US President Donald Trump is expected to nominate David Malpass to head the World Bank, a known vocal critic of the institute’s lending to China, according to several reports, citing senior administration officials.
A European diplomatic source told the Reuters news agency that the Trump administration had notified several countries of the Malpass nomination, adding that European shareholders of the bank were not likely to block it.
White House Press Secretary Sarah Sanders declined to confirm that Malpass is the president’s pick to lead the world’s largest development lender.
“When the president is ready to make that announcement, he certainly will,” Sanders said on Tuesday. “I can tell you if he chooses David, it will be a great choice. Highly respected and a strong member of the team.”
According to the Washington Post, Malpass has accepted Trump’s offer to lead the bank. A source close to Malpass said his priorities would be raising incomes in developing nations and defending US interests.
Malpass would succeed Jim Yong Kim, who announced in January that he is stepping down three years before his term was set to expire amid differences with the Trump administration over climate change and development resources.
Kim’s departure is likely to become a contentious fight between the Trump administration and other countries who believe the United States exerts too much influence over the bank, which is based in Washington, DC.
Kim was first nominated by former US President Barack Obama in 2012.
Malpass, the undersecretary for international affairs at the Treasury Department and recently involved in the US-China trade negotiations, has been a sharp critic of the World Bank, especially over its lending to China.
Over the past two years, Malpass has pushed for the World Bank to halt lending to China, which he says is too wealthy for such aid, especially when Beijing has subjected some developing countries including Sri Lanka and Pakistan to crushing debt loads with its “Belt and Road” infrastructure development programme. China is the World Bank’s third-largest shareholder after Japan.
At a 2017 forum sponsored by the Council on Foreign Relation, Malpass singled out China as one of the biggest beneficiaries of the World Bank.
“Well, China has plenty of resources,” he said at the time. “And it doesn’t make sense to have money borrowed in the US, using the US government guarantee, going into lending in China for a country that’s got other resources and access to capital markets.”
Asked during the forum if he has discussed his concerns with “Dr Kim’s bank”, he said he was met with “a lot” of resistance. “But we’re having a good dialogue with them,” he said.
Last year, Malpass helped negotiate a package of World Bank lending reforms tied to a $13bn capital increase that aimed to limit the bank’s lending and focus resources more on poorer countries.
The reforms seek to “graduate” countries to private-sector lending and limit World Bank staff salary growth.
Malpass or any other US nominee would still need to win approval from the World Bank’s 12-member executive board. The US holds a controlling 16-percent share of board voting power and has traditionally chosen the World Bank’s leader, but challengers could emerge.
China is the World Bank’s third-largest shareholder after Japan, with about a 4.5 percent share of voting power.
The World Bank was founded in 1944 with the task of shoring up the economies of nations devastated by World War II. The World Bank committed nearly $64bn to developing countries in the fiscal year, which ended on June 30, 2018.