Ajay Banga, President Biden’s pick to be World Bank president and broaden his ambitions to combat climate change, was approved by his executive board on Wednesday.
Mr. Banga will take office on June 2, succeeding David Malpass, who was nominated by former President Donald J. Trump and has held the position for four years. A former Mastercard chief executive who grew up in India, the incoming chairman will bring deep developing economy experience and financial insights to a global institution facing a critical moment of transition.
The approval by the bank’s board of 25 executive directors was not unanimous. Russia, which has been largely isolated in international forums since its invasion of Ukraine, abstained. Russia signaled in March that it was trying to find an alternative candidate, but Banga was ultimately the only nominee put forward.
The president of the World Bank is traditionally a US citizen chosen by the United States, while the managing director of the International Monetary Fund is chosen by the European Union.
Mr Biden praised the board’s decision in a statement Wednesday, expressing optimism that Mr Banga would help lead the bank to address challenges like climate change in ways that will make it even more effective in its mission to reduce poverty.
“Ajay Banga will be a transformational leader,” Biden said, “bringing knowledge, experience and innovation to the role of World Bank President.”
Treasury Secretary Janet L. Yellen, who was an early supporter of Mr. Banga’s candidacy within the Biden administration, said she hoped the incoming president would broaden the bank’s reach by forging new partnerships between governments and the private sector. She added that she hoped to see a “phased adoption of reforms” over the course of the next year.
“Ajay understands that the challenges we face, from combating climate change, pandemics and fragility to eliminating extreme poverty and promoting shared prosperity, are deeply intertwined,” said Ms Yellen. “He has effectively built a broad global coalition around his vision for the bank over the course of his candidacy.”
Mr Banga will face high expectations and pressing questions about whether the bank will change its lending model, seek more money from shareholders and how it should tackle problems like poverty, global warming and the war in Ukraine. He, too, will face a challenging diplomatic environment, trying to meet US climate ambitions while maintaining the bank’s focus on development. And he will have to navigate a delicate relationship with China, a major shareholder and creditor that has been facing international pressure to allow poor countries to restructure their debts.
The leadership change comes at a difficult time for the global economy, which has been hit by a pandemic, inflation and war for the past three years. These colliding crises have sent millions of people into poverty and decades of development progress reversed.
The bank’s endorsement of Banga, who was contacted by Biden in February, followed an extensive listening tour that included visits to eight countries and dozens of meetings with government officials from around the world.
Russia’s withheld support made the voting process unusual and underscored the friction its war in Ukraine has created within international institutions.
Biden administration officials declined to comment on how Russia voted, saying they were confident Banga would take office with a strong mandate and solid support.
Mr. Banga is being appointed to serve a five-year term. His predecessor, Mr Malpass, announced earlier this year that he would resign following criticism that he was not sufficiently committed to renewing the World Bank’s climate agenda.