President Donald Trump plans to nominate David Malpass, the undersecretary of the Treasury for international affairs, to head the World Bank, selecting an outspoken critic of the institution who has pushed to overhaul its long-standing practices, administration officials said Monday.
The officials, who insisted on anonymity to confirm the choice before the formal announcement, said the president will unveil his selection Wednesday. The nomination must be ratified by the bank’s board, but by tradition, the United States, the largest shareholder, has long named its president.
Malpass’ nomination could prompt debate given his past comments about the role of multilateral institutions.
Like Trump, he has questioned the scope and mission of international institutions such as the World Bank, saying they have grown “more intrusive” and need to be refocused.
The larger trend toward multilateralism, he has said, “has gone substantially too far.”
That viewpoint squares with a broader scepticism that Trump’s administration has shown toward various structures of what is often called the liberal international order, including the World Trade Organisation, the North Atlantic Treaty Organisation, the European Union and any number of international agreements. Just last week, the administration announced that it has suspended a nuclear arms treaty negotiated by President Ronald Reagan in 1987, citing Russian cheating.
Series of changes
The World Bank, controlled by the world’s most developed nations, lends money to developing nations for infrastructure and development projects.
From his role at the Treasury Department, Malpass pressed the World Bank last year to commit to a series of changes even as it moved to increase its capital.
Malpass, whose loyalty to the president runs deep, has also been the Treasury Department’s point person on trade talks with China and travelled to Beijing last month to set the framework for last week’s talks in Washington. He was then a member of the delegation that met with Chinese officials as part of an effort to reach an agreement by March 1.
Malpass, like Trump, has cited the World Bank’s continuing loans to China as an example of its outdated approach to financing developing countries.
“The World Bank’s biggest borrower is China. Well, China has plenty of resources,” Malpass said in a 2017 interview sponsored by the Council on Foreign Relations.
During that same session, Malpass denied that the president’s “America First” approach to international institutions amounted to isolationism.
“I want to make a clear distinction between isolation, which we oppose, and our view that multilateralism has gone substantially too far — to the point where it is hurting US and global growth,” he said.
“This viewpoint is sometimes mislabelled populism, but I think it is a pragmatic, realistic response to a multilateral system that often drifts away from our values of limited government, freedom, and the rule of law.”
During congressional testimony in 2017, he said those benefiting from the World Bank’s lending practices were “the people who fly in on a first-class ticket to give advice to governments.”
The United States has privately tested Malpass’ selection with other major bank shareholders and received positive feedback, according to one of the administration officials.
They presented Malpass as a constructive reformer who, despite his criticisms, will work with other shareholders.
If confirmed, Malpass would fill the position being vacated by Jim Yong Kim, who abruptly announced last month that he would resign as World Bank president nearly three years before his term’s expiration.
Malpass, 62, who served on Trump’s transition team, was the chief economist at Bear Stearns, the defunct investment bank, from 1993 until its collapse in 2008.
In 2010, Malpass ran unsuccessfully as a Republican candidate for the US Senate in New York. He previously worked as the deputy assistant secretary of state under President George H.W. Bush and as deputy assistant secretary of the Treasury under President Ronald Reagan.
The process of choosing a successor to Kim was overseen by Treasury Secretary Steven Mnuchin; Mick Mulvaney, acting White House chief of staff; and Ivanka Trump, the president’s eldest daughter. The president personally met with finalists for the position.
Others whose names were considered included Indra K. Nooyi, the former chief executive of PepsiCo; Ray Washburne, the president of the Overseas Private Investment Corporation; and Heidi Cruz, a Goldman Sachs executive and the wife of Sen. Ted Cruz, R-Texas.
Ivanka Trump’s role in the process has drawn some criticism from ethics watchdogs, who said that it could pose a conflict of interest for the president’s daughter to be involved in international economic matters when she has not completely divested from her assets.
The choice of Malpass was reported earlier Monday by Politico and other news outlets.