Major changes are afoot at the World Bank, but few people seem to be paying attention. Beyond devising a new, greener mission, the Bank is undergoing a leadership transition, with important implications for its relationship with the Global South and the institution’s long-term relevance.
By the time David Malpass, the World Bank’s president, announced his resignation last month, tensions over the Bank’s stance on climate change had been building for months. Chosen for the job by former President Donald Trump’s administration, Malpass faced considerable pressure when Joe Biden took over, with the U.S. Treasury expressing dissatisfaction with the Bank’s failure to show genuine climate leadership.
Criticism of Malpass escalated in September, after he refused to acknowledge the role of human greenhouse-gas emissions in driving climate change. While he subsequently did so, his backpedaling did nothing to diminish accusations that, under his leadership, the World Bank was not doing nearly enough to align its lending with global emissions-reduction goals.
A month later, a group of ten major economies–the G7, plus Australia, the Netherlands, and Switzerland submitted a proposal for a “fundamental reform” of the Bank that would lead to greater progress on this front. The Bank’s climate action plan remains, according to many Western countries, too short on ambition.
Malpass’s resignation was thus probably a relief–not least to the United States. Almost immediately, Treasury Secretary Janet Yellen reiterated America’s commitment to “evolve the World Bank” into an engine of the green transition. Soon after, Biden nominated Ajay Banga–the Indian-born former Mastercard executive who oversaw the firm’s emergence as a global payment platform–to succeed Malpass.
Read the rest of Ana Palacio's editorial here.