U.S.

Biden administration may try to oust World Bank head David Malpass

Biden officials have considered ousting World Bank president David Malpass, who took office during the Trump administration, because they believe he is weak on climate, according to people familiar with the matter.

Why it matters: Government officials are deeply concerned that Malpass failed to provide an answer this week on whether climate change was caused by humans. His response provides ammunition to officials who want Biden to spend some political capital to try to remove him.

  • But officials know that replacing Malpass would be a messy process, and they aren’t sure how — or even if — the US could orchestrate his impeachment.
  • Malpass was confirmed by the bank’s board of directors, over which the White House has no control.

Situation: Malpass, a Trump property, was viewed suspiciously by the Biden administration from the start. That suspicion has now been confirmed. And he’s been on thin ice for months.

  • Malpass’s refusal to acknowledge that fossil fuels are warming the planet caused international furore, including calls to resign.
  • Malpass went into harm reduction Thursday, emailing staff and telling CNN, “Clearly, greenhouse gas emissions come from man-made sources, including fossil fuels…I’m not a denier.”

Reality check: The fact that Biden has made no change suggests there is some internal resistance to ousting Malpass.

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context: The World Bank, based in Washington, uses capital contributions from member states to provide loans to developing countries to help alleviate poverty and promote economic growth.

  • In recent years, the bank has increasingly focused on financing projects that reduce CO2 emissions. Critics, including Gore, want the bank to do more about climate change.

Between the lines: Declaring the president of the World Bank can upset a delicate balance: the US traditionally gets to elect the president of the World Bank, while the European Union elects the head of the International Monetary Fund.

  • The chairmanship of the bank lasts for five years. So the new US president often inherits bank presidents from the counterparty.
  • Malpass is a former Bear Stearns economist and Treasury official in the Trump administration. His term ends in 2024.

What we look at: At a New York Times climate event this week, former Vice President Gore called for an uproar from the World Bank, saying it’s “ridiculous to have a climate denier as the head of the World Bank”.

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  • Some Biden officials have gone so far as to try out potential replacements — including Gore and former Secretary of State John Kerry, who is now Biden’s climate envoy. Biden’s thinking is unknown.
  • Kerry has been a strong advocate for the World Bank to focus more on climate. Asked at the Times event whether the government has confidence in Malpass, Kerry declined: “I can’t comment on a person’s status — that’s the president’s decision.”

Other opportunities for the orbit of Malpass including former New York City Mayor Mike Bloomberg and Raj Shah, chairman of the Rockefeller Foundation and former head of USAID.

The Intrigue: Countries from the so-called “Global South” have been looking for an opportunity to claim the top job for a candidate from Africa, Latin America, Asia or Oceania.

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  • Biden officials have discussed who could fit into that bill. Options include Ngozi Okonjo-Iweala, a Nigerian-American economist who now heads the World Trade Organization, and Minouche Shafik, an Egyptian-born British-American economist who is director of the London School of Economics.

What they say: “We expect the World Bank Group to be a global leader in climate ambition… We have [made] – and will continue to make – to make that expectation clear to the World Bank leadership,” a spokesman for the Treasury Department told Axios.

  • Malpass’s comments “were deemed harmful, there is no doubt about it,” said Mark Malloch-Brown, the chairman of the Open Society Foundations and a former World Bank official.
  • “It’s a big problem,” he said. “These institutions are not serving the agenda of their leader, but ultimately of their government owners. And their unequivocal priority is the fight against climate change.”
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