Abuse inquiry poses leadership test for Banga

WASHINGTON: At the World Bank’s annual meetings last year in Morocco, the organisation’s new president, Ajay Banga, outlined a sweeping vision for how he wanted to rid the world of poverty while keeping the planet habitable.

Four months later, Banga, who assumed the top job last June, is confronting his first big management test and some early signs of unrest that have little to do with his aspirations to modernise the bank and supercharge its ambitions to combat climate change.

The challenge is related to an investment that the World Bank made a decade ago in a chain of schools in Kenya. The educational project was partially funded through the International Finance Corporation, the bank’s investment arm. It became a source of controversy when allegations emerged in 2020 about widespread sexual abuse at the schools, prompting an investigation by the bank’s internal watchdog.

The executive board of the I.F.C. has been reviewing a revised “action plan” that could take effect as soon as this week.

In recent months the World Bank’s leadership has been engaged in fraught deliberations over how much responsibility to accept and whether to compensate the victims. The debate has divided the countries that are invested in the bank and put a spotlight on Banga, who will be responsible for finalising and carrying out the action plan.

The case has drawn the scrutiny of development experts and lawmakers, amid suggestions that the World Bank failed to police how its money was being used and even took steps to cover up wrongdoing.

While fielding questions at an event sponsored by the Centre for Global Development in early February, Banga, a former finance executive, surprised some in the audience when he dismissed the possibility of a cover-up. In response to another question about employment disputes and the integrity of the bank, he expressed frustration about a job that just a year ago he travelled the world campaigning to secure.

“I’d be happy to be fired, by the way,” Banga said. “I can go back to my private-sector life. Much more interesting.”

Banga was selected by President Biden to bolster the bank’s efforts to combat climate change and inject a new sense of urgency into a lumbering institution that was founded in the aftermath of World War II. His appointment came after the resignation of David Malpass, who was appointed by President Donald J. Trump and who frustrated the Biden administration and many Democratic lawmakers when he equivocated about the causes of climate change.

In his first year on the job, Banga has encouraged wealthy countries to increase their contributions to the bank, and he recently took steps to restructure its loan guarantee program to increase private renewable energy investments. —NYT