What "new script" will the new president of the Indian World Bank write?, Before taking office, I met with Yellen Institution | Peng Anjie | President
The new President of the World Bank, Peng Anjie, has taken office for a five-year term.
Peng Anjie is an Indian American born in India in 1959. He received education in India and became an American citizen in 2007. He previously served as the President and CEO of Mastercard Company.
On his first day in office, he requested in a memo that 16000 employees of the World Bank "double their efforts" in development and climate to accelerate the bank's growth and address the most pressing global issues.
It is reported that before taking office, he visited US Treasury Secretary Yellen on the 1st. According to a statement released by the US Treasury Department, Yellen urged him to "fully utilize the bank's balance sheet" and leverage more private capital.
A senior figure working in international multilateral institutions told First Financial reporters that there were some doubts about Peng Anjie's eligibility for election, as he comes from a background as a financial enterprise leader and lacks sufficient experience in multilateral institutions and addressing the challenges posed by climate change. After Peng Anjie takes office, he needs to prove his abilities in this regard.
New World Bank President Peng Anjie
Meet Yellen before taking office
Starting from 2022, Yellen is urging the World Bank and other multilateral lending institutions to improve their business models and significantly increase loan resources to address climate change, epidemics, food security, and other global crises.
This is different from the development approach of development institutions in recent decades: multilateral development institutions typically operate through project loans targeting specific countries.
Former World Bank President Marcus has been highly questioned. During his tenure, he has doubled the Bank's climate financing to $32 billion, but this is clearly not enough. In addition, during an event last September, when asked if he believed that global warming was caused by humans, Marcus repeatedly avoided the question: "I am not a scientist." This has sparked anger and sharp criticism from the outside world that the World Bank has not taken the climate crisis seriously. Although Marpas later refuted this statement, former US Vice President Gore and others still called on the Biden administration to dismiss him. Finally, Marpas announced this year that he will resign early.
On May 3rd, the Executive Board of the World Bank approved Peng An as the President of the World Bank, with a term starting from June 2nd.
The United States is the largest shareholder of the World Bank, followed by Japan, China, Germany, France, and the United Kingdom. Previously, the President of the World Bank was nominated by the United States. This originated from the gentlemen's agreement reached between Europe and the United States in 1945, which stated that all World Bank presidents were Americans, while all International Monetary Fund presidents came from Europe.
Yellen warmly welcomed Peng Anjie's upcoming appointment as president and expressed a strong desire for the US Treasury Department to continue working closely with him.
Specifically, cooperation between the two sides includes continuing to implement the recommendations of the G20 Capital Adequacy Framework Review to fully utilize the World Bank's balance sheet, improve and increase private capital mobilization for global development goals, and refine operational models to enhance the Bank's responsiveness and flexibility.
The issue of fully utilizing the World Bank's balance sheet, as mentioned by Yellen, is also the most urgent issue currently surrounding how the World Bank should reform and finance in the face of the new challenge of climate change. World Bank shareholders approved the first round of balance sheet reform in April, increasing loans by $50 billion over a 10-year period while maintaining its top AAA credit rating. But Yellen believes that further loan reforms and other changes will be needed in the coming months.
Simply put, the World Bank can modify its internal lending guidelines to unleash its lending capacity and provide more climate financing by expanding its balance sheet and taking on more risks. However, modifying its capital adequacy ratio rules may damage the World Bank's long-standing pride in its AAA credit rating, and developing countries warn against doing anything that could jeopardize the bank's AAA rating and increase financing costs as a result.
Trillions of dollars in annual financing required
Currently, various climate and development organizations have also made new demands on the World Bank, including a complete withdrawal from financing fossil fuel projects.
It is reported that in the memo sent to World Bank employees, Peng Anjie also included a statement he made to the World Bank Executive Committee during his job interview on April 1st, in which he stated that trillions of dollars of investment are needed annually to prevent climate change.
He added that this will require "full effort" and the joint efforts of all departments of the World Bank to provide the solutions the world needs.
He told World Bank employees that his vision is to "create a world free of poverty on a livable planet", and "achieving our ambitions will require us to constantly develop, maximize resource utilization, write new scripts, think creatively, take wise risks, and establish new partnerships with civil society and multilateral institutions.".
Peng Anjie also stated that the World Bank needs to improve efficiency and shorten the approval time for financing projects. Currently, a project approval process may take up to three years.
Director of the Global Development Policy Center at Boston University, Gallagher, said that Peng Anjie needs to first restore the morale of World Bank employees and quickly implement balance sheet reforms to squeeze out more loans from existing resources. "Under his leadership, the world must achieve the Sustainable Development Goals and most of the commitments in the Paris Agreement. Without increased funding and significant resource growth, he simply cannot achieve this," he said.
The senior figure working in multilateral institutions mentioned earlier told reporters that environmental activists are currently looking forward to Peng Anjie using his background in the financial industry to establish new partnerships between the private and public sectors.
It should be explained that the President of the World Bank is also the Chairman of the Executive Board of the International Bank for Reconstruction and Development. The President is also the ex officio Chairman of the Executive Council of the International Development Association, International Finance Corporation, Multilateral Investment Guarantee Agency, and International Investment Dispute Resolution Center.
