Ajay Banga, the US pick to head the World Bank, appears almost certain to become the anti-poverty lender’s next president after nominations closed Wednesday with no country proposing an alternative candidate. The former Mastercard Inc. chief executive was tapped by President Joe Biden last month after current president David Malpass announced plans to step down almost a year early.
Malpass, nominated by former President Donald Trump in 2019, won the top spot unopposed. The institution’s top job has always gone to a US candidate. The Washington-based lender’s board will consider Banga for the position, it said in an emailed statement Thursday. The executive directors will conduct a formal interview with Banga and expect to conclude the selection in due course, it said.
While Banga has built a long career in the private sector, especially in finance and banking, he’s highlighted the perspective he could bring to the job from his upbringing and education in India, as well as his commitment to climate science and his belief that poverty and environmental issues are intertwined. The Washington-based World Bank opened the nomination period in late February and said at the time that it expected the process to wrap up by early May.
Banga, 63, spent most of the past month on a global tour to creditor and borrower nations to build support for his nomination. That included stops in China, Kenya and Ivory Coast, as well as the UK, Belgium, Panama and his native India. Banga is poised to take over at a pivotal time for the anti-poverty lender, which gives out about $100 billion annually. The US is among nations pushing reforms of multilateral development banks to unlock more climate financing for the developing world.
Treasury Secretary Janet Yellen has said the world’s oldest and largest development bank must evolve from its traditional focus on country-specific lending to address global challenges like fighting climate change, and to more aggressively extend its balance sheet. While such a funding move is expected to unlock billions of dollars in additional funds, the US has urged care to protect the lender’s AAA credit rating, which allows it to borrow and lend cheaply to poorer countries. Banga earlier this month said that grade needs to be protected, and called on private capital to help expand the bank’s effectiveness.
The shift in leadership 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 US. While creditors are seeking to rework debt loads that are becoming untenable amid rising interest rates, Beijing has been pushing for loans from the World Bank to be included in restructurings, which means the institution would take haircuts along with sovereign or private lenders. Such a move is also considered a threat to the bank’s rating.
Biden’s choice of Banga, who has been an advocate in his private-sector career of cashless transactions and finding ways to serve the unbanked, had been met with criticism among advocates as being too associated with corporate interests.
Since his nomination, Banga has declared himself a “big believer” in the scientific evidence that burning fossil fuels contributes to climate change, seeking to address criticism about the lender’s commitment to the issue under its outgoing chief. His comments also contrast with a public relations flub by Malpass last year, when he came under fire for appearing to dodge questions on whether he believed that climate change is driven by man-made greenhouse gas emissions. Banga serves as vice chairman at US investment firm General Atlantic LP. Before that, he spent a decade as president and chief executive officer of Mastercard. He also held various positions at Citigroup Inc., including as CEO of the Asia-Pacific region.