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

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Phnom Penh curfew starts today

    A two-week curfew from 8pm to 5am starts today in Phnom Penh, a day after a sub-decree detailing administrative measures to contain Covid-19 was issued by Prime Minister Hun Sen. “Travelling in Phnom Penh is temporally banned between 8pm and 5am,” said Phnom Penh governor

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants