The case for a heterodox feminist World Bank President 

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.

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. 

The US nominates its candidate… that was fast!

Ajay S. Banga, Former President and Chief Executive Officer of Mastercard, US’s nominee to the presidency of the World Bank. Credit: World Economic Forum / Benedikt von Loebell

Ironies never cease. As the World Bank shareholders begin the process of reviewing the institution’s ability to effectively respond to the multiple crises impacting the globe and to address calls for urgent reform by discussing its ‘evolution roadmap’, it seems efforts to ensure the gentleman’s agreement, born in the age of empire, in which the US and European split leadership of the World Bank and IMF respectively are in rude health.

Following the unexpected resignation of its current President David Malpass and coinciding with the opening of the ‘process’ for the selection of his replacement, the US administration today announced the nomination of former MasterCard CEO Ajay Banga as the US candidate – and thus, likely its next president. The announcement was preceded by a statement from US Treasury Secretary Janet Yellen that the US would ‘quickly’ nominate its candidate, leaving one with the distinct impression that Malpass’s surprise resignation may not have surprised everyone.

Given the urgent need for reform in the global financial architecture to address the pressing challenges faced by the planet, women, the poor and marginalised populations, the nomination of someone so closely aligned with international finance and who has championed public-private partnerships as a solution to pressing environmental, social and human rights issues leaves little room for hope in the ‘evolution’ of the Bank. Mr. Banga’s background makes him rather unlikely to ensure the World Bank takes the opportunity of discussions about the roadmap to critically assess the effectiveness of the Bank’s private and finance-led approach to date and thus lead in a truly developmental direction.

The nomination of someone whose background indicates he would be committed to the failed ‘billions to trillions’ agenda and public-private partnerships, with their extremely poor track record, by the Bank’s principal shareholder and strong proponent of the gentleman’s agreement underscores the need for an end of the archaic and counter-productive ‘agreement’.

Indeed, the nomination makes clear the need for what civil society and low- and middle-income countries have long demanded, a merit-based, transparent selection process that necessarily incorporates exchanges with global civil society so that the World Bank president is selected in accordance with clear selection criteria, such as a commitment to human rights law and to a feminist, green and just transition that ensures economic transformation in middle- and low-income countries so that these can escape their long-standing path dependency.

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 and to ensure it is truly ‘fit for purpose’.