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Join civil society and individuals demanding the end of the ‘gentlemen’s agreement’ and calling for a merit-based, open and transparent World Bank presidential selection process.

Statement calling on the World Bank shareholders to ensure a merit-based, open and transparent World Bank presidential selection process and an end of the ‘gentlemen’s agreement’ that has characterised the leadership ‘race’ at the World Bank and IMF since their establishment.

Civil society demands the end of the ‘gentlemen’s agreement’ and calls for merit-based, open and transparent World Bank presidential selection process

The undersigned organisations and individuals write to demand that the World Bank use the opportunity of the resignation of President David Malpass to heed long-standing calls from global civil society and countries from the Global South and ensure the next World Bank president is selected in accordance with a merit-based, open and transparent process, underpinned by well-defined and publicly available selection criteria and civil society engagement with the candidates. The time has surely come to put an end to the archaic gentleman’s agreement, which has its origins in the times of empire and continues to damage the institution’s standing and legitimacy. 

The selection of the World Bank’s next president takes place at a time of mounting global challenges, such as the existential climate and nature crisis, rising inequality, increasing debt distress and the related increase in social and political instability. It also occurs against the backdrop of increasing threats of the fragmentation of the multilateral order. The proposed expansion of the BRICS grouping and the establishment of the New Development Bank and Asian Infrastructure Investment Bank are clear evidence of the frustration with and consequences of the continued lack of democratic legitimacy of the Bretton Woods Institutions, and the need for an urgent change in their governance. 

Discussions of the World Bank’s evolution roadmap, the G20 MDBs’ capital adequacy frameworks, alongside the Bridgetown Initiative and commitments made at COP26 to meet global goals for nature, climate and people, are signs of a recognition that the World Bank must change if it is to rise to the occasion, meet its development mandate and gain the trust of the population and states of the Global South.  

The next president must have the qualifications, experience and commitment to integrity to ensure that the Bank’s policies and approaches seriously engage with the vast academic and civil society literature that documents the need for urgent reform. The president must ensure reforms are the result of a clear, critical and evidence-based analysis of the serious flaws and shortcomings of the World Bank’s approach to date. 

As the World commemorates the 75th anniversary of the Universal Declaration of Human Rights and the 50th anniversary of the UN General Assembly Declaration on the Establishment of a New International Economic Order, we demand that the criteria for the next World Bank president include: 

  •  Minimum of 20 years of professional work experience in the field of sustainable economic and social development, including at international and country levels; 
  • A demonstrated commitment to international human rights law and standards, to ensure that  the World Bank does not work against human rights but to advance prosperity for all, including by developing a human rights policy for the institution and helping to deliver the right to a clean, healthy and sustainable environment; 
  • A demonstrated understanding and commitment to urgently tackle climate change and ensure development supports nature, peoples and the planet;
  • Sufficient experience in development issues to lead a critical analysis of the Bank’s development approach and private sector bias to date; 
  • An understanding of and commitment to feminist principles, equitable development and the green and just transition; 
  • A commitment to ensuring that World Bank policies and programmes advance community-led development, are truly country-led and support ending poverty, reducing inequality and creating shared prosperity for all, as well as the economic transformation necessary for a global green and just transition; and 
  • A commitment to engagement with global civil society and, importantly, civil society at the country and local levels and with under-represented communities, as core to its mission. 

We also demand that the selection process be open and transparent and includes an opportunity for civil society to engage with the candidates. In that regard, we demand that: 

  • The World Bank publishes the revised and detailed selection criteria, including the minimum standards outlined above; 
  • Shareholder votes are made public; and  
  • The World Bank hosts exchanges between candidates and civil society at the upcoming Spring Meetings in Washington DC. 

The process used to select the next World Bank president will speak volumes about whether the reforms undertaken under the banner of an ‘evolution’ of the Bank will result in urgently needed change in policies and approach, and thus enable it to play a positive role in supporting an equitable, feminist, green and just transition, or will rather result in a little changed, but marginally better resourced, institution.

Access the letter and list of signatories here.

Banga’s nomination has Empire written all over it

By Iolanda Fresnillo, Jean Saldanha (Eurodad)

Ajay S. Banga at the India Economic Summit 2017 in New Delhi, India. Credit: World Economic Forum / Benedikt von Loebell

The speed with which the US nominated Wall Street veteran Ajay Banga as their candidate for the World Bank Group’s (WBG) President came as a surprise to many in civil society. Malpass’ resignation, announced just a week before, was a new opportunity to rethink the role of the institution to address the multiple challenges that countries in the global south are facing. Instead, hope turned to incredulity and anger – as the US government announced that the vice-chair of a US private equity group, and former chief executive of MasterCard, was their choice to lead an international institution with a mandate to promote sustainable development and eradicate poverty. 

It is a widely held view that the WBG is in urgent need of a rethink. Following the publication of two damning reports in 2021, revealing serious ethical improprieties, conflicts of interest in the Bank’s Advisory Services and data manipulation in the development of its flagship Doing Business Report, more than 100 civil society organisations and academics from around the world called for the overhaul of the institution. Then in September 2022, environmental organisations demanded that Malpass step down as President after his non-committal response when questioned about whether he believed in human-driven climate change. Yet he remained. And he remained defending until the end the assertion that it is more important to retain the AAA rating of the World Bank than to open the door to debt cancellation, not even for a temporary suspension of debt payments. 

On the other side of the spectrum, the Bank’s shareholders have also stepped up their call for reform. With the Bridgetown initiative – presided over by Barbados’ Prime Minister Mia Mottley – leading the vanguard, and the G20 following with their particular appeal for more firepower, the World Bank and other multilateral banks are under pressure to be bolder and step up concessional lending.

The next leader of the World Bank must break with the past and have a vision for the future. The President must understand that the Bank has at best been floundering, and at worst completely failing to achieve its objectives – and it must change. It must play its part in implementing rather than undermining the global agenda on development, inequality, climate change, and social justice. It needs to earn the trust of the communities and countries where the World Bank does – or should – provide finance. Human rights must be at the centre of its policy and democracy and inclusiveness at the heart of its governance model. And it is high time that a woman – a feminist – an heterodox economist – a person truly representing the global south, is given the job.

Instead with Banga it will be more of the same. And doubly so. US President Biden noted his ‘decades of experience building global companies and public-private partnerships’ as valued credentials when announcing Banga’s nomination. Yet there is very little documented evidence of global companies of the likes of Citigroup, Dow, Pepsico or  Nestle that Banga has earned his stripes with – or public private partnerships in general – creating shared prosperity in a sustainable way.  On the contrary: both Exor, the investment holding company of which he is the Board Chair and Temasek, Singapore’s state owned investment fund where he is a director, invest in fossil fuel projects. He cashed in on share sales after Trump-era tax cuts allowed MasterCard to inflate its share price through buybacks. Biden’s choice for the World Bank leadership sends a clear message: the future they picture is private. Banga is amongst the believers that climate action will happen through private finance and private investment. We strongly disagree. 

Banga’s rapid nomination also continues the archaic and deeply neocolonial ‘gentlemen’s agreement’ whereby the US gets to choose the head of the World Bank and Europe, the head of the IMF. Having crafted an ‘elegant solution’ to the diversity conundrum – as India’s IMF Executive Director described the nomination of Indian-born Banga – it is not expected to receive great opposition from other parts of the world. 

Irrespective of this the US’ rapid nomination of their candidate demonstrates their intent to maintain an antiquated arrangement. This could not be further away from the good governance principles of transparency and efficiency that the World Bank and its shareholders preach, but do not practice. 

Well into the 21st century, it is time for responsive, inclusive, democratic and accountable governance of the World Bank, starting with the selection of its President in an open and transparent process. Right now, this feels more Empire than meritocracy.  

Read and sign the letter of rejection here. This is an Open Letter, which will be sent to the World Bank Board of Directors.

This post was originally published on Eurodad’s website.

Letter of rejection of the US nomination of Ajay Banga, former Mastercard chief, to be World Bank president

Civil society organisations from around the world reject the nomination of Mr. Banga for World Bank president and call for an end of the gentlemen’s agreement. 

We, the undersigned organisations, are appalled that in the context of calls for a democratisation of the governance in the World Bank, and the global consensus of the need for climate and economic justice, the US government nominated Ajay Banga on Thursday 23 February, former MasterCard CEO, to become World Bank president. We reject the nomination of Mr. Banga for World Bank president.

Banga, vice-chair of US private equity group General Atlantic and former chief executive of MasterCard until the end of 2020, was nominated by Joe Biden despite his explicit lack of credentials to lead the World Bank Group towards seriously tackling the generational challenges of climate change and global inequality. A Wall Street veteran, with no demonstrated development experience, Banga lacks the credibility to lead the World Bank in its stated objective of promoting sustainable development and eradicating poverty, or in addressing economic and social rights of the most vulnerable communities, let alone climate change. Banga’s current and past affiliations include being Chairman of the Board at Exor (a Dutch investment holding company) and Director at Temasek (Singapore’s state-owned investment fund), both of which invest in fossil fuel projects. He also benefited from Trump-era tax cuts by cashing in on share sales after the tax cuts had allowed MasterCard to inflate its own share price through buybacks.

The profile of this nominee could not be further away from what the world needs in the current context of multifaceted crises and environmental emergencies. The World Bank is not a private equity firm. The nomination of yet another investment banker illustrates how deeply Wall Street financiers remain embedded in leadership, advisory, stakeholder and many other key positions across international financial institutions, particularly the World Bank Group and International Monetary Fund.

The nomination demonstrates another dangerous step towards the Wall Street Climate Consensus, where private sector investors take the leading role in financing and governing the supposed “green transition”, while public institutions, including the World Bank, are relegated to derisking private investments in a show of “subsidised greenwashing”. In the context of a Global South debt crisis and hard-hitting austerity measures, the derisking agenda further erodes what is left of the developmental state and the prioritisation of a public budget for economic and social rights and needs.

Banga’s focus on financial markets access and instruments, particularly green bonds, for financing climate and sustainable development investments would only exacerbate the current extractive dynamic, in which scarce public financial resources are massively being diverted from education, health or social protection budgets to repay private bondholders and commercial banks. His appointment is a message from the Biden administration that the World Bank should continue channeling critical sums of public financing to private interests, as the International Finance Corporation (IFC) has been doing for decades.

The nomination by the US government makes clearer than ever the need for a truly merit-based, transparent and open selection process – not just on paper. The World Bank’s next leader must serve billions of people living in poverty and tackle the growing multiple climate, inequality and economic crises in a just, equitable and systemic manner. The world needs a World Bank President who prioritises public financing for public investments and public services, reverses the austerity wave, supports economic diversification and the nurture of domestic productive sectors, and promotes fair resolution to sovereign debt distress, including multilateral debt cancellation when needed. The only way to ensure this leader has the right experience and background to do so is a due selection process that puts an end once and for all to the gentlemen’s agreement between the US and Europe, and prioritises the nomination of a person who comes from the Global South and represents the interests of these countries. A process that necessarily incorporates exchanges with global civil society and sets clear selection criteria, such as a commitment to human rights law and to a feminist, green and just transition that ensures economic transformation in the Global South.

We look forward to progressive candidates from the Global South with the qualifications and lived experience to enable them to lead the World Bank during these challenging times.

Read the letter in Arabic | French | Spanish.

Add your organisation’s signature here. 

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