U.S. President Joe Biden nominated former Mastercard Inc CEO Ajay Banga to lead the World Bank, betting the India-born executive's ties to the private sector and emerging markets will jump-start the 77-year-old institution's overhaul to better address climate change.
Biden's nomination on Thursday of Banga, 63, now a U.S. citizen, all but assures he will assume a job that oversees billions of dollars of funding, as it races to help developing countries address climate change.
The World Bank (WB) 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 sparked by his initial refusal to say if he accepted the scientific consensus on climate change, and pressure by Treasury Secretary Janet Yellen for him to adopt "bolder" reforms.
"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," said Scott Morris, a senior fellow at the Center for Global Development and a former U.S. Treasury official.
Biden noted Banga's decades of experience building global companies and public-private partnerships to fund responses to climate change and migration and said he had a proven track record working with global leaders.
"Ajay is uniquely equipped to lead the World Bank at this critical moment in history," Biden said in a statement, hailing the business executive's Indian roots and knowledge of the challenges facing developing countries and ability to mobilize private capital to tackle big problems.
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 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.
India was expected to support Banga's candidacy, according to Krishnamurthy Subramanian, the former top economic adviser to the Indian government who now serves as India's executive director at the International Monetary Fund. "It's an elegant solution."
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.
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 not to nominate 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 worked only 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 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 retired in December 2021 after 12 years at the helm of Mastercard, where administration officials noted that 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 nonprofit funds to advance economic opportunity in northern Central America.