Devex Newswire: World Bank meetings go out with an inconclusive bang

The World Bank-International Monetary Fund annual meetings ended with plenty of discord over the agreements that were clinched — with bank President Ajay Banga’s reforms garnering mixed reviews. Also in today’s edition: Is the World Bank sacrificing its original mandate of poverty alleviation in favor of fighting climate change? + Join our workshop today at 10 a.m. ET (4 p.m. CET) to find out how a portfolio career offers endless possibilities for growth and fulfillment in the global development sector. Can’t attend live? Register anyway and we’ll send you a recording. Good enough for now? Thoughts on what was accomplished — and what was not — at the World Bank-IMF annual meetings in Morocco last week depend on who you speak to. I got a range of reactions from folks in Marrakech. For some, Banga was a breath of fresh air who laid out a clear vision to “create a world free of poverty on a livable planet” — i.e., one not made uninhabitable by climate change. For others, the measures he proposed were woefully inadequate to meet this moment of polycrisis — from escalating conflict in the Middle East to the ongoing war in Ukraine to soaring food prices, inflation, and debt distress. For others still, what Banga did produce was a good start but just that — the start of a long and complicated journey. “Some progress but a very long way to go” is how Devex contributing reporter Sophie Edwards puts it in her comprehensive wrap-up of the annual meetings, held in Africa for the first time in 50 years — a symbolically important move given that so much of the bank’s work focuses on the continent. But was it empty symbolism? On the one hand, Banga’s mission to sweat the bank’s existing balance sheet could yield more than $150 billion over 10 years in additional lending — small in the grand scheme of things, but not insignificant. On the other hand, World Bank officials skirted around the subject of a capital increase, which some say is inevitable given the hefty challenges bearing down on the globe. But any additional money relies on the iffy generosity of donors, many of whom are facing their own fiscal constraints back home. “Despite the Moroccan setting and the hugely different — dare I say flashy? — style of the new World Bank president, substantively these annual meetings felt like more of the same,” Kate Donald from Oxfam tells Sophie. “To his credit, Banga seems to recognize the scale of the challenge ahead of the bank, even if some of his prescriptions seem dubious,” Donald adds. “We’ll be keeping a close eye on all this, while pressuring G7 countries to dig much deeper into their pockets.” Read: World Bank-IMF meetings — a start, but still a long way to go A climate tradeoff? The debate over whether the World Bank can take on both poverty and climate change under Banga’s expanded mandate seems to be settled — but not everyone’s convinced. That includes well-known climate skeptic Bjørn Lomborg, who says he doesn’t deny that climate change is important, but argues that poverty alleviation should come first, insisting that people in lower-income countries want to see their kids live past the age of 5, rather than worrying about what will happen in 50 years. And with finite resources, uncomfortable tradeoffs are inevitable. “In a perfect world where we could do everything, we should do everything. But in the real world, we have to confront the fact that we end up making priorities,” he told me at the World Bank-IMF annual meetings. “It’s not rocket science. There’s only one pot of money.” Lomborg is not alone in his logic. Charles Kenny of the Center for Global Development recently criticized high-income countries that claim “no tradeoffs” in climate mitigation and development funding, “despite the fact there is an obvious tradeoff between financing bed nets in Liberia and a solar power plant in Brazil if you are a child in Liberia.” But others criticize Lomborg for oversimplifying an existential threat that is already thrashing lower-income countries. That includes Nobel Prize-winning economist Joseph Stiglitz, who wrote in The New York Times that “Lomborg is correct that climate change is not the only problem the world faces. But he poses a false choice, because it is possible to walk and chew gum at the same time.” Read: Bjørn Lomborg, the climate contrarian who puts poverty first Related: How to make climate disasters pay (Pro) + Access all our exclusive reporting and analysis by starting your 15-day free trial of Devex Pro today. Prioritizing the most vulnerable Much of the World Bank’s climate push will be directed toward middle-income countries that emit greenhouse gas emissions, leaving low-income countries, which hardly contribute to emissions, worried that they’ll be left out in the cold. Enter the International Development Association, the World Bank’s lending arm for the lowest-income countries. IDA is facing a financial cliff, and even Banga has lamented that its paid-in capital is minuscule compared to the overwhelming needs of low-income countries. But it remains to be seen how much wealthy donors will open up their wallets during an upcoming replenishment. Experts I talked to at the meetings said concerns by lower-income countries that their middle-income counterparts will grab all the resources could be ameliorated by a healthy IDA replenishment. Mark Suzman, CEO of the Gates Foundation, tells me that while boosting lending to middle-income countries is critically important, “that cannot come at the expense of focusing on IDA and focusing on the basic needs in low-income countries and the poor and vulnerable who live in middle-income countries.” “In terms of truly concessional capital to the poorest countries on the planet that is available to invest in, what we would argue at the Gates Foundation are the most important critical needs — including human development, human capital formation, basic health care, basic education, basic infrastructure — it is the most important single pool of capital available,” Suzman added. Read: Gates Foundation CEO urges action to repair global north-south schism ‘Global attention continues to fade’ With roughly 1 million residents of Gaza now internally displaced following Israel’s warning for residents in the north to relocate to the south of the tiny coastal strip in advance of a potential ground incursion, many aid groups are reporting an unprecedented humanitarian crisis. As devastating as that is, it isn’t the world’s largest displacement crisis. In Sudan, six months after the outbreak of fighting between the country’s army and the paramilitary Rapid Support Forces erupted in mid-April, an estimated 9,000 people have been killed and over 4.5 million people have been recently displaced. This brings the total displaced within the country to 7.1 million people, according to the International Organization for Migration. “The humanitarian situation in Sudan is catastrophic with no end in sight and civilians are the ones paying the price,” said IOM Director General Amy Pope in a statement. The Sudanese American Physicians Association issued its own statement on Saturday, saying: “We are deeply concerned that even as the humanitarian catastrophe grows by the day, global attention continues to fade. The international community is not meeting its obligations to protect civilians, and we are especially disappointed that countries have only fulfilled one-third of the total United Nations appeal to respond to this crisis.” Related reading: • U.N. chief decries scapegoating of world body over Sudan crisis. • How are USAID and other donors responding to the Sudan crisis? In other news The U.N. Security Council rejected a Russian-proposed resolution for a humanitarian ceasefire in Gaza, with U.S. Ambassador Linda Thomas-Greenfield citing concerns over the country's handling of Hamas’ terrorism and treatment of victims. [UN News] Nigeria is set to receive a $1.5 billion loan from the World Bank by year-end, with an additional $80 million from the African Development Bank on the horizon. [Bloomberg] Russia’s opposition to holding next year’s U.N. climate summit in a European Union member country has left nations scrambling to search for an alternative venue. [Reuters] Update, Oct. 17, 2023: This article has been updated to clarify a quote’s source. Sign up to Newswire for an inside look at the biggest stories in global development.