Throughout the World Bank’s history, every one of its 13 Presidents has been a citizen of the United States, except Bulgarian national Kristalina Georgieva, who served as acting president in 2019.
US President Joe Biden has nominated Indian-American executive Ajay Banga to assume the position of World Bank President. However, this is largely a ceremonial gesture, as the US has traditionally maintained a stronghold on the position.
The United States’ exclusive grip on the World Bank presidency is not accidental but rather a deliberate and calculated strategy.
The longstanding pattern of US citizens occupying the World Bank’s top position is no coincidence, as the country has worked to secure and maintain its dominance.
With more than 16% of the World Bank’s total capital subscription and over 15% of the votes, the US holds the largest share among all the Bank’s shareholders. In addition, the US is the sole country with the power to veto certain changes to the Bank’s structure.
According to a report by The Wall Street Journal, the US has been able to use the appointment of the World Bank President as a tool to advance American economic interests, exert power, and promote development priorities worldwide.
Until 2011, the US faced no competition for the World Bank presidency, as the appointment process was changed to a more transparent and merit-based system.
The origin of the World Bank sheds light on another factor contributing to the dominant position of the United States.
The World Bank was founded after World War II, which devastated European economies but elevated the US to a position of economic power. As the largest purchaser of shares, controlling 35.07% of voting rights and providing substantial funding, the US held significant influence over the Bank.
Initially, the World Bank focused on rebuilding Western Europe, placing the US in a prime position to take on a leadership role. Given that the US had largely escaped the war’s devastation, it was in a favourable position to lead.
In contrast, European nations had an informal understanding of leading the International Monetary Fund (IMF), which was also established alongside the World Bank. As a result, all Managing Directors of the IMF have been Europeans.
Process of Electing the World Bank President
The World Bank utilizes a weighted voting system, with each member nation receiving votes based on share votes (one vote for each share of the Bank’s capital stock held by the member nation) and basic votes.
The Bank states that “basic votes shall be the number of votes that results from the equal distribution among all members of 5.55% of the aggregate sum of the voting power of all the members.”
The Executive Directors’ board elects the President of the World Bank. The board comprises 25 members, with five being nominated and 20 elected.
Nomination Process for the World Bank President
The nomination process for the World Bank President commenced on February 23 at 9:00 am Eastern Standard Time (EST) and will conclude on Wednesday, March 29 at 6:00 pm EST. Executive Directors or Governors can nominate a candidate through their Executive Director.
The Governor at the World Bank is typically a country’s finance minister or chief of the central bank, and the Executive Director manages the day-to-day affairs on the Governor’s behalf.
The Executive Directors will subsequently shortlist three candidates and conduct formal interviews. Reports suggest that once the board confirms the new President, most likely Mr Banga will assume office by early May 2023.