Washington | US President Donald Trump has nominated noted economist David Malpass to head the World Bank and ensure that the bank’s dollars are spent “effectively and wisely” and to “serve American interests,” sparking concerns that he may seek to reduce the role of the global lender.
A Trump loyalist and a vocal critic of the World Bank, 62-year-old Malpass was a senior economic adviser to the US president during his 2016 election campaign.
If approved by the Directors of the World Bank Group, Malpass, currently the under secretary for international affairs at the US Treasury Department, would replace Jim Yong Kim as the president of the World Bank.
Kim stepped down abruptly early this year, effective February 1, three years before the end of his term.
Announcing his nomination on Wednesday, Trump declared Malpass, a long-time Republican, as a “special man”, and as someone who was eminently qualified for the position.
“America is the largest contributor to the World Bank, giving it over USD 1 billion every year,” Trump said.
“My administration has made it a top priority to ensure that US taxpayers dollars are spent effectively and wisely, serve American interests and defend the American values,” he added.
The president, who frequently criticises multilateral institutions, said he expected Malpass to ensure that the bank’s dollars “are spent effectively and wisely, serve American interests and defend American values.”
“Malpass is a strong advocate for accountability at the World Bank for a long time,” said the US president.
The US has historically been allowed to choose the head of the World Bank, although that dynamic has more recently faced opposition from other nations. Nominating someone who has been so openly critical of the bank could intensify that resistance.
Malpass has been a point person in the Trump administration’s trade negotiations with China and has overseen the government’s relationship with the World Bank.
He is also a longtime critic of the World Bank’s lending practices and its business model and has expressed concern about the power that multilateral institutions exert.
If approved, he is expected to push the bank to narrow the focus of its lending to the world’s poorest countries, among other changes.
His nomination has stirred debate, as some worry that Malpass will seek to reduce its role.
His appointment could also prove controversial given as some analysts fear that the Trump administration could politicise the role and use it to curb China’s growing influence around the world.
White House officials said Malpass would be a “pro-growth reformer”.
The US controls 16 per cent of the 25-member board’s voting power.
Given the vote share of various countries in the World Bank, the confirmation of Malpass as its next president is now a mere formality.
In his current capacity as the Under Secretary of the Treasury for International Affairs, Malpass oversees the working of the International Monetary Fund and the World Bank.
An internationally renowned economist, Malpass brings 40 years of experience in economics, finance, government, and foreign policy to his new assignment, Trump said.
After receiving a degree in international economics from Georgetown University’s prestigious School of Foreign Service, Malpass served as deputy assistant secretary of the treasury under President Ronald Reagan and Deputy Assistant Secretary of State under President George H W Bush.
Treasury Secretary Steven Mnuchin said Trump had made an excellent choice by nominating Malpass to serve as President of the World Bank.
“David has worked closely with me at the Treasury Department and understands the President’s pro-growth economic agenda that has led to the strongest US economy and job market in generations,” he said.
“As Under Secretary, he successfully negotiated a capital increase and reform package to focus the World Bank on its core mission of lifting up the standard of living in lower-income countries,” said Mnuchin who was assisted by Trump’s daughter and senior presidential advisor Ivanka Trump in the selection process.
“David’s extensive knowledge of the World Bank’s challenges and opportunities make him a uniquely qualified steward of a great institution that is operating below its full potential,” Ivanka Trump said.
“David’s leadership was invaluable in the design and implementation of the World Bank’s Women Entrepreneurs Finance Initiative (We-Fi) and I look forward to continuing our work together to realize the mission of the Bank, to eliminate poverty and build prosperity, by economically empowering women in the developing world,” she said.
Scott Morris, senior fellow at the Center for Global Development and former US Treasury deputy assistant secretary for development finance and debt, said as the US candidate, Malpass will have a lot of work to do to convince other shareholders that he was prepared to move beyond his past statements and track record when it comes to the World Bank’s agenda.
“That includes the bank’s critical role in climate finance and the need for constructive engagement with China. The rest of the world holds 84% of the voting power at the World Bank. It’s fully within their ability to block an unsuitable nominee,” Morris, who played a leading role in Jim Kim’s campaign for World Bank president, said.