A Compelling Choice for the Next World Bank Group President

Little more than a week after David Malpass announced his intention to step down as World Bank Group president, President Biden named Ajay Banga his administration’s pick to fill the top spot in development finance. Banga’s name did not appear on most shortlists of rumored candidates. Yet, with a resume that includes president and CEO of Mastercard and CEO of Citigroup’s Asia Pacific operations, Banga’s nomination underscores the importance the U.S. administration places on management experience to guide the institution through an “evolution” that would treat global public goods, especially climate, as foundational to the bank’s development mandate. In addition, Banga’s finance background should support efforts at private capital mobilization to meet massive investment needs. Finally, as an Indian American born and educated in India, Banga could appeal to the bank’s emerging market shareholders, not least India, who as current G20 chair, has placed World Bank reform high on its agenda.

While calls for a leadership change at the World Bank Group began shortly after the 2020 U.S. presidential election, they gained steam last September when Malpass, a Trump appointee, appeared to question the link between fossil fuel use and global warming. Such calls intensified, along with demands for the evolution of World Bank Group operations to better deal with global challenges, ranging from climate change to pandemics to fragility and conflict. The CSIS Economics Program offered a roadmap of recommendations for how the World Bank could navigate such an evolution in a December 2022 report, highlighting the importance of management’s commitment to implementing the bank’s strategic vision. The United States alone does not officially choose the World Bank Group president; rather candidates are nominated by the board’s 25 executive directors, with top candidates advancing to formal interviews and ultimate selection by the board. In practice, however, the United States, as the bank’s largest shareholder, nominates a U.S. citizen for the bank’s president, while the leader of its sister institution, the International Monetary Fund (IMF), has historically been a European national.

On February 22, a week after Malpass’s announcement, the bank’s executive board issued a statement on the selection process for the next World Bank Group president, affirming its commitment to “an open, merit-based and transparent selection process.” The board identified (i) a proven track record of leadership and accomplishment, particularly in development; (ii) experience managing large organizations with international exposure, and a familiarity with the public sector; (iii) ability to articulate a clear vision of the World Bank Group’s development mission; (iv) a firm commitment to and appreciation for multilateral cooperation; and (v) effective communication and diplomatic skills, showing impartiality and objectivity in the performance of the responsibilities of the position as candidate qualification criteria.

The board’s selection criteria were little changed compared to 2019 when Malpass was chosen as bank president, notwithstanding the fact that the bank is under pressure from many shareholders, including the United States, to rethink development finance and “develop new strategies, policies, and approaches to mobilize financing move effectively.” Where the 2023 criteria differed from their 2019 predecessors, the changes were limited: first, to specify that the candidate has a proven track record not only of “leadership” but also “accomplishment, particularly in development” (see first criterion above) and second, to strongly encourage the nomination of women candidates.

Of course, Banga cannot do much about the latter, although his efforts to prioritize gender equality while at the helm of Mastercard demonstrate a history of attention to gender equity issues. In addition, the constellation of Biden administration officials that likely had a role in Banga’s selection include the United States’ first woman vice president, Kamala Harris, and first woman treasury secretary, Janet Yellen. The fact that women currently occupy the top spots at both the IMF and the World Trade Organization (WTO), as well as U.S. seats at the World Bank Group’s and IMF’s executive boards, arguably provided the administration with more flexibility to address a fuller range of selection criteria and administration priorities, without making gender a dominant consideration.

Regarding the board’s criterion calling for a track record of “accomplishment, particularly in development,” Banga’s supporters have pointed to his development bona fides, including the creation of Mastercard’s Center for Inclusive Growth during his tenure at Mastercard and more recent role as cochair of the Partnership for Central America, a nongovernmental organization that aims to “sustainably address the root causes of migration from northern Central America” by advancing economic opportunities in the region. Vice President Harris, who leads the Biden administration’s efforts to deepen private sector investment in the Northern Triangle countries of El Salvador, Guatemala, and Honduras, predicted Banga will be a “transformative World Bank President,” referencing their work together on a new model of public-private partnership. At CSIS, Banga was a member of a 2019 CSIS Trade Commission, where colleagues involved in the initiative noted his thoughtfulness on policy issues and effective communication and diplomatic skills. 

The vice president’s reference to Banga’s experience with public-private partnership underscores the priority U.S. officials and others place on the World Bank Group playing a greater role in private capital mobilization. At an event hosted by the CSIS Economics Program earlier this month, Secretary Yellen cautioned that “international public finance alone will come nowhere close to the level of financing needed to effectively tackle global challenges and achieve sustainable development goals,” making clear the link between the World Bank’s evolution and innovations to mobilize private capital for, inter alia, climate mitigation and adaptation.

Throughout discussions of the World Bank’s evolution, borrowing countries have consistently communicated that financing for climate should not come at the expense of other development priorities. In nominating Banga, whose candidacy does not lead with climate, the United States has signaled agreement that the bank’s development mandate cannot be abandoned in favor of a “climate only” agenda. At the same time, support for Banga’s candidacy, including from Presidential Envoy for Climate John Kerry, should give climate advocates comfort that as World Bank president, he would prioritize climate mitigation and adaptation in the bank’s operations, and seek to leverage private capital in furtherance of these goals.

The bank’s nomination period remains open through March 29, and other countries may still put forward additional candidates. However, the convention of U.S. selection of World Bank Group president is strong. With the nomination of Ajay Banga, the United States has chosen a candidate with broad appeal across various constituencies and the skills to steer the institution through what promises to be both an exciting and challenging evolution.

Stephanie Segal is a senior fellow with the Economics Program at the Center for Strategic and International Studies in Washington, D.C.

Stephanie Segal

Stephanie Segal

Former Senior Fellow, Economics Program