Ajay Banga, the Nestlé intern who became president of the World Bank

In 2015, in a keynote address to the graduating class of the Indian Institute of Ahmedabad (IIM-A), Ajay Banga recounted how when he’d completed his own studies at that same institution decades eariler, he still did not have a clear calling in life: “I had no clue what I was going to do with my life, other than join a great global firm, Nestlé. That was my grand plan: Get with somebody good. Get with somebody global.” That Nestlé intern on Friday officially became the new president of the World Bank. His experience at several multinationals, especially his time as CEO of Mastercard, gives him a global experience that was viewed as a perfect fit for his new position.

Banga was born in November 1959 into a Sikh family in Pune (India), where his father, an army officer, was stationed. His family is originally from Jalandhar, in the Punjab. He graduated with honors in Economics from St. Stephen’s College in Delhi, and subsequently obtained a postgraduate degree from the country’s leading business school.

He began his career in 1981 at Nestlé, where he entered the commercial area as an intern and held different positions for 13 years, until he was signed by PepsiCo, where he played a decisive role in launching its fast food franchises Pizza Hut and KFC in India as the economy was liberalized. In 1996, he joined Citigroup. He came to the United States with this financial institution and acquired U.S. citizenship in 2007. Two years later, he went to work for Mastercard, becoming CEO the following year.

At Mastercard, Banga focused decidedly on emerging markets, especially in Asia. He transformed the company, tripling revenue, growing profits six-fold and increasing market capitalization from less than $30 billion to more than $300 billion.

“The world is becoming smaller and more interdependent, making leadership and developing a sense of globality more important than ever,” Banga argued in the book A Leader Listens, where he collected his philosophy of leadership.

For Banga, in today’s world of rapidly advancing technology and shorter innovation cycles, there is no room for procrastination, and leaders must develop a sense of urgency. But in his opinion, the need to make urgent decisions and execute them should not come at the cost of listening to everyone. The new president of the World Bank is in favor of taking “thoughtful risks” instead of waiting for perfect information, which is rarely possible. He also advocates “being competitively paranoid.” That is to say, not being afraid, but constantly questioning everything and asking yourself if you might be missing something.

In addition, Banga believes that a good leader must develop a global view and favor diversity. “A group of similar people tends to think in similar ways, reach similar conclusions, and have similar blind spots. To guard against that, you need to harness the collective uniqueness of those around you to widen your field of vision — to see things differently, to fail harder, to innovate, and to question everything. Widening that field of vision means widening your worldview,” he told the class of graduating students in 2015.

Experience running a global organization like Mastercard has prepared Banga for his tenure at the World Bank, says Homi Kharas, a senior fellow at the Brookings Institute’s Center for Sustainable Development in Washington, D.C. In a Brookings podcast recorded in late February, Kharas noted how, midway through his tenure at Mastercard, Banga created a center for inclusive and sustainable growth. “And that is actually what the World Bank is supposed to be all about. So many of the topics and the issues, the substance of the discussion, will not be foreign to him. It will actually be things that are true to his heart. And he came at it and put something into practice in 2014, well before many of these things became fashionable in development circles. So the chances are that these are things he truly believes in.”

The highest form of leadership, according to Banga, is to do well and do good. “It’s the idea that you can pursue what is in your best interest as well as what is in the interest of others. It’s the recognition that your success is tied to the success of others. You know the saying, it’s lonely at the top? It’s only lonely at the top when you don’t bring other people along with you,” he said in his IIM-A address.

After being proposed by U.S. President Joe Biden for the position in February, Banga was appointed a month ago, replacing David Malpass who was proposed by Donald Trump and left early after failing to demonstrate commitment to the fight against global warming. Banga once served with President Barack Obama on an advisory council, has worked on various initiatives with Vice President Kamala Harris, and is on good terms with Treasury Secretary Janet Yellen.

Although it is an unwritten law, traditionally a European candidate takes the post of managing director of the International Monetary Fund (IMF), while an American candidate gets to head the World Bank, which lends its funds mainly to developing countries. The United States is the main shareholder of the World Bank.

On May 3, following the appointment, Biden said that “Ajay Banga will be a transformative leader, bringing expertise, experience, and innovation to the position of World Bank President. And together with World Bank leadership and shareholders, he will help steer the institution as it evolves and expands to address global challenges that directly affect its core mission of poverty reduction — including climate change.” Biden also underscored that the new president’s background will make him “integral in bringing together the public and private sectors makes him ideal for promoting public-private collaboration.”

According to the Brookings expert Kharas, the great challenge for the new World Bank president will be to make the institution relevant in many middle-income countries., which have chosen to turn to other sources of financing. in particular to bond markets that suffer from great volatility. “So Mr. Banga’s core challenge is going to be to persuade people that there is a need for a far larger World Bank. By far larger, I’m talking about three times, five times. I don’t know the exact size, but many multiples of where the World Bank is today. And to scale it up and to bring not just the World Bank’s own financial firepower to bear and their analytical knowledge, but also to crowd in finance from all kinds of other private financiers so that one can actually undertake very large investments that are going to be needed if countries are going to move to this integrated climate-cum-development agenda at scale and achieve fairly decisive transformations,” he noted in the podcast.

When Banga told the graduating class of his alma mater that he did not know what his life would turn out like, he added: “Don’t stress if you haven’t got a detailed plan for your life. Anyone can have a good idea or plan; what makes it great is execution.” Now, at the World Bank, it is his turn to execute.

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