Donald Trump to choose Treasury Department's David Malpass to lead World Bank

The Washington-based World Bank has been led by an American ever since it was founded in the aftermath of World War II while its sister institution the International Monetary Fund, has always been led by a European. — File

A European diplomatic source told Reuters news agency that the Trump administration had notified several countries of the Malpass nomination, adding that European shareholders of the bank were not likely to block it.

Reports have emerged that Trump will nominate David Malpass, a Treasury Department official, to be the new head of the World Bank.

Malpass has been heavily involved in U.S.

Malpass, the Treasury's Undersecretary for International Affairs, drove the negotiations on a capital increase and reform package for the World Bank previous year.

As the biggest shareholder, the United States has sway over the selection of the new World Bank president but it does not have a veto and needs the backing of European nations. He has also criticized the bank's lending criteria, while taking potshots at what he sees as a bloated staff with inflated salaries.

Malpass' selection was confirmed by a senior administration official who spoke on condition of anonymity because the official wasn't authorized to comment publicly on personnel decisions. "He still sees the institution through that lens".

According to the Washington Post, Malpass has accepted Trump's offer to lead the bank.

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On the surface, the choice mirrors other Trump nominations, both for domestic and global positions, with leaders seemingly hand-picked to undermine the agencies they are tapped to lead. Rick Perry, the secretary of energy, famously sought to abolish that department during his own failed run for president.

Malpass would succeed Jim Yong Kim, who announced in January that he was stepping down three years before his term was to expire.

The senior Treasury official is expected to be nominated tomorrow, according to Politico.

The World Bank has been led by an American ever since it was founded in the aftermath of World War II. The World Bank, for example, has all but ended its financial support for coal-fired power plants in countries around the world, since burning coal contributes to global warming.

Over the past two years, Malpass has pushed for the World Bank to halt lending to China, which he says is too wealthy for such aid, especially when Beijing has subjected some developing countries including Sri Lanka and Pakistan to crushing debt loads with its "Belt and Road" infrastructure development programme. At Treasury, he argued against pumping more USA money into the bank while it was lending more money to China than anywhere else.

"China borrows cheap from the World Bank and relends money with a geopolitical markup, lending according to its own geostrategic priorities", said Benn Steil, the director of worldwide economics at the Council on Foreign Relations. One barrier is China, which wants to continue tapping the Bank's funds.

However, he cautioned that failure to name a "credible" candidate could unite World Bank members to oppose the United States choice, especially if that choice is "a person seen as hostile to the institution". He has argued that the bank, a lending institution with a focus on emerging countries, has concerned itself too much with its own expansion and not enough with its core missions, like fighting poverty. "China doesn't necessarily need the money, it's more the incentives those loans create", he said.

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