WASHINGTON — The World Bank has appointed veteran staffer Axel van Trotsenburg — who is known for his work to boost the institution’s balance sheet in recent years — as its new managing director.
The Dutch and Austrian national was officially named managing director of operations on Tuesday. He has been acting World Bank CEO since the beginning of September, stepping in for Kristalina Georgieva after she was nominated to head up the International Monetary Fund — a position she has since secured.
In his new role, van Trotsenburg, who is the multilateral development bank’s longest-serving vice president, will oversee the operations of its two main lending arms — the International Bank for Reconstruction and Development, and the International Development Association — representing more than $40 billion in commitments last year.
Unlike his predecessor, van Trotsenburg will not have the title of “CEO,” but will hold the same responsibilities and grade level, a bank source told Devex. This is a return to form for the bank, which has traditionally had a managing director in the role but made an exception for Georgieva, the source added.
On World Bank leadership
In a press release, World Bank President David Malpass praised van Trotsenburg’s “deep experience in regional operations and finance.” Former and current bank staff told Devex they were positive about the promotion, which was expected. The decision is also said to have been welcomed by the bank’s board, although it was not required to approve it.
The fact that Malpass has chosen to appoint a bank veteran has also been interpreted by some as a sign that the new president — whom many had feared would try and ring the changes at the bank — is actually seeking continuity.
However, some raised questions about the decision to give van Trotsenburg the title of managing director rather than CEO. This could signal that Malpass is keen to take more of a hands-on role than his predecessor Jim Kim, according to one insider.
The announcement comes at a busy time for the multilateral development bank, which is gearing up for its annual meetings, starting in Washington D.C. on Oct. 14. It is also negotiating with shareholders to replenish IDA — the bank’s lending fund for the lowest-income countries. The replenishment process, which takes place every three years, is due to conclude in December.
Speaking to Devex shortly after the announcement, van Trotsenburg said his immediate priority as managing director is “bringing the IDA 19 negotiations to a successful conclusion,” but said his broader focus is on ensuring that the bank remains “the premier development institution.”
This will mean demonstrating “credibility, delivery, and innovation” to shareholders, he said, while also demonstrating that the bank is “always willing to learn and adapt to new circumstances to prove it is relevant.” It also means paying closer attention to how the bank “delivers quality projects on the ground,” van Trotsenburg said, which is a key focus for Malpass during the 6 months he has been president, he said.
“Malpass … is very committed to the overall development agenda of the bank and very eager to translate that overarching commitment into country programs … He doesn’t want to stay at 30,000 feet but wants to land this overall commitment to country programs,” van Trotsenburg said.
The new managing director has some 30 years of experience at the bank including positions as vice president for Latin America and the Caribbean as well as regional and country director positions across the region.
As former head of development finance, van Trotsenburg helped raise a record $75 billion for IDA 18 in 2016, which also led to the creation of the innovative “private sector window” — which set aside $2.5 billion of IDA concessional finance for private sector investments. While the private sector window has attracted criticism, van Trotsenburg told Devex that it will be an integral part of the IDA 19 discussions.
The new managing director is also credited with helping secure the bank’s somewhat unexpected $13 billion capital increase in 2018 for IBRD and the International Finance Corp., the bank’s private sector arm.