Treasury's Malpass aims to reform the World Bank

Nomination sparks controversy

11 February 2019 | Ekonomie
Virginie Montet - In his two years serving in the US Treasury, David Malpass has repeatedly lambasted the big development lenders as wasteful and ineffective, and called for reforms.

Now he is poised to take over the helm of the World Bank, where he can put his own stamp on its policies - something that many experts say undermines the institution.

President Donald Trump on Wednesday tapped Malpass to lead the World Bank, replacing Jim Kim who left February 1.

According to an unwritten rule, as the single largest shareholder, Washington gets to choose the leader, with the support of European nations.

Malpass, a 62-year-old US treasury official in charge of international affairs, does not mince words.

Institutions such as the World Bank, he said in congressional testimony in 2017, "spend a lot of money" but are "not very efficient".

"They are often corrupt in their lending practices and they don't get the benefit to the actual people in the countries," he said.

‘Abrasive’

Malpass is tall and approachable but also viewed as brittle, with a direct manner bordering on abrasive.

By the middle of last year, about 20 career staff at Malpass' office had quit, some of them chafing at his management style, according to media reports.

The Michigan native with a degree in physics completed studies in economics at George Washington University in the US capital. He then held several Treasury Department positions under former Republican presidents Ronald Reagan and George H.W. Bush.

He then began a lengthy stint at Bear Stearns - an investment bank that collapsed at the start of the 2008 financial crisis - including six years as its chief economist.

After the bank failed in 2008, he founded his own economics firm, Encima Global.

Forecasts

His policy positions and economic forecasts have had decidedly mixed results.

In 2007, the eve of the financial crisis, Malpass penned a Wall Street Journal op-ed telling readers not to "panic" because "housing and debt markets are not that big a part of the US economy".

In 2010, as the Federal Reserve was pumping cash into markets, he signed onto a letter to Fed chairman Ben Bernanke, calling for an end to the stimulus program, which he said would drive up inflation.

It did not.

That year, he also made a foray into politics, waging an unsuccessful campaign to become the Republican senator from New York.

He was an economic adviser to Trump's presidential campaign in 2016.

Controversy

Word of Malpass' nomination has spurred controversy and, should he take office, his presidency would mark a sharp break with that of his predecessor, Jim Yong Kim.

Named by former president Barack Obama, Kim abruptly resigned last month, not even half way through his second five-year term.

Malpass favors reforms for World Bank that would lean more heavily on the private sector and lend less to high-growth economies like China that he says have sufficient access to credit already.

"Imagine what appointing Malpass would do to intellectual quality and morale at the World Bank," economist and New York Times opinion columnist Paul Krugman wrote on Twitter.

"But I don't know whether other countries will stand up to Trump on this."

But Malpass told reporters that his concerns about lending to China were addressed in the reform package World Bank shareholders approved last year.

"China is the world's second biggest economy so as it borrows from the World Bank it raises the question, Why is this having to happen?" he said, noting that he wants the bank to stick to its "graduation" policy for middle income countries.

Outrage

Still, many experts expressed outrage, accusing Malpass of disdain for the World Bank's poverty reduction mission.

"There is no case for Malpass on merit," said Justin Sandefur, a senior fellow at the Center for Global Development, a development research organisation in Washington.

"The question now is whether other nations represented on the World Bank's board of governors will let the Trump administration undermine a key global institution." – Nampa/AFP

Soortgelyk

 

B-dag: Maak of breek

8 ure gelede | Regering

Jo-Maré Duddy – Dolleë staatskoffers eerder as hemelhoë besteding is waarskynlik finansminister Iipumbu Shiimi se grootste uitdaging wanneer hy vanmiddag Namibië se moeilikste begroting sedert...

Stigma jeens lorriedrywers kwel

8 ure gelede | Vervoer

Ronelle Rademeyer en Francoise Steynberg – Lorriedrywers wat Namibië van noodsaaklike lewensmiddele voorsien en seker maak produkte bly op winkelrakke, bevind hulle terselfdertyd aan die...

‘Hongerpandemie’ lê vir wêreld op loer

8 ure gelede | Byvoegsels

Ronelle RademeyerDie wêreld se ekonome en beleidmakers twyfel nie meer daaraan dat die wêreldekonomie weens die Covid-19-krisis in ’n resessie gedompel gaan word nie. Trouens,...

Weer vir 27 Mei 2020

8 ure gelede | Weer

BINNELAND: Koud aanvanklik, maar andersins gedeeltelik bewolk en matig in die Suide. Elders sal dit gedeeltelik bewolk en matig tot warm wees.KUS: Gedeeltelik bewolk en...

Polisie lê beslag op sestig bokse vol drank

8 ure gelede | Misdaad

Francoise Steynberg – Die Namibiese polisie het Maandag knap ná middernag in Pionierspark op 60 bokse drank beslag gelê.Drie verdagtes is in hegtenis geneem, het...

Chaos toe jonges op vulstasie afpyl

8 ure gelede | Ongelukke

Drie jong mans wie se name in dié stadium onbekend is, het op 23 Mei om 01:00 'n ongeluk by die Total-vulstasie in Outjo veroorsaak...

Stappe by Covid-drywer se stoppe

8 ure gelede | Gesondheid

Leandrea Louw en Denver Kisting – 'n Handelsbank op Walvisbaai wat 'n Covid-19-geval onlangs besoek het, sê hulle het die personeel van daardie dag vervang...

Etosha Sondagmiddag deur aardbewing geskud

8 ure gelede | Ongelukke

Ronelle Rademeyer - ’n Aardbewing van 4,7 op die Richterskaal het Sondag om 16:42 in die Etosha nasionale park voorgekom.Me. Gloria Simubali, adjunk uitvoerende direkteur...

Medelye stroom in vir man wat aan Covid-19 sterf

8 ure gelede | Gesondheid

Ronelle Rademeyer – Medelye stroom glo in vir die familie van die Namibiër wat Saterdag in Nottingham, ­Engeland, aan die coronavirussiekte (Covid-19) dood is.Die minister...