New WB chief urges action on development, climate efforts

The World Bank’s new president Ajay Banga on Friday asked the lender’s 16,000 staff to “double down” on development and climate efforts as he seeks to accelerate the bank’s evolution to tackle the most pressing global problems.

On his first day in the job, the former Mastercard CEO told staff in a memo that he would seek to recruit each of them to work towards his vision “to create a world free from poverty on a livable planet.”

“Making good on our ambition will require us to evolve to maximise resources and write a new playbook, to think creatively, take informed risks and forge new partnerships with civil society and multilateral institutions,” Banga wrote.

Banga on Thursday met with US Treasury Secretary Janet Yellen, who urged him to “get the most out of the bank’s balance sheet and mobilize more private capital for climate finance and global crises and to address other global problems”, the Treasury said.

Yellen last year began pressing the World Bank and other multilateral lenders to revamp their business models and dramatically scale up lending resources to address climate change, pandemics, food security and other global crises.

This would move the development lenders beyond the country-specific project loans they have pursued for decades, though she has demanded they maintain their core mission to reduce poverty.

In his memo, which incorporated his statement to the World Bank Executive Board during an April 1 job interview, Banga said annual investments of trillions of dollars were needed to arrest the forces of climate change and fragility, while building up human capital and fighting inequality in health, education, and financial access.

“We are at a critical moment in the arc of humanity and the planet. The World Bank Group is being asked to lead the way, to double down on development and climate efforts and to deliver even more impact and results,” he said.

He added this would require “all shoulders to the wheel,” and all of the World Bank’s divisions working together to deliver solutions needed by the world.

Banga, 63, was elected to a five-year term as World Bank president by the lender’s board of governors in May. Nominated by US President Joe Biden, the Indian-born finance and development expert was the sole contender for the job.

The US, the World Bank’s largest shareholder, has traditionally chosen an American to run the institution, while Europe has chosen the head of the International Monetary Fund. Banga, a US citizen since 2007, started his new role on Friday.

Ajay Banga began his first day at the helm of the World Bank Group on Friday, taking charge of the development lender as it grapples with questions about its future direction.

“We are at a critical moment in the arc of humanity and the planet,” Banga wrote Friday morning in an email to staff obtained by AFP, calling on the bank to “evolve” to meet the challenges it now faces.

An Indian-born, naturalized US citizen, Banga was nominated to the position by US President Joe Biden after a successful business career which included a long stretch running the payments company Mastercard.

Banga, 63, has taken over from David Malpass as the bank’s 14th president on a pledge to expand the role of the private sector in addressing the world’s development needs.

“The scale and diversity of our challenges -- poverty and development, pandemics, climate change, conflict, and fragility -- are deeply intertwined and threaten our collective ambitions, as decades worth of hard-won progress erode,” Banga said in his email.

“The World Bank’s challenge is clear: It must pursue both climate adaptation and mitigation, it must reach out to lower income countries without turning its back on middle income countries, it must think globally but recognise national and regional needs, it must embrace risk but do so prudently,” he added.

“Change is appropriate for the World Bank,” he said. “It isn’t a symptom of failure or drift or irrelevance, it is a symptom of opportunity, life, and importance.”

Banga took over the top job at the World Bank from Malpass, who stepped down early from his five-year term amid questions about his stance on climate change.

Under an increasingly contentious unwritten arrangement, a US citizen has historically held the presidency of the Washington-based development lender, while the International Monetary Fund has been run by a European.

In his final message as World Bank president on Thursday, Malpass touted the World Bank’s role in “quickly” mobilizing resources to respond to the Covid-19 pandemic and war in Ukraine, and highlighted the doubling of climate financing for developing countries under his watch.

“One of my key priorities while at the Bank has been to foster more debt transparency and sustainability — both essential to bolster investment and growth in developing economies,” he wrote in the statement posted on LinkedIn.

US Treasury Secretary Janet Yellen on Thursday told incoming World Bank Group President Ajay Banga to “get the most” out of the bank’s balance sheet and mobilize more private capital to finance climate change initiatives and global development objectives, the Treasury said.