Malpass to step down early as World Bank president

World Bank President David Malpass has said he would leave his post well before his term ends, months after running afoul of the White House for failing to say whether he accepts the scientific consensus on global warming.

Malpass, appointed by former President Donald Trump, will depart the multilateral development bank, which provides billions of dollars a year in funding for developing economies, by the end of June. His five-year term was due to end in April 2024.

The former investment banker informed US Treasury Secretary Janet Yellen of his decision on Tuesday, a source familiar with the matter said.

Malpass, who survived multiple calls for his resignation last fall and was not expected to be offered a second term, gave no specific reason for the move, saying in a statement, “after a good deal of thought, I’ve decided to pursue new challenges.”

Malpass has been under pressure from Yellen in recent months to accelerate reforms aimed at changing the way the World Bank operates to ensure broader lending to combat climate change and other global challenges.

Yellen thanked Malpass for his service in a statement, saying: “The world has benefited from his strong support for Ukraine in the face of Russia’s illegal and unprovoked invasion, his vital work to assist the Afghan people, and his commitment to helping low-income countries achieve debt sustainability through debt reduction.”

The US Treasury chief said the United States would soon nominate a replacement for Malpass and looked forward to the bank’s board undertaking a “transparent, merit-based and swift nomination process for the next World Bank president.”

Yellen last month declined comment when asked if the United States would support a second term for Malpass.

Malpass is expected to stay at least through the April meetings of the World Bank and International Monetary Fund, but could leave his post before the end of June, given the timeline for nominating and confirming a successor, one source said.

By long-standing tradition, the US government selects the head of the World Bank, while European leaders choose the leader of its larger partner, the International Monetary Fund.

Nadia Daar, who heads the Washington office of Oxfam International, said the process should be opened to more candidates to improve the credibility of the institution.

“If shareholders really want to ‘evolve’ the @WorldBank, Malpass’ successor must be hired based on an open and merit-based selection process,” she said on Twitter.

Malpass took up the World Bank helm in April 2019 after serving as the top official for international affairs at US Treasury in the Trump administration. Before that, he served as the chief economist for the now-defunct investment bank Bear Stearns for more than a decade.

In fiscal 2022, the World Bank committed more than $104 billion to projects around the globe, according to the bank’s annual report.

Leaving at the end of the fiscal year at the end of June was a natural time to step aside, a source familiar with Malpass’s thinking said. Doing so will give his successor time to put their imprint on the reforms before the joint meetings of the World Bank and the IMF in Morocco in October.

Two of the top contenders for the post are Samantha Power, who currently leads the US Agency for International Development (USAID) and served as US ambassador to the United Nations under President Barack Obama, and Rajiv Shah, former USAID administrator under Obama and currently president of the Rockefeller Foundation, a philanthropic group.

The World Bank’s governors are expected to approve the bank’s “evolution roadmap” for reforms incorporating US-requested changes, such as balance sheet adjustments that free up an additional $2 billion for lending in fiscal 2024, at the spring meetings of the IMF and World Bank set for mid-April.

According to the bank’s 2021 annual report, Malpass earned $525,000 in annual net salary that year, and the bank made more than $340,000 in annual contributions to a pension plan and other benefits.