World Bank board elects US Treasury’s Malpass as next president

The World Bank’s executive board on Friday unanimously approved David Malpass, the US Treasury Department’s top diplomat, as the bank’s next president.

The bank said that Malpass, the Treasury’s undersecretary for international affairs, will start his new role on Tuesday as the World Bank and International Monetary Fund Spring Meetings get under way.

Malpass, a former Bear Stearns and Co chief economist who advised US President Donald Trump‘s 2016 election campaign, was the sole candidate for the job. Previous World Bank President Jim Yong Kim faced two challengers, from Nigeria and Colombia, in 2012 when he was first selected.

This time around, bank board members had said there was little appetite for a challenge to a US candidate.

In a note to World Bank employees after his selection, Malpass said that more than 700 million people remain in extreme poverty in the world. Too many people are not seeing an advance in their living standards, with the poorest nations facing the steepest challenges, he said. 

“Faced with these challenges, our twin goals of eliminating extreme poverty and achieving shared prosperity are more relevant than ever,” Malpass said. “The Bank Group is strong financially and well equipped with the tools and talent to achieve measurable successes.”

In a phone interview with the Reuters news agency, Malpass said he would uphold the bank’s commitment to reducing poverty in the poorest countries and to fight climate change, and pursue goals stated in a $13bn capital increase last year.

Critical of bank’s lending to China

Since taking his job at the Treasury in 2017, Malpass had been particularly critical of the World Bank’s continued lending to China, which he says is no longer a developing country that depends on the bank’s loans because it can borrow on global capital markets. He has argued that the World Bank should be targeting more of its support for development projects to poorer nations.

Those comments and Malpass’s role in US-China trade negotiations caused some concern in the development community that he might try to use the bank’s influence to put pressure on China.

But Malpass said he saw an “evolution” of the bank’s relationship with China “towards one which recognises China as the world’s second-biggest economy and an important factor in global development. I expect there to be a strong relationship collaboration with China. We have a shared mission of poverty alleviation and reduction.”

Malpass said he did not participate in this week’s US-China trade talks and is winding down his role at the Treasury. He said he intends to make his first trip as World Bank president in late April to Africa, which has been a primary focus for the bank’s development efforts.