Ajay Banga vows to build better World Bank: But is he the wrong man for the job?

The World Bank has never been more important. The resilience of the global economy as it recovers from the twin shocks of Covid and Russia’s war on Ukraine has been remarkable.

In particular, the inflationary spiral has been halted without huge pain in terms of growth and unemployment.

But amid the optimism embraced by Western financial leaders at this spring’s sessions of the IMF and World Bank in Washington, little was heard of the plight of the planet’s 75 poorest nations.

After decades of progress they are in the midst of what the Bank describes as a ‘historic economic reversal’, battered by pre-pandemic vulnerabilities, overlapping crises, climate change and increases in violence and conflict.

Broadcast bulletins in the West have been dominated by Gaza and worries about famine (now retreating as aid starts to flow again).

Career: World bank president Ajay Banga (pictured) was formerly chief exec at Mastercard

But extreme poverty elsewhere is increasing, with the number of people facing hunger or malnutrition doubling since 2019 to 651million.

Small wonder that resentment in the poorer South of the globe over lack of health support during the pandemic, including a share of vaccines, has transmogrified into a deep geopolitical rift, with emerging markets and poor nations more sympathetic to Russia and the Palestinians than under-siege democracies in Ukraine and Israel.

Amid this catastrophic convergence of poverty and political outrage, the recent Washington meetings were a glorious opportunity for World Bank’s president Ajay Banga to use the presence of the world’s top financial officials and global media to rally opinion behind a rescue for the world’s neediest.

Banga fills an office held by such luminaries as Robert McNamara who was able to move hard-bitten financial officials to tears with his determination to lift the world’s least well-off out of poverty.

IMF managing director Kristalina Georgieva captured headlines when she said the world managed a ‘soft landing’ from inflation and growth prospects were improving.

Banga, after an illustrious career at the exemplar of consumer capitalism Mastercard, was a shadowy presence.

His centrepiece press conference didn’t happen, much to the chagrin of media who had travelled from around the world, including from Africa.

It was explained that he had provided an ‘online’ briefing a week ahead of meetings and wanted to focus on visiting delegations rather than public sessions.

As laudable an aim as that might be, the open public seminars and press events at IMF-World Bank meetings are critical to building support for funding, such as the next round of funding for the International Development Association (IDA21), which provides least well-off countries with grants and concessional lending.

Banga was at a summit in Nairobi in the last week where donors were told: ‘IDA’s country-driven model has tangible results that make a real impact. In the last IDA20 cycle, each $1 of donor contributions enabled $3.50 of assistance.’

The World Bank president told the FT: ‘Ignoring Africa is like ignoring the future of where the world is going.’

His organisation calculates that as a result of its efforts between ‘2012 and 2023, 1.18bn people around the world received essential health services, 117m gained access to improved water services, and 92m obtained new or improved electricity services.’

Projects: The World Bank calculates that as a result of its efforts between ‘2012 and 2023, 117m gained access to improved water services

The weight of this powerful message at the Washington meetings, attended by finance ministers, central bankers and private sector lenders from every corner of the globe, would have been far greater.

I attended one of the few public sessions with Banga when he appeared with the World Health Organisation (WHO) to make the case for universal health care in less developed and developing nations.

It WAS a less than inspiring appearance. It started with him speaking about process. He argued you cannot build a ‘new house with poor plumbing’ and explained his priority was to ‘improve the speed of turnaround times to get projects approved’.

Previously, it had taken 19 months and he had shortened it by three months. His goal was to reduce the time lag to a year.

The Bank president spoke at breakneck speed and one had the impression he would rather be anywhere else than on the public stage.

There was an acknowledgement that there are two billion people who do not have access to healthcare in a way that they get insurance and get it free. So we’re going to fix a fundamental requirement for human existence’.

After a plea for finance, Banga departed. He left behind Japanese finance minister Shunichi Suzuki and WHO director-general Tedros Adhanom Ghebreyesus who explained the flight plan towards a Universal Health Care hub to be based in Tokyo in 2025.

Banga’s diary was largely occupied with meeting representatives from bank clients. Nevertheless, the health session, billed as a showpiece, might have been expected to command undivided attention.

Perhaps, that’s the way that senior executives run matters at Mastercard. However, it seemed out of keeping with the collegiate and participatory approach nurtured by the World Bank down the decades.