World Bank’s Malpass on surprise exit: 4 years is a long time

WASHINGTON, USA – World Bank President David Malpass on Thursday, February 16, told Reuters he decided to leave before his five-year contract ended because he felt work was well underway on reforms aimed at expanding the bank’s lending.

In his first interview since announcing his departure on Wednesday, February 15, the former Bear Stearns chief economist told Reuters he would support a “smooth transition” to a successor. He declined comment on possible replacements and dismissed suggestions that he was pushed out.

“There’s a lot of logic to it, both from the spot of the bank and also me personally,” Malpass said, when asked about the timing of his departure. “We’re completing the things that I needed to get done at the bank. We’ve launched the evolution process and it’s far along.”

Malpass, who was nominated by former president Donald Trump, said the end of the bank’s fiscal year was a good time for a transition. “And then, for me personally, it will have been more than four years, which is a long time in the job.”

Malpass said he had no specific follow-on plans.

“It’s a good time for me to look at new challenges,” Malpass said. “I think we’ll have made progress [on the reforms] by the spring meetings, and then there’ll be other issues that take longer, and my successor will step in.”

Malpass will leave the bank by the end of June. The news came months after he was condemned by the White House for declining to say whether he accepts the scientific consensus on global warming and amid increasingly urgent calls by Treasury for the bank to be “bolder and more imaginative” in changing to address global challenges.

Asked about suggestions he had been urged to leave, Malpass said he was leaving on his own terms and it made sense for him at this time.

Malpass, a Republican, survived multiple calls for his resignation after the climate incident last autumn, for which he apologized. Sources familiar with the situation said he never expected to be offered a second term by Democratic President Joe Biden.

Malpass’ term was due to end in April 2024. 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.

Leaving after four years on the job means Malpass will get 70% of his salary as an annual pension, versus 80% if he completed all five years, according to the terms of his contract.

Malpass said he would work hard to ensure a good transition. He said the bank was moving swiftly to enact reforms that would increase its lending power to developing countries, including through potential changes to its equity-to-lending ratios, a key demand voiced by Treasury, that should be finalized by the April meetings of the World Bank and the International Monetary Fund.

Malpass would not comment on whether it was time to end a long-standing tradition of having the bank’s leader come from the United States.

The World Bank Group, which includes the International Bank for Reconstruction and Development and the International Finance Corporation, committed $440 billion in loans and grants over the past four years in response to the COVID-19 pandemic, the war in Ukraine, global economic recession and slowdown, unsustainable debt burdens, climate change, and food, fertilizer, and energy shortages. – Rappler.com