Trump’s World Bank Nominee Tries to Distance Himself From the President

Trump’s World Bank Nominee Tries to Distance Himself From the President

WASHINGTON — When President Trump selected David Malpass to lead the World Bank last month, he showered his nominee with gratitude for years of loyal support, praised his intelligence and made one thing abundantly clear: The World Bank under his watch must put America first.

“My administration has made it a top priority to ensure that U.S. taxpayers’ dollars are spent effectively and wisely, serve American interests and defend American values,” Mr. Trump said. He noted, not for the first time, that the United States was the bank’s biggest donor and said that Mr. Malpass “has been a strong advocate for accountability at the World Bank.”

But as Mr. Malpass, 63, canvasses the world to seek support for his candidacy, he is trying to distance himself from his boss. In meetings with dozens of world leaders in both established and developing economies, Mr. Malpass has struck a conciliatory tone and tried to assure other nations that he will not simply serve as a proxy for the United States president.

His selection has sent ripples of anxiety through some corners of the world and raised fears that the World Bank could become an organ to promote Mr. Trump’s nationalist agenda.

Big questions remain about how Mr. Malpass, a little-known Treasury Department official who has previously criticized multilateral institutions for overstepping their authority, will run the 75-year-old institution. Among the most pressing questions is whether Mr. Malpass will use the bank’s lending power to contain China or steer resources away from its billion-dollar efforts to combat climate change.

For now, Mr. Malpass is declaring his independence. In a telephone interview with The New York Times between trips to Europe and Mexico, Mr. Malpass said that if he won sufficient support from the bank’s 25-person board to become president, he would be leaving the United States government and reporting to the bank’s governors and shareholders.

And Mr. Malpass signaled that on both climate change and China he wanted to bring continuity rather than upheaval, despite the Trump administration’s aggressive rebuke of climate science and China’s economic practices.

“I’ve been very pleased with the tone of the conversations, which have been focused on development and development goals,” said Mr. Malpass, who serves under Treasury Secretary Steven Mnuchin as under secretary for international affairs.

In conversations with world leaders, Mr. Malpass, a former chief economist at Bear Stearns, has focused on highlighting his economic development background as a Treasury and State Department official in the Reagan and George Bush administrations. He has also played up his role in getting Mr. Trump to back a $13 billion capital increase for the World Bank last year, which came with a caveat that borrowing costs for wealthier countries like China would increase.

The United States traditionally selects the bank’s president, who serves a five-year term that can be renewed once. Other nations can submit their own candidates, and countries have until Thursday to offer a nominee. So far, no foreign leader has publicly opposed Mr. Malpass or thrown support behind a different candidate.

While Mr. Malpass hails from the Trump administration, those who know him said they did not expect him to parrot the president’s views.

“I was kind of surprised that Trump nominated him for the job, because while he supported Trump and worked at Treasury under Mnuchin, he is not what you would call a Trumpite,” said Steve Bell, a former Republican staff director of the Senate Budget Committee who hired Mr. Malpass in the 1980s. “He’s not going to go in there and do crazy things.”

The bank was conceived in 1944 to help with postwar reconstruction in Europe. It later shifted its attention to eradicating poverty in developing countries, education and public health. While the bank has received less attention in recent years, its lending has continued to grow.

Over the past decade, addressing climate change has become a major part of the World Bank’s portfolio as scientific evidence of the impact of rising global temperatures mounted and vulnerable nations sought new sources of funding to protect themselves from rising sea levels and fierce storms. Under Jim Yong Kim, who stepped down in January after serving six years as president, the World Bank became a global leader on environmental matters.

Last year, the bank provided $20.5 billion in financing for climate change efforts, which amounted to just over one-third of the institution’s overall support to developing countries. Much of that money went toward renewable energy development, agriculture investments to help farmers increase crop yields amid changing weather patterns and efforts to help countries meet the pledges they made to cut planet-warming emissions under the Paris Agreement on climate change.

The World Bank has also developed a vast body of research devoted to understanding how the rise in global temperatures could keep millions of people worldwide trapped in poverty. In 2013, after a bruising battle between rich and poor nations over addressing one of the main causes of climate change, the bank drastically restricted lending for coal-fired power plants.

Those goals are fundamentally at odds with the Trump administration, which has rolled back Obama-era climate change regulations, promoted the increased development of fossil fuels and is developing a White House effort to question the scientific consensus that climate change, caused by human activity, poses an urgent threat.

Mr. Trump himself has called global warming a “hoax” and promotes climate change deniers on Twitter. He has also vowed to pull the United States out of the Paris Agreement and said that the pact among nearly 200 nations to voluntarily curb greenhouse gases “hamstrings the United States.” Those positions have made other global leaders apprehensive about whether Mr. Malpass can effectively take the reins on what has become a core issue for the bank.

“As he has made the rounds, this is the key area where he would have to provide reassurances,” Scott Morris, a senior fellow at the Center for Global Development, said of preserving the bank’s climate agenda. “That said, it’s still hard to imagine him going off to the climate summits and being a cheerleader.”

Conservatives have criticized the World Bank’s emphasis on climate change as a departure from its mission of reducing poverty, and cheered Mr. Malpass’s nomination. Myron Ebell, the director of the energy and environment center at the Competitive Enterprise Institute, a free-market think tank, said he expected Mr. Malpass to “challenge many conventional pieties that have become institutionalized at the bank” like climate change.

“I hope that one of the first policies he will take on is the bank’s ban on financing coal-fired power plants,” Mr. Ebell said.

That has worried Europeans, environmental activists and development experts who see reducing emissions as a key ingredient in alleviating poverty.

“Many countries, including Europeans, have been investing quite heavily politically and financially in ensuring the bank is a strong champion of climate action,” said Leonardo Martinez-Diaz, who served as the Treasury Department’s deputy assistant secretary for energy and environment in the Obama administration.

“They’re worried the agenda, even if it’s not completely reversed, will stall.”

Mr. Malpass’s own record on climate change is sparse. At a 2007 speech by California’s governor, Arnold Schwarzenegger, who had recently signed a law capping greenhouse gas emissions, Mr. Malpass asked him to address one of the “question marks over global warming.” The Earth saw a period of warming around 1000 to 1300 A.D., Mr. Malpass noted, according to a transcript, “and it wasn’t carbon emissions from people that were doing it then.”

Climate skeptics have long held up the medieval warm period as proof that today’s warming is the result of natural causes, a theory that has been debunked by scientists. Asked about his 2007 comment, a Treasury Department spokesman said the question was not indicative of Mr. Malpass’s views.

Mr. Malpass would not say in the interview where he stood but insisted that he would honor commitments that the bank had made and continue its efforts to be a global leader on the environment.

“My focus is on making the bank very effective, including meeting its obligations on climate change,” Mr. Malpass said.

Mr. Malpass has been more assuring in private conversations and tried to demonstrate his support for the bank’s climate mission, according to people familiar with those conversations. He has pointed out his role in the World Bank’s incorporation of environmental research in the 1980s, when he was at the Treasury Department, and has signaled his intent to continue programs that recognize that human activities cause climate change.

George David Banks, who served as a special assistant to Mr. Trump on international energy issues, said Mr. Malpass was not involved in the Treasury Department’s decision to revoke Obama-era restrictions on United States support for coal financing and said he did not believe he would seek major changes in energy lending at the World Bank.

“It would take a tremendous amount of political capital to unravel a lot of the fossil fuel agenda that the World Bank has already established,” Mr. Banks said. “I think he would be reluctant to unravel something that’s already been committed to.”

Mr. Malpass may have more leeway when it comes to curbing China’s use of World Bank financing. The Trump administration has made containing China’s economic rise a priority, imposing steep tariffs to force the Chinese government to lower trade barriers and stop subsidizing its industries.

Mr. Malpass, who has been deeply involved in trade talks with China, has criticized Beijing’s economic practices and called for changes to China’s Belt and Road Initiative, which the World Bank has supported, over concerns that it saddles developing nations with debt. This week, the White House National Security Council scolded Italy on Twitter for endorsing the initiative, arguing that doing so “lends legitimacy to China’s predatory approach to investment.”

Mr. Malpass said that he would push for China to be more transparent about its lending through Belt and Road, but that he hoped it could continue to have a strong relationship with the bank.

“To the extent that China is a constructive force in development, I expect there would be good cooperation with the World Bank in various programs,” he said.

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