After a week pounding the pavement at the World Bank and International Monetary Fund annual meetings, here's my wrap-up of what they mean for COP, the next G-20 summit, and the bank itself.
Also in today’s edition: Sweden’s new government has new ideas about aid, and the Gates Foundation’s war on polio.
Sharp turns ahead
“The world is in a dangerous condition.” The words of Sri Mulyani, the finance minister of Indonesia, which heads the G-20 this year, summarized the attitude of last week’s World Bank-IMF annual meetings, which took place amid multiple shocks, from the pandemic fallout to Russia’s war in Ukraine.
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Even with the joy of being back in person for the first time since 2019 — the Moroccan tagine being served (the meetings are being held in North Africa next year), and the Indonesian coffee meted out in delicious doses in G-20 branded cups — the overarching mood was grim.
In summary: The risk of a recession is rising, the food price crisis is on everyone’s mind, and climate change, shockingly, was not solved. Worse, we are seeing reversals to development and progress in reducing poverty has stopped. Central bank policy tightening in high-income nations is spilling over to vulnerable populations, which U.S. Treasury Secretary Janet Yellen acknowledged.
So where do we go from here?
• World Bank reform: There is a growing chorus of calls for reforms at the anti-poverty lender — led by the United States and Germany — including for more aggressive capital disbursements and spending on climate. However, there is pushback from some low-income nations that are not prepared to abandon gas, which they see as key to their development. A major argument is that high-income nations that are historic polluters should bear the burden of the energy transition. In a G-20 “chair’s summary” of the annual meetings released three days late — seemingly indicating disagreement over wording about the impact of Russia's invasion of Ukraine on food and fuel inflation — the G-20 gave multilateral development banks until spring to update the bloc on the status of raising their lending in line with a much-discussed report that presented a road map for increased financing.
• The 27th United Nations Climate Change Conference: Much of the climate finance debate will come to a head at the meeting in Sharm el-Sheikh next month. Lower-income nations are demanding “loss and damage” payments and that high-income nations, at the very least, fulfill their pledges on $100 billion in annual climate finance — promises made long ago and never kept. A strong sense of double standards is emerging. And on Sunday, as the meetings came to a close, the V-20, a group of 58 self-described climate-vulnerable nations, called for “immediate reform of the sovereign debt restructuring architecture.” Specifically, they want to redirect debt payments to investments in clean energy transitions and climate resilience — a kind of debt-for-climate swap. The group has some $435 billion in debt servicing payments due in four years.
• G-20 in Bali: Mulyani, a former World Banker, will have her work cut out for her. Just as the climate conference is ending, world leaders will be landing in Bali for the Group of 20 major economies’ last summit of the year, before Indonesia hands the wheel over to India.
IMF chief Kristalina Georgieva, in her last press conference of the week, warned against global fragmentation, saying that in closed-door meetings low-income countries were the most vocal about the need to ensure continued economic integration between nations. Her message going ahead? “Buckle up, and keep going.”
Georgieva said she also urged Russia to “stop the war” in Ukraine. Moscow’s representatives blocked consensus on a joint communiqué, as it would have blamed the war for spiking food and energy prices. In the end, the chair of the International Monetary and Financial Committee released the statement on her own, blaming Russia’s war for “detrimental repercussions for the global economy.”
Russia did not send a high-level delegation to Washington for the meetings, officials at the meetings confirmed to Devex, as key Russian officials are under sanctions, it seems.
Catch up on all our coverage of the World Bank-IMF annual meetings.
+ For Devex Pro members: Two World Bank experts lay out the short-term intervention to help the most vulnerable deal with food price shocks. Not gone Pro yet? Start your 15-day free trial of Devex Pro to unlock the piece.
Once and for all
$1.2 billion
—That’s the sum the Bill & Melinda Gates Foundation is committing to eradicate polio in Pakistan and Afghanistan, the last two countries where it is endemic, and prevent the spread of new vaccine-derived variants of the virus such as those that have recently emerged in the U.S. and Europe, my colleague Stephanie Beasley reports.
The foundation’s CEO Mark Suzman made the announcement Sunday at the opening of the World Health Summit in Berlin and ahead of a polio pledging event that kicks off today.
Read: Gates Foundation pledges $1.2B to end polio as virus stages a comeback
Border trouble
Acting Director of Africa CDC Dr. Ahmed Ogwell tweeted on Saturday that he was "mistreated" at the Frankfurt airport while en route to the World Health Summit, saying that instead of attending the summit he returned to Africa. He compared it to the International Aids Conference in July in Canada, where many participants were denied visas.
Summit organizers tweeted that this was "very concerning,” echoed by WHO Director-General Tedros Adhanom Ghebreyesus and AMREF Africa Group CEO Githinji Gitahi, who tweeted, "It's tiring begging people to allow you to do your work." But Dr. Ayoade Alakija, special envoy to the ACT Accelerator, tweeted a clarification that Ogwell’s entry into Berlin was not actually denied, noting she had been "dealing with German authorities & @WHO & @WorldHealthSmt on this matter."
+ Follow coverage from Devex global health reporter Sara Jerving for everything you need to know from the World Health Summit.
Lowering expectations
On Friday, Sweden’s incoming Prime Minister Ulf Kristersson, voted into office by his parliament today, said the country would drop its aid target of 1% of gross national income, my colleague Vince Chadwick reports. You heard it here first: Last week, my wide-ranging interview with Open Society Foundations President Mark Malloch-Brown included a prediction that Swedish aid would be next to see big cuts.
That’s not all for the third-most generous donor in the OECD: Sweden’s far-right influenced coalition agreement, released on Friday, also highlighted the need to use aid as a tool to counter migration.
Read: UN, EU push back as Sweden drops 1% aid target
In other news
At the World Health Summit, a WHO official blamed Uganda’s health worker shortage for the spread of Ebola, calling on the global community to prioritize bulking up global health forces. [Devex]
Saudi Arabia promised Ukraine $400 million in humanitarian aid and stated its willingness to support ongoing mediation and de-escalation. [Reuters]
An International Rescue Committee aid worker died Friday following an explosion in Ethiopia’s Tigray region, where the ongoing civil war has been attributed as a major cause of delay in the country’s request for debt restructuring. [VOA and Reuters]
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About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
