Logo of Phnom Penh Post newspaper Phnom Penh Post - Trump taps fierce World Bank critic to take helm

Trump taps fierce World Bank critic to take helm

Content image - Phnom Penh Post
US President Donald Trump announces David Malpass’s candidacy to lead the World Bank during an event in the Roosevelt Room of the White House February 6, 2019, in Washington, DC. AFP

Trump taps fierce World Bank critic to take helm

US PRESIDENT Donald Trump on Wednesday tapped a well-known World Bank critic to lead one of the world’s primary development lending institutions.

US Department of the Treasury senior official David Malpass is a controversial choice but if Trump wins the support of a majority the bank’s shareholders, especially European nations, he will have the opportunity to reshape the bank.

Trump called Malpass “an extraordinary man” who was “the right person to take this incredibly important job”.

“America is the largest contributor to the World Bank,” he said. “My administration has made it a top priority to insure that US taxpayers’ dollars are spent effectively and wisely.”

Trump and his team have attacked multilateral institutions in the two years he has been in office, and Malpass has led the charge against the World Bank and the International Monetary Fund.

Malpass has called the international financial institutions’ lending practices “corrupt” and complained about financing to China and other relatively more well-off countries that he says should have graduated from the institutions.

Speaking at the White House, Malpass said he would seek to implement reforms approved last year after negotiations to increase the bank’s lending capital by $13 billion, such as curbing loans to and charging higher interest to higher income countries like China.

“I’m very optimistic that we can achieve breakthroughs to create growth abroad that will help us combat extreme poverty and increase economic opportunities in the developing world,” Malpass said.

Asked about his attacks on the lender, he said his concerns were addressed in last year’s reforms, and he hopes to be able to oversee implementation of those changes.

“It doesn’t make too much sense for the higher income countries to be drawing so many resources from the bank when there are poorer countries that could make use of these resources,” he told reporters.

European support?

The surprise early departure of World Bank president Jim Yong Kim, effective on February 1, not even halfway through his second five-year term, gives Trump the opportunity to put his stamp on the organisation.

Beginning on Thursday, the bank’s board will accept nominations until March 14 and plans to name a new president prior the IMF and World Bank Spring meetings, set for April 12-14 in Washington.

Any of the 189 members can propose a candidate.

The Washington-based lending institution has been led by an American since the bank’s founding in the aftermath of World War II, while its sister institution, the International Monetary Fund, has always been led by a European.

In recent years, the growing emerging market countries have challenged this unwritten arrangement, demanding a more open, merit-based selection process.

Experts had thought it unlikely those countries would join forces against the US candidate but the choice of Malpass could unite them behind a rival.

Many, including former Treasury officials from both political parties, have sharply criticised Malpass and his qualifications, pointing to his failure to foresee the global financial crisis and opposition, which later proved unjustified, to US Federal Reserve policies.

“David Malpass would be a disastrous, toxic choice for World Bank president,” said Tony Fratto, former Treasury assistant secretary in the George W Bush administration.

The US is the biggest World Bank shareholder but it does not have a veto and needs the backing of European nations in a simple majority vote by the board.

Senior administration officials said Secretary of the Treasury Steven Mnuchin had already been reaching out to other World Bank shareholders to make the case for Trump’s candidate.

Malpass will travel next week to Beijing to participate in trade negotiations and then will go to Japan, the World Bank’s second largest shareholder.

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10