The World Bank’s 25-member executive board on Wednesday elected former Mastercard CEO Ajay Banga to a five-year term as president, effective June 2, the bank said, ushering in an Indian-born finance and development expert charged with revamping the lender to tackle climate change and other global crises.
Banga, 63, was nominated for the post by United States President Joe Biden in late February and was the sole contender to replace departing World Bank chief David Malpass, an economist and former US Treasury official who served in the Trump administration.
Keep readinglist of 4 items
Malpass, who faced criticism for his stance on climate change, with former US Vice President Al Gore labelling him a climate denier and climate activists calling for his resignation, announced earlier this year in February that he would step down in June, nearly a year earlier than his five-year term. Malpass’s last day at the bank will be June 1.
Banga’s election came after World Bank board members interviewed him for four hours on Monday. The decision came in a vote by 24 of the board’s members, with Russia abstaining, instead of the usual consensus-based process, a source familiar with the process said.
Biden congratulated Banga on his “resounding approval” to run the World Bank, which he described as “one of humanity’s most critical institutions to reduce poverty and expand prosperity around the globe”.
“Ajay Banga will be a transformative leader, bringing expertise, experience, and innovation to the position of World Bank president,” Biden said. “He will help steer the institution as it evolves and expands to address global challenges that directly affect its core mission of poverty reduction — including climate change.”
Treasury Secretary Janet Yellen said Banga brought the “right leadership and management skills” to the job, and would play a critical role in pushing forward with additional reforms, including by forging partnerships between the public and private sectors and nonprofit groups.
“Ajay understands that the challenges we face – from combatting climate change, pandemics, and fragility to eliminating extreme poverty and promoting shared prosperity – are deeply intertwined. He has effectively built a broad global coalition around his vision for the Bank over the course of his candidacy,” Yellen said in a statement.
Sources familiar with the process had expected Banga to win the board’s approval handily after several meetings with board members in recent weeks and Monday’s formal interview.
One of the sources called Banga a “true change-maker” who will help accelerate reforms at the global development bank. It already loans out hundreds of billions of dollars to developing countries but is working to increase its lending to help them address global challenges, such as climate change.
“The Board looks forward to working with Mr. Banga on the World Bank Group Evolution process, as discussed at the April 2023 Spring Meetings, and on all the World Bank Group’s ambitions and efforts aimed at tackling the toughest development challenges facing developing countries,” the bank said.
Biden announced Banga’s candidacy during Yellen’s participation in a meeting of Group of 20 finance officials in Bengalaru, India, a source familiar with the process said.
Once it became public, she and her top travelling aides immediately began selling their counterparts on Banga’s candidacy, the source said.
The World Bank has been led by an American since its founding at the end of World War II, while the International Monetary Fund has been led by a European. Banga, who was born in India and spent his early career there, has been a US citizen since 2007.
Banga has met officials from 96 governments since his nomination, the source said. He visited eight countries during a three-week world tour to meet government officials, business leaders and civil society groups, flying a total of 39,546 miles (63,643km).