Indian-born Ajay Banga to become World Bank chief unopposed

Ajay Banga, the US pick to head the World Bank, looks almost certain to become the anti-poverty lender’s next president after nominations closed on Wednesday, with no country publicly proposing an alternative candidate.

The former chief executive of Mastercard Inc. was hired by President Joe Biden last month after current chairman David Malpass announced his intention to step down almost a year earlier.

Mr Malpass, nominated by former President Donald Trump in 2019, won first place unopposed. The highest position in the institution has always been awarded to an American candidate.

Although no country other than the United States has announced nominees, World Bank rules allow member countries to make nominations during the window that closed Wednesday afternoon without making them public.

Although Mr. Banga has built a long career in the private sector, particularly in finance and banking, he highlighted the perspective he could bring to his work through his upbringing and education in India, as well as his commitment to climate science and his belief that poverty and environmental issues are closely linked.

The Washington-based World Bank opened the nominations period in late February, saying at the time that its board would conduct formal interviews with top candidates after nominations close and that it expected that the process ends at the beginning of May.

Banga, 63, has spent most of the past month touring creditor and borrower countries globally to build support for his nomination. This included stops in China, Kenya and Ivory Coast, as well as the UK, Belgium, Panama and his native India.

Mr Banga is set to take over at a pivotal time for the anti-poverty lender, which disburses around $100bn a year. The United States is among nations pushing for reform of multilateral development banks to unlock more climate finance for the developing world.

Treasury Secretary Janet Yellen said the world’s oldest and largest development bank must abandon its traditional focus on country-specific lending to tackle global challenges such as tackling climate change and expanding its balance sheet more aggressively.

While such a funding move is expected to unlock billions of dollars in additional funds, it jeopardizes the lender’s AAA credit rating, which allows it to borrow and lend cheaply to poorer countries. Earlier this month, Mr Banga said the note needed to be protected and appealed for private capital to help boost the bank’s efficiency.

The leadership change also comes as loans from multilateral institutions such as the World Bank are at the center of a dispute between China, the biggest creditor to emerging economies, and traditional lenders led by the United States.

As creditors seek to rework debt burdens that are becoming unsustainable amid rising interest rates, Beijing has pushed for World Bank loans to be included in the restructurings, meaning the institution would accept haircuts with sovereign or private lenders. Such a move is also seen as a threat to the bank’s rating.

Biden’s choice of Mr. Banga, who has been an advocate in his career in the private sector of cashless transactions and finding ways to serve the unbanked, has been criticized by advocates as being too associated with the interests of companies.

Since his appointment, Mr Banga has declared himself a ‘big supporter’ of scientific evidence that burning fossil fuels contributes to climate change, seeking to address criticism over the lender’s engagement on the issue under his leadership. outgoing leader.

His comments also contrast with a public relations mistake by Malpass last year, when he was criticized for appearing to dodge questions about whether he believed climate change was caused by greenhouse gas emissions. man-made greenhouse effect.

Mr. Banga is vice-president of the American investment company General Atlantic LP. Prior to that, he spent a decade as Chairman and CEO of Mastercard. He also held various positions at Citigroup Inc., including as CEO of the Asia-Pacific region.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)