Moved by Lord Stern of Brentford
To ask Her Majesty’s Government whether they can confirm that nomination by the government of the United States does not constitute grounds for giving a candidate special priority for the position of President of the World Bank; and whether they are committed to an open, merit-based and transparent selection process for that position.
My Lords, I thank the Minister for his reply. The perpetuation of the de facto monopoly by the USA and Europe of the positions at the head of the IMF and the World Bank undermines confidence in those institutions and in internationalism, and is surely unacceptable in a world that has changed radically since the founding of those institutions seven decades ago.
First, will the Minister now clearly and strongly on behalf of Her Majesty’s Government encourage good candidates from across the world to come forward for nomination, recognising that the past monopoly and the current signalling from Europe in relation to this appointment is a real deterrent? Secondly, will he recognise that the sustainable development goals agreed at the UN in September 2015 and the UN Paris climate agreement of December 2015 are at the core of the World Bank’s agenda and therefore recognise that the absence of commitment to this agenda is a serious weakness in the candidate nominated by the US, a weakness compounded by his lack of experience in managing a financial institution?
This is important. Thirdly, when the tenure of Christine Lagarde, who has done an outstanding job as head of the IMF, comes to an end, will the Minister state clearly and strongly that Her Majesty’s Government will not support the perpetuation of Europe’s monopoly of this position and will actively seek good candidates from outside Europe and the USA?
In answer to the first question, yes, there should be an open process and suitable candidates should come forward. When the noble Lord was at the World Bank, there was an anointing of the US candidate; since 2011, there has been a process, which we welcome. Secondly, we are absolutely unequivocal in standing by our commitments on climate change, which are an integral part of the role of the World Bank and have been shaped in great part by the noble Lord’s work, for which we are all grateful.
My Lords, irrespective of the outcome of this open and transparent process that the Minister is talking up so much, I have no doubt that the outcome will be Malpass, the US nominee, getting it. However, what are the British Government doing to ensure that we have the fullest representation at the World Bank, with people there to influence its decisions—more than simply the head of the bank?
Our key representative serving on the executive board is Richard Montgomery, our executive director. I am in regular contact with him, and he makes a great contribution in this area. Of course, the application process is still under way: it is open until
That is the process that is under way at the moment. The only formal candidate to have been nominated currently—Under-Secretary Malpass—is in London today to meet the UK Governor of the World Bank, the Secretary of State for International Development. She is making very clear the importance we attach to the World Bank’s commitments, particularly in relation to climate change.
My Lords, does my noble friend the Minister agree that the recent announcement that Norway’s sovereign wealth fund, currently valued at around $1 trillion, will shortly increase its stake in Britain—currently 8.5%, which is significant in its own right—is a strong vote of confidence in the UK’s economy post Brexit?
Absolutely. I am grateful to my noble friend for drawing that to the House’s attention. I am sure that noble Lords will welcome not only that vote of confidence in Britain but Forbes magazine’s assessment of the UK as the top place in the world to invest in and do business in, and its continuing to be the number one location for foreign direct investment in the European Union.
My Lords, the Government repeatedly say that they are committed to a proactive foreign policy following Brexit, in which we will play a full part in building a constructive, peaceful world based on human rights and the rule of law. Despite whatever the Minister may say in good faith, the perception worldwide is that certain traditional powers see these key posts as a carve-up for them. How is that acceptable, and why is the world not given the opportunity to find the strongest possible candidate, committed to the UN objectives, at such a crucial time?
These Bretton Woods institutions were set up in 1944-45 on the basis of shareholdings. The United States has a shareholding of 16%; ours is some 3.8%. It is natural for the largest shareholder to represent the money it put on the table to get the Bank off the ground. We should consider their putting forward a candidate a good thing.
My Lords, if the World Bank is to be the champion of the world’s poor and leave no one behind, is it not important for the President of the World Bank to command the confidence of the world’s poor?
We attach great importance to the legitimacy of the open, merit-based process that is now in place for making that appointment.
My Lords, in assessing which candidate will succeed, will the Minister take account of the policies advocated by them? Along with the IMF, the World Bank has had a reputation in recent decades for pursuing a destructive, neoliberal policy, which has recently failed in Georgia, as it has elsewhere. Privatisation, marketisation, small government and cuts in public spending have become a religion, instead of a sensible policy to allow these countries to grow and succeed.
I do not accept that description of the World Bank’s work. It does an incredible amount for the world’s poor through investing in infrastructure and food—for example, for the Rohingya population. It is absolutely committed to eradicating extreme poverty around the world, which is why we support it.
The nomination process will close on
My Lords, if the outcome of the shortlist is that the only remaining candidate is someone who appears to deny climate change and to adopt policies meaning that the good work the World Bank has done on sustainable development would be reversed, would the Government be prepared to veto such an appointment in those circumstances?
The World Bank has undertaken a very major commitment: between 2021 and 2025, a significant increase—some $200 billion—will be devoted to climate change projects. That is fundamental to the work of the World Bank. We have made it clear that we expect that work, which has already been agreed, to be continued under whoever is the president.