The Biden administration on Thursday nominated Ajay Banga, a former Mastercard executive who is now vice chairman at the private equity firm General Atlantic, to be the next president of the World Bank.
The announcement puts an end to intense speculation about who would take over the bank, which has tremendous sway over international development projects and policy worldwide. The bank’s current leader, David Malpass, has been under fire recently over his views on climate change. He announced his resignation last week.
In a statement, President Biden highlighted Banga’s experience forging partnerships to address financial inclusion and climate change.
“He … has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change,” Biden said.
Former secretary of state John F. Kerry, who is currently the U.S. special presidential envoy for climate, said Banga will be able to help deploy large sums of money necessary to reduce global greenhouse emissions while encouraging developing countries to adapt to a changing climate.
A host of climate advocates expressed frustration with Biden’s choice, however, saying Banga’s record is too aligned with Wall Street.
“Banga has no background in public service, mitigating climate change, promoting sustainable agriculture, reducing poverty or supporting just energy transitions,” said Kate DeAngelis, international finance program manager for Friends of the Earth. “He represents U.S. corporations rather than the needs of 8 billion people around the world.”
A development official with close ties to the World Bank described the mood there as disappointed.
“This came completely out of left field,” said the official, who spoke on the condition of anonymity to protect working relationships. Banga, the official said, would have to “get up to speed very quickly to demonstrate that his commitment to climate change is not as thin as his credentials in that area.”
Malpass, who was chosen by President Donald Trump, has drawn criticism for an alleged lack of focus on the bank’s climate mission.
In September, when asked at a New York Times event whether he accepted the idea that burning fossil fuels caused global temperatures to rise, he equivocated, saying, “I’m not a scientist.” He told The Washington Post he was “leaving on his own terms” despite the controversy. He plans to formally leave the position at the end of June.
According to an informal agreement among member countries, a U.S. citizen is chosen as World Bank president while a European candidate (typically French or German) is chosen as managing director of the International Monetary Fund. This custom has been subject to increasing criticism because so much of the global economy lies beyond the borders of the United States and Europe, and because many of the U.S. choices have been considered lacking.
Pointing to Banga’s upbringing in India and his work in the Global South, administration officials emphasized his long experience mobilizing capital while ensuring that related projects do not boost emissions.
His career has spanned the highest reaches of global finance, with senior management roles in the United States, Europe, India and elsewhere, according to a biography published by Mastercard.
He began his career at Nestlé's India operations and later helped launch Pepsico’s first fast-food franchises there. Later on, he oversaw Citibank’s brand marketing and microfinance divisions.
He ran Mastercard as chief executive for more than a decade before retiring in December 2021. He has been credited with helping transform the credit card company into a payment technologies company, adding new products through acquisitions and taking the firm into new markets. The company’s revenue more than tripled during his time as chief executive.
“He has extensive experience with emerging markets and is a champion of inclusion,” said Merit Janow, a former dean of Columbia University’s School of International and Public Affairs and a member of Mastercard’s board of directors, pointing to Banga’s experience forming development partnerships in Central America.
During his tenure, Mastercard took several steps to raise its profile in helping to address climate change. In January 2020, the company announced the launch of the Priceless Planet Coalition, a group of 10 major banks, retailers and transportation companies that pledged to plant 100 million trees over five years.
Later, in November 2021, Mastercard accelerated its plan to cut its net emissions to zero, changing its target date from 2050 to 2040. Under this new timeline, it seeks to reduce the greenhouse gas emissions most closely under corporate control by 38 percent by 2025, and those emitted by other consumers by 20 percent, from a 2016 base year. Mastercard’s greenhouse gas emissions that year were substantially higher than in later years, making reductions easier to reach.
But the company is still trying to figure out how it could make its 2.9 billion cards from sustainable materials. In collaboration with the Swedish firm Doconomy, Mastercard has adopted the Carbon Calculator, a device that allows consumers to view the estimated carbon footprint of their purchases.
At the beginning of 2022, Banga joined General Atlantic, a private equity firm that was co-founded in 1980 by Chuck Feeney, who also co-founded Duty Free Shoppers. The firm now has $73 billion of assets under management.
The firm has partnered with an independent consulting firm, Systemiq, and made climate investments in a handful of companies, including a vertical farming company, a commercial recycling company, a supply chain planning firm, and a maker of solar lanterns and home systems for off-grid and under-electrified areas primarily in Africa and India.
“On climate, it might not be something he’s spent a lot of time on,” said Afsaneh Beschloss, a former World Bank treasurer who served on the board of the Red Cross with Banga. But she said she personally felt “comfortable that he’ll be able to do it, even though it’s not written up in his CV.”
The decision to nominate Banga may disappoint some who had hoped the bank would have a female leader for the first time. DeAngelis, the Friends of the Earth program manager, expressed frustration that the World Bank had continued its “boys club tradition of male leadership.”
Oxfam similarly criticized an “old gentlemen’s agreement of World Bank and IMF appointments,” saying it should have been a more transparent and merit-based global process.
Asked about the decision to appoint a man, an administration official declined to directly address the issue but said Banga has a clear record of bringing “gender equality and inclusion” to his work.
Jeff Stein contributed to this report.