Ivanka Trump Dominating World Bank Presidency Story, but Do Bigger Concerns Lie Ahead?

News emerged from the White House on Monday that Ivanka Trump, daughter of US President Donald Trump, is to play an essential role in the identification of the US candidate for the recently vacated position as World Bank President.

There are reports circulating that Ms. Trump herself has been under consideration for the role.

These reports have been claimed to be “false” according to the White House.

We have seen confirmation that the job of nominating a successor to outgoing President Jim Yong Kim (see image above) rests with a team of three individuals.

Acting Chief of Staff Mick Mulvaney, along with Treasury Secretary Steven Mnuchin, and Ms. Trump.

Ivanka Ruled out, but What Next?

Ivanka Trump attending an event in the Oval Office where U.S. President Donald Trump signed Anti-Human Trafficking Legislation, on January 9, 2019, in Washington, DC. Mark Wilson/Getty Images/AFP

The announcement from White House officials that the President’s daughter is not under consideration for the role will do little to quell the controversy that surrounds the situation. Her involvement in the process in any capacity has surprised many, especially considering her lack of experience in development finance.

Much of the media headlines have been taken up by the possibility of Ivanka Trump heading a list of nominations to succeed the outgoing President.

However, are we seeing this particular thread of the story obscure another “Trump factor” that is far more likely to play out?

Since its creation following the second world war, an American nomination has traditionally held the position of World Bank President.

Although, there was a strong challenge last time where Nigerian economist Ngozi Okonjo-Iweala, who opposed the eventual winner Jim Yong Kim.

The truth is, the World Bank is facing the daunting prospect of a new President chosen by a US Government that hasn’t hidden its suspicions of multilateral institutions.

There's fear that President Trump's choice could wreak havoc on funding allocated to projects fighting climate change.

Any program that is considered supportive of Chinese initiatives could also find itself under threat.

The Financial Times quoted one former senior World Bank official as saying that

“right now people in the bank are worried about how we protect the institution.”

Selection Process Will Be “Transparent”

The World Bank board will ultimately be responsible for choosing the new President from a list of potential candidates. A list which it describes as containing “a significant number of recommendations for good candidates.”

It has also stressed that the process will be “open, merit-based and transparent.”

For many, this is wishful thinking.

The consensus is that acceptance of a US nomination would do much to encourage the United States to remain engaged with the World Bank. It could also help to improve the current US views of multilateral institutions.

While Ms. Trump’s potential candidacy grabbed most of the headlines, there have been other names touted around Washington.

These include the head of the US Agency for International Development, Mark Green, and Nikki Hayley, former ambassador to the United Nations.

There is also the small matter of outgoing President Kim’s new position with Global Infrastructure Partners.

Although not a major player in emerging markets at the moment, this could be set to change.

GIP has suggested that once Kim’s one-year cooling off period is over, working with the World Bank on a number of initiatives is a possibility.

Even with the official denial of Ivanka Trump’s candidacy by the White House, there’s still going to be plenty of “Trump factor” to keep headline makers happy when it comes to the World Bank situation.

Featured image from Reuters.

Last modified (UTC): January 15, 2019 6:48 AM

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David Cullinan @DavidCullinan8

David is a UK born and educated finance & tech journalist and an avid crypto enthusiast. He’s also a keen day trader and investor in both the crypto and traditional markets.

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