Georgieva will face World Bank diplomatic test

Subject

World Bank leadership change.

Significance

The arrival of Bulgarian economist Kristalina Georgieva as second-in-command at the World Bank Group may have a steadying effect on the institution, which faces uncertainties over its future size, shape and role as the United States retreats from multilateralism following the election of President Donald Trump.

Impacts

• Georgieva’s insider background and experience as EU budget chief will help her argue for continued US funding of the Bank.
• The concept of an ‘infrastucture finance cascade’ may weaken arguments that the Bank should withdraw from middle-income countries.
• Should the US administration block a World Bank capital deal, emerging economies could desert the Bank and favour new alternatives.