David Malpass, a senior US Treasury official and staunch supporter of President Donald Trump, was unanimously chosen Friday as the next president of the World Bank.
The 63-year-old has been a strident critic of global financial institutions, calling their lending practices “corrupt” and ineffective, and complaining they are overly generous to China.
Malpass — who has softened his message since being tapped to lead the World Bank — begins his five-year term on Tuesday, replacing former President Jim Yong Kim, whose surprise departure came not even halfway through his second term.
The announcement came as expected just prior to next week’s joint spring meetings of the World Bank and the IMF.
The bank said in a statement that Malpass’ selection by the board of directors followed an “open, transparent” nomination process in which citizens of all membership countries were potentially eligible.
But since the bank’s creation following World War War II, all of its presidents have been American men, following an unwritten rule that also ensures European leadership at the top of its sister institution, the International Monetary Fund.
The US Treasury official in charge of international affairs, Malpass had been the lone candidate for the World Bank job and his nomination by Trump earlier this year sparked outrage among critics, who saw it as an affront to the global anti-poverty lender’s very mission.
Malpass now emphasizes he is committed to the bank’s mission of eliminating extreme poverty, however, and that reforms enacted last year as part of a $13 billion capital increase addressed many of his criticisms.
In an open letter to bank staff on Friday, Malpass said the bank’s mission was “more urgent than ever,” adding that he had “listened carefully” in recent meetings with staff, board members and other stake holders.
An open process?
In recent years, emerging market countries have challenged the unwritten arrangement on World Bank and IMF leadership, demanding a more open, merit-based selection process.
The bank has been at pains to stress that it has heard such criticisms and now allows a more open process. But the few non-American candidates in recent years have received little support from major bank shareholders.
Many, including former Treasury officials from both political parties, have sharply criticized Malpass and his qualifications.
They pointed to his failure to foresee the 2008 global financial crisis during his time at the now-defunct investment bank Bear Stearns and his opposition, which later proved unjustified, to post-crisis Federal Reserve policies.
Malpass previously also held a senior role in the US State Department for Latin American affairs.
In a statement, US Treasury Secretary Steven Mnuchin and Ivanka Trump, the president’s daughter and advisor who has spearheaded a bank campaign for women entrepreneurs, both congratulated Malpass, citing what they called a commitment to poverty reduction in his career.
Mnuchin called Malpass “an ideal fit” to lead the bank while Trump said she believed he would be “an extraordinary leader.”