The clock is ticking

On February 18, Lebanon’s minister of finance nominated Ziad Hayek, an investment banker and expert on public-private partnerships. While the World Bank’s board of executive directors promised an “open, merit-based and transparent” process, Hayek was the only known challenger to the Trump administration’s nominee, David Malpass, former Bear Stearns chief economist, a US treasury official who was a negotiator for the recent IBRD/IFC capital increase, and currently a member of the US team working with their Chinese counterparts to resolve Donald Trump’s trade crisis.

Enthusiasm for Malpass seems restricted to various American conservative news outlets and commentators who support a nativist “American interests first” view of multilateralism, falsely accuse the Bank of corruption (a position Malpass has publicly taken in Congressional testimony), and see a reduction in lending to middle income countries—including and in particular, China—as urgent. This notion about China, and possibly other upper-middle-income countries like Turkey, is mistaken: “The World Bank is a bank, and it needs to be lending profitably to at least some of its borrowers. China serves that role very well,” Christopher Kilby, an economics professor at Villanova University, told Bloomberg. Slashing credit to China could also have unintended consequences for the World Bank’s efforts to combat global problems such as climate change. And it could leave the bank on the outside looking in, without influence over such major and controversial Beijing initiatives like Belt and Road.

Malpass will no doubt want to explain his positions on these matters in the context of the Bank’s long-standing global role beyond finance, in knowledge generation and translation, and as a convener on a broad range of global public goods. In the case of China, in particular, the World Bank’s long, trusted relationship continues to provide a deep, well-informed and collaborative perspective on China’s many, and formidable, development challenges. Continue reading

A credible candidate and a credible process

Ziad Hayek has been nominated by Lebanon’s Minister of Finance. With a credible résumé and a diverse international track record in finance, Hayek reportedly has an American passport, too, if that matters to the Bank’s board: it shouldn’t, and it’s not in the five criteria they’ve set out.

It’s interesting that a governor from the constituency group headed by Merza Hussain Hasan, who, as the longest-serving executive director also serves as dean of the board. Merza presides over the transparent, open, and merit-based selection process we’ve been promised, alas unaided—or, depending on your perspective, unhindered—by an executive search firm. Pour mémoire, any governor may nominate anyone.

Also, as dean of the Board, Merza surely has an obligation to operate with clean hands on nominations, and on the process. If he is concerned about the Bank’s credibility, and the board’s, he should realize that an ‘open, merit-based and transparent’ process would be greatly bolstered by a competitive selection. He should be taking steps to tease other serious candidates to offer themselves, as Ziad Hayez, with the support of Lebanon’s finance minister, has. Continue reading