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Senior U.S. Treasury official and World Bank critic David Malpass has been confirmed as the U.S.’s choice for the presidency of the Bank, President Donald Trump announced on Wednesday afternoon. The announcement is the culmination of a search effort headed by Treasury Secretary Steven Mnuchin and the President’s daughter, Ivanka Trump. Indira Nooyi, India-born chairperson of PepsiCo, was also being considered for the top job at the Bank, which became available after Jim Yong-kim resigned abruptly, to join an investment firm, three years before his second term expired. Mr. Malpass, currently the Undersecretary of the Treasury for International Affairs, is a controversial candidate for the job, owing to his views on multilateral organisations, including the World Bank. “…Multilateralism has gone substantially too far — to the point where it is hurting U.S. and global growth.” Mr. Malpass had told the Council on Foreign Relations in 2017. Mr. Malpass has been an advocate of a smaller, more focussed World Bank, arguing that countries can raise capital in private markets. He has also been critical of China’s Belt & Road Initiative (BRI) as well as China being the largest borrower of the Bank. In his role in the Treasury, Mr. Malpass has tried to slow down the Bank’s ability to raise capital, pushing the bank to adopt a new financial sustainability framework. “This new framework is aimed at achieving financial discipline and avoiding future capital increase requests,” Mr. Malpass testified before Congress last November. The Bank had committed over $60 billion in financing in the 2018 fiscal year. Senior administration officials on Wednesday defended Mr. Malpass’s ability to lead the Bank despite his views on multilateralism and the Bank itself. “David [Malpass] and the U.S. government support when we are participating in these organisations and they are fulfilling their mission, they’re working efficiently and effectively. In fact, the U.S. founded and built the World Bank… and we continue to strongly support it…” officials said on a briefing call in response to questions on Mr. Malpass’s suitability for the job. Largest shareholder The U.S., which is the Bank’s largest shareholder and has 16% of its voting power, normally picks its President, with the Europeans picking the International Monetary Fund (IMF) head. Mr. Malpass, if elected, would be working with Ivanka Trump in his new role, officials told journalists on Wednesday. In response to a question on how other shareholders have reacted to Mr. Malpass’s name, administration officials said Mr. Mnuchin has been talking to them and would increase his outreach over the next few weeks. Concerns are likely to be raised about his qualifications for the job. “I don’t think he [Mr. Malpass] is a good choice… Mr. Malpass’s attitudes towards multilateralism, which reflect his boss’s or the Trump administration’s, are not the sort the owners of the Bank should accept in a world where the World Bank is one of the most successful international institutions,” Paul Cadario, a former World Bank senior manager and currently a distinguished fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy, told The Hindu .
