Banga nominated to lead financial institution

The Biden administration nominated Ajay Banga, the former longtime chief executive of Mastercard, to be the next president of the World Bank, a selection that is likely to drastically reshape the global development institution and broaden its ambitions to combat climate change.

The nomination will initiate a monthslong confirmation process before a final decision by the World Bank’s board. It is not clear if any other countries will nominate a candidate. The World Bank president is traditionally an American citizen chosen by the United States.

If confirmed, Banga will bring vast experience running large organizations and deep knowledge of the digital economy. Raised in India, he would bring a firsthand understanding of the challenges that developing countries face.

“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” President Joe Biden said in a statement. “He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change.”

Speculation surrounding the nomination has gathered momentum in the last week since

David Malpass, the current World Bank president, announced his intention to step down by the end of June, with nearly a year left in his five-year term. Malpass, who was picked by former President Donald Trump, drew criticism from climate activists and stirred frustration among Biden administration officials for his lack of focus on the bank’s climate agenda.

Those concerns came to a head in September, when Malpass came under fire for his views on climate change. When asked if he accepted the overwhelming scientific consensus that the burning of fossil fuels was causing global temperatures to rise, he demurred. “I’m not a scientist,” he said. The exchange, during a live interview at a New York Times event, set off a slow-motion public relations crisis for Malpass.

Banga has sought to carve out a public stance signaling his concern for climate change, including at Mastercard. In 2020, under his watch, the company announced the creation of the Priceless Planet Coalition, a group of about 100 firms that make corporate investments to preserve the environment.

“No matter who you are or what you do, climate change affects you. But, it has the biggest negative impact on those who are socially and economically vulnerable,” Banga said at the time.

Former Vice President Al Gore, who won a Nobel Prize for his work to fight global warming, praised the nomination. “Those who have worked with Ajay Banga know that he is an exemplary leader and I am extremely optimistic that he will bring renewed leadership on the climate crisis to the World Bank,” Gore said.

Still, his selection prompted dismay from some climate activists who have been calling on the Biden administration to nominate a president with a strong background in environmental issues. His lack of direct public sector experience could also be viewed with skepticism by some development experts.

“Put simply, this is not the guy that President Biden should be nominating when a livable planet is teetering at the brink of collapse,” John Noel, senior climate campaigner at Greenpeace USA, said in a statement. “If Mr. Banga is to lead the World Bank, we hope he will follow the demands of science and justice by lending significantly more money to climate projects and ending funding for oil and gas projects.”

Others said the choice was indicative of the changing role of the World Bank. A central part of the next president’s job will be re- engineering the institution to make it a more pivotal player in a coordinated effort by Western nations to address global warming, despite some developing countries’ concerns that the mission could overtake the bank’s poverty reduction goals.

“I think it’s interesting that they’re not tapping a climate expert per se, they are tapping someone who can help them with climate finance,” said Scott Morris, a senior fellow at the Center for Global Development. “It sends a pretty clear signal that the U.S. wants to look at the bank as a bank.”

Banga has described the challenge of climate change, which he called “humanity versus nature,” as a matter of trade- offs that has for years stumped politicians.

“You end up applying what are shorter-term solutions to what are very long-term problems,” Banga said in 2021 in a conversation at the Council on Foreign Relations. “And therefore you end up putting a Band-aid on an open wound.”

Banga has become a close ally of Vice President Kamala Harris and is part of a group of 10 corporate executives who have worked with her office to raise $1 billion aimed at stemming the root causes of immigration from Central America. Harris has cited poverty, corruption, climate change and political instability as the factors fueling migration.

The collaboration has so far raised about $4 billion to support communities in the region. In an interview with The New York Times last fall, Banga said he approached the effort with the understanding that it would not result in any short-term wins.

“Investing in a region takes patience, time and resilience,” Banga said.