United States President, Donald Trump, on Wednesday nominated a well-known World
Bank critic, David Malpass to lead one of the world’s primary
development lending institutions.
Bank critic, David Malpass to lead one of the world’s primary
development lending institutions.
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| Donald Trump |
Malpass, a senior official in the Treasury Department, is a
controversial choice but if Trump wins the support of a majority of the
bank’s shareholders, especially European nations, he will have the
opportunity to reshape the bank.
controversial choice but if Trump wins the support of a majority of the
bank’s shareholders, especially European nations, he will have the
opportunity to reshape the bank.
Trump called Malpass “an extraordinary man” and “the right person to take this incredibly important job.”
“America is the largest contributor to the World Bank,” he said. “My
administration has made it a top priority to ensure that US taxpayer’s
dollars are spent effectively and wisely.”
administration has made it a top priority to ensure that US taxpayer’s
dollars are spent effectively and wisely.”
Trump and his team have attacked multilateral institutions in the two
years he has been in office, and Malpass has led the charge against the
World Bank and the International Monetary Fund.
years he has been in office, and Malpass has led the charge against the
World Bank and the International Monetary Fund.
Malpass has called the international financial institutions’ lending
practices “corrupt” and complained about financing to China and other
relatively more well-off countries that he says should have graduated
from the institutions.
practices “corrupt” and complained about financing to China and other
relatively more well-off countries that he says should have graduated
from the institutions.
Speaking at the White House, Malpass said he would seek to implement
reforms approved last year after negotiations to increase the bank’s
lending capital by $13 billion, such as curbing loans to and charging
higher interest to higher income countries like China.
reforms approved last year after negotiations to increase the bank’s
lending capital by $13 billion, such as curbing loans to and charging
higher interest to higher income countries like China.
“I’m very optimistic that we can achieve breakthroughs to create
growth abroad that will help us combat extreme poverty and increase
economic opportunities in the developing world,” Malpass said.
growth abroad that will help us combat extreme poverty and increase
economic opportunities in the developing world,” Malpass said.
Asked about his attacks on the lender, he said his concerns were
addressed in last year’s reforms, and he hopes to be able to oversee
implementation of those changes.
addressed in last year’s reforms, and he hopes to be able to oversee
implementation of those changes.
“It doesn’t make too much sense for the higher income countries to be
drawing so many resources from the bank when there are poorer countries
that could make use of these resources,” he told reporters.
drawing so many resources from the bank when there are poorer countries
that could make use of these resources,” he told reporters.
The surprise early departure of World Bank President Jim Yong Kim,
effective February 1, not even halfway through his second five-year
term, gives Trump the opportunity to put his stamp on the organization.
effective February 1, not even halfway through his second five-year
term, gives Trump the opportunity to put his stamp on the organization.
Beginning Thursday, the bank’s board will accept nominations until
March 14 and plans to name a new president prior the IMF and World Bank
Spring meetings, set for April 12-14 in Washington.
March 14 and plans to name a new president prior the IMF and World Bank
Spring meetings, set for April 12-14 in Washington.
Any of the 189 members can propose a candidate.
The Washington-based lending institution has been led by an American
since the bank’s founding in the aftermath of World War II, while its
sister institution, the International Monetary Fund, has always been led
by a European.
since the bank’s founding in the aftermath of World War II, while its
sister institution, the International Monetary Fund, has always been led
by a European.
In recent years, the growing emerging market countries have
challenged this unwritten arrangement, demanding a more open,
merit-based selection process.
challenged this unwritten arrangement, demanding a more open,
merit-based selection process.
Experts had thought it unlikely those countries would join forces
against the US candidate but the choice of Malpass could unite them
behind a rival.
against the US candidate but the choice of Malpass could unite them
behind a rival.
Many, including former Treasury officials from both political
parties, have sharply criticised Malpass and his qualifications,
pointing to his failure to foresee the global financial crisis and
opposition, which later proved unjustified, to Federal Reserve policies.
parties, have sharply criticised Malpass and his qualifications,
pointing to his failure to foresee the global financial crisis and
opposition, which later proved unjustified, to Federal Reserve policies.
“David Malpass would be a disastrous, toxic choice for World Bank
president,” said Tony Fratto, former Treasury assistant secretary in the
George W. Bush administration.
president,” said Tony Fratto, former Treasury assistant secretary in the
George W. Bush administration.
The United States is the biggest World Bank shareholder but it does
not have a veto and needs the backing of European nations in a simple
majority vote by the board.
not have a veto and needs the backing of European nations in a simple
majority vote by the board.
Senior administration officials said Treasury Secretary Steven
Mnuchin had already been reaching out to other World Bank shareholders
to make the case for Trump’s candidate.
Mnuchin had already been reaching out to other World Bank shareholders
to make the case for Trump’s candidate.
Malpass will travel next week to Beijing to participate in trade
negotiations and then will go to Japan, the World Bank’s second largest
shareholder
negotiations and then will go to Japan, the World Bank’s second largest
shareholder
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