US President Donald Trump has nominated David Malpass, a vocal critic of the World Bank, to head the international financial institution, sparking concerns that he may seek to reduce the role of the global lender.
If approved by the Directors of the World Bank Group, 62-year-old Malpass would replace Jim Yong-kim as the president of the World Bank, who stepped down abruptly this year.
Malpass is currently in international affairs at US Treasury Department
Jim's resignation is effective February 1. He resigned three years before the end of his term.
Malpass is currently the under-secretary for international affairs at the US Treasury Department.
Announcing his nomination yesterday, Trump declared Malpass as a "special man", and as someone who was eminently qualified for the position.
"Malpass is a strong advocate for accountability at the World Bank," said the president
'America is the largest contributor to the World Bank'
"America is the largest contributor to the World Bank, giving it over $1 billion every year. My administration has made it a top priority to ensure that US taxpayers dollars are spent effectively and wisely, serve American interests and defend the American values," Trump said.
US chooses World Bank head generally, but times are changing
The US has historically been allowed to choose the head of the World Bank, although that dynamic has more recently faced opposition from other nations.
Nominating someone who has been so openly critical of the bank could intensify that resistance.
Malpass has been a point person in the Trump administration's trade negotiations with China and has overseen the government's relationship with the World Bank.
Malpass is longtime World Bank critic, nomination has stirred debate
Malpass is also a longtime critic of WB's lending practices and its business model and has expressed concern about the power that multilateral institutions exert.
If approved, he's expected to push the bank to narrow the focus of its lending to the world's poorest countries, among other changes.
His nomination has stirred debate, as some worry that Malpass will seek to reduce its role.
Analysts fear Trump administration could politicize World Bank President role
Malpass' appointment could also prove controversial given as some analysts fear that the Trump administration could politicize the role and use it to curb China's growing influence globally.
White House officials said Malpass, a long-time Republican, would be a "pro-growth reformer".
Given the vote share of various countries inside World Bank, the confirmation of Malpass as its next president is now a mere formality.
Currently, Malpass oversees working of IMF and the World Bank
In his current capacity as the Under Secretary of the Treasury for International Affairs, Malpass oversees working of the International Monetary Fund and the World Bank.
An internationally renowned economist, Malpass brings 40 years of experience in economics, finance, government, and foreign policy to his new assignment, Trump said.
Malpass is a degree-holder in international economics from Georgetown University's prestigious School of Foreign Service.
Malpass has also worked under former presidents Reagan, Bush
After his Georgetown University stint, Malpass served as deputy assistant secretary of the treasury under President Ronald Reagan and Deputy Assistant Secretary of State under President George H W Bush.
Treasury Secretary Steven Mnuchin said Trump had made an excellent choice by nominating Malpass to serve as President of the World Bank.
"David has worked closely with me at the Treasury Department," he said.
David understands the President's pro-growth economic agenda, says Mnuchin
"David understands the President's pro-growth economic agenda that has led to the strongest US economy and job market in generations," Mnuchin said.
"As Under Secretary, he successfully negotiated a capital increase and reform package to focus the World Bank on its core mission of lifting up the standard of living in lower-income countries," he added.
Mnuchin was assisted by Ivanka Trump in the selection.
World Bank is operating below its full potential, says Ivanka
"David's extensive knowledge of the World Bank's challenges and opportunities make him a uniquely qualified steward of a great institution that is operating below its full potential," said Ivanka, daughter and senior presidential advisor of Donald Trump.
"David's leadership was invaluable in the design and implementation of World Bank's Women Entrepreneurs Finance Initiative and I look forward to continuing our work together," she added.
Malpass will have a lot of work to do: Morris
Scott Morris, senior fellow at Center for Global Development and former US Treasury deputy assistant secretary for development finance and debt, said as the US candidate, Malpass will have a lot of work to do.
He has to convince other shareholders that he was prepared to move beyond his past statements and track record when it comes to the World Bank's agenda, Morris added.
Morris played a leading-role in Jim's campaign for WB president
"That includes the bank's critical role in climate finance and need for constructive engagement with China. The rest of the world holds 84% of voting power at the World Bank. It's fully within their ability to block an unsuitable nominee," Morris, who played a leading role in Jim's campaign for World Bank president said.
Jim was serving as World Bank's 12th President since 2012.