The World Bank and International Monetary Fund annual meetings officially kick off Friday in Lima, Peru. This is the first time in nearly 50 years the meetings have been held in Latin America, and they represent the latest installment in a 2015 global development calendar that has spanned continents and reshaped the global conversation about poverty.
Global development organizations have their marching orders: 17 new Sustainable Development Goals that span everything from ending extreme poverty to protecting the world’s oceans. At the same time the World Bank is undergoing its most significant reform in decades and has adopted its own new mission statement under President Jim Yong Kim’s controversial leadership.
So what sets these annual meetings apart from the rest? Devex compiled a list of five things to watch for this weekend and beyond:
1. Will finance ministers put their own money on the table?
This is the first meeting of global finance ministers since the launch of the Sustainable Development Goals, and since they convened in Addis Ababa, Ethiopia, for the Financing for Development Conference. In those previous global gatherings, one common theme emerged: Foreign aid won’t pay for the SDGs. Private investment and, increasingly, domestic tax resources from developing countries will.
In Lima, the people responsible for managing public budgets will be in the same place at the same time, talking about how to end extreme poverty and build more inclusive societies. The World Bank’s annual meetings present a well-timed opportunity for finance ministers to show they’re serious about the sustainable development goals and about the necessity of domestic public budgets to finance their achievement.
“Unless and until finance ministers are willing to commit their governments to pay for the SDGs, they’re not going to be relevant enough to the people who need them,” said Paul O’Brien, vice president for policy and campaigns at Oxfam America.
“The thing we’re going to be watching for is: are they going to be collecting revenues in more progressive ways and spending them in order to achieve poverty reduction,” O’Brien added.
The annual meetings agenda isn’t centered on explicit commitments, but it will provide plenty of opportunities for finance ministers to articulate their plans publicly — and for civil society organizations to take note.
2. Lending numbers have increased. What does that mean for development?
In the midst of a tumultuous reform, the World Bank’s performance is under a microscope at these annual meetings.
Following financial reforms in April 2014, the International Bank for Reconstruction and Development’s lending commitment expanded from $15 billion annually to $25 billion annually. And overall World Bank lending commitments from fiscal year 2013 to 2015 increased by approximately $10.94 billion.
The institution’s President Jim Yong Kim has already begun to argue for a capital increase in order to meet rising demand and will meet with bank shareholders in Lima this week to continue to make his case.
A capital increase would be a win for Kim and the institution as a whole — providing the multilateral donor with needed room to grow as the post-2015 development era kicks off and new competition from the China-based Asian Infrastructure Investment Bank and New Development Bank enter the development finance fray.
Questions remain about what more World Bank lending means for development impact. More financial commitments from the world’s largest multilateral donor don’t necessarily translate into better results and poverty reduction. This will be a point of discussion this weekend — and a question that Devex will continue to explore.
3. Will we see a shift in the safeguards and human rights debate?
At the United Nations General Assembly last month, U.N. Special Rapporteur for Human Rights and Extreme Poverty Philip Alston dropped a bomb on the World Bank’s human rights approach. Alston called the bank a “human rights free zone” and admonished the institution’s leadership for not taking a firmer stance on human rights protections in its operational policies.
Bank leaders point to their founding documents, which prohibit interference in a country's internal politics, and they note that they are owned by shareholders, not all of whom agree on the explicit connection between human rights and development.
Those fundamental questions will continue to complicate an ongoing review process of the bank’s social and environmental safeguards, which has seen a long process of contentious consultation and revision. Safeguards protests have become a common theme at World Bank global gatherings. It will be worth watching what shape those protests take in Lima — and if they reshape the safeguards debate in any meaningful way.
4. Should we all celebrate World Bank Annual Meetings Day?
On Oct. 8, 1879, Peru and Chile clashed in the culminating naval battle of the War of the Pacific. Now Oct. 8 is a national holiday in Peru. This year, thanks to the annual meetings, so is October 9.
Lima’s traffic is infamous. The city is looking for public transportation upgrades to cut down on the congestion. But to ensure finance ministers, VIPs, press and politicians make it from meeting to meeting, Peru has declared an extra day of national holiday.
Let’s hope the Chileans don’t take offense.
5. How will the annual meetings set the stage for the Paris COP21 climate talks?
The 21st annual Conference of Parties in Paris is less than two months away and World Bank special envoy for climate change Rachel Kyte has been actively engaged in putting climate friendly development policies into practice.
Speaking at the World Bank’s headquarters last month, Kyte said that each country’s climate commitments, or “intended nationally determined contributions,” will influence the future of bank lending.
Kyte will be leaving her post at the bank following the anticipated climate gathering in Paris to join the U.N. Sustainable Energy for All Initiative as CEO.
Climate smart food, investing in renewable energy, and building sustainable cities feature as key topics of discussion in Lima; but the bank has also been criticized for the fossil fuel investments it continues to make in countries that lack readily available alternatives.
The past month has seen a flurry of climate activity as countries assemble and disseminate their individual climate plans. The World Bank’s leaders say they want the institution to be a climate action stalwart, but how hard will they push their clients when lending quotas are on the line?
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