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Trump's pick Malpass has clear path to lead World Bank, no challengers emerge

EconomyMar 14, 2019 09:30PM ET
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© Reuters. FILE PHOTO: U.S. candidate in election for the next President of the World Bank David Malpass speaks at an event with U.S. President Donald Trump at the White House in Washington

By David Lawder

WASHINGTON (Reuters) - U.S. President Donald Trump's pick to lead the World Bank faces a clear path toward approval as a nomination deadline passed on Thursday with no challengers, continuing the tradition of the United States choosing the development lender's president.

David Malpass, the U.S. Treasury's undersecretary for international affairs, will interview with the World Bank's executive directors in the coming days, the bank said in a statement.

The directors expect to conclude their selection process before the World Bank and International Monetary Fund spring meetings on April 12-14, the bank said.

Malpass has traveled to Europe and Asia in recent weeks to lobby for support from major World Bank shareholders. His nomination was prompted by the departure in January of Jim Yong Kim, who left the bank after more than six years at its helm to join a private equity infrastructure fund.

The United States is the largest shareholder with 16 percent of its voting power and has chosen its leaders since it began operation in 1946. Kim faced off against candidates from Nigeria and Colombia in 2012 under a then-newly-open nominations process, but bank board members have said there was little appetite to challenge Washington's nominee this time around.

A spokesman for the U.S. Treasury, which oversees the U.S. shareholding in the World Bank, could not immediately be reached for comment on Malpass' lone candidacy.

Malpass, a Trump loyalist and former campaign adviser, has raised some concerns that he will use the bank to further Trump's controversial "America First" agenda.

While Malpass, a former Bear Stearns chief economist, has been critical of the World Bank's growth and ample lending to China, in recent weeks he has adopted a more conciliatory tone, emphasizing his past experience in emerging market finance and goals for poverty reduction.

He also has touted his role in negotiating World Bank lending reforms aimed at focusing more resources on poorer countries as part of a $13 billion capital increase last year.

Malpass also has said he was committed to pursuing the World Bank's goals on combating climate change, which have been at odds with the Trump administration's support for coal. The lender has largely withdrawn from financing new coal-fired power projects in favor of renewable energy projects.

Pledging to stay the course on climate change goals will likely win support for Malpass from board members, said Scott Morris, a senior fellow at the Center for Global Development and a former Treasury official.

"He's distanced himself from some of his past positions," Morris said. "His message has been that he's committed to implementing the bank's agenda put forth in the capital increase last year. That's an ambitious agenda, not one of dialing the bank back."

Morris added that it would be "extremely unlikely" that Malpass would be rejected by the bank's board in the absence of other candidates.

One of Malpass' first issues to handle at the bank would be dealing with the aftermath of a U.S. Supreme Court ruling that opens the door to lawsuits against the International Finance Corp, part of the World Bank Group, in American courts over projects it finances.

Trump's pick Malpass has clear path to lead World Bank, no challengers emerge
 

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