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This can be seen as a strategic international political move by Joe Biden. The American president on Thursday appointed a compatriot of Indian origin as president of the World Bank. Ajay Banga, former CEO of payment company Mastercard, has US citizenship but was born in India and still feels like a “totally made in india man“, he confided to the economic channel CNBC in 2020.
Thus, the American government responds somewhat to the feeling felt for years by the governments of poor and emerging countries: they too want to see themselves represented at the top of the development bank. Traditionally, the United States provides the president of the bank which was founded in 1944 to increase the level of development of poor countries. Europe provides the president of the International Monetary Fund. President Barack Obama also addressed the World Bank’s aversion to American dominance by highlighting South Korea’s Jim Yong Kim in 2012.
The post of World Bank president became vacant last week when David Malpass, who was appointed in 2019 on the recommendation of President Donald Trump, unexpectedly announced he would step down in early April. In the background, there was growing dissatisfaction with Malpass’s undisguised climate skepticism among key member states, who are the bank’s major shareholders and backers. Countries like the United States, Germany and France want the World Bank to do more with climate finance, and also to take more financial risk in this area.
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Read also: The departure of the head of the World Bank ignites the debate on the climate at the bank
In this regard, Banga (63) seems to have better papers. As CEO of Mastercard, he regularly expressed concern about climate change. “Whoever you are or whatever you do, climate change affects you. But it has the greatest negative impact on those who are socially and economically vulnerable,” Banga said when Mastercard formed the Priceless Planet Coalition in 2020 along with other large companies. The group of companies has promised to plant 100 million trees within five years. Biden and Treasury Secretary Janet Yellen both cited Banga’s climate commitment as one of her strengths on Thursday, in addition to her corporate leadership experience and background on development issues.
“High time” for a woman
Banga, born as the son of an Indian army officer, is still today vice-president (Vice Chairman of the Board) of General Atlantic, an American private equity firm. Prior to heading Mastercard (2010-2019), he worked at food maker Nestlé and soft drink maker PepsiCo in India, and at Citibank in the United States, where he focused on microcredit (small loans start-up entrepreneurs) in developing countries.
Banga has no experience with public international organisations, but this should not be a problem: in the world bank job profile only “familiarity with the public sector” is required. Banga has done a lot of work on this in recent years: he has held various advisory positions in Democratic governments. He served on President Obama’s Cybersecurity Committee and advised current Vice President Kamala Harris on a project to address the causes of illegal migration from Latin America, including poverty and climate change. . Banga has an extensive network in the political world of Washington and the business world of New York.
There is one point in the job profile that Banga cannot answer: the World Bank Board (appointed by member states) “strongly encourages women to apply”. German Development Cooperation Minister Svenja Schulze wrote this week on Twitter that it is “definitely time” for a woman to lead the World Bank, which until now has always been led by (American) men. The International Monetary Fund and the World Trade Organization are currently headed by women, respectively Kristalina Georgieva (Bulgaria) and Ngozi Okonjo-Iweala (Nigeria).
It is unclear whether other countries will field their own candidates for the World Bank this time around. The biggest shareholders – with the exception of the United States, which are China, Japan, Germany, France and the United Kingdom – must in any case agree on the appointment. The position is still open until March 29.
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