The President of the World Bank, David Malpass, is leaving his post at the end of June this year, almost a year earlier than his employment contract foreseen. The World Bank made its decision public on Wednesday. The Executive Directors, who represent the countries and groups of countries as shareholders, were surprised by the move. In the public statement, the 66-year-old Malpass gave no reason for his premature resignation except the phrase that he wanted to face new challenges.

Winand von Petersdorff-Campen

Economic correspondent in Washington.

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However, the statement by US Treasury Secretary Janet Yellen can be interpreted as an indication that the US government has complimented Malpass out of office. She expressed her gratitude for his openness to "our objectives" and the preparation of a roadmap for the further development of the World Bank. At the same time, she formulated gentle criticism. Everyone must step up their collective efforts in the fight against climate change.

Changing of the guard in explosive phase

In fact, the changing of the guard comes at an explosive time for the World Bank: Important shareholders, Germany and the United States at the forefront, want to fundamentally reform the World Bank so that it can better face transnational challenges such as climate change, refugee flows or health crises and remain relevant as a global player. At the Spring and Annual Meetings in the autumn, the reform is to be decisively advanced. Malpass is not the right person for such reform, said Clemence Landers, a World Bank expert at the Center for Global Development, a development policy think tank. This requires someone who stands for the new vision and can implement it. Landers therefore believes that the changing of the guard will be welcomed by the American government.

Shortly before the most recent annual meeting in September last year, Malpass' post seemed threatened because of a thoughtless statement. Speaking at New York Climate Week, he was asked if he believed burning fossil fuels would warm the planet quickly and dangerously. At first, Malpass had tried to dodge the question, finally saying, "I don't even know. I'm not a scientist."

These remarks triggered calls for resignation from so-called climate activists. The most prominent among them, former US Vice President Al Gore, called Malpass a "climate change denier" and added, "We need to get rid of this leadership."

In a PR offensive, Malpass later made it clear that he was convinced of man-made climate change and that the World Bank placed a strong focus on financing climate protection projects.

Pushed into office by Trump

Malpass was undersecretary of the Treasury under Steven Mnuchin when President Donald Trump pushed him through as head of the World Bank. Even before he took office, there was a hail of criticism from left-wing groups who resented his proximity to Trump, questioned his commitment to multilateral institutions and suspected him of not taking climate change seriously enough.

But he was able to win over critics and many World Bank employees because he was relieved that the classic core task of the institution, the fight against global poverty, was a real concern for him. He stubbornly campaigned for debt relief for poor countries and a change in debt relief procedures. Sometimes the conservative Malpass seemed like a leftist when he castigated – as in the F.A.Z—interview – the global economic policy that served above all rich people and rich countries, or when he found disturbing the fact that Microsoft wanted to buy a gaming company for 69 billion, while the World Bank gave poor countries just eight billion dollars in one year.

Malpass proudly announces that the World Bank has reacted quickly to the major crises under his aegis: The various divisions have mobilized the record sum of 440 billion dollars within four years to alleviate the consequences of the pandemic, the war in Ukraine, the debt crisis, the climate crisis and the lack of essential goods such as food, fertilizer and energy.

There is now speculation about various names for his successor: the Nigerian-American head of the World Trade Organization Ngozi Okonjo-Iwealae, the Indian-American deputy head of the International Monetary Fund, Gita Gopinath and America's head of the development agency US Aid, Samantha Power.

The post is traditionally held by Americans. Treasury Secretary Janet Yellen announced that she would make a proposal. She is looking forward to a transparent, candidate-oriented and fast application process. A personality will be appointed who will further develop the Bank to meet the challenges of the 21st century. This includes the fight against climate change.