Trump Nominee Malpass Selected as Next World Bank President
The former undersecretary of the Treasury for international affairs has been a critic of the international development bank
President Donald Trump’s choice to be the next World Bank president, David Malpass, was formally approved on Friday by a unanimous vote of the bank’s board of executive directors in Washington. Mr. Malpass—previously the undersecretary of the Treasury for international affairs and a critic of the World Bank—will take office on April 9, just in time for a gathering of the world’s finance ministers and central bankers in Washington for the spring meetings of the bank and the International Monetary Fund. The confirmation by the bank’s directors was all but assured as no other candidate emerged to challenge Mr. Malpass in the two months since the U.S. announced his candidacy. The Washington-based World Bank is the world’s largest and most influential development bank. Its president is selected by a board of executive directors, made up of representatives from the bank’s 189 member countries. The U.S. is the bank’s largest shareholder and by tradition has selected the president, though that is not guaranteed.
Mr. Trump has been an avowed skeptic of multilateral institutions. But Mr. Malpass has sent strong signals that he doesn’t envision a shake-up of the organization in interviews since his nomination. The day-to-day operations of the World Bank may see little initial change. In recent years, the previous World Bank President Jim Yong Kim, relied heavily on the bank’s chief executive officer, Kristalina Georgieva, to run the day-to-day operations. Mr. Malpass intends to retain Ms. Georgieva in the role. Ms. Georgieva and Mr. Malpass worked together closely last year negotiating a deal to increase funding for the bank. The two are said to work very well together; the U.S. had been the last holdout on the deal.
Mr. Malpass has drawn attention for his criticism of China’s relationship with the World Bank. Even as China has grown wealthier, it continues to draw heavily upon World Bank loans. In his prior job as Treasury undersecretary for international affairs, Mr. Malpass pushed for the bank to cut its lending to Beijing. Mr. Malpass was never alone in this effort. Japan, the World Bank’s second-largest shareholder, for example, has publicly backed that initiative. Japan’s finance minister, Taro Aso, met with Mr. Malpass early in February and cited his desire to curtail Chinese lending as a reason to support his candidacy. “We expect [the World Bank] to steadily scale down loans to high- and middle-income countries, especially China,” Mr. Aso later told reporters. He cited Mr. Malpassas saying he “will firmly carry out [the request] if he becomes president.”
Mr. Malpass’s critics highlight his time as the chief economist of Bear Stearns, the investment bank that collapsed early in the financial crisis. But Mr. Malpass also has a long track record with international development issues. He twice held the title of deputy assistant secretary, once for the Treasury Department with a focus on developing nations, and once at the State Department, focused on Latin American economic affairs. He also served stints as a trade analyst for the Senate Budget Committee and a staff director of the Joint Economic Committee.
During his time in Ronald Reagan’s Treasury Department, Mr. Malpass worked to negotiate a 1987 funding increase for the World Bank; the deal, he noted, created the World Bank’s environmental division. This history was an effective part of Mr. Malpass’s campaign for his candidacy to the World Bank’s member nations. One reason no other candidate emerged for the president’s job is that key shareholders were convinced the bank’s environmental work wasn’t in jeopardy.
In a meeting in Paris in February, Mr. Malpass secured the support of French Finance Minister Bruno Le Maire. Mr. Le Maire said Mr. Malpass was “a good candidate” adding that “the good candidate needs to support the poorest countries and must participate in the fight against global warming.” The Trump administration has faced concerns over its lack of support for international efforts to combat climate change and reduce carbon emissions. Most prominently, Mr. Trump withdrew the U.S. from the 2015 Paris climate treaty. But Mr. Malpass said he was committed to ensuring the bank remained a leader at incorporating environmental standards into its projects and that it would honor its current obligations to climate projects.
https://www.wsj.com/articles/trump-nominee-malpass-selected-as-next-world-bank-president-11554482367?mod=rsswn