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World Bank's search for new chief, a test of Trump's America First policy

Kristalina Georgieva will take over as interim president on February 1


World Bank
World Bank Photo: Reuters

The World Bank’s search for a new leader will be the latest test of President Donald Trump’s pledge to put ‘‘America First’’ in the nation’s foreign policy.

Jim Yong Kim abruptly resigned as president of the on Monday more than three years before the end of his term, potentially sparking an tussle over who replaces him as the Trump administration questions the development lender’s purpose.

Kristalina Georgieva, the bank’s second in command, will take over as interim president on February 1, the Washington-based bank said Monday in a statement. In an email to employees of the lender, Kim said he’ll join a private firm focused on infrastructure investments in developing countries.

“The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets,” Kim said.

ALSO READ: World Bank's Jim Yong Kim to resign effective Feb 1, work on infrastructure

Kim, 59, began his second five-year term at the bank on July 1, 2017. He helped the lender win support from its member countries in April for a $13-billion capital increase, after the US dropped proposals to limit the World Bank’s resources.

President will now be expected to put forward a preferred American candidate to replace Kim, who was nominated by The choice could prove controversial if the nominee shares Trump’s own disdain for institutions such as the World Trade Organization and

ALSO READ: After Jim Yong Kim's exit, is it time to give up on the World Bank?

The president’s national-security adviser, John Bolton, wrote an article in 2016 in which he cited arguments for privatizing the World Bank, while Treasury Undersecretary for Affairs David Malpass has questioned why the bank lends so much money to China when the nation already has access to global financial markets.

Trump’s decision could affect how the bank deploys its capital at a time when emerging markets are facing growing stress from rising US interest rates and trade tensions. The committed nearly $64 billion in loans to developing countries in the fiscal year ended June 30 last year.

The US is the largest shareholder in the development lender, which was conceived during the Second World War to finance the reconstruction of Europe. It has since focused on alleviating extreme poverty around the world.

An American has run the bank since it was established in 1945. Its sister institution, the International Monetary Fund, has always been led by a European, as part of an unwritten understanding between Western powers. Former French Finance Minister Christine Lagarde is the current head of the IMF.

First Published: Tue, January 08 2019. 20:57 IST