On 3 May, the World Bank formally announced the unsurprising appointment of Ajay Banga, former CEO of Mastercard and sole candidate for the position, as the new president of the institution. His appointment marks a continuation of the neo-colonial “gentleman’s agreement” (see Inside the Institutions, What is the ‘gentleman’s agreement’?) despite calls by civil society organisations (CSOs) and academics for a merit-based, democratic, open and transparent selection process (see Observer Spring 2023).

Banga’s background at the helm of large corporations such as General Atlantic, Citigroup, PepsiCo and Nestlé, plus the US’s emphasis on his “critical experience mobilizing public-private resources”, have raised concerns about the Bank’s willingness to use the Evolution Roadmap to question its development model and move away from its failed Billions to Trillions approach, also known as the Cascade (see Observer Summer 2023, Summer 2017).

Jeff Hauser, of the US-based CSO Revolving Door Project, said in a public statement following Banga’s nomination, that none of the companies Banga has worked for “promote shared prosperity. They all do vastly more to exacerbate inequality than to fight it.”

The new president has been accused of using predatory financing during his time at Mastercard in projects promoted in the name of financial inclusion (see Observer Spring 2023). For instance, a project in South Africa that involved payment of social grants, supported by the World Bank through loans to MasterCard’s partner bank Net1 by the Bank’s private-lending arm, the International Finance Corporation, became increasingly controversial because of irregularities in the tendering process and links to facilitating exploitative lending practices (see Observer Winter 2017).

Banga has publicly argued that “there is not enough money [for development] without the private sector”, and made clear his belief that for the private sector to be mobilised the Bank needs to help “de-risk” investments, according to Devex. This was very clear at the Summit for a New Global Financial Pact in Paris on 22-23 June where in a panel with France President Emmanuel Macron, IMF Managing Director Kristalina Georgieva and Kenya President William Ruto, Banga noted that his aim was to mobilise five dollars of private sector co-investment for every dollar in World Bank financing, for which he received immediate push back from Ruto.

True reform or more of the same?

The Evolution Roadmap reform process will be the first big test for the new president. It presents a chance for Banga – although unlikely given his corporate background – to, in line with what CSOs are demanding, take a U-turn in his current approach, starting with an evaluation of the Bank’s effectiveness and the inversion of the Cascade. It could also be an opportunity to transform the Bank’s approach to the climate emergency, aligning finance with the green transition and developing strategies to mobilise public finance at scale, as well as to recognise the need for the institution to develop a human rights policy (see Observer Summer 2023).

The Roadmap also opens a window for Banga to ensure the Bank mainstreams gender in its operations as a formal consultation for the next Gender Strategy occupies the second half of 2023. Bank staff were quick to emphasise how close gender equality is to the new president’s heart in Paris. Yet feminist economists and CSOs have campaigned for years to highlight the demonstrably negative impact on women and girls that a private sector first approach – which seems likely to intensify under his mandate – has had.

Joe Athialy, of India-based Center for Financial Accountability, highlighted: “Banga’s appointment comes at a time when there’s an increasing recognition that MDBs [multilateral development banks] require fundamental reforms – not just among its critics and CSOs, but, even in the Bridgetown Initiative and at the Paris Global Climate Financing Summit. The Roadmap and the Remedy Framework could be the two testing grounds to see Bank’s earnestness and Banga’s leadership in making the reforms real and lasting.”