World Bank president David Malpass will step down from his post at the end of June, nearly a year before his term expires.
The bank issued a statement on Wednesday saying Malpass, who was appointed to his position by former US president Donald Trump, had informed the board of his decision to step down after four years “to pursue new challenges”.
“It has been an enormous honour and privilege to serve as president of the world’s premier development institution alongside so many talented and exceptional people,” Malpass said in a statement.
In an internal email to staff seen by the Financial Times, Malpass said that while his intention to step down over the summer would coincide with the end of the bank’s fiscal year, “the next few months” would “provide a good opportunity for a smooth leadership transition”.
The US and other big World Bank shareholders have been pressuring the institution over the past year to step up efforts on tackling global challenges, including climate change, alongside its traditional mandate of tackling global poverty.
That pressure intensified after Malpass refused to say whether he believed in human-caused climate change at a conference in September, despite repeated questioning. He later said he had been misunderstood.
Last week, US Treasury secretary Janet Yellen urged the bank’s leadership to “quickly” put in place reforms to free up more money to address climate change.
Speaking in Washington on Thursday, less than a fortnight after a trip to three African countries, Yellen focused on her concerns about the World Bank. It should “expand its vision to include addressing global challenges” and help lower costs for countries needing funds to do so, as well as engage in “stronger” mobilisation of private finance, she said.
The US is the largest shareholder in the World Bank, and traditionally appoints its president.
Reform of the multilateral development banks, including the World Bank, has risen on the global policy agenda as wealthy countries are confronted by increasingly urgent questions about who pays for the catastrophic impact of hurricanes, floods and wildfires.
Smaller and less-wealthy nations have pressed to build a UN coalition to secure funds that would help them tackle the consequences of global warming without increasing their debt burdens to crippling levels.
The US has led calls from developed countries for reform of the World Bank and other financing institutions. Last year, Yellen asked the bank to develop an “evolution road map” to show how it would incorporate climate and pandemic preparedness into its operating models.
On Wednesday, Yellen thanked Malpass for his service to the World Bank, and said the US would put forward a candidate following a “transparent, merit-based and swift nomination process”.
Yellen said the new candidate would “carry forward” work “to evolve the multilateral development banks to better meet the challenges of the 21st century”.