Trump's World Bank pick, an ally for the lender's critics? | The Daily Star
12:00 AM, February 11, 2019 / LAST MODIFIED: 12:00 AM, February 11, 2019

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

US President Donald Trump's choice to lead the World Bank is a firebrand critic of the world's largest anti-poverty lender -- an institution he has called wasteful, corrupt and overly generous to China.

Those complaints are similar to those voiced by others in the development community. But that does not mean they have found a new ally in David Malpass, the senior US Treasury official who has pledged to reform the bank.

Nancy Pelosi, the newly reinstalled Democratic speaker of the US House of Representatives, says Trump's choice threatens to "undermine the institution's mission."

And Liberia's former minister of public works W. Gyude Moore tweeted that "an incorrigible arsonist will now be our fire chief."

Malpass' many criticisms of the Washington-based lender certainly echo familiar refrains.

Many activists have long called for reforms at the World Bank, citing a litany of alleged human rights failures and scandals, and saying projects all too often left the world's poorest even worse off, harmed the environment or entrenched the power of oligarchies and despots.

Those critics might well have nodded their heads in accord in 2017 when Malpass said international financial institutions such as the World Bank "spend a lot of money" but are "not very efficient."

"They are often corrupt in their lending practices and they don't get the benefit to the actual people in the countries," he said in congressional testimony.

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

Internal audits and outside reports have, however, tied World Bank funds to forced labor in Uzbekistan, death squads in Honduras and a Chadian oil pipeline that enriched the undemocratic local government all while child mortality rose, to name just a few examples.

So is Malpass a kindred spirit? Analysts and activists say probably not.

David Pred, head of Inclusive Development International, which has accused the World Bank of back-door financing for coal-fired energy in Asia that is likely to spur global warming, strongly questioned Trump's choice.

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

Malpass served as chief economist at the former investment bank Bear Stearns, whose collapse marked the start of the global financial crisis.

To be sure, Malpass' nomination has delighted some observers, including the World Bank's conservative critics.

A Wall Street Journal editorial called Malpass, himself a long-time contributor, "the best man to run" an institution whose operations he well understands.

With a long career in development economics, Malpass has worked to "wean" the increasingly wealthy and ambitious China off World Bank financing as it pursued its ambitious "Belt and Road" infrastructure initiative across multiple continents, the newspaper said.

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