Fri. Feb 22nd, 2019

Trump nominates US Treasury’s David Malpass to lead World Bank

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US President Donald Trump said on Wednesday that the World Bank Group should be led by US Treasury official David Malpass, a Trump loyalist and critic of multilateral institutions who has vowed to pursue “pro-growth” reforms at the global lender.

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.

He would succeed Jim Yong Kim, who announced in January 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. 

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The departure of Kim, who was first nominated by former US President Barack Obama in 2012, 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.

The Washington Post reported on Tuesday that Malpass had 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.

Critic of 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.” 

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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.

Trump’s nomination of Malpass is subject to a vote by the World Bank’s executive board and could draw challengers from some of the bank’s 188 other shareholding countries.

The United States, the lender’s largest shareholder with 16 percent of its voting power, has traditionally chosen the bank’s president, but departing president Jim Yong Kim faced challengers from Colombia and Nigeria in 2012.

Trump nominates US Treasury’s David Malpass to lead World Bank

US President Donald Trump said on Wednesday that the World Bank Group should be led by US Treasury official David Malpass, a Trump loyalist and critic of multilateral institutions who has vowed to pursue “pro-growth” reforms at the global lender.

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