President Joe Biden will nominate former Mastercard Chief Executive Officer Ajay Banga in a surprise pick to be the next president of the World Bank as Washington pushes the lender to expand its financial firepower and confront global issues such as climate change and public health.
Banga “has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change, Biden said in a statement Thursday.
The 63-year-old currently serves as vice chairman at US investment firm General Atlantic LP. Before that, he spent a decade as president and CEO of Mastercard. He also held various positions at Citigroup Inc., including as CEO of the Asia-Pacific region.
While the official nomination process to replace Malpass opened earlier Thursday, and a final selection isn’t expected until early May, Washington’s candidate has traditionally taken the top spot at the World Bank, where the US is the largest shareholder. Current President David Malpass, who was nominated by President Donald Trump
, last week unexpectedly announced that he plans to leave by the end of June.
The nomination comes at a time when the World Bank and its twin Bretton Woods institution the International Monetary Fund facing growing demand for their assistance, with 60 percent of low-income nations at or near distress, with countries owing their creditors hundreds of billions of dollars. It also comes as Treasury Secretary Janet Yellen is pushing an evolution of the development lender from its traditional focus on country-specific lending to focus on global goods like fighting climate change and pandemics.
Raised in India, Banga has “a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity,” Biden said.
Yet he wasn’t among a list mentioned by analysts in recent days, which included Samantha Power, head of the US Agency for International Development; and Ngozi Okonjo-Iweala, the current head of the World Trade Organization, a dual Nigeria-US citizen. The World Bank board said Wednesday said that it would strongly encourage women nominees.
Banga’s nomination comes with Yellen in India for discussions among Group of 20 finance ministry and central bank leaders gathering this week in Bengaluru, India.
The former Mastercard chief has advocated greater use of green bonds to drive climate finance into developing countries. And he’s highlighted the challenge of financing climate-friendly projects in developing countries with high debt loads.
Banga has co-led the Partnership for Central America, an initiative launched by Vice President Kamala Harris to marshal private-sector support for the region aimed at creating more economic activity and jobs, with contributions of more than $4.2 billion across about 50 companies and organizations.
The Biden administration is confident that Banga will have a strong commitment to gender equality and inclusion, and that his experience growing up and spending the early part of his career in India will help give him a different perspective than his predecessors, a senior administration official told reporters.
If appointed by the executive board, Banga would follow the early departure of David Malpass, who was tapped in 2019 by then-President Donald Trump
and seen by critics as unfriendly to Biden and Yellen’s climate priorities.
The bank’s next president will be tasked with reforming the nearly 80-year-old institution, a process spurred along by a Group of 20 review released last year and promoted by Yellen.
Among other recommendations, the bank is urged to tackle global and transnational issues, particularly climate change, and expand its so-called capital adequacy, allowing it to share more funds and take on more risk, all while continuing its traditional role of poverty reduction and project finance.
Any effort, however, will need to be balanced against preserving the bank’s triple-A credit rating and preferred creditor status, which allows it to borrow cheaply and lend at below-market rates.
Malpass, whose term was set to run through 2024, came under scrutiny in September after appearing to dodge questions over the man-made causes of climate change, raising calls for his replacement and for multilateral banks to stop funding fossil-fuel energy projects.
The bank’s executive board said Wednesday that it will accept nominations through March 29, and then decide on a shortlist of up to three candidates and conduct formal interviews.
Yellen earlier this month called on the bank to implement changes by the time shareholders meet for its so-called Spring Meetings this April in Washington, and asked it to kick off a second phase of reforms by the time shareholders meet for its annual meetings in October.