Category Archives: World Bank

(Economist) Donald Trump picks David Malpass to run the World Bank


If the nomination passes, the bank will be led by one of its fiercest critics

IN MOST job interviews, candidates gush and enthuse about the institution they hope to join. The World Bank’s board can expect to hear few warm words from David Malpass, whom President Donald Trump is expected to nominate this week to lead it. In his current role handling international affairs at America’s Treasury, Mr Malpass has described the bank as part of a “giant sprawl” of international organisations that create “mountains of debt without solving problems”.

Two strands of thought shape his view: a conservative disdain for big, unaccountable bureaucracies and a hawkish distrust of China’s growing international ambitions. Awkwardly, the two are in tension with each other.Get our daily newsletter

Like many conservatives, Mr Malpass worries about state institutions that do not have to prove their worth in the marketplace. (He was once chief economist of Bear Stearns, a financial institution that spectacularly failed its own market test.) This concern is magnified when the public-sector entity is multilateral and not answerable to any single government. He has criticised the bank and other similar organisations for “mission creep” and for prioritising their own growth over that of their clients. Last year the White House agreed to increase the World Bank’s capital only on the condition that it restrain salaries and impose additional limits on its lending.

The bank’s sprawling mission is, however, the fault of its owners—member governments—as much as of its staff. At gatherings like the G20, presidents and prime ministers cannot resist inviting the bank to involve itself in new initiatives, blueprints or facilities, tackling everything from ebola to e-commerce. A truly unaccountable bureaucracy could say no. The World Bank rarely does.

Mr Malpass has been working with “like-minded governments” to narrow the G20’s focus. But it is easier to complain about a menagerie of mandates than it is to kill any government’s pet project. Mr Malpass himself wants to enlist the World Bank in a new “debt-transparency initiative” that will shed more light on the international liabilities of the world’s governments—a worthy cause, no doubt, but one that will add to the bank’s responsibilities. Thus does its creeping mission creepeth.

Like many hawks in Washington, Mr Malpass also worries about China’s growing global influence. He has been harshly critical of its Belt and Road Initiative (BRI), which aims to build infrastructure and other links across scores of countries in central Asia, the Indian Ocean and beyond. In his view, China overlends to fragile countries, builds ill-conceived projects with its own firms and then takes ownership of the assets when governments default.

Many analysts who share Mr Malpass’s anxieties about debt-trap diplomacy want China to work more closely with existing multilateral lenders and to adopt their norms and lending practices. But Mr Malpass seems unusually ambivalent about this kind of co-operation and assimilation. “China has made substantial inroads into the [multilateral development banks] that are worrisome,” he told America’s Congress in December. The World Bank has a fund that works with the BRI, he pointed out, and the Inter-American Development Bank has co-financed projects with Chinese lenders. Unlike most observers, he seems to worry that China might learn too much, not too little, from the multilateral lenders. “China is absorbing decades of financial know-how into its institutions in a few short years, a similar pattern to its absorption of manufacturing technology,” Mr Malpass complained.

When Jim Yong Kim said last month he would step down as president of the World Bank three years early, some hoped for a proper succession fight. They were tired of the anachronistic convention that allows an American to head the World Bank and a European to lead the International Monetary Fund. But it soon became clear that America would get its way as long as Mr Trump nominated a “credible” candidate.

Is Mr Malpass such a candidate? He is the kind of character a previous Republican president might have nominated. He speaks four languages and has worked for three administrations. He has been wrong on a number of big economic questions—too complacent about financial risks before the 2008 crisis, then too paranoid about the dangers of monetary easing after it—but wrong in that reassuringly conventional way that does little damage to a person’s standing in elite circles. Besides, monetary policy is the IMF’s job.

Having declared that multilateralism has gone “substantially too far”, he may struggle to convince the World Bank’s board that he has the “appreciation for multilateral co-operation” that is one official requirement for the job. But he can presumably argue that multilateralism is a good thing, of which it is possible to have substantially too much.

His appointment will also revive China’s fears that the existing international institutions will never truly accommodate it. But policymakers in Beijing may calculate that Mr Malpass is less dangerous at the World Bank than at the Treasury, especially if he seeks to curb the bank’s limited powers further. A determined China hawk could lead the World Bank on an expansive drive to compete with China’s chequebook diplomacy. A cost-cutting crusader could stringently curtail the bank’s budget and ambitions. Someone who is torn between these two tendencies will probably do neither.

(BBG) London Remains Ahead of New York as Top Global Financial Center

(BBG) The Global Financial Centers Index measures cities based on their attractiveness to financial services professionals, according to two inputs: statistical data and a poll of finance professionals. The index was created by the Z/Yen group for the City of London.

London 795 1 800 1
New York 794 2 792 2
Singapore 752 3 755 3
Hong Kong 748 4 753 4
Tokyo 734 5 728 5
San Francisco 720 6 711 8
Boston 719 7 709 9
Chicago 718 8 706 11
Zurich 716 9 714 6
Washington DC 713 10 712 7
Sydney 712 11 692 17
Luxembourg 711 12 698 14
Toronto 710 13 707 10
Seoul 704 14 705 12
Montreal 703 15 686 21
Shanghai 700 16 693 16
Osaka 699 17 687 20
Dubai 698 18 699 13
Frankfurt 695 19 689 18
Vancouver 694 20 684 22
Taipei 692 21 677 24
Shenzhen 691 22 688 19
Geneva 689 23 694 15
Melbourne 687 24 669 30
Los Angeles 685 25 670 29
Beijing 683 26 682 23
Munich 680 27 672 27
Cayman Islands 676 28 641 41
Paris 672 29 667 32
Casablanca 671 30 665 33
Dublin 663 31 643 39
Abu Dhabi 662 32 675 26
Amsterdam 659 33 664 34
Calgary 658 34 671 28
Hamilton (Bermuda) 654 35 629 50
British Virgin Islands 653 36 635 46
Vienna 645 37 642 40
Tel Aviv 643 38 676 25
Bangkok 642 39 633 47
Doha 641 40 652 35
Busan 640 41 644 38
Jersey 639 42 617 62
Kuala Lumpur 638 43 649 36
Stockholm 636 44 648 37
Warsaw 633 45 631 48
Qingdao 631 46 594 79
Guernsey 630 47 613 66
Dalian 629 48 668 31
Oslo 628 49 614 65
Tallinn 627 50 596 78
Sao Paulo 626 51 639 43
Riga 625 52 605 71
Milan 624 53 625 54
Rio de Janeiro 623 54 637 44
Gibraltar 622 55 618 61
Liechtenstein 621 56 598 76
Istanbul 620 57 636 45
Manama 619 58 609 69
Johannesburg 618 59 628 51
Copenhagen 616 60 630 49
Glasgow 615 61 620 59
Brussels 614 62 627 52
Panama 613 63 603 72
Rome 612 64 616 63
Isle of Man 611 65 610 68
Edinburgh 610 66 623 56
Monaco 609 67 590 80
Madrid 608 68 615 64
Lisbon 607 69 599 75
Almaty 605 70 597 77
Trinidad and Tobago 604 71 New New
Prague 603 72 622 57
Mexico City 600 73 626 53
Valletta 599 74 587 81
Mumbai 598 75 640 42
Jakarta 597 76 621 58
Budapest 596 77 600 74
Manila 595 78 624 55
Port Louis 594 79 601 73
Nicosia 593 80 576 83
Helsinki 586 81 619 60
Riyadh 585 82 606 70
Reykjavik 573 83 562 85
Moscow 568 84 611 67
St Petersburg 567 85 585 82
Bahamas 566 86 568 84
Athens 535 87 558 86

SOURCE: Global Financial Centres Index (GFCI) www.zyen.com

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(Inquirer) World Bank chief Kim heads for 2nd term, lacking contenders


This file photo taken on June 1, 2016 shows World Bank president Jim Yong Kim as he speaks during a conversation entitled Preventing The Next Pandemic at the Center for International and Strategic Studies (CSIS) in Washington. Kim effectively won a second five-year term after nominations to lead the global development bank closed Wednesday with no other candidates proposed. AFP

WASHINGTON, United States — World Bank President Jim Yong Kim effectively won a second five-year term after nominations to lead the global development bank closed Wednesday with no other candidates proposed.

The World Bank executive board said in a statement that, following official procedures, it would formally meet with Kim as a candidate “with the expectation of completing the selection process by the 2016 Annual Meetings,” which take place on October 7-9.

Kim, 56, a Korean-American medical doctor who has focused the World Bank on programs to reduce extreme poverty, earned solid backing for a second term from the United States, France, Germany, China, and other major shareholders of the bank.

But as with his first nomination in 2012, the bank was criticized from inside and outside for not truly opening the selection process to all comers and not managing it in a fully transparent mode.

Following an unwritten rule, since the World Bank was created in the wake of World War II to help rebuild the global economy, its leader has always been an American chosen by Washington.

In 2012, Kim did face competition when Nigerian Finance Minister Ngozi Okonjo-Iweala also contended for the presidency.

But no rivals surfaced during the three-week nomination period this time around, leaving Kim virtually assured of continuing in the job when his first term ends on June 30, 2017.

In an open letter in August, the 15,000 member World Bank Group Staff Association called for a more open and focused search and selection process that did not repeat “decades of backroom deals which, 12 times in a row, selected an American male.”

Kim’s first term has been marked by his campaign to eradicate extreme poverty by 2030; the bank’s leadership in a 2014 campaign to halt the deadly outbreak of Ebola in West Africa; and its initial resistance to, and then tentative partnership with, the China-created rival Asian Infrastructure Bank.

But he has also faced rebellion from within the Washington-based bank over an ambitious and still-incomplete restructuring of how the huge organization manages its poverty-fighting and development programs. Lending for those programs is expected to hit $46 billion this year.

In an employee survey, staff  have reported feeling detached from senior management and unsure of the direction of policy.

“Only one in three understand where the senior management team is leading us,” the Staff Association said in its letter.

“Even fewer believe that our senior management creates a culture of openness and trust.”