multilateral treaties and economic regulation. In addition, he stands for the continued use of climate-destroying fossil fuels.