Wednesday, June 12, 2024
 
 

Trump sends David Malpass to the World Bank

Malpass may dampen China’s global financial reach

- Advertisement -

President Donald J Trump named David Malpass, currently US Treasury Undersecretary for International Affairs, as the US candidate for the Presidency of the World Bank – formally the International Bank for Reconstruction and Development, or IBRD – on February 6 after current President Jim Yong Kim resigned unexpectedly from the position on February 1.
Washington doesn’t have the only word
Although not a hard and fast requirement, the US selected for the IBRD’s lead position is almost invariably awarded the job in view of the decisive role the US played in setting up the development-focused IBRD at the end of World War II, as well as hosting it in Washington DC, along with the IMF. A European has traditionally been designated to run the IMF, which proved to be a wise move as it was called on to play a major role in the Eurozone crisis.
Nevertheless, this is not a done deal. The IBRD’s board will accept nominations until March 14 and hopes to have the new President designated at the regular spring meeting of the IBRD/IMF in April. Voting weight on the board is determined by a member country’s financial contributions, so although the US is the biggest shareholder based on contributions, the White House cannot install a new IBRD President unilaterally.
Reports have surfaced of staff-level opposition to the Malpass selection as well as unhappiness of some IBRD member countries, but these are not expected to be sufficient to derail the appointment.
In a final twist, Washington based media are reporting that Malpass’ eldest son, Robert, a newly-hired employee of the International Finance Corporation, itself a subsidiary of the IBRD, has offered to step down from his entry-level job if his father takes the reins.
President Trump cares
The good news is that Trump was convinced that a US-directed IBRD is better than the punching bag it might have become if one listened to Trump’s “America first” campaign pronouncements, which took aim at most multilateral organisations the US participated in throughout the postwar era. Malpass himself had been a major IBRD critic prior to assuming his current position at the Treasury Department.
Important reforms achieved
In recent negotiations for $13 billion in IBRD replenishment funding, Malpass and the US Treasury secured management reforms that carry significant weight with the sceptical United States Congress that ultimately must approve US funding. The reforms include limits on staff salaries and other benefits, a tremendous issue in Congress and around Washington where the international financial institutions based there are seen to spend substantially more than the US Federal Government does for comparable staff salaries and benefits, generating continuing resentment and mistrust.
Whether it is true or not, some global players will see the Malpass nomination as part of a broader new China “containment” strategy from the US. At Treasury, Malpass has been critical of the Chinese and their use of the IBRD for project finance in view of its massive reserves and a surging economy. He may now be in a position to do something about this.


In addition, last October, Trump created a new foreign assistance agency named the United States International Development Finance Corporation – the IDFC. While still in a formation stage that will last most of this year, the IFDC was designed to help Washington counter Beijing’s influence globally, especially in the developing world.
One should expect to see the IBRD under Malpass to begin aggressively partnering with the IFDC to give developing countries new project financing options instead of the traditional “take it or leave it” Chinese financing offers available to them at present.

- Advertisement -

Subscribe to our newsletter

CEO/Editor-in-Chief.  Former US diplomat with previous assignments in Eastern Europe, the UN, SE Asia, Greece, across the Balkans, as well as Washington DC.

Latest

EU-Central Asia discuss security challenges, joint cooperation

The European Union and the five Central Asian Deputy...

Manila rejects Beijing’s South China Sea demands as “absurd”

The Philippine Coast Guard accused its Chinese counterpart on...

World Oceans Day calls for action to protect coastal communities and marine ecosystems

UN World Oceans Day, which is officially on June...

U.S.-Kazakhstan Enhanced Strategic Partnership Dialogue deepens political and economic ties

The sixth annual United States-Kazakhstan Enhanced Strategic Partnership Dialogue...

Don't miss

EU-Central Asia discuss security challenges, joint cooperation

The European Union and the five Central Asian Deputy...

Manila rejects Beijing’s South China Sea demands as “absurd”

The Philippine Coast Guard accused its Chinese counterpart on...

World Oceans Day calls for action to protect coastal communities and marine ecosystems

UN World Oceans Day, which is officially on June...

U.S.-Kazakhstan Enhanced Strategic Partnership Dialogue deepens political and economic ties

The sixth annual United States-Kazakhstan Enhanced Strategic Partnership Dialogue...

Interview: EU and Turkmenistan are getting closer

NE Global sat down exclusively with Sapar Palvanov, Ambassador...

EU-Central Asia discuss security challenges, joint cooperation

The European Union and the five Central Asian Deputy Foreign Ministers discussed common security challenges and joint cooperation to deepen ties between the two...

Manila rejects Beijing’s South China Sea demands as “absurd”

The Philippine Coast Guard accused its Chinese counterpart on June 7 of blocking efforts to evacuate a sick member of its armed forces in...

World Oceans Day calls for action to protect coastal communities and marine ecosystems

UN World Oceans Day, which is officially on June 8, was celebrated on June 7 at UN Headquarters in New York, focusing on protecting...

U.S.-Kazakhstan Enhanced Strategic Partnership Dialogue deepens political and economic ties

The sixth annual United States-Kazakhstan Enhanced Strategic Partnership Dialogue (ESPD) was held in Washington D.C. on May 31.The U.S.-Kazakhstan Enhanced Strategic Partnership Dialogue was...

Interview: EU and Turkmenistan are getting closer

NE Global sat down exclusively with Sapar Palvanov, Ambassador of Turkmenistan to the Kingdom of Belgium, also accredited as the head of the Mission...

Washington orders new sanctions against Russia’s Wagner Group in Africa

 On May 30, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) ordered new sanctions measures to counter Russia’s destabilizing activities in...

Xi challenges a divided Europe

After the May 5-9 visit of President Xi Jinping to Europe most of the political analysts in Brussels who argued that the Chinese President's...

COP29 in Azerbaijan to focus on peace, climate finance, green issues

During this year’s United Nations climate conference COP29, host-country Azerbaijan will strive to act as a bridge-builder between all members of the international community,...