Sep 23, 2022 - Politics & Policy

Scoop: Biden administration may try to oust World Bank head

David Malpass
David Malpass. Photo: Leigh Vogel/Getty Images for Concordia Summit

Biden officials have considered trying to oust World Bank President David Malpass, who took office during the Trump administration, because they believe he's weak on climate, according to people familiar with the matter.

Why it matters: Administration officials are deeply concerned by Malpass' failure to answer this week when asked if climate change was caused by humans. His response provides ammunition to officials who want Biden to spend some political capital to attempt to remove him.

  • But officials know that replacing Malpass would be a messy process and they are unsure how — or even if — the U.S. can orchestrate his ouster.
  • Malpass was confirmed by the bank's board of executive directors, which the White House doesn't control.

State of play: Malpass, a Trump holdover, was viewed suspiciously by the Biden administration from the beginning. That suspicion has now been confirmed. And he's been on thin ice for months.

  • Malpass' refusal to acknowledge fossil fuels were warming the planet set off international furor, including calls to resign.
  • Malpass went into damage control Thursday, emailing a clarification to staff and saying on CNN: "It’s clear that greenhouse gas emissions are coming from man-made sources, including fossil fuels ... I’m not a denier."

Reality check: The fact that Biden hasn't made a change suggests that there's some internal resistance to ousting Malpass.

Context: The World Bank, based in Washington, uses capital contributions from member countries to provide loans to the developing world to help alleviate poverty and promote economic growth.

  • In the past several years, the bank has increasingly turned its focus to financing projects that will reduce carbon emissions. Critics, including Gore, want the bank to do more on climate change.

Between the lines: Ushering out the World Bank president could upset a delicate balance — the U.S. traditionally gets to pick the president of the World Bank, while the European Union selects the head of the International Monetary Fund.

  • The bank’s presidency runs for five years. So the new U.S. president often inherits bank presidents from the opposite party.
  • Malpass is former Bear Stearns economist and Treasury official in the Trump administration. His term is up in 2024.

What we're watching: At a New York Times climate event this week, former Vice President Al Gore called for a World Bank shakeup, saying it's "ridiculous to have a climate denier the head of the World Bank."

  • Some Biden officials have gone as far as gaming out potential replacements — including Gore and former Secretary of State John Kerry, who is now Biden's climate envoy. Biden's thinking isn't known.
  • Kerry has been a forceful advocate for getting the World Bank more focused on climate. Asked at the Times event if the administration has confidence in Malpass, Kerry deflected: "I can’t comment on what the status is of an individual — that is the president’s decision."
  • A Gore spokesperson told Axios: "VP Gore strongly believes that there needs to be new leadership at the World Bank, but has no intention of pursuing the role himself and would not accept it if offered."

Other possibilities for Malpass's job include former New York Mayor Mike Bloomberg and Raj Shah, president of the Rockefeller Foundation and former head of USAID.

The intrigue: Countries from the so-called "Global South" have been looking for an opportunity to claim the top job for a candidate from Africa, Latin American, Asia or Oceania.

  • Biden officials have discussed who could fit that bill. Options include Ngozi Okonjo-Iweala, a Nigerian-American economist who now heads the World Trade Organization, and Minouche Shafik, an Egyptian-born British-American economist who is director of the London School of Economics.

What they're saying: "We expect the World Bank Group to be a global leader of climate ambition ... We have [made] — and will continue to make — to make that expectation clear to World Bank leadership," a Treasury spokesman told Axios.

  • Malpass' remarks "were considered damaging, there’s no doubt about it," said Mark Malloch-Brown, the president of the Open Society Foundations and a former World Bank official.
  • "It’s a big problem," he said. "These institutions don’t serve the agenda of their leader, but ultimately of their government owners. And their unambiguous priority is the fight against climate change."

Editor's note: This story was updated to include a statement from a spokesperson for former Vice President Al Gore.

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