US president Donald Trump’s pick to take over the helm of the World Bank has been officially confirmed.
Initially considered a controversial pick, Mr Trump’s nomination of Treasury undersecretary David Malpass – a Republican stalwart, China hawk and sceptic of multilateralism and climate change – sailed through confirmation by the World Bank’s 25 board members. “Our twin goals of eliminating extreme poverty and achieving shared prosperity are more relevant than ever,” Mr Malpass said.
Mr Malpass, formerly an economist at Bear Stearns before joining Mr Trump’s 2016 campaign as an advisor, has previously criticised the World Bank, arguing that it had strayed from its original mandate to provide financing to the world’s poorest countries. Prior to his nomination, he characterised the bank as “entrenched” and “intrusive”.
“The World Bank’s biggest borrower is China. Well, China has plenty of resources. And it doesn’t make sense to have money borrowed in the US, using the US government guarantee, going into lending in China,” Mr Malpass said during an event at the Council on Foreign Relations.
He was also critical of the bank’s $13bn capital expansion, an initiative of his predecessor, Jim Yong Kim, who abruptly left the bank for the private sector in February 2019.
Mr Malpass appeared keen to mollify his critics during interviews with the bank’s board of governors ahead of the vote to appoint him. “David Malpass has tried to reassure World Bank member countries that he is committed to implementing the bank’s full agenda, as laid out in last year’s capital increase. That’s an important and constructive signal,” said Scott Morris, senior fellow at think tank the Centre for Global Development.
Mr Malpass is not the first critic to end up leading the institution; Mr Kim was vocal in his opposition to many World Bank policies before being nominated to lead it by the Obama administration in 2012.
“As bad as the Trump administration’s posture and policies are on climate change or support for refugees, Mr Malpass now seems to recognise that he is accountable to a diversity of governments and shareholders – not just one,” said Mr Morris. “But saying he understands the multilateral goals of the bank is one thing, and embracing the agenda is something else.”
Mr Malpass’s nomination also encountered surprisingly little opposition from emerging markets. A gentleman’s agreement that allows the US to pick the leader of the World Bank while Europeans choose the head of the International Monetary Fund, its sister institution, has held since the Bretton Woods accords of 1944.
As China, India and others have emerged as economic powerhouses in their own right, they have criticised the status quo. During Mr Kim’s nomination process, several countries put forward alternative candidates in protest. This time, Mr Malpass’s nomination was allowed to pass uncontested.