Malpass, appointed by President Donald Trump, had sought to “increase economic growth, alleviate poverty, improve living standards and reduce government debt,” according to a statement from the bank.
But the World Bank, which more than doubled its climate finance to developing countries last year to a record $32 billion, had failed to fund climate-related projects to the extent the Biden administration had hoped. With Congress unwilling to help Biden fulfill his pledges to help developing countries with climate aid, the White House has increasingly turned to global financial institutions to help reduce greenhouse gas emissions and strengthen the adaptation protection against a warming world.
Less than a week ago, Yellen had urged the World Bank to “expand its vision to address global challenges” and to do so “quickly”. And late last year she had asked Malpass for a roadmap to outline the type and pace of change for the bank.
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“The world has changed and we need these vital institutions to change with it,” she said. “In today’s world, sustainable progress in poverty reduction and economic development is simply not possible without addressing the global challenges we all face.”
Malpass faced calls for his removal in September after refusing to say whether he accepted the scientific consensus that man-made burning of fossil fuels was warming the planet. “I’m not a scientist,” Malpass said at a New York Times event. He later amended his comments and Kerry did not call for his impeachment.
The bank said it had set a target for climate finance 35 percent of total lending, resulting in loans averaging $25 billion a year over five years, a figure many government officials and climate activists say is much too low.
On Wednesday, Yellen praised Malpass’ tenure, pointing to his support for Ukraine, his aid to the Afghan people and his commitment to debt reduction in low-income countries, noting that “we must all continue to raise our collective ambitions in the fight against climate change .” She also credited him for regular reports that help countries “prioritize the most impactful actions that can reduce greenhouse gas (GHG) emissions and drive adaptation.”
Others were less generous. In a tweet, Senator Edward J. Markey said, “I am pleased that David Malpass has heeded my call to step down as President of the World Bank. His support for fossil fuels and the abnormal failure to fund climate action is unacceptable.” He said the bank “needs to make amends for its wrongdoings”.
“The departure of Malpass allows the World Bank to hit the reset button and finally commit to the leadership needed on climate finance,” said Jake Schmidt, senior strategic director for international climate at the Natural Resources Defense Council.
According to a study, the World Bank spent nearly $15 billion on fossil fuel-related projects between 2016 and 2021. That included a $200 million loan guarantee in 2021 for a gas-fired power plant in Uzbekistan.
To deal with a range of global problems, the bank financed a $1.6 billion pandemic fund and mobilized $19 billion for Ukraine in its war with Russia.
“The past four years have been some of the most meaningful of my career,” Malpass said in a statement. “I have made a lot of progress and after much reflection I have decided to take on new challenges.”
Prior to running the World Bank, Malpass held various positions under Presidents Ronald Reagan, George HW Bush and Trump. He was also chief economist for Bear Stearns, an investment bank, before it collapsed. He later joined the Trump campaign as an economic adviser.
Under an informal agreement between member countries, the World Bank elects a US citizen as president and a European candidate (usually French or German) as director of the International Monetary Fund. This custom is subject to increasing criticism because much of the world’s economy lies beyond the borders of the United States and Europe, and the choice of president puts nationality above merit.
The United States has 16.32 percent of the total vote in the World Bank, enough to give it veto power over major policy decisions, which requires an 85 percent majority. The largest shareholders after the United States are Japan (6.89 percent of the voting power), China (4.45 percent), Germany (4.03 percent), France (3.78 percent) and the United Kingdom (3.78 percent). per cent).