It’s decision time at the World Bank.
This week, the bank — along with the International Monetary Fund — holds its spring meetings in Washington. There, World Bank governors and shareholders are expected to mull over the group’s new vision: to help reduce extreme poverty to 3 percent and raise income of the poorest 40 percent of the population in each country by 2030.
The idea is an integrated strategy for all the bank’s affiliates, a first in the bank’s history. As Jim Yong Kim, the World Bank Group president, has noted: “For a very long time, they have coexisted, but they haven’t really worked well together.”
How far the bank will go to achieve the ambitious poverty-reduction goal will hinge on its leadership as much as its rank-and-file.
For aid advocates, Kim’s vision is a step in the right direction, and they hope to hear more about it during the meetings. They want him to share specifics, moving from boardroom conversation to a concrete road map.
One area many believe the World Bank should look at is the International Development Association, which is up for replenishment this year. It’s high time that the bank’s anti-poverty arm undergo serious reform in the face of changing socioeconomic realities in the developing world.
Getting buy-in from the board
Kim hopes his anti-poverty vision will be endorsed by the bank’s governors when they meet this Saturday.
“So far, we have a lot of positive feedback,” Kim said during a talk Wednesday. “These goals have been embedded with our executive directors.”
The harder part, it appears, is convincing the governors to endorse the strategy. Kim expects that during the ministerial meeting, “a lot of questions” will be asked: How is the vision going to work within the World Bank bureaucracy? How is it going to impact lives?
After overcoming that hurdle, Kim said the real work begins. The bank will “present a real strategic plan that would cut across the World Bank Group,” should the governors give “a strong endorsement” of the strategy.
For Scott Morris of the Center for Global Development, the endorsement by the bank’s shareholders holds the key.
“Will the bank be willing to say ‘no’ to some of its largest borrowers when a proposed project fails against the tests defined under the new strategy?” Morris asked. “And will the bank’s biggest shareholders be willing to support even more bank engagement in middle-income countries, which is also implied in the goals themselves?”
It will take a lot of political muscle to make this strategy work, Lindsay Coates, executive vice president of InterAction, told Devex.
“I think the rhetoric is there,” Coates said. “I think the devil is in the political will and implementation.”
The World Bank, she suggested, is an institution that cares about measuring success. So one way to bring substance to rhetoric, she said, is for indicators such as income inequality and wage gap to “become normalized within the bank.”
Like many of her peers, Emma Seery of Oxfam International is waiting to see the bank’s detailed plan.
“What we have right now is a strong vision statement from President Kim but very little on what the World Bank would actually do to deliver on that,” Seery told Devex.
Calling for IDA reform
Ambitious as the vision may sound, global development advocates say the plan is achievable and the World Bank just needs to look at its anti-poverty arm to make things happen.
IDA, they say, should address how to help its recipient countries that are now attaining middle-income status. At the same time, it should also prepare for ways on how reforms can truly transform fragile and conflicted-affected states, which may well be the bank’s next-in-line clientele.
InterAction’s Coates recommended that the bank rethink the roster of countries that are eligible to participate in IDA and the kinds of projects the agency needs to implement.
Kim said during Wednesday’s talk that the World Bank is “happy” to work with middle-income countries.
“But we do have views – evidence-based views – on what works, and we want to bring those to the table in our discussions with our partners and clients,” Kim said.
IDA isn’t planning to leave behind graduating clients. When IDA shareholders met last month for the 17th replenishment conference, they crafted a plan for so-called transitional support to these countries. To access money from IDA, graduating countries would need to meet the following eligibility criteria:
Gross national income per capita below the historical threshold at the time of graduation.
A significant poverty agenda, as measured by poverty levels and other indicators.
A significant prospective reduction in available financing from World Bank after graduation from IDA.
IDA shareholders agreed India would be eligible for transitional support during the 17th replenishment period.
Once middle-income countries graduate from IDA, fragile and crisis-hit countries will likely make up most of the agency’s clientele. If that happens, “it would be harder to drive change in all places,” Coates said.
During Wednesday’s talk, Kim acknowledged that “not all of us are happy” about the bank’s work in fragile states.
IDA shareholders recently agreed on an ambitious agenda for fragile and conflict-torn states that would entail:
Designing strategies that address drivers of conflict.
Creating responsive operational policies that can be adopted in low capacity and high-risk environments.
Shifting more resources to the front lines.
Increasing funding to respond to the needs of fragile states.
There’s a need to rethink the projects IDA should be investing in given the changing face of global poverty, many aid advocates agree.
“If you’re talking about country where there is great social inequality but great growth, that’s a different set of programmatic challenges than if you’re talking about a country that is basically poor across the board,” Caotes said.
For Oxfam’s Seery, IDA can channel its money through direct budget support to provide some flexibility for developing countries to manage their own resources. The money can, she suggested, back long-term training of teachers and doctors, or improve tax collection capacity.
Beyond direct budget support, IDA can look for other financial instruments like cofinancing initiatives, such as the Global Partnership for Education in countries like Niger and Burkina Faso, Seery said.
Coates and Seery’s views are shared by many of their peers who have been gathering at civil society forums all week in Washington. If the World Bank president needs more allies in his push for reform, he will find them there.
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