2023-05-04 21:05:05
Alone in the running, Ajay Banga has unsurprisingly become the new president of the World Bank (WB), an institution under fire from criticism both in terms of its governance and its efforts in the fight against global warming. Themes on which the candidate from the United States, a 63-year-old business executive who was born and raised in India, knows he is expected, assuring that he wants to make it the priority of his mandate. This, for a period of five years, will begin on June 2, said the WB in its press release announcing the decision of its board of directors. US President Joe Biden immediately congratulated Mr. Banga, ensuring that he was ready to “support his efforts to transform the World Bank, which remains one of the most essential institutions in the fight against poverty in the world”.
Traditionally, the WB is the preserve of the United States, a citizen of which has always led the Bank since its creation, in the wake of the Bretton Woods agreements in 1944. But this hegemony was increasingly challenged, in particular by the major emerging countries, led by Brazil, China, India and Russia, who have been wishing for several years to see their place in international financial institutions strengthened. Amid rising geopolitical tensions, the US decision to nominate Mr Banga, who was born and raised in India, was anything but trivial, as the US tries to get closer to the other giant Asia to counter Chinese influence in the region.
As soon as he was appointed, Ajay Banga embarked on a world tour, aiming to promote his candidacy and obtain the support of as many countries as possible, in particular emerging and developing countries. He was thus able to count on India, Kenya and even South Africa, which supported his candidacy. But not only, since Mr. Banga was also able to count on the support of a certain number of French-speaking countries, in particular, as recalled in mid-April
Abdoul Salam Bello, administrator of the WB representing 23 African countries. “I think the campaign is going very well,” said a US Treasury official at the end of March, “his experience is seen as essential, as is his knowledge of the private sector and of private-public partnerships, which are essential in the context of of the World Bank”.
Moving from theory to practice
“We believe that his experience will be very important in helping the WB to strengthen the mobilization of the private sector. During our discussion, he spoke of very interesting practical solutions to strengthen this commitment from the private sector,” added Mr. Bello. “When we know that we may need funding, it is difficult not to support the candidate who will be elected”, confided to AFP an African minister present in Washington during the spring meetings of the WB and of the International Monetary Fund (IMF), in early April.
In a context where more than sixty poor and emerging countries are on the brink of or hit by a debt crisis, funding from the two institutions is even more essential to avoid a collapse of their national economies. Especially since the rise in the rates of the main central banks affects the access of these countries to financing, while strongly increasing the costs, further complicating the budgetary situation of these countries.
However, the hardest part now remains to be done for Ajay Banga, who will have to meet expectations on two burning and linked issues: the reform of international financial institutions, starting with the WB, and an increase in the financing of the fight against global warming. climatic. Especially since the needs are enormous, as the IMF has repeatedly pointed out: a minimum of 1,000 billion dollars per year will be necessary, over the next few years, to help emerging and developing countries to meet them. .
During the spring meetings, the main contributors to the WB agreed to increase its financing capacities by 50 billion dollars over the next ten years, a significant effort but notoriously insufficient compared to the needs. In response, Ajay Banga made no secret of his desire to involve the private sector. “There is not enough money, whether in the multilateral development banks, in the major governments of the developed world, in civil society, even with the most philanthropic intentions”, he insisted at the beginning of March. Among the recommended solutions, Mr. Banga envisaged in particular rethinking the financing approach by specific projects, so as to be more incentive with regard to the private sector. He will now have the opportunity to move from theory to practice.
Erwan LUCAS/AFP
Alone in the running, Ajay Banga has unsurprisingly become the new president of the World Bank (WB), an institution under fire from criticism both in terms of its governance and its efforts in the fight against global warming. Themes on which the candidate from the United States, a 63-year-old business executive who was born and raised in India, knows he is expected,…
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