World Bank board elects US Treasury’s Malpass as next president

Monday, 8 April 2019 00:00 - - {{hitsCtrl.values.hits}}

David Malpass

WASHINGTON (Reuters): David Malpass, US President Donald Trump’s nominee to lead the World Bank, won unanimous approval from the institution’s executive board on Friday, continuing the 73-year tradition of an American running the world’s largest development lender.

The bank said that US Treasury International Affairs Undersecretary Malpass will start his new role tomorrow as the World Bank and International Monetary Fund Spring Meetings get underway.

Malpass, a former Bear Stearns and Co-chief economist who advised Trump’s 2016 election campaign, was the sole candidate. Previous World Bank President Jim Yong Kim, who left in January to join a private infrastructure fund, faced two challengers from Nigeria and Colombia, in 2012 when he was first selected.

This time around, bank board members had said there was little appetite for a challenge to a US candidate from developed economies such as Europe and Japan, and from larger emerging markets such as China and Brazil.

In a phone interview with Reuters, Malpass said he would uphold the bank’s commitment to reducing poverty in the poorest countries and to fight climate change, and pursue goals stated in a $ 13 billion capital increase last year.

In an email to World Bank employees, Malpass emphasised the need to fight extreme poverty and “foster broad-based growth for each and every borrower, and a stronger, more stable global economy for all”.

Since taking his job at the Treasury in 2017, Malpass had been critical of the World Bank’s continued lending to China, arguing that the world’s second-largest economy was too wealthy for such aid while it was loading up some countries with unsustainable debt from its Belt and Road infrastructure program.

Those comments and Malpass’ role in US-China trade negotiations caused some concern in the development community that he might try to use the bank’s influence to put pressure on China.

But Malpass told Reuters that he foresees an “evolution” of the bank’s relationship with China “toward one which recognises China as the world’s second-biggest economy and an important factor in global development. I expect there to be a strong relationship collaboration with China. We have a shared mission of poverty alleviation and reduction”.

Malpass said he did not participate in this week’s US-China trade talks and is winding down his role at the Treasury. He said he intends to make his first trip as World Bank president in late April to Africa.

World Bank CEO Kristalina Georgieva will attend China’s second Belt and Road Forum on 26-27 April, not Malpass.