Dhe President of the World Bank, David Malpass, is leaving his post at the end of June this year, almost a year earlier than his contract of service stipulated. The World Bank made its decision public on Wednesday. The Executive Directors, representing the countries and groups of countries as shareholders, expressed surprise at the move. In the public statement, the 66-year-old Malpass gave no reason for his early resignation apart from the phrase that he wanted to face new challenges.
However, the statement by US Treasury Secretary Janet Yellen can be interpreted as an indication that the US government has complimented Malpass out of office. She thanked him for his openness to “our goal” and the preparation of a roadmap for the further development of the World Bank. At the same time, she formulated gentle criticism. Everyone must step up their collective efforts to fight climate change.
Changing of the guard in an explosive phase
In fact, the change of guard comes at an explosive time for the World Bank: Important shareholders, Germany and the United States in the lead, want to fundamentally reform the World Bank so that it can better face transnational challenges such as climate change, refugee flows or health crises and remain relevant as a global player. At the spring conference and the annual conference in autumn, the reform is to be decisively advanced. Malpass is not the right place for such reform, said Clemence Landers, World Bank expert at the Center for Global Development, a development policy think tank. This requires someone who stands for the new vision and can implement it. Landers therefore believes that the changing of the guard will be welcomed by the US government.
Shortly before the most recent annual meeting in September last year, Malpass’ post seemed threatened because of a thoughtless statement. Speaking at New York Climate Week, he was asked if he believed burning fossil fuels was rapidly and dangerously warming the planet. At first, Malpass tried to avoid the question, only to say, “I don’t even know. I’m not a scientist.”
These statements triggered calls for resignation from so-called climate activists. The most prominent among them, former US Vice President Al Gore, called Malpass a “climate change denier” and added: “We have to get rid of this leadership.”
In a PR offensive, Malpass later made it clear that he was convinced of man-made climate change and that the World Bank placed a strong focus on financing climate protection projects.
Maneuvered into office by Trump
Malpass was Treasury Secretary under Steven Mnuchin when President Donald Trump installed him as head of the World Bank. Even before he took office, he was criticized by left-wing groups, who resented his close ties to Trump, questioned his commitment to multilateral institutions and suspected he was not taking climate change seriously enough.
However, he was able to win over critics and many World Bank employees because it was believed that the classic core task of the institution, the fight against global poverty, was a real concern for him. He fought tenaciously for debt relief for poor countries and a change in debt relief procedures. Sometimes the conservative malpass came across as a leftist when – as in the FAZ interview – he lashed out at global economic policies that primarily served rich people and rich countries, or found the fact unsettling that Microsoft wanted to buy a games company for 69 billion while the World Bank gave poor countries just $8 billion in one year.
Malpass proudly announces that under his aegis the World Bank has reacted quickly to the major crises: the various divisions have mobilized a record sum of 440 billion dollars within four years to deal with the consequences of the pandemic, the war in Ukraine, the debt crisis, to alleviate the climate crisis and the lack of essential goods such as food, fertilizer and energy.
Various names are now being speculated about his successor: Nigerian-American head of the World Trade Organization Ngozi Okonjo-Iwealae, Indian-American deputy head of the International Monetary Fund, Gita Gopinath and America’s head of the development aid agency US Aid, Samantha Power.
The post is traditionally held by Americans. Treasury Secretary Janet Yellen said she would make a proposal. She is looking forward to a transparent, fast application process based on the candidate’s performance. A personality will be appointed to continue developing the bank to meet the challenges of the 21st century. This includes the fight against climate change.
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