2023-05-03 17:56:00
” Congratulation to Ajay Banga, elected new president of the World Bank. We are counting on him to implement an ambitious development of the World Bank, in particular by further integrating the ecological transition into its projects.”, immediately greeted French Economy Minister Bruno Le Maire on Twitter on Wednesday. The appointment of Ajay Banga as head of the institution is not a surprise. The American, of Indian Sikh culture and origin, was the only one in the running.
This 63-year-old business leader will have to restore the image of the institution, under the fire of criticism both in terms of his governance and his efforts in the fight against global warming. He will replace David Malpass, appointed by Donald Trump and resigning a year before the end of his mandate because of his climatosceptic positions.
US President Joe Biden immediately congratulated Mr. Banga, assuring that he was ready to “support its efforts to transform the World Bank, which remains one of the most essential institutions in the fight against poverty in the world”.
This appointment, which will begin on June 2 for a period of five years, is also symbolic, at a time when the BRICS (Brazil, Russia, India, China, South Africa) seek to emancipate themselves from the domination of the dollar, in the context of the war in Ukraine and the sanctions.
Also, facing Beijing, the United States is trying to get closer to the other Asian giant to counter Chinese influence in the region.
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.
The only candidate supported in Africa
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 to AFP Abdoul Salam Bello, administrator of the WB representing 23 African countries.
“When you know that you may need funding, it is difficult not to support the candidate who will be elected”however, told AFP an African minister present in Washington during the spring meetings of the WB and 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, financing 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.
Private funding
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.
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 big 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.
An international life and career
Born in Pune, in the central state of Maharashtra, into a family of the Sikh religious minority, Ajay Banga moved regularly during his childhood, according to the assignments of his father, a soldier, who will end his career with the rank of general of army corps.
He also continued his studies there, first at St Stephen’s College in New Delhi and then at the Indian Institute of Management in Ahmedabad, one of the best business schools in Asia, before starting his career there, in beginning of the 1980s, in the local subsidiaries of large agri-food groups, Nestlé then PepsiCo.
Ajay Banga moved into finance at the end of the 1990s, joining the American bank Citigroup, and found himself responsible, between 2005 and 2009, for the development of the banking group’s micro-financing strategy.
In 2009, he joined Mastercard as Chief Operating Officer before becoming Chief Executive Officer a year later, then Chairman of the Board of Directors in 2021.
(Par Erwan Lucas, AFP)
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