Malpass, the US Treasury’s top diplomat, has pushed the bank to cut lending to China, which is embroiled in an ongoing trade war with the US.

Trump announces his nomination of David Malpass to head the World Bank, during an event at the White House on February 6, 2019, in Washington.
Trump announces his nomination of David Malpass to head the World Bank, during an event at the White House on February 6, 2019, in Washington. (AP)

US President Donald Trump on Wednesday nominated a  Treasury official David Malpass, his loyalist and critic of multilateral institutions, as head of the World Bank. 

Malpass, 62, still has to go through a vote by the World Bank's executive board and could draw challengers from some of the bank's 188 other shareholding countries.

The United States, the lender's largest shareholder with 16 percent of its voting power, has traditionally chosen the bank's president, but departing president Jim Yong Kim faced challengers from Colombia and Nigeria in 2012.

Malpass, the Treasury Department's top diplomat, has vowed to pursue "pro-growth" reforms at the development lender and his selection signals that the Trump administration wants a firmer grip on the World Bank. 

He was an economic adviser to Trump's 2016 election campaign.

Malpass, Treasury undersecretary for international affairs, a job in which he oversees Washington's role in the World Bank and the International Monetary Fund, has criticised them for growing ever larger, more "intrusive" and “entrenched."

He also has pushed the bank to cut back lending to China, which he argues is too wealthy for such aid.

Last year, as part of a $13 billion World Bank capital increase, Malpass helped negotiate reforms aimed at refocusing resources towards the poorest countries and winding down lending to China.

US Trade Representative Robert Lighthizer, right, accompanied by Trump Administration officials, met Chinese Vice Premier Liu He, left, and other Chinese officials during US-China Trade Talks on January 30, 2019, in Washington
US Trade Representative Robert Lighthizer, right, accompanied by Trump Administration officials, met Chinese Vice Premier Liu He, left, and other Chinese officials during US-China Trade Talks on January 30, 2019, in Washington (AP)

"He has fought to ensure financing is focused on the places and projects that truly need assistance, including people living in extreme poverty," Trump said in announcing his choice at the White House with Malpass by his side.

Malpass will continue to participate in US-China trade negotiations as he campaigns for the World Bank presidency. 

He will join a delegation heading to Beijing for more talks next week, a senior Trump administration official said.

But as Trump's "America First" trade agenda and tariff war with China puts strains on many developing economies, some development experts say that Malpass' candidacy will be a difficult sell.

"David Malpass will have a lot of work to do to convince other shareholders that he is prepared to move beyond his past statements and track record when it comes to the World Bank’s agenda," said Scott Morris, a former US Treasury development finance official.

Morris said that includes the global lender's role in climate finance and "the need for constructive engagement with China."

By naming Malpass a day before the World Bank board begins a month-long nomination process, Trump could deter the emergence of other candidates.

Jim Yong Kim, the departing World Bank president, has stepped down early to join an investment firm.
Jim Yong Kim, the departing World Bank president, has stepped down early to join an investment firm. (AP)

A family affair 

In a nod to the president's daughter and adviser, Ivanka Trump, Malpass said he would focus on improving the status of women.

"A key goal will be to ensure that women achieve full participation in developing economies," Malpass said. 

"I know Ivanka has been a strong leader on women's economic empowerment, and I look forward to continuing our work together on her women's global development and prosperity initiative."

David Malpass would have to deal with his son's employment if his nomination goes through World Bank’s executive board. 

His eldest son, Robert, works as a research analyst at the International Finance Corporation, a unit of the World Bank, according to the Financial Times

It said the global lender’s rules state that close relatives are not allowed to be simultaneously employed at the institution. 

Source: TRTWorld and agencies