In April, the World Bank will negotiate with shareholders on proposals that include a capital increase and new lending tools for climate-related initiatives.
On Wednesday, the largest provider of financial and technical assistance to developing countries around the world – the World Bank – announced looking for a candidate for the role of its president. Its current leader David Malpass, appointed back in 2019 by Donald Trump, will step down from his position by the end of June, almost a year before the end of his five-year term contract. Following the announcement of the World Bank, US President Joe Biden nominated Ajay Banga, the former chief executive officer of Mastercard Incorporated (NYSE: MA), for the role.
According to Joe Biden, Banga is “uniquely equipped to lead the World Bank at this critical moment in history” as he “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.”
Biden further added:
“He (Banga) has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organisations through periods of fundamental change. He has a proven track record managing people and systems, and partnering with global leaders around the world to deliver results.”
Ajay Banga is an Indian-American business executive, with more than 30 years of business experience. He started his career with Nestle in India and went on to work with Citigroup in India and Malaysia. Later, he was handling different roles at Mastercard and on the boards of the American Red Cross, Kraft Foods, and Dow Inc.
In 2022, Banga assumed responsibilities at General Atlantic as Vice Chairman. During his career path, Ajay Banga has become a global leader in technology, data, financial services and innovating for inclusion. With his rich experience, he is a perfect candidate to lead the World Bank operation.
World Bank’s Climate Controversy
Notably, David Malpass decided to step down as World Bank’s President earlier as a result of criticism over the bank’s commitment to climate action as well as his personal views on climate change.
In September 2022, Davis Malpass was asked whether he accepts the scientific consensus on climate change, and he refused to answer, saying that he is “not a scientist.” This provoked a wave of criticism, with many opponents calling for Malpass’ resignation. The US, Germany and other governments called on the bank to launch “fundamental reform” on the climate agenda. To handle the controversy that followed Malpass’ statements, the World Bank decided to make climate action more central to its mission. Besides, the bank has revealed it is seeking to vastly expand its lending capacity to address climate change and other global crises.
In April, the World Bank will negotiate with shareholders on proposals that include a capital increase and new lending tools for climate-related initiatives. In particular, to encourage emissions reductions in middle-income countries, its so-called “evolution roadmap” proposes scaling up the global public good fund of the International Bank for Reconstruction and Development, the World Bank’s lending arm.