US Treasury Secretary Janet Yellen said she expected former Mastercard chief executive Ajay Banga to be elected president of the World Bank as nominations drew to a close. It is not surprising as, when nominations closed at 6pm in Washington yesterday, there were no other publicly declared candidates.
Who is Mr. Banga?
According to Wikipedia, Ajay Banga was born in 1959 and became a naturalised US citizen in 2007. His first job was with Nestle in 1981, working in roles across sales, marketing, and general management. He then moved to PepsiCo and was involved in the launch of its international fast food franchises, including Pizza Hut and KFC.
In 1996, he moved to Citigroup and ended up heading the bank's Asia-Pacific business. His success was spotted by MasterCard who made him their CEO in 2010. During his tenure, Mr. Banga tripled revenues, increased net income sixfold and grew market capitalization from under $30 billon to more than $300 billion.
But here’s the thing, and maybe why Mr. Banga has Biden’s endorsement, because Mr. Banga created the Priceless Planet Coalition in 2020. What is the Priceless Planet Coalition?
It’s a MasterCard backed initiative to plant 100 million trees on behalf of their card users.
So it’s interesting that Mr. Banga is now endorsed, and likely to take over the World Bank at the end of this month. Some like his nomination. For example, Al Gore predicts that he will bring “renewed leadership on the climate crisis to the World Bank.” Stephanie Segal, a senior fellow with the Economics Program at the Centre for Strategic and International Studies, wrote in an essay: “throughout discussions of the World Bank’s evolution, borrowing countries have consistently communicated that financing for climate should not come at the expense of other development priorities”, such as poverty and inequality.
Whilst others are sceptical: “Many question whether his history at global multinationals such as Citibank, Nestlé, KFC and Mastercard will prepare him for the huge challenges of poverty and inequality,” said Recourse in a statement. Recourse is a non-profit environmental organisation that has been critical of the World Bank’s policies on gas transition, its exposure to coal and its pace of action on climate change.
Either way, a new World Bank leader who prioritises addressing climate, poverty, diversity and inequality should be welcomed, and I noted one big thing in his background. Ajay was the man responsible possibly for the death of Facebook’s Libra project. You remember that one? The idea of creating a Facebook currency. Ajay pulled the plug because of due diligence considerations such as know your client, anti-money laundering, data management and more. In an interview with The Financial Times in 2020, he said that “every time you talked to the main proponents of Libra, I said ‘Would you put that in writing?’ They wouldn’t.” Hmmmm …
So, the man who built MasterCard into a major enterprise, destroyed Libra, and focuses on inequality, poverty and climate issues, is the man to lead the future of the World Bank. Sounds good to me, but why isn’t the person a woman?
When asked that question, Mr. Banga responds:
“I think that you should credit the administration with taking a huge leap forward into finding somebody who wasn’t born here, wasn’t educated here. I believe that giving people a level playing field is our job. And that means whether you’re a woman, your colour, your sexual orientation, growing up on the wrong side of the tracks, it doesn’t matter.”
On a final note, it is not a done deal that Mr. Banga gets the job as Russia, still a member of the World Bank and with a vote, is talking about blocking his nomination. Although, as Aljazeera notes: “A challenge from Russia or an allied country is unlikely to change the outcome, given the shareholding structure, but it could expose simmering tensions between the US and Western nations and China — the bank’s third largest shareholder — over the World Bank and other global financial institutions.”
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...