Trump Nominates David Malpass to Head World Bank

Senior Trump administration officials told reporters on Wednesday that Steven Mnuchin, the Treasury secretary, has briefed many finance ministers of other countries about the plan to select Mr. Malpass and that they have been “receptive” to the choice. The officials said that Mr. Malpass has a history of working constructively with China and that he would honor commitments the bank had made on issues such as climate change.

If approved by the bank’s board, Mr. Malpass could put additional pressure on China at a time when it is locked in a protracted battle with the United States over geopolitical and economic dominance. The Trump administration has been urging the bank to reduce lending to China, which since 2016 has received more than $7.8 billion in loans, according to the Center for Global Development. In 2017 comments at the Council on Foreign Relations, Mr. Malpass argued that this should change.

“The World Bank’s biggest borrower is China,” Mr. Malpass said. “Well, China has plenty of resources. And it doesn’t make sense to have money borrowed in the U.S., using the U.S. government guarantee, going into lending in China for a country that’s got other resources and access to capital markets.”

Last year Mr. Malpass helped negotiate a $13 billion capital increase for the World Bank. One condition of the agreement was that richer developing countries, such as China, would face higher borrowing costs.

Mr. Malpass could also steer the bank away from accommodating China’s One Belt, One Road development initiative, which he has assailed for being harmful to developing countries that receive loans and other financing from China. In testimony before the House Financial Services Committee last December, Mr. Malpass warned that the initiative, “often leaves countries with excessive debt and poor-quality projects.”

The Trump administration’s doubts about the causes of climate change could also stoke concern about Mr. Malpass’s role. The World Bank has identified combating climate change as a key priority and plans to invest $200 billion over the next five years.

As the U.S. candidate, David Malpass will have a lot of work to do to convince other shareholders that he is prepared to move beyond his past statements and track record when it comes to the World Bank’s agenda,” said Scott Morris, senior fellow at the Center for Global Development and former Treasury deputy assistant secretary for development finance and debt. “That includes the bank’s critical role in climate finance and the need for constructive engagement with China.”

This article was originally published at: http://worldnewsweb.space/2019/02/trump-nominates-david-malpass-to-head-world-bank/

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