WASHINGTON — David Malpass makes his debut as the 13th president of the World Bank on Tuesday. After an appointment process some observers described as “farcical,” “flawed,” and a “mockery,” World Bank staffers are nonetheless prepared to move forward under Malpass’ leadership — assuming he clears up a few things early on in his tenure.
As he made the rounds to meet with World Bank shareholders and secure their support for his appointment, Malpass also sought to win the hearts and minds of his future employees. Last month, the candidate met with the World Bank’s staff association to hear their concerns and share his vision for the future of the institution.
“Saying [Malpass] understands the multilateral goals of the bank is one thing, and embracing the agenda is something else.”— Scott Morris, senior fellow, Center for Global Development
In general, people familiar with Malpass’ conversations in the lead up to his appointment said he offered some reassurance that, unlike his predecessor Jim Kim, who introduced sweeping and highly-disruptive reforms, he has no plans for a dramatic shakeup of the bank early in his tenure.
“We appreciate his willingness to understand staff concerns and engage constructively with us," Daniel Sellen, chair of the staff association, wrote to Devex.
"We encourage him to affirm to staff, as soon as possible, his commitment to multilateralism and addressing climate change, his views on lending to middle-income countries, and especially whether staff can expect continuity or major reforms during his tenure," Sellen said.
On Friday, after the board announced its unanimous vote in Malpass’ favor, the president-elect issued his first statement to the entire World Bank staff. He described a focus on “measurable successes,” and listed priorities including raising median incomes, creating job opportunities for women and girls, and sustainable debt management and transparency.
Malpass will make his first public appearance as president on Tuesday morning, Devex has learned, when he is scheduled to give an address in the atrium of the bank’s Washington, D.C., headquarters, to kick off the World Bank Spring Meetings.
On Thursday, he will participate in a press conference, where he is sure to face questions about how his recent history as a member of the Trump administration will translate into leadership of a multilateral development institution.
In his message to staff, Malpass highlighted the capital increase and “Forward Look” reform package that he helped secure last year as a member of the U.S. Department of the Treasury. With those pieces in place, Malpass wrote, “the WBG can become even more effective, responsive and efficient in helping countries across the development spectrum make much-needed breakthroughs.”
Climate change concerns
Notably, the all-staff email did not explicitly mention climate change, but instead committed to World Bank leadership on “crisis preparedness, prevention and management, global public goods, and fragile and conflict-affected situations.”
Malpass’ stance on climate change — and where the issue fits within the bank’s priorities — will be under close scrutiny by civil society organizations, shareholders, and bank staffers, many of whom have been involved in recent efforts to establish more ambitious climate targets for the institution, and harder-line policies against financing fossil fuel projects.
“We are extremely keen to hear Malpass make an unwavering commitment early on to the bank’s agenda on climate including its existing commitments such as those on ending upstream oil and gas and boosting climate finance with 50% for adaptation,” Nadia Daar, head of Oxfam International's Washington, D.C., office, said in a statement.
Devex has learned that in his conversations with stakeholders prior to securing the board’s appointment, Malpass suggested he would uphold the bank’s current targets on climate change finance, which included a pledge to double climate finance between 2021-2025.
With those targets already in place, supported by many of the bank’s largest shareholders, and with climate finance flowing to projects around the world, “it’s difficult to see how the bank could renege on its commitments in the short term,” said James Close, former director for climate change at the World Bank.
He added that the bank’s commitment to increase lending for adaptation responds to real demand from low- and middle-income countries around the world, which are now feeling the impacts of climate change on the ground and looking for resources to prepare and adapt.
The Trump administration has used international climate change conferences to argue that the bank should reverse its policies against financing coal projects except under extraordinary circumstances. Even if Malpass were sympathetic to fossil fuel-intensive projects, it is not clear that the bank’s client countries would want them, according to Close.
“Promoting lending for fossil fuels could increase but demand is likely to be limited as, in many countries, renewable solutions are more cost-effective,” he said.
Malpass the globalist?
David Malpass and China:
What does David Malpass’ nomination, as a key architect of the Trump administration's ongoing feud with China, signal for the World Bank?
Onlookers have also been speculating about how Malpass might seek to change the bank’s relationship with China, which, despite having the world’s second-largest economy, remains the bank’s largest borrower. The question of how the bank’s relationship with middle-income countries will evolve under Malpass’ leadership promises to be a key topic during this week’s meetings.
Across the board, bank observers have stressed that to gain the trust of his new employees and stakeholders, Malpass will have to show that his loyalties now lie with the World Bank, and not with his former boss, President Donald Trump. Some of them are happy with what they have heard so far.
“As bad as the Trump administration’s posture and policies are on climate change or support for refugees, Mr. Malpass now seems to recognize that he is accountable to a diversity of governments and shareholders — not just one,” Scott Morris, senior fellow at the Center for Global Development, said in a statement.
“But saying he understands the multilateral goals of the bank is one thing, and embracing the agenda is something else,” Morris added.
If this week’s spring meetings offer Malpass the opportunity to make a good impression, prove his critics wrong, and assuage the fears of nervous staff and civil society groups, the same cannot be said for the World Bank’s board of directors, whom many believe failed to deliver the “fair, open, and transparent” presidential appointment process they committed to in 2011.
“The Staff Association is disappointed with the Board, which promised an international competition and then failed to deliver,” Sellen wrote to Devex.