Ajay Banga may be what the struggling World Bank needs
〇February 23rd, a week after David Malpass announced his resignation as World Bank President, and after the bank announced that the search for a successor would be months-long “open, merit-based and transparent.” Just hours later, everyone knew who would win: former Mastercard boss Ajay Banga was nominated by the White House to become the lender’s waiting leader. A naturalized American, ‘Made in India’ in his words, and a private sector businessman, Mr. Banga represents a departure from tradition.
However, the emerging economies did not see his nomination as a victory. The White House has elected every president of the World Bank since it struck a gentlemen’s agreement with Europe. imfboss, 1944. America also has a significant amount of voting power in the bank. This made sense after World War II. Now, countries from China to Panama want their institutions to reflect their growing presence in the global economy.
Banga’s first task is to tackle the infighting. The same tension extends to the debate over the role of banks. The U.S. and Europe want to ease constraints and lend more to lessen the burden of rising interest rates, climate change and less Chinese lending to poor countries. But some emerging economies have resisted, saying such a move would jeopardize the ultra-security of their organizations. ah credit rating. Without extra capital, the bank has a big hole in its coverage.
Another battle concerns debt relief, which China stalls by insisting that the World Bank write down its loans. Malpass has so far stood by his position, arguing that it would undermine banks’ ability to lend. The more hostile China becomes, the less likely US policymakers will agree to cast more votes for Beijing anytime soon.
Mr. Banga (Mr. Banga, Director of Exor, economistparent company) is capable of the bureaucratic maneuvers necessary to break the deadlock. Mr Banga will be the first appointment without full-time development or government experience since banker and attorney James Wolfensohn in 1995. But Mr. Banga’s career can be an asset. After working on Wall Street for more than a decade, he oversaw his Mastercard, which in 2009 grew from his $20 billion credit card company to his $300 billion payments platform. Did. He is well-positioned to lead the bank’s priority work on digital payments. And he has a reputation for transforming unwieldy tissues into sophisticated outfits.
Banga may also help banks finally embrace the green agenda. Malpass said in September that he was “not a scientist”, dodging his questions about fossil fuels and global warming. In January, Western countries rejected a bank’s climate change plan on the grounds that it was not ambitious. It is hoped that he will use his Wall Street know-how to get companies to fund green technology and infrastructure.
America’s ideal World Bank, like the Mastercard left by Mr. Banga, is a machine oiled with sustainability. Before repeating this trick, the new president must first win over emerging economies and end the routine infighting. In order to do so, he must make them forget the unfair circumstances of his choice. ■
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https://www.economist.com/finance-and-economics/2023/03/02/ajay-banga-may-be-just-what-the-fractious-world-bank-requires Ajay Banga may be what the struggling World Bank needs
