US President Joe Biden has nominated Indian-American executive Ajay Banga to become the next President of the World Bank. This is in line with the traditional practice of the US holding the presidency of the World Bank. All 13 Presidents of the Bank so far have been US citizens, except for Bulgarian national Kristalina Georgieva who served as the acting president in 2019. This is due to the US being the single-largest shareholder in the Bank, holding 16.35% of total capital subscription and over 15% of the votes. The US also has veto power over certain changes in the Bank's structure, which further strengthens its dominance. The US has historically used the appointment of the Bank's President as a means to advance American economic interests and development priorities around the world.
The pre-eminence of the US in the World Bank can also be attributed to the Bank's origins. The Bank was established towards the end of World War II when European economies were devastated, but the US emerged as an economic powerhouse. The US purchased the most shares in the Bank, controlled 35.07% of the voting rights, and heavily funded the Bank. In its early years, the World Bank focused on the reconstruction of Western Europe, making the US the natural choice for leadership.
The World Bank has a weighted system of voting, where member nations receive 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 President is elected by the Board of Executive Directors, with 25 Directors in total - five nominated and 20 elected. The nomination process began on February 23, and the nomination will end on March 29. The Executive Directors manage the day-to-day affairs of the Bank on behalf of their respective Governors, who can be a country's finance minister or the chief of the central bank.
The Executive Directors will later shortlist three candidates and formally interview them. Once confirmed by the Board, the new President is likely to be in place by early May 2023.
FAQs:
Q1: Why has the US dominated the presidency of the World Bank?
The US has dominated the presidency of the World Bank due to its status as the single-largest shareholder, holding veto power over certain changes in the Bank's structure, and the Bank's origins following World War II when the US emerged as an economic powerhouse.
Q2: How is the President of the World Bank elected?
The President of the World Bank is elected by the Board of Executive Directors, with 25 Directors in total - five nominated and 20 elected. Member nations receive votes based on share votes and basic votes, and the Executive Directors manage the day-to-day affairs of the Bank on behalf of their respective Governors, who can be a country's finance minister or the chief of the central bank.
Latest World News
