Candidate for World Bank top post makes all the right noises

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DAVID Malpass, US President Donald Trump’s pick for the post of the President of the World Bank, has been making all the right noises about the future use of development funding.

Those close to Malpass, currently the Under Secretary for International Affairs at the Department of the Treasury, say that he will be a ‘constructive’ Bank President who will focus on raising the incomes of developing countries.

Malpass has in the past called for the World Bank to direct funding where it was needed and to promote successful countries.

His candidacy was announced by Trump days after Jim Yong Kim stepped down as Bank President on January 31, three years before the end of his second term.

Malpass helped negotiate a package of World Bank lending reforms tied to a $13bn capital increase that sought to limit its lending and instead focus resources on poorer countries.

The reforms aim to ‘graduate’ more middle-income countries to private sector lending, and limit the growth of the salaries of World Bank staff.

Malpass told the Council on Foreign Relations in Washington in November 2017: ‘What we’ve challenged the World Bank to do is graduate countries [so] that as they are successful, let’s reduce the lending there and allow more lending to countries that need it.’

He was critical of World Bank lending to China: ‘The World Bank’s biggest borrower is China. Well, China has plenty if resources.’

Malpass also criticised the World Bank, the International Monetary Fund and other multilateral institutions for having ‘grown larger and more intrusive.’

He added: ‘The challenge of refocusing them has become more urgent and more difficult.’

Speaking at the White House when he introduced Malpass, Trump said: ‘David has been a strong advocate for accountability at the World Bank for a long time.

‘He has fought to ensure financing is focused on the places and projects that truly need assistance, including people living in extreme poverty.’

African economic experts welcome this and hope that this will lead ‘to inclusive development policies, especially on the back of marked imbalances in development in most African countries.’

Saloua Sehili, Chief Strategy Officer, and Clement Mensah, a consultant, both with the AfDB, noted that one of the reasons for ‘widespread underdevelopment is that development aid flowing to African countries –from multilateral development banks or other development partners – tends to have a bias for wealthy regions.’

Writing on the AfDB website, they argued: ‘Thus, aid ends up in already relatively endowed regions, particularly national capitals and urban areas, a situation that leaves citizens of other regions with the short end of the development stick – poor access to infrastructure, services, decent jobs and the benefits of industrialisation.’

Malpass said at the White House that ‘a key goal will be to ensure that women achieve full participation in developing economies.’

He said he was ‘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 will bring to the job as World Bank President over 40 years’ experience in economics, finance, government and foreign policy.

He currently oversees the World Bank and IMF in his current role within the US government.

With the African Development Bank and the African Union reaffirming their commitment to accelerate Africa’s economic transformation at this month’s AU Summit in Addis Ababa, economic experts would like to see both institutions take advantage of the changes that will be introduced by Malpass.

 

 

 

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