U.S. Nominates Ajay Banga to Lead World Bank
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BENGALURU, India — The Biden administration nominated Ajay Banga, the former longtime chief executive of Mastercard, to be the next president of the World Bank, a selection that is likely to drastically reshape the global development institution and broaden its ambitions to combat climate change.
The nomination will initiate a monthslong confirmation process before a final decision by the World Bank’s board. It is not clear if any other countries will nominate a candidate. The World Bank president is traditionally an American citizen chosen by the United States.
If confirmed, Mr. Banga will bring vast experience running large organizations and deep knowledge of the digital economy. Raised in India, he would bring a firsthand understanding of the challenges that developing countries face.
“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” President Biden said in a statement. “He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change.”
Speculation surrounding the nomination gathered momentum in the week since David Malpass, the current World Bank president, announced his intention to step down by the end of June, with nearly a year left in his five-year term. Mr. Malpass, who was picked by President Donald J. Trump, drew criticism from climate activists and stirred frustration among Biden administration officials for his lack of focus on the bank’s climate agenda.
Those concerns came to a head in September, when Mr. Malpass came under fire for his views on climate change. When asked if he accepted the overwhelming scientific consensus that the burning of fossil fuels was causing global temperatures to rise, he demurred. “I’m not a scientist,” he said. The exchange, during a live interview at a New York Times event, set off a slow-motion public relations crisis for Mr. Malpass.
Mr. Banga has sought to carve out a public stance signaling his concern for climate change, including at Mastercard. In 2020, under his watch, the company announced the creation of the Priceless Planet Coalition, a group of about 100 firms that make corporate investments to preserve the environment.
“No matter who you are or what you do, climate change affects you. But, it has the biggest negative impact on those who are socially and economically vulnerable,” Mr. Banga said at the time.
Former Vice President Al Gore, who won a Nobel Prize for his work to fight global warming, praised the nomination. “Those who have worked with Ajay Banga know that he is an exemplary leader, and I am extremely optimistic that he will bring renewed leadership on the climate crisis to the World Bank,” Mr. Gore said.
Still, his selection prompted dismay from some climate activists who have been calling on the Biden administration to nominate a president with a strong background in environmental issues. His lack of direct public-sector experience could also be viewed with skepticism by some development experts.
“Put simply, this is not the guy that President Biden should be nominating when a livable planet is teetering at the brink of collapse,” John Noël, senior climate campaigner at Greenpeace USA, said in a statement. “If Mr. Banga is to lead the World Bank, we hope he will follow the demands of science and justice by lending significantly more money to climate projects and ending funding for oil and gas projects.”
Others said the choice was indicative of the changing role of the World Bank. A central part of the next president’s job will be re-engineering the institution to make it a more pivotal player in a coordinated effort by Western nations to address global warming, despite some developing countries’ concerns that the mission could overtake the bank’s poverty reduction goals.
“I think it’s interesting that they’re not tapping a climate expert per se, they are tapping someone who can help them with climate finance,” said Scott Morris, a senior fellow at the Center for Global Development. “It sends a pretty clear signal that the U.S. wants to look at the bank as a bank.”
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Mr. Banga has described the challenge of climate change, which he called “humanity versus nature,” as a matter of trade-offs that has for years stumped politicians.
“You end up applying what are shorter-term solutions to what are very long-term problems,” Mr. Banga said in 2021 in a conversation at the Council on Foreign Relations. “And therefore you end up putting a band aid on an open wound.”
Mr. Banga has become a close ally of Vice President Kamala Harris and is part of a group of 10 corporate executives who have worked with her office to raise $1 billion aimed at stemming the root causes of immigration from Central America. Ms. Harris has cited poverty, corruption, climate change and political instability as the factors fueling migration.
The collaboration has so far raised about $4 billion to support communities in the region. In an interview with The Times last fall, Mr. Banga said he approached the effort with the understanding that it would not result in any short-term wins.
“Investing in a region takes patience, time and resilience,” Mr. Banga said.
Mr. Banga is currently a vice chairman of General Atlantic, a private equity firm. He retired from Mastercard in 2021 after running the company for more than a decade, quadrupling its profits and becoming one of the most prominent Indian American executives in the United States. Before Mastercard, Mr. Banga worked for more than a decade at Citigroup and at Nestlé in India.
The son of an army general, Mr. Banga has said his upbringing, which involved moving around different cities in India, made him highly adaptable.
“The one thing it did for me more than anything else was this easy adaptability, the willingness to adjust and the willingness to just fit in; I think it’s helped me in all my life,” Mr. Banga told The Times in 2020.
Mr. Banga has said his experience of being an immigrant to the United States inspired his ambition to bring 500 million people around the world who are “unbanked” into the financial system. Although he had a good income when he moved to the United States in 2000, the fact that he was not yet a citizen with a credit history made it a challenge to even buy a cellphone.
“I call myself financially excluded at that time,” Mr. Banga said at an event hosted by the Center for Strategic and International Studies in 2020. “Financial exclusion is not just people who don’t have an income.”
Rachel Kyte, dean of the Fletcher School of international affairs at Tufts University and a former World Bank vice president and climate change envoy, said that while Mr. Banga did not have a deep history of working on climate and fiscal policy, he had strong management skills and a genuine concern about climate change.
“He’s a proven C.E.O., he turned Mastercard around and built it into the modern organization that it is, he has a deep commitment to financial inequality and he’s in the last few years become very conversant in the climate crisis,” Ms. Kyte said in an interview. “Is he a climate activist? No. Has he been working in development for 40 years? No. But does he understand the macro-level investment that needs to happen to make the money flow to green energy instead of brown? Yes. ”
The World Bank’s board of executive directors met this week to open up the nomination process and lay out the criteria for in its next leader. Those qualities included a proven track record of leadership and accomplishment, particularly in development, and experience managing large international organizations while being familiar with the public sector.
The board of executive directors said it “would strongly encourage women candidates to be nominated.”
The bank has never had a woman serve as its permanent president, although Kristalina Georgieva, who is the managing director of the International Monetary Fund, served as acting president in 2019.
Countries have until March 29 to put forward other nominees. The World Bank’s board hopes to select a new president by May.
Biden administration officials said they did not know if any other country would offer a nominee and explained that they were able to nominate Mr. Banga so quickly because they had been preparing for the end of Mr. Malpass’s term next April. Asked about why the White House did not select a woman, as the executive board suggested, the officials pointed to Mr. Banga’s dynamic background and noted that he had a strong track record of promoting gender equality and inclusion within organizations.
“His management record on women will be important for the board to consider since NGOs and others will focus on the missed opportunity to nominate a woman,” said Paul M. Cadario, a former senior manager at the World Bank who is now a distinguished fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy.
Alan Rappeport reported from Bengaluru, and Coral Davenport from Washington. Zolan Kanno-Youngs contributed reporting from Washington.
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