Joe Biden has nominated a former boss of Mastercard with decades of experience on Wall Street to lead the World Bank and oversee a shake-up at the development organisation to shift its focus to the climate crisis.
The US president’s choice of Ajay Banga, an American citizen born in India, comes a week after David Malpass, a Donald Trump appointee, quit the role.
The World Bank’s governing body is expected to make a decision in May, but the US is the Washington-based organisation’s largest shareholder and has traditionally been allowed to nominate without challenge its preferred candidate for the post.
Malpass, who is due to step down on 30 June, was nominated by Trump in February 2019 and took up the post officially that April. He is known to have lost the confidence of Biden’s head of the US Treasury, Janet Yellen, who with other shareholders wanted to expand the bank’s development remit to include the climate crisis and other global challenges.
Malpass upset the Biden administration when he appeared to question the extent to which humans had contributed to global heating.
Biden said he wanted Banga to use his decades of experience on Wall Street to support private-sector lending to countries in the developing world.
“Ajay is uniquely equipped to lead the World Bank at this critical moment in history. He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organisations through periods of fundamental change,” the president said.
“He has a proven track record managing people and systems, and partnering with global leaders around the world to deliver results,” he added.
Anti-poverty groups are expected to question Banga’s commitment to fighting the climate crisis using private sector funds. Several countries have defaulted on foreign loans, in effect declaring themselves bankrupt, and are locked in negotiations with banks and other private-sector lenders to reduce their debts.
The World Bank said the first criterion for a future president was “a proven track record of leadership and accomplishment, particularly in development”.
Banga has recently joined several bodies as a climate adviser. He became vice-chairman of General Atlantic’s climate-focused fund, BeyondNetZero, at its inception in 2021.
Raised in India, Banga is expected to appeal to many developing world leaders as an executive bringing financial acumen to the job and a strong relationship to the Biden administration.
The World Bank’s board has rebutted previous criticism of its commitment to reducing global heating, saying that climate finance doubled under Malpass from $14bn (£12bn) in 2019 to $32bn last year.
John Kerry, Biden’s climate envoy, said Banga was “the right choice to take on the responsibilities of the World Bank at this critical moment”.
He said it would allow the World Bank to “mobilise capital to power the green transition”.
Manish Bapna, chief executive of the research organisation, the Natural Resources Defense Council, said Banga would need to be a “transformative leader with a clear vision for ambitious climate action” who must prevent the world’s most vulnerable people from being “forced to pay a price they can’t afford for a crisis they didn’t cause”.