President Joe Biden has selected former Mastercard CEO as the nominee for the World Bank, replacing the existing head, pushed out two years before his term is up for his views on climate change.
Key Details
- The White House announced on Thursday that Ajay Banga, former CEO of Mastercard, has been nominated by the U.S. to lead the World Bank.
- The World Bank, or the International Bank for Reconstruction and Development, is an international poverty-reduction financial firm that loans money to low-income countries. It is a sister agency to the International Monetary Fund.
- The previous head David Malpass was nominated in April 2019 by President Donald Trump. He is unexpectedly departing in June, two years before the end of his five-year term, partly because he would not admit that human activity causes climate change.
- The World Bank will continue accepting nominations through March 29, with the final selection possible in May. The nominees are usually American and are voted into office by the Board of Executives.
Why It’s Important
This nomination marks an effort by the Biden administration to shift the organization’s direction and address climate-change efforts in less-wealthy countries. ABC News reports that the administration is eager to address criticism that the World Bank has not done enough to assist struggling countries saddled with debt and in need of more significant climate change and pandemic preparations.
“Ajay Banga will be a transformative World Bank President as the institution works to deliver on its core development goals and address pressing global challenges, including climate change,” says Vice President Kamala Harris.
Alternative Perspective
The pressure faced by the World Bank reflects a global push to divert the organization’s stated mission of reducing extreme global poverty to 3% of the world and promoting income growth for those living in the bottom 40%.
The World Bank has repeatedly denied allegations that it is insufficiently responsive to climate issues. Repeated allegations—from Oxfam International and The Big Shift Global—against former head David Malpass have pressured the organization to push for new climate measures and seek new leadership. These groups allege the bank has spent $14.8 billion on fossil-fuel projects and overstated its climate investments by $7 billion.
The Organization for Economic Cooperation and Development reports that the World Bank spent $68 billion on climate initiatives in the past five years, making it the most prominent global financier of such projects. The World Bank paid more than $67 billion in overall disbursements in 2022.
Backing Up A Bit
Outgoing head Malpass was at the center of public criticism last year after he denied that climate change was the result of human activity. He deferred when asked about the scientific consensus on climate change by remarking, “I’m not a scientist.” The comment set off a gradual public-relations crisis leading to his resignation on Wednesday.
Part of the problem with Malpass is that while he would not admit that humans cause climate change, he would also deny that he would not admit it.
In late 2022, he said no to a reporter from The Guardian who asked if he were “a climate-denier,” noting in a speech at COP27 that “We want to dramatically increase the number and size of projects that reduce greenhouse-gas emissions.”
“I don’t have any personal beef with [Malpass] as an individual, [but] his approach has really fallen way short of what the world needs,” says former Vice President Al Gore.
Notable Quotes
Leading Democratic Party voices have praised the nomination. Treasury Secretary Janet Yellen praised Banga as having “the right leadership and management skills” to address the current moment in history in a Thursday statement. Former Secretary of State and Special Envoy For Climate John Kerry similarly praised the nomination.
“He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies and guiding organizations through periods of fundamental change. He has a proven track record managing people and systems and partnering with global leaders around the world to deliver results,” says President Biden.
U.N. general secretary António Guterres recently defended Malpass’s record while still affirming that the World Bank should divert more attention to climate change. “The problem is not the president of the bank. The problem is sometimes the board and sometimes the bureaucracy. The board must give a clear orientation for the World Bank and the other international financial institutions. They need to do more for climate.”
