9 February 2019   Leave a comment

The US has nominated David Malpass to lead the World Bank once the current President, Jim Yong Kim steps down. By tradition, the US gets to choose the head of the World Bank and Europe gets to choose the Director of the International Monetary Fund. That process was initiated when the US and Europe were the largest contributors to each institution. But that is no longer the case. Nonetheless, the Trump Administration is acting as if the tradition should continue.

But Malpass is not a good choice for an international organization, although he does represent the views of President Trump. Stewart Patrick assesses Malpass:

“Malpass, for his part, has at times been critical of the Bank,  characterizing it as obsolete in an era of accessible private capital markets. While he played a role in shepherding the recent U.S. funding increase, he has also criticized the Bank’s failureto “graduate” countries no longer needing its resources (not least China), which he made a stipulation of the recent capital infusion. More generally, he regards the Bank as overly “intrusive” on its member states, part of a “multilateral system that often drifts away from our values of limited government, freedom, and the rule of law.” 

There is much to criticize about the operations of the World Bank, but those criticisms suggest that the world would be better served by someone who takes the idea of economic development as something that departs from the traditional notion of a “bank”. Malpass wrote that the US economy was in great shape in 2007, just before the financial disaster we call the Great Recession of 2008-09. Malpass wrote an op-ed for the Wall Street Journal entitled “Don’t Panic About the Credit Market”.

Posted February 9, 2019 by vferraro1971 in World Politics

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