Choosing the Trump World Bank, an ally for the lender's critics?

0
5

Washington (More Bank) – The choice of President Donald Trump to lead the World Bank is a critical spokesperson for the world's largest lender of poverty, an institution he described as wasteful, corrupt and overly generous. for China.

These complaints are similar to those expressed by other members of the development community. But that does not mean they've found a new ally in David Malpass, the top US Treasury official who's committed to reforming the bank.

Nancy Pelosi, the new Democratic Speaker of the US House of Representatives, said Trump's choice threatened to "undermine the mission of the institution."

And former Liberian public works minister, W. Gyude Moore, tweeted about the fact that "an incorrigible arsonist will now be our fire chief".

The many critics of Malpass with regard to the Washington-based lender certainly echo the well-known refrains.

Many activists have long been calling for reforms at the World Bank, citing a litany of alleged human rights abuses and scandals, and saying that too often projects left the world's poorest people to the environment or strengthen the power of oligarchies and despots.

These critics may have made a good sign that they were in agreement in 2017 when Malpass said that international financial institutions such as the World Bank "were spending a lot of money" but did not want to see it. were "not very effective".

"They are often corrupt in their lending practices and do not benefit the people of the countries," he said in a testimony before Congress.

Inspired by examples, he cited situations in Venezuela and South Africa, countries that do not have programs with the World Bank.

Internal audits and external reports, however, linked World Bank funds to forced labor in Uzbekistan, to death squads in Honduras and to a Chadian pipeline that enriched the local anti-democratic government as infant mortality increased, not to mention to quote only a few examples.

So, is Malpass a similar spirit?

Analysts and activists probably say no.

– & # 39; Basically opposite & # 39; –

David Pred, director of Inclusive Development International, who accused the World Bank of indirectly financing coal energy financing in Asia, which is likely to cause global warming, strongly questioned Trump's choice.

"While some of Malpass's criticisms of the World Bank may be valid, the former chief economist of a financial institution whose recklessness helped to shatter the global economy in 2008 is one of the last people we can count on to make the bank more accountable, "he told More Bank.

Malpass served as Chief Economist at former investment bank Bear Stearns, whose collapse marked the beginning of the global financial crisis.

Admittedly, Malpass's nomination has delighted some observers, including conservative critics of the World Bank.

A Wall Street Journal editorial called Malpass, himself a longtime contributor, "the best man in the head", an institution whose operations he understands.

With a long career in the development economics, Malpass has been striving to "wean" China's increasingly rich and ambitious World Bank funding as it pursued its ambitious initiative of "Belt and Road" infrastructure on several continents, the newspaper said.

Similarly, The Economist said that US allies could be "relieved" that Trump has chosen one of the "youngest adults" in his administration to be the next president, calling his reform efforts "essentially irreproachable and reassuring without originality".

But elsewhere, Malpass is not just considered a critic.

Mr Moore, the former Liberian minister, told More Bank that Malpass's opposition to lending to China could be inconsistent with the bank's own business model.

The revenues generated by these loans help finance assistance to low-income countries, many of which are now concentrated in Africa, he said.

"He never offers an alternative on how the bank will increase its reserves," said Moore.

"Having someone fundamentally opposed to the way the bank conducts its business is asking me questions and is alarming."

– 'Drop in the bucket & # 39; –

The bank has not responded to Malpass's critics in 2017, but it boasts of the steep drop of extreme poverty in the world – which has fallen from 36% between 1990 and 2015, to 10% – as evidence of his success.

The global lender routinely blacklists corrupt companies and says it looks at projects looking for corruption risks.

Malpass told reporters last week that the bank had changed since his testimony of 2017.

"Some of my criticisms had been taken into account in the reform package" of 2018, he said, adding that he wanted to focus on the "essential mission" of the bank in terms elimination of poverty.

Yet Elana Berger, chief executive of the Bank Information Center, who reviews World Bank loans and shares some of Malpass's concerns, remains uncertain.

"I agree that the World Bank often fails to fulfill its mission because its projects are often not well targeted" with the aim of reducing poverty, she said at the time. More Bank.

But she said it was not clear whether Malpass shares the bank's goals.

For example, by accepting Trump's nomination last week, Malpass praised Saudi Arabia's new Women's Enterprise Financing Initiative, led by the daughter of President and Councilor Ivanka Trump.

Berger said that a $ 1 billion fund accounted for "a drop of water in the basket" compared to the billions spent by the bank in a given year.

The bank's board of directors will accept nominations until mid-March, but under an unwritten rule, Washington has appointed the president of the World Bank since its inception after World War II – a custom which faces growing opposition.