U.S. President Joe Biden on Thursday nominated former MasterCard CEO Ajay Banga to become president of the World Bank, hailing his business experience in his native India and his commitment to mobilizing private funds to expand financial inclusion and help developing countries grapple with climate change.
The World Bank on Wednesday said it expects to select a new president by early May to replace David Malpass, who announced his resignation last week after months of controversy over his views on climate change and pressure by Treasury Secretary Janet Yellen for him to adopt “bolder and more imaginative” reforms.
Scott Morris, a senior fellow at the Center for Global Development and a former U.S. Treasury official, said: “I think the speed of the nomination, less than 48 hours after the WB board launched the process, reflects a desire to discourage any challengers and wrap it up quickly.”
Biden’s nomination of Banga, 63, now a U.S. citizen, all but assures he will assume a job that oversees billions of dollars of funding, putting someone with close ties to emerging markets at the helm of the bank as it races to better help developing countries address climate change and other pressing challenges.
“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” Biden said in a statement. “Raised in India, Ajay has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity.”
Biden singled Banga’s decades of experience building global companies and building public-private partnerships to tackle urgent challenges such as climate change, and said he had a proven track record working with global leaders.
Banga’s work in India and other emerging markets, his “obsession” with expanding financial inclusion, and his deep knowledge of new technologies could help bridge the growing divide between rich countries and emerging markets, said Luis Alberto Moreno, who worked closely with Banga while serving as president of the Inter-American Development Bank.
“He can really be a force for change,” Moreno said, noting that Banga enjoyed the trust of financial markets whose support was urgently needed to help raise the trillions of dollars needed to deal with global challenges.
The bank has historically been headed by someone from the United States, its largest shareholder, while a European heads the International Monetary Fund (IMF), but developing countries and emerging markets have pushed to widen those choices.
Banga’s nomination is the first to be made public, but the bank will accept nominations from other member countries through March 29. Germany, another major shareholder, this week said the job should go to a woman since the bank has never been headed by a woman in its 77-year history.
A senior U.S. administration official said they did not know if other countries would nominate candidates for the post.
Asked about Washington’s decision to skip nominating a woman, the official said Banga had “a personal conviction and excellent track record promoting diversity, equity and inclusion in the work that he does” and would bring that view to the bank.
But Jeff Hauser, who heads the progressive Revolving Door Project, demanded Biden retract the nomination of a top official from a “rapacious international private equity firm” who had previously only worked in private sector firms.
“Neither private equity, nor MasterCard, nor Citigroup, nor PepsiCo, nor Nestlé, nor Dow promote shared prosperity. They all do vastly more to exacerbate inequality than to fight it,” he said in a statement.
Oxfam International said the next bank president should be chosen through a transparent global process. “The World Bank is not a U.S. bank, a commercial bank, or a private equity firm. For a job of this stature, we need more than a tap on the shoulder from President Biden.”
Banga, born into a Sikh family in India, is vice chair of General Atlantic, a U.S. private equity firm that administration officials said has invested over $800-million in EV charging solutions, solar power and sustainable farming. He also serves as honorary chair of the International Chamber of Commerce.
He retired in December 2021 after 12 years at the helm of Mastercard Inc, where he helped 500 million unbanked people join the digital economy, averted layoffs of the bank’s 19,000 employees during the COVID-19 pandemic, and led work on climate, gender and sustainable agriculture.
Vice President Kamala Harris said Banga brought “great insight, energy and persistence” to his role as co-chair of the Partnership for Central America, which has mobilized $4.2-billion in public, private and non-profit funds to advance economic opportunity in Northern Central America.
Treasury’s Yellen said Banga clearly understood the importance of retooling the bank to help developing countries address climate change, prepare for future pandemics and mitigate the causes and consequences of conflict and fragility.
“Mr. Banga’s track record of forging partnerships between the public sector, private sector, and non-profits uniquely equips him to help mobilize the private capital and press for the reforms needed to meet our shared ambitions,” she said.
Biden’s climate envoy John Kerry said Banga brought the “new thinking and creative vision regarding finance” needed to meet the challenge of the energy transition.