Thursday, 07 February 2019 05:48

David Malpass, Sharp Critic of World Bank, Could Be Its Next Leader

David Malpass has been a sharp critic of the World Bank, the Washington-based lending institution for impoverished nations, and now he could be its next leader.

Malpass, the under secretary of the U.S. Treasury for international affairs, is U.S. President Donald Trump's choice to head the agency, which has always been headed by an American. But the selection, which has to be ratified by the bank's board, could draw opposing candidates supported by poor nations that are the institution's chief funding beneficiaries.

Malpass helped push through a $13 billion funding increase for the bank last year, but he has railed against continued lending to China, the world's second biggest economy after the United States. He says Beijing no longer needs the bank's support, which has amounted to nearly $62 billion in development loans since China joined the World Bank in 1980.

"The World Bank's biggest borrower is China," Malpass said at a 2017 forum sponsored by the Council on Foreign Relations. "Well, China has plenty of resources."

Malpass, a Trump loyalist, has argued, much like the president, that "multilateralism has gone substantially too far," through international agreements that largely have been described as part of the liberal world order of agencies and agreements spawned in the seven decades since the end of World War II. The Trump administration has dropped out of a 12-nation Pacific Rim trade deal, the Paris climate change pact and the international agreement to restrain Iran's nuclear weapons development.

The 62-year-old Malpass, part of the Trump administration's team attempting to negotiate a new trade pact with China, said opposition to multilateralism "is sometimes mislabeled populism, but I think it is a pragmatic, realistic response to a multilateral system that often drifts away from our values of limited government, freedom and the rule of law."

Opposition

Trump's nomination of Malpass to head the World Bank is already drawing opposition from those who closely watch the institution's policies and lending practices.

Gyude Moore, a former Liberian public works minister with wide experience in developing countries, said, "An incorrigible arsonist will now be our fire chief. Man spends his adult life denigrating multilateralism and now has the 'pleasure' of running one of its pillars. When does it end?"

Justin Sandefur, an economist at the Center for Global Development, a research group that works to alleviate global poverty and promote development, described Malpass as "a Trump loyalist who has committed economic malpractice on a wide range of topics, from dismissing the first signs of the 2008 global financial crisis to flirting with the abolition" of the International Monetary Fund, another global financial institution based in Washington.

Sandefur said Malpass' "disdain for the World Bank's mission of fighting global poverty rivals [Trump national security adviser] John Bolton's respect for the United Nations. There is no case for Malpass on merit. The question now is whether other nations represented on the World Bank's board of governors will let the Trump administration undermine a key global institution. They have a choice. It's a simple majority vote, the U.S. has no veto in this election, and there are many better candidates."

Other options

The U.S. controls about 16 percent of the voting power in making the choice for the World Bank presidency, although collectively European countries hold more. By tradition, however, a European has been named as managing director of the IMF and is currently headed by Christine Lagarde, a former French finance minister.

But no other nominees have emerged as alternatives to lead the World Bank, although one possibility is Ngozi Okonjo-Iweala, a former Nigerian foreign affairs and finance minister who ran for the job in 2012 with the support of South Africa, Nigeria and other African governments. She lost to Jim Yong Kim, a Korean-American physician and anthropologist who had wide backing from the United States, but she has said she would run again if nominated by one of the bank's directors.

Other developing world candidates could include Raghuram Rajan, a former IMF chief economist and Indian central bank governor, who has been calling for more than a decade for a non-American to head the bank, and Akinwumi Adesina, the president of the African Development Bank.

Kim abruptly announced his resignation last month, three years before his term ended, setting the stage for Trump's nomination of Malpass.

Malpass served on Trump's transition team after he won the 2016 election, was deputy assistant secretary of state under former President George W. Bush, and deputy assistant secretary of the Treasury under former President Ronald Reagan. He was chief economist at the defunct investment bank Bear Stearns from 1993 to its collapse in 2008.

(VOA)

World News

Latest World News

There are 30403 listings and 923 categories in our website

Call us

For Business Promotions - +94 777 200 670