US leads search for new World Bank chief with climate at heart

The US Treasury Department is scrambling to assemble a roster of contenders with strong credentials in climate finance to spearhead the World Bank’s overhaul following the early departure of Trump-appointed David Malpass.

Potential candidates include Samantha Power, former US Ambassador to the United Nations and now head of the US Agency for International Development (USAID), Rockefeller Foundation President Raj Shah and World Trade Organization Director-General Ngozi Okonjo-Iweala , according to development finance officials .

Gayle Smith, a former senior Obama aide, US development official and Africa expert, and Mafalda Duarte, chief executive officer of the $11 billion climate investment fund, are also potential candidates.

The US, which traditionally elects the World Bank President, is expected to select a candidate who could win the support of other leading shareholders and accelerate its reform to put climate change at the heart of its work.

The US is by far the bank’s largest shareholder, out of nearly 190 member countries, followed by Japan, China, Germany, France and the UK. The countries are represented by a board of governors, usually finance or development ministers from the member countries, and 25 executive directors, who are responsible for the operational business.

The Board is expected to announce soon a timeline for all Member States to propose potential candidates for the top position and their review will begin after that process.

Clemence Landers, a former Treasury Department official who works on working with multilateral development banks and former adviser to the US executive director of the World Bank, said there was a “crisis of confidence” in international institutions among countries borrowing from them. The next president must be able to “rebuild frayed relationships of trust”.

Some developing countries fear the reforms could distract from the bank’s core mission of poverty alleviation. Development finance experts said the next president must allay their concerns while enacting meaningful change.

“This is not about the next five years, this challenge is about the next three decades,” said Amar Bhattacharya, senior fellow at the Center for Sustainable Development. “We need someone who understands both development and the climate agenda and doesn’t see this as a zero-sum game.”

Avinash Persaud, climate adviser to Barbados Prime Minister Mia Mottley, who has proposed a range of reforms to the IMF and World Bank, said the US should consider breaking with tradition of appointing a US citizen for the job, it is because he was an American candidate was “the best person for the job”.

Malpass has signaled he will leave the bench by June 30th. The Next Best Group management are managed by Axel van Trotsenburg, who was recently promoted to operations manager of the bank.

The Bank’s governance will come under intense scrutiny at the spring meetings in April and the annual meetings in October, which are expected to be key moments in the reform process.

Experts said the new president is unlikely to be elected before the spring convention. Scott Morris, a senior fellow at the Center for Global Development, said it’s “a pretty compressed amount of time” to have someone by June.

Although presidents have traditionally been US citizens, this was not an official requirement. That tradition “should not be taken for granted,” especially given the ongoing reform process, Morris said.

Inder Sud, a former bank executive, said the next president had to be “a proven leader” and that the recently appointed people had “no leadership experience” because the US was “starting to reward friends.”

Kate Hampton, executive director of the Children’s Investment Fund Foundation, said Malpass’s departure “creates an unexpected opportunity to restart the international financial system, beginning with [multilateral development bank] reform, but not in the end”.

However, frustration with Malpass had been building for some time in the US government and boiled over after he failed to acknowledge human-caused climate change at a conference late last year. He said afterwards that he had been misunderstood.

As calls for Malpass’s removal grew louder over the past year, some people close to the bank said Wednesday’s announcement was unexpected.

However, one person with knowledge suggested his exit this week might not have been “quite as sudden as it seemed.”

US Treasury Secretary Janet Yellen threw down the gauntlet last year by demanding that the bank come up with a plan for change. However, the “evolution roadmap” drawn up in December was criticized as insufficient.

Additional reporting by Daria Mosolova and Jonathan Wheatley in London

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Adam Bradshaw

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