Wall Street veteran Ajay Banga is nominated to head the World Bank : NPR
The U.S. has nominated Ajay Banga to head the World Bank. A naturalized American, Banga has decades of experience in finance but faces major challenges at the multilateral lending institution.
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The Biden administration has nominated a Wall Street veteran to lead the World Bank. If chosen by its board, Ajay Banga will replace David Malpass, who created controversy over his views on climate change. As NPR’s Jackie Northam reports, focusing on global warming will be just one of the major challenges Banga would face as head of the multilateral institution.
JACKIE NORTHAM, BYLINE: Ajay Banga was born in India. He’s the son of an army officer, but his calling was finance. Banga started his career at Nestle in India, moving his way up through various senior management roles across the world, including CEO of Mastercard for more than a decade. Along the way, the now-63-year-old Banga became a U.S. naturalized citizen.
JOHANNES LINN: Being from a developing country originally and having grown up in India, you know, I’m sure he brings a perspective to the development business. Let’s call it that.
NORTHAM: Johannes Linn, a former vice president of the World Bank, says Banga’s a good choice to lead the bank.
LINN: Secondly, his successful career, especially in the finance domain, is very important right now. He is clearly also a very experienced manager of big organizations, which the World Bank is.
NORTHAM: The U.S. is the largest shareholder at the World Bank and typically picks who will lead it. The Biden administration has made clear Banga has a mandate to set a more ambitious agenda on tackling climate change.
Scott Morris, a senior fellow at the Center for Global Development, says Banga could have a real challenge finding consensus on global warming policies.
SCOTT MORRIS: Because as much as, you know, at a broad level, countries embrace the climate finance agenda, there are real differences in the particulars and the trade-offs that are inherent, and more money for climate versus other priorities that developing countries might have. So, you know, that is actually a fairly tricky landscape that he will need to navigate.
NORTHAM: And with a large, multilateral bank, it’s hard to escape geopolitics. Morris points to China, which he says is the largest source of emissions in the world.
MORRIS: It’s really hard to see how you make progress on the climate agenda at the World Bank if you don’t have some kind of effective relationship with the Chinese. And, you know, that is going to be squarely on his agenda in trying to manage that at a time when his largest shareholder and the country that nominated him does not really have a pro-engagement stance with the Chinese.
NORTHAM: China has also set up its own international development banks in competition with the World Bank.
Another concern for Banga is the looming global debt crisis, made worse in developing countries by massive borrowing, the pandemic and the war in Ukraine.
AFSANEH BESCHLOSS: You have 100 trillion debt across the board. You have 60 countries going into default.
NORTHAM: Afsaneh Beschloss is a former treasurer and chief investment officer at the World Bank. She was also on the board at the American Red Cross with Banga for several years.
BESCHLOSS: But also, you have the private sector at this moment not putting out a lot of money in emerging markets. So the challenge is the biggest it’s ever been, and it’s something that does need to get fixed.
NORTHAM: Beschloss says the World Bank is capable of fixing the crisis, but, no question, Banga has his work cut out for him. Voting on his nomination is expected in May.
Jackie Northam, NPR News, Washington.
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