Fri, Feb 08, 2019 - Page 5 News List

Trump taps fierce World Bank critic to take charge

CONTROVERSIAL:David Malpass has called the World Bank and IMF ‘corrupt’ and complained about financing to countries like China he says should have graduated already

AFP, WASHINGTON

US President Donald Trump, right, introduces Undersecretary of the Treasury for International Affairs David Malpass, his candidate in the election of the next president of the World Bank, at the White House in Washington on Wednesday.

Photo: Reuters

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

Undersecretary of the Treasury for International Affairs 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” and “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 taxpayer’s 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 IMF.

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 US$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.

The bank’s board is accepting nominations from yesterday 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.

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

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

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

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

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