Against the backdrop of the coronavirus pandemic, World Bank President David Malpass has been a surprisingly outspoken advocate of policies to reduce global warming, control economic inequality and use multilateral institutions to combat the worst of the pandemic’s impacts.
Why it matters: As indicated by former President Donald Trump and a longtime skeptic of multilateral institutions, many feared that Malpass would weaken the World Bank’s work on climate change or make it more “America First” in its direction. But that was not the case, as he explained in “Axios on HBO”.
The big picture: Malpass leads one of the most powerful financial institutions in the world, whose mission is to reduce global poverty and is often the last resort for countries struggling to stay afloat.
- “We have seen this growing and growing inequality … it seems that the system we currently have is not working.”
- “There has been less and less capital available for small businesses. And there has been a centralization of wealth in the various economies.”
Where is it: In December, the World Bank raised its target and now expects 35% of its funding to have “climate co-benefits, on average, over the next five years”. That’s 28% in 2019 and an 18% target under Malpass’s predecessor, Jim Yong Kim.
- The Bank has also strongly supported the implementation and support of the Paris Climate Agreement, with Malpass telling “Axios at HBO” that the Bank has been “heavily involved in this effort”.
About inequality, Malpass has been one of the most vocal critics of the current situation and the way central banks have handled the issue.
- “Inequality is a major challenge for political systems and also for people’s health, for their livelihood,” said Malpass.
- “There is not much going on for people at the bottom end of the scale. The biggest thing that helps them is education and employment. And both were hurt during the COVID crisis.”
Flashback: When Malpass was appointed in 2019, Stewart Patrick, a senior member of the Council on Foreign Relations, wrote that Malpass had views “antithetical to the Bank’s mission”.
- Patrick also said that Malpass shared “Trump’s mistaken view that multilateral institutions are inherently contrary to U.S. sovereignty and national interests, and can be counted on to undermine the Bank’s priceless work around the world.”
- “He is precisely the wrong person at the wrong time to run the bank,” concluded Patrick.
Kim reportedly left his post three years earlier because of disagreements over the Trump administration’s position on climate change, including Trump’s claims that climate change was a “farce” and his plans to withdraw from the Paris agreement.
The last word: “Climate change, poverty and inequality are defining issues of our time,” said Malpass in a recent speech.