World Bank president David Malpass on chaos engulfing Liz Truss, tax cuts, and why he believes Britain is STILL a big player on world stage

- Advertisement -


- Advertisement -

Influential: World Bank President David Malpass.

- Advertisement -

The morning routine of 66-year-old David Malpass, one of the most influential figures in the world of finance, is normally reassuring. He gets up at 6 a.m. when he’s at home in one of Washington’s poshest neighborhoods, then has breakfast with his family before walking with his 14-year-old son to the bus stop.

He then frequents the headquarters of the World Bank, located just a block from the White House. Along the way, he usually stops to chat or wave to colleagues. It’s a very different approach to many of the big players in the US capital, who usually move around the city hiding behind the tinted windows of long black limousines.

- Advertisement -

The tall and charming World Bank president, who has served in nearly every Republican administration since Ronald Reagan in the 1980s, sees the organization as a square hole in a round hole.

Donald Trump’s choice of a conservative economist with two decades on Wall Street as president of the most important development institution on the planet looked like a deliberate provocation.

His history as Trump’s senior international official at the US Treasury makes Malpass a distrusted figure in the development community and among some senior Democrats. He went out of his way to build a “good, constructive relationship” with US Treasury Secretary Janet Yellen, who represents the bank’s largest shareholder.

However, he faces an ongoing smear campaign from some development and climate change lobbyists. Malpass recently faced calls for the White House to fire him from climate activist and former US Vice President Al Gore. This came after the head of the World Bank suggested that the impact of greenhouse gases on climate is the work of “scientists”.

As we chat in his spacious office, Malpass sits at a light wooden conference table surrounded by scribbled notes in a yellow notepad and beige folders. He is an indecisive speaker and constantly refers to his personal notes. He is hitting back at years of critics, including UK development campaign charity Oxfam.

“I’ll just say the main problem is, are you a climate denier?” he tells me.

“The answer is no, I am not a climate denier. It is clear that anthropogenic greenhouse gas emissions are the cause of climate change.”

He says the charges against him have “taken on a life of their own.”

The fierce criticism coming from a high-ranking Democrat like Gore gives little insight into the deep ideological divisions that at times seem to be tearing America apart.

Trust between the two major political parties is low, and Republicans have so far not dared to cast aside Trumpism. Malpass defends the role of the global institution on climate change under his leadership.

“We are a global leader in delivering real, impactful climate change action,” he says. He adds that we have “significantly expanded our climate finance with record spending increases.”

He directly disputes Oxfam’s accusations that spending on climate change is 40% less than the data published by the World Bank. Malpass says the $7bn (£6.3bn) loan for his watch was a “record” 31 percent improvement. He says that if the charity wants to come to World Bank headquarters to discuss disagreements, the door is open, but she didn’t agree.

Malpass’s main focus is currently on the food and fertilizer crisis in developing countries. Russia’s war with Ukraine has hit the poorest countries hardest, and food makes up “a very large part of people’s budgets.”

It has also forced many of these struggling countries, especially in sub-Saharan Africa, back onto the debt risk list. He is particularly concerned about the upcoming planting season in countries dependent on agriculture, given the high cost of fertilizer.

Prime Minister Liz Truss knows Malpass. He met her when, as Foreign Secretary, she was the British Governor of the World Bank after the Foreign Office was taken over by the Foreign Office. “She recognizes some of the strengths of the World Bank,” he says, and refuses to directly criticize cuts in the overseas development budget during the Boris Johnson era.

But it made a difference in terms of Britain’s firepower at the Bank. “Contributions matter within an organization,” he says. In particular, the UK was forced to abandon its role as the largest investor in the International Development Association (IDA) Bank. This is a division of the World Bank that provides grants and concessional financing to the poorest and most advanced countries. The US, historically reluctant to fund, is now the largest donor. Malpass is quick to point out that this does not mean that the UK’s role in the World Bank and the IMF is diminishing. “The UK retains its importance in the world,” insists Malpass.

“We are thinking about the Ukrainian crisis, the crisis in Africa, the Afghanistan trust fund, where the UK is an anchor donor. This points to a very important role for the UK.”

As a Republican who nailed his teeth in the Reagan Administration on tax cuts, what does Malpass think of ousted Chancellor Kwasi Kwarteng’s tax-cut mini-budget?

“I think it’s very important to maximize growth and have a low broad base tax rate,” Malpass says. “Often the tax base is narrow because they exempt” people and companies through tax credits.

He remains proud to have worked closely with legendary White House Chief of Staff and Treasury Secretary James Baker to cut tax rates during the Reagan era.

As an American patriot, Malpass is adamant that a “strong and stable dollar” is vital to the global economy, despite the pressure it puts on the pound sterling, euro, yen and emerging market currencies.

He claims it’s not about the strength of the dollar…

Credit: www.thisismoney.co.uk /

- Advertisement -

Recent Articles

Related Stories