His nomination is original. Ajay Banga, 63, an Indian-American, is Joe Biden’s pick to head the World Bank after David Malpass steps down on February 15, 2023. The Board of Directors must ratify this nomination for the former CEO of Mastercard, who will take up residence at 1818 H Street, Washington, DC, in June 2023. He will then become ex-officio Chairman of the Board of the International Bank for Reconstruction and Development (IBRD), the World Bank and the International Development Association (IDA). He will also serve as CEO of the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
The White House statement describes him as a man who “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.” For US President Joe Biden, having “spent more than three decades building and managing successful, global companies, he can lead the World Bank at this critical moment in history”.
“Ajay Banga has helped bring 500 million unbanked people into the digital economy,” said US Treasury Secretary Janet Yellen
“His efforts have helped bring 500 million unbanked people into the digital economy, deploy private capital into climate solutions, and expand economic opportunity through the Partnership for Central America,” U.S. Treasury Secretary Janet Yellen said in a separate statement in which she applauded President Biden’s decision.”
Ajay Singh Banga was born on November 10, 1959 in Khadki Township, Pune, Bombay, India, to an army officer father. After studying at the Hyderabad Public School, he obtained a Bachelor’s degree in Economics from St. Stephen’s College, University of Delhi, followed by an MBA from the Indian Institute of Management, Ahmedabad.
His career began at Nestlé in 1981, before moving to Pepsico and then Citigroup. He was also CEO of Mastercard, the financial services company. Before being approached by the US, he was Vice President of the US private equity firm General Atlantic and the Agnelli family’s Exor Holding.
“Raised in India, Ajay has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can reduce poverty”
Ajay Banga is also Honorary Chairman of the International Chamber of Commerce and served on the Boards of the American Red Cross, Kraft Foods and Dow Inc. “Ajay has worked closely with Vice President Harris as the Co-Chair of the Partnership for Central American,” the White House said in the statement. He is a founding trustee of the U.S.-India Strategic Partnership Forum, a former member of the National Committee on United States-China Relations, and Chairman Emeritus of the American India Foundation.
“Raised in India, Ajay has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity.”
World Bank: Ajay Banga woos AfDB
The US president’s nominee to replace David Malpass at the World Bank wants to involve the African Development Bank (AfDB) in the decisions of the financial institution he will lead.
Ajay Banga, the US nominee for World Bank President, wants to make the continent a privileged player in the financial institution he is preparing to lead from June 2023. The former CEO of Mastercard intends to involve Africa in the World Bank’s decision-making process through the AfDB.
“There is a need to strengthen the links between the World Bank and the AfDB”
The project was presented to the AfDB President in Abidjan on March 6 2023 during the first leg of his world tour. “There is a need to strengthen decision-making links between the AfDB and the World Bank,” said the AfDB press release.
For Ajay Banga, “inequality, tension between humanity and nature, and the tendency to apply short-term solutions to long-term problems which only delivers poor results” are the main challenges of his future term. All this “in a context marked by the COVID-19 pandemic, environmental degradation, and the impact of the Russia-Ukraine War.”
“We should regenerate our partnership by engaging governments, the private sector, and other stakeholders to deliver meaningful change,” Adesina Akinwumi, President of AfDB
Banga’s call for a regenerated partnership resonated with AfDB’s President. “There is need for a new way of working between both institutions. “It is more than financial. It’s more about how we work to optimize resources by engaging governments, the private sector, and other stakeholders to deliver meaningful change,” he pointed out.
About climate change, Adesina said it is “decimating lives, displacing people, creating refugees and deepening poverty.” In front of Ajay Banda, he called for “a new way of measuring the wealth of nations:” the GDP “does not consider important factors like a country’s contribution to carbon emission and impact on biodiversity.” Hence, the triangle of disaster: increasing poverty, rising youth unemployment and environmental degradation, and this is breeding ground for terrorism.” Adesina Akinwumi is therefore counting on the future head of the World Bank to advocate “the creation of a global security council on the environment and biodiversity.”
“Africa’s debt overhang should be on agenda of next World Bank president”
Declarations of intent aside, Africa is waiting for Ajay Banda on its debt overhang. In July, the British NGO Debt Justice published a survey showing that “39% of African countries’ accumulated external debt of $696 billion is owed to multilateral institutions such as the World Bank, the International Monetary Fund (IMF) and the AfDB”. According to a recent IMF report, “60% of African countries are at high risk of debt distress, and four of them (Zambia, Ethiopia, Chad and Ghana) have already requested debt restructuring under the G20 Common Framework for Debt Treatment”.
The Heavily Indebted Poor Countries (HIPC) debt relief initiative of 20 years ago no longer seems to be working. And with good reason: times and creditors have changed. The African Union can be an ally through its debt monitoring center for its 55 member states. Together, they can help them improve the management of their public finances.
“Ajay Banda should speak to the presidents of AfDB and AIIB. He began in Africa. This is great,” said Hannah Ryder, CEO of Development Reimagined
Could Ajay Banda, the new World Bank president, be Africa’s “messiah”? For Chris Ferai, a researcher at the Overseas Development Institute (ODI), “World Bank decisions reflect the views of Washington and the major non-borrowing shareholders, rather than those of the recipients”. He adds: “Ajay Banda will have to make policy and operational decisions that satisfy the interests of shareholder governments.
This pessimism is not shared by Hannah Ryder, CEO of Development Reimagined. In a recent column, she advised Ajay Banda to “speak to the presidents of the AfDB and the Asian Infrastructure Investment Bank (AIIB)”. This began in Abidjan. She welcomed this in a subsequent tweet.
Source: Africa News Agency