..

The Conversation

  • Written by Mark Crosby, Professor, Monash University

Treasurer Josh Frydenberg has offered support to Donald Trump’s pick for the World Bank Presidency.

David Malpass is currently Under Secretary of the United States Treasury with responsibility for International Affairs, and his previous experience includes being chief economist at Bear Stearns prior to their collapse.

Our Treasurers support is wrong headed.

No matter what the strengths of David Malpass, the next World Bank President should not be American.

After World War Two the victors designed many of our global institutions, including the World Bank, and the International Monetary Fund. Major global institutions were headquartered in Europe or the United States, and there was an agreement that the World Bank President would be a US citizen, while the IMF would be headed by a European.

This cosy arrangement was fine for most of the 20th century, but is at odds with our 21st century world.

Trump’s unspoken ultimatum

Frydenberg is wrong to support Ivanka and Donald Trump on the World Bank. It'd be better to let it die David Malpass, Donald Trump’s pick for World Bank President. Jim Lo Scalzo/EPA

It has been suggested that Trump would follow his usual negotiating tactics and withdraw support from the World Bank if the next chief is not American, which is presumably why some countries including Australia are likely to support Malpass.

The search for the US nomination was headed by Steven Mnuchin and Ivanka Trump, with Invanka Trump herself mentioned as a possible nomination.

Malpass may be a better candidate than the President’s daughter, but I doubt it.

Malpass has been a critic of World Bank lending to China and at Bear Stearns he ignored warning signs of crisis in 2007.

But it’s not so much Malpass’ dubious credibility that is the problem, but the idea that the President should always be American.

The American might not be the best candidate

Important global institutions should be led by the best candidate. The views and expertise of emerging market candidates, particularly from larger economies such as China, India, Brazil, Nigeria and Indonesia should be taken more seriously.

In recent years the IMF would have been much better led by a non-European. The decision to bail out French and German banks at the expense of the Greek economy in 2012 was a poor decision made by the French head of the IMF.

The IMF rightly supported restructuring of banks and financial markets after the Asian Financial Crisis in 1997, but did not push for the same for European or US banks after 2008.

So what if Australia and other middle powers did not support Malpass’ nomination?

Better off withoug the World Bank?

A US withdrawal from the World Bank would probably see its demise. But so what?

The World Bank has become relatively toothless.

Last year China lent more money to emerging market economies than the World Bank.

And this is the point. China needs to be brought into the World Bank and other institutions more fully, not sidelined.

Read more: A Trump-aligned World Bank may be bad for climate action and trade, but good for Chinese ambitions

Problems with governance and other issues with China’s Belt and Road initiative would be much better handled by a multilateral agency, whether that is a properly renewed World Bank or a new institution.

Authors: Mark Crosby, Professor, Monash University

Read more http://theconversation.com/frydenberg-is-wrong-to-support-ivanka-and-donald-trump-on-the-world-bank-itd-be-better-to-let-it-die-111434

Politics

Prime Minister interview with Alan Jones

Good morning Alan.   ALAN JONES: Thank you for your time. Could I just begin by saying that politicians rarely get praise. I have been speaking to farmers during the course of the weekend. You wen...

Alan Jones - avatar Alan Jones

Scott Morrison on Shorten's Border Protection backdown

Border Protection   PRIME MINISTER: Less than 24 hours ago, I warned Australia that Bill Shorten would make Australia weaker and the Labor Party would weaken our border protection. That they could...

Scott Morrison - avatar Scott Morrison

Funding to support women and children escaping domestic violence

Hundreds more women and children escaping domestic and family violence will have a safe place to sleep with a $78 million investment by the Morrison Government.   This investment includes a $60 mi...

Scott Morrison - avatar Scott Morrison

Business News

Sharing the Load - A Guide to Outsourcing as an SME

As a small and medium-size enterprize you need to be able to keep pace with changing technologies and stay ahead of the game. Generally, this means there is a definite need to outsource your SME’s I...

News Company - avatar News Company

Why Branding is vital to your family owned business

Once available only to large corporations, branding is now more accessible and vitally important to every size (and type) of family business, including yours. But what is branding and how does it ...

Stella Gianotto - avatar Stella Gianotto

Statewide Super announce Tony D’Alessandro as CEO

Tony D’Alessandro Tony D’Alessandro will be the new Chief Executive Officer of Statewide Super, effective 1 March 2019. Mr D’Alessandro will replace Richard Nunn, who in January announced his ...

Media Release Service - avatar Media Release Service

Travel

Older generation Australians are embracing solo travel

Allianz predicts a rise in solo travel in 2019, revealing those most likely to ‘go -it-alone’ among the 50+ age group   The popular ‘solo travel’ trend is predicted to continue in 2019 with mor...

Media Release - avatar Media Release

Fun Things You Must Do In Perth

Perth: Sun, sand and 19 beaches might seem to sum up the city, but not quite. The sunniest capital city in Australia offers so much more for you to do. Regardless of what your idea of fun is, you wi...

News Company - avatar News Company

ex-HMAS Tobruk dive site Fraser Coast

Fraser Coast Has a New Sunken Treasure for Divers to Explore A rush of scuba divers from around Australia is expected to begin exploring the underwater wonderland created by the ex-HMAS Tobruk after...

Tracey Joynson - avatar Tracey Joynson

You might also like