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.