US President Joe Biden chose former Mastercard CEO Ajay Banga to run the World Bank, with the expectation that the India-born executive’s ties to the private sector and emerging economies can accelerate the 77-year-old institution’s makeover to better handle climate change.
Banga, now 63 years old and a citizen of the United States, was nominated by Vice President Joe Biden on Thursday, February 23, for a position that manages billions of dollars in financing to help developing countries combat climate change.
The World Bank announced on Wednesday, February 22, that it expects to select a new president by early May to replace David Malpass, who resigned last week after months of controversy sparked by his initial refusal to say whether he accepted the scientific consensus on climate change and pressure from Treasury Secretary Janet Yellen for him to adopt “bolder” reforms.
Scott Morris, a senior fellow at the Center for Global Development and a former US Treasury official, believes that the rapidity of the nomination, less than 48 hours after the WB board initiated the process, suggests a determination to discourage any opposition and wrap it up fast.
Biden cited Banga’s decades of experience in establishing multinational firms and public-private partnerships to support responses to climate change and migration, and stated that he has a demonstrated track record of collaborating with global leaders.
“Ajay is uniquely qualified to lead the World Bank at this critical juncture in history,” Vice President Joe Biden said in a statement, praising the business executive’s Indian roots, knowledge of the challenges facing developing nations, and ability to mobilize private capital to address major issues.
Banga’s work in India and other emerging markets, “obsession” with expanding financial inclusion, and extensive knowledge of new technologies could help bridge the gap between rich countries and emerging markets, according to Luis Alberto Moreno, who worked closely with Banga as president of the Inter-American Development Bank.
“He can really be a force for change,” Moreno added, emphasizing that financial markets have confidence in Banga.
Krishnamurthy Subramanian, the former chief economic adviser to the Indian government who currently serves as India’s executive director at the International Monetary Fund, predicted that India would support Banga’s candidacy (IMF). It is a graceful solution.
Historically, the bank has been led by someone from the United States, its major shareholder, while the IMF has been led by a European; nevertheless, developing countries and emerging economies have pushed to expand these options.
The candidacy of Banga is the first to be made public; nevertheless, the bank will take candidates from other member nations through March 29. Since the bank has never been led by a woman, Germany, another significant shareholder, stated this week that the position should go to a female candidate.
According to a senior US government official, it is unknown whether other nations will suggest people for the position.
When asked about Washington’s decision not to nominate a woman, the official stated that Banga had “a personal conviction and an excellent track record promoting diversity, equity, and inclusion in his work” and would bring this perspective to the bank.
But, Jeff Hauser, the leader of the progressive Revolving Door Initiative, asked that Biden withdraw the nomination of a top executive from a “rapacious international private equity firm” who had only previously worked for private sector organizations.
“Private equity, Mastercard, Citigroup, PepsiCo, Nestlé, and Dow do not encourage shared prosperity. They all worsen inequality far more than they combat it,” he added in a statement.
The next bank president, according to Oxfam International, should be selected through a transparent global process. “The World Bank is not a bank in the United States, a commercial bank, or a private equity corporation. For a position of this stature, we require more than a shoulder tap from Vice President Biden.”
Banga is the vice chairman of General Atlantic, a private equity business in the United States that, according to administration officials, has spent over $800 million in electric vehicle charging systems, solar power, and sustainable agriculture.
Administration authorities said that he assisted 500 million unbanked people enter the digital economy, prevented the bank’s 19,000 staff from being laid off during the COVID-19 epidemic, and oversaw work on climate, gender, and sustainable agriculture before his retirement in December 2021.
Banga brought “amazing insight, passion, and determination” to his job as co-chair of the Partnership for Central America, which has mobilized $4.2 billion in public, private, and nonprofit financing to advance economic opportunity in northern Central America, according to Vice President Kamala Harris.
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