Jim Yong Kim, President, World Bank Group; Ivanka Trump, Senior Adviser To The President Of The United States; Reem Bint Ebrahim Al Hashimy, Minister Of State For International Cooperation, United Arab Emirates; Steven Puig, CEO, Banco BHD; Philippe Le Houérou, CEO, IFC; Anta Babacar Ngom, Executive Director, Sedima; Nour Al-Hassan, CEO, Tarjama; Win Win Tint, CEO, City Mart Holding Company. Photo: World Bank / Simone D. McCourtie
An American Has Always Lead the World Bank…Until Now?
President Trump is reportedly picking David Malpass, an official at the Treasury Department, as the US nominee to serve as president of the World Bank.
Under normal circumstances, this would mean that David Malpass will become the next president of the World Bank. That is because an American has always served as World Bank president, owing to an agreement between Europe and the United States in which Europeans support the American candidate for the World Bank and Americans support Europe’s pick for head of the International Monetary Fund.
But that agreement is under significant strain right now.
Trump’s pick is not guaranteed to lead the World Bank
Even before this nomination, the “gentlemen’s agreement” between the United States and Europe was fraying. When President Obama nominated Jim Yong Kim to serve as president of the World Bank his nomination was challenged by two candidates, a Nigerian finance minister and Colombian UN diplomat. These candidates received wide support from the developing world and gave Kim a serious challenge. Ultimately, the voting and diplomatic power of Europe and the United States prevailed, landing Kim in the top spot.
Scott Morris of the Center for Global Development was a Treasury official in the Obama administration who worked on Jim Yong Kim’s candidacy in 2012. He spoke to me on the Global Dispatches podcast about the growing global discontentment over the United States’ lock on the job. “I left that experience working on Jim Kim’s candidacy convinced that the next time this came up, there was absolutely no guarantee that even the most qualified American candidate could be viewed as pre-ordained,” he said.
This time around, European countries might break with Trump.
Malpass is a controversial figure in economic circles and is not respected in the global development community. Justin Sanfleur of the Center for Global Development curtly sums up the consensus view of Malpass among people who have made a career of fighting poverty in the developing world, which is the ostensible goal of the World Bank.
Europeans might interpret Malpass’ nomination as an attempt to take the reigns of the World Bank in service of the parochial foreign policy priorities of the Trump administration. And if they decided to, Europe could stop his candidacy cold in its tracks.
The President of the World Bank is selected through a simple majority vote of the Executive Board of the World Bank, with voting shares distributed based on country’s contributions to the bank. The United States owns the single largest share at over 15%. But Europe’s collective voting power is greater, and it would be impossible for Malpass to secure the majority without Europe’s backing.
The World Bank expects to select a new President in time for the annual Spring Meeting, in mid-April. Last month, the World Bank said that at least three candidates would be shortlisted for interviews and consideration before a vote is taken, so we know that there will be a formal competition. And this time around, there is a good chance that World Bank member states will rally around a non-American.