Then on Wednesday, Malpass announced he would step down, roughly a year before his term was to end. The move came as a surprise to the bank’s shareholders, staff and even the White House, according to people familiar with the matter. And while the decision could be seen as an admission of defeat for Malpass, a heavily scrutinized Trump nominee bowing out early as the Biden administration talks up climate action, it also allows him to exit on his own terms and avoid a grueling final year on the job.
Grueling because, even before that fateful September interview, profound changes were in store for the World Bank. For years, global development experts have complained that the bank was not doing nearly enough to help vulnerable nations adapt to climate change. Instead, it was operating much as it has for the last several decades: handing out loans intended to raise living standards in the developing world, but not trying to help reduce overall global emissions.
But by last year, many of the bank’s biggest shareholders appeared to be arriving at a consensus that big changes were needed. Janet Yellen, the United States Treasury secretary, called for the bank to produce an “evolution roadmap,” giving it a chance to reimagine its work. A group of economists and policymakers led by Mia Mottley, the prime minister of Barbados, began their own work on exploring how the bank and its sister institution, the International Monetary Fund, might operate more equitably. That all raised the hopes of global development experts, who say that if some of the changes on the table are enacted, it could mean hundreds of billions, or even trillions, of dollars are made available to fund climate adaptation and energy transition projects worldwide.
That was the easy part. It’s simple enough to get everyone to agree that a lumbering old institution is in dire need of an overhaul, and by COP 27, the United Nations climate meeting in Egypt in November, just about everyone, including Malpass himself, was acknowledging that change was afoot.
Now comes the hard part. Over the next year, the World Bank will be at the center of a process that is likely to reveal starkly different visions among its shareholders, and potentially leave some parties dissatisfied. Among the issues at stake: Whether or not existing shareholders will be asked to contribute more money to the bank, which is a politically delicate prospect; whether China is able to assume more influence at the bank; the role of Russia, which remains a major shareholder despite its invasion of Ukraine; how much lending the bank can do below commercial rates; and just how central the issue of climate change will be to decision making at the bank in the years ahead.
