Ajay Banga, of Indian Origin, to Become World Bank Chief Without Opposition
- ByStartupStory | March 31, 2023
It is highly likely that Ajay Banga will be appointed as the next president of the World Bank, as no other country has proposed an alternative candidate before the nomination deadline closed on Wednesday. Banga, who previously served as the CEO of Mastercard Inc., was selected by US President Joe Biden to succeed current president David Malpass, who announced his early resignation. Malpass himself was unopposed for the role when he was nominated by former President Donald Trump in 2019, as the top position at the World Bank has historically been held by a US candidate.
Although no countries other than the US have declared their candidates, member nations can nominate individuals within the timeframe that ended on Wednesday, without revealing their identities as per World Bank regulations. With a distinguished career in finance and banking, Mr. Banga emphasizes the unique perspective he can bring to the position from his Indian upbringing and education, in addition to his dedication to environmental sustainability and his conviction that poverty and environmental concerns are interconnected.
The World Bank, based in Washington, began accepting nominations in February and planned to conduct formal interviews with leading candidates after the nomination period closed. The organization aimed to complete the process by early May. To garner support for his nomination, Mr. Banga, aged 63, embarked on a month-long international tour to creditor and borrower nations, including China, Kenya, Ivory Coast, the UK, Belgium, Panama, and his home country, India.
As the World Bank disburses approximately $100 billion each year, Mr. Banga’s appointment comes at a crucial juncture for the organization committed to poverty reduction. The US and other nations are advocating for multilateral development banks to undergo reforms, enabling the provision of greater climate financing to developing countries. According to Treasury Secretary Janet Yellen, the world’s oldest and largest development bank must transform from a nation-focused lender to combat global challenges such as climate change, as well as expand its balance sheet more aggressively.
While this move is anticipated to generate billions of dollars in supplementary funding, it jeopardizes the World Bank’s AAA credit rating, which enables it to borrow and lend affordably to underdeveloped nations. Mr. Banga emphasized the importance of safeguarding this rating earlier this month and suggested that private capital could support the bank’s growth. The transition in leadership coincides with a dispute over loans from multilateral institutions such as the World Bank, which involves China, the most significant creditor to emerging economies, and conventional lenders led by the US.
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