World Bank Group President David Malpass has announced he is leaving the post on June 30. His successor should be named quickly and, in keeping with tradition, should be an American.
We face a number of development-related challenges, including managing the economic and social impact of climate change, the post-pandemic economy and the war in Ukraine. These and other crises are global and require U.S. leadership if they are to be addressed in a way that moves the world’s nations forward with regard to freedom, prosperity and equality.
The World Bank has stepped up its effort to respond to what may be the most important issue of our time: climate change. Specifically, its Climate Change Action Plan “aims to deliver record levels of climate-related financing to developing countries, reduce emissions, strengthen adaptation, and align financial flows with the goals of the Paris Agreement. The action plan for 2021-2025 broadens World Bank Group efforts from investing in “green” projects to helping countries “fully integrate their climate and development goals.”
The bank has been criticized for not doing enough on climate change, but as Treasury Secretary Janet Yellen pointed out in her comments about its work on climate change, there has been progress and “while we all must continue to raise our collective ambitions in the fight against climate change, during President Malpass’s tenure, the World Bank has made important recent advances in this area, including through the successful launch of the Country Climate Diagnostic Reports.”
The pandemic turned the global economy upside down. Its impact will be felt for years to come. A report by the business data firm Statista estimates that, “while it is difficult to tell exactly what the economic damage from the global COVID-19 coronavirus pandemic has been, it has had severe negative impacts on the global economy. During 2020, the world’s collective gross domestic product (GDP) fell by 3.4 percent. To put this number in perspective, global GDP reached $84.54 trillion U.S. dollars in 2020 — meaning that a 3.4 percent drop in economic growth results in over $2 trillion U.S. dollars of lost economic output.”
The World Bank provided $157 billion to help alleviate the impact of the pandemic on developing nations. This included helping with health care, job creation and general economic recovery. The magnitude of the pandemic’s effect on the developing nations is profound and beyond the resources of any one institution or nation, but World Bank involvement has helped to lead the way in confronting this crisis.
The war in Ukraine complicated an already complex global economic situation. Just as recovery from the pandemic began to take hold, Russia’s invasion of Ukraine eroded some of that progress, impacting energy and food prices and contributing to global inflation. Specifically, the World Bank has indicated that “the global economy continues to be weakened by the war through significant disruptions in trade and food and fuel price shocks, all of which are contributing to high inflation and subsequent tightening in global financing conditions.” Again, the bank stepped in to help mitigate the impact of the war. It has committed to spend $170 billion to respond to “the surging cost of food, fuel and fertilizer [which] is increasing hunger, malnutrition, food insecurity and hardship for millions of poor people around the world.”
The fight to maintain support for democracy is not a battle that the apolitical World Bank can join, but its policies certainly have an impact on the future of democratic governments. In an article in Foreign Affairs, U.S. Agency for International Development (USAID) Administrator Samantha Power links economic development, among other things, with continued support for global democracy. “Those [of us] invested in the global renewal of democracy must help societies address economic concerns that antidemocratic forces have exploited,” she writes. If the essence of democracy is protecting the freedom and dignity of the individual, Power rightly adds that “among the biggest errors many democracies have made since the Cold War is to view individual dignity primarily through the prism of political freedom, without being sufficiently attentive to the indignity of corruption, inequality and a lack of economic opportunity.”
The World Bank has a role to play in addressing the issues that Power and other development experts raise. Under the leadership of an American president, the World Bank has responded to crises that have had a profound effect on developing countries. Again, as Yellen pointed out, “Under President Malpass’s leadership, the World Bank has advanced shared priorities that have measurably improved the lives of people around the globe. The world has benefitted 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.”
Now is not the time to break from the tradition of having an American lead this important international institution. There is much work to be done by the World Bank Group and its member nations, and the U.S. has proven that it can — and should — lead the way.
William Danvers is an adjunct professor at George Washington University’s Elliott School and worked on national security issues for the Clinton and Obama administrations.