Home / International/ Trump nominates critic of global institutions to lead World Bank

Trump nominates critic of global institutions to lead World Bank

Comments / {{hitsCtrl.values.hits}} Views / Friday, 8 February 2019 00:00



WASHINGTON (Reuters): US President Donald Trump said on Wednesday that the World Bank Group should be led by US Treasury official David Malpass, a Trump loyalist and critic of multilateral institutions who has vowed to pursue “pro-growth” reforms at the development lender.

US Department of the Treasury Under Secretary for International Affairs David Malpass gestures during the 2018 G20 Conference entitled ‘The G20 Agenda Under the Argentine Presidency,’ in Buenos Aires, Argentina, 18 March 2018 – Reuters

Trump’s nomination of Malpass, the Treasury Department’s top diplomat, is subject to a vote by the World Bank’s executive board and could draw challengers from some of its 188 other shareholding countries.

The United States is the largest shareholder with 16 percent of its voting power and has traditionally chosen the bank’s president, but Jim Yong Kim, who stepped down from the job on 1 February, faced challengers from Colombia and Nigeria in 2012.

The nomination of Malpass signals that the Trump administration wants a firmer grip on the World Bank. He was an economic adviser to Trump’s 2016 election campaign.

Malpass, Treasury undersecretary for international affairs, a job in which he oversees the US role in the World Bank and the International Monetary Fund, has criticized them for growing ever larger, more “intrusive” and “entrenched.”

He also has pushed the bank to cut back lending to China, which he argues is too wealthy for such aid when it is saddling poorer countries with debt in its Belt and Road infrastructure drive.

Last year, as part of a $13 billion World Bank capital increase, Malpass helped negotiate reforms aimed at refocusing resources towards the poorest countries and winding down lending to China.

“He has fought to ensure financing is focused on the places and projects that truly need assistance, including people living in extreme poverty,” Trump said in announcing his choice at the White House with Malpass by his side.

Malpass said at the White House he would work to implement these reforms and also focus on women’s economic empowerment.

“I’m very optimistic that we can achieve breakthroughs to create growth abroad that will help us combat extreme poverty and create economic opportunities in the developing world,” Malpass said.

Malpass will continue to participate in US-China trade negotiations as he campaigns for the World Bank presidency. He will join a delegation heading to Beijing for more talks next week, a senior Trump administration official said.

But as Trump’s “America First” trade agenda and tariff war with China puts strains on many developing economies, some development experts say that Malpass’ candidacy will be a difficult sell.

“David Malpass will have a lot of work to do to convince other shareholders that he is prepared to move beyond his past statements and track record when it comes to the World Bank’s agenda,” said Scott Morris, a former US Treasury development finance official who is now a senior fellow at the Center for Global Development in Washington.

Morris said that includes the global lender’s role in climate finance and “the need for constructive engagement with China.”

By naming Malpass a day before the World Bank board begins a month-long nomination process, Trump could deter the emergence of other candidates.

Malpass would honour the bank’s standards and obligations, including its initiatives to combat climate change, the senior Trump administration official said.

If approved, Malpass would replace Kim, a physician and former university president who resigned more than three years before his term ended to join private equity fund Global Infrastructure Partners. Kim had differed with the Trump administration over climate change, effectively ending the bank’s financing of coal-fired power projects.

Malpass served in Treasury and State Department roles during the Ronald Reagan and George H.W. Bush administrations and at investment bank Bear Stearns where he was chief economist before its 2008 collapse.


Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Trendvertising: The new world of communication in a hashtag world

Tuesday, 20 August 2019

Rahul Bose, an Indian actor, caught a lot of attention for a video post that went viral, where he complained about the price of bananas during his stay at a five-star hotel in Mumbai. As he explained in his story – he went to the gym at his hotel w

Company Law intertwined with Income Tax – Understanding the nexus! Part II

Tuesday, 20 August 2019

A comparison and analysing the impact of corresponding provisions of Companies Act No. 7 of 2007 and Inland Revenue Act No. 24 of 2017 reveals invaluable insights corporate management must be aware of in day-to-day management activities as well as st

Will ‘10 February’ be repeated?

Tuesday, 20 August 2019

Whilst Sri Lanka is in election mode, the thought crossing every Sri Lankans mind is, ‘Will the 10 February 2018 elections behaviour be repeated?’ given the head-start that ‘Brand Gota’ has got. Whilst many are speculating who will be the fig

Shanta Devarajan: Economist who cannot get disconnected from his motherland

Monday, 19 August 2019

For me, Shanta Devarajan, formerly the Acting Chief Economist of the World Bank Group succeeding the Nobel Laureate Paul Romer and presently Professor at Georgetown University, USA, was a legend by himself. When I met him in early part of the new mil

Columnists More

Special Report