The 2017 World Bank Spring Meetings — which begin today and continue through the weekend — will be subject to the same whispered undercurrents we’ve heard at other global gatherings these past few months: Trump, Brexit, populism, protectionism, and nationalism. And there’s no doubt that these political trends are gale-force headwinds for organizations, such as the World Bank, seeking a more prosperous, globalized, connected world — but requiring taxpayer funds from the likes of the United States and United Kingdom to operate.
These challenging times may crystalize a new era for the World Bank, an organization many in the global development community worry is losing purpose as ballooning private capital flows and rising powers such as China, India and Brazil have challenged its existence over the past two decades. These existential questions pre-date President Jim Kim, and he used his first term to try to refashion the world’s largest multilateral development bank into something more attuned to global challenges such as pandemics, refugees and climate change.
Internally at the World Bank, important initiatives in those areas were overshadowed by organizational reforms that sparked a prolonged and vocal backlash. Recent staff surveys suggest that there remains as recently as last summer confusion over the strategic direction of the massive institution, which boasts more than 15,000 employees. And World Bank veterans with whom I’ve spoken worry that Kim’s interest in global public goods is neglecting the core focus of the bank’s work in developing projects and making loans.
Now, facing the external challenge of rising skepticism about global development institutions like the World Bank and headed into his second term, President Kim is using these meetings in Washington, D.C., to communicate a clearer, more comprehensive strategy for the institution — one that leverages all the core assets of the World Bank Group and could set it up for a new era of relevance even amid political turmoil in donor nations.
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The strategy, simply put, calls for the World Bank to become the key leverage point that moves trillions of dollars in private capital into fragile and emerging economies to create jobs and stability and stem migration, climate change, and terrorism. If it sounds tailor-made to appeal to the occupants of 10 Downing Street and the White House, that’s a feature, not a bug. But more than any fleeting political message, this is a strategy that recognizes the World Bank’s project-based approach of old is no longer as relevant when what’s required is trillions, not billions, of dollars of investment in global development.
It’s a radical notion that positions the bank more as a modern financial engineer than a lender of old. But it has the benefit of addressing reality: Needs for investment, especially in areas such as infrastructure, far exceed the amounts of concessional finance available. Private capital is the essential ingredient, and if the World Bank can mobilize it and ensure projects safeguard people and the environment, it stands to gain new stature as a critical global player.
An important piece of this strategic puzzle is Kim’s creation of a new CEO role for the two major lending institutions in the World Bank Group — the International Bank for Reconstruction and Development, and the International Development Association — and the appointment of the widely respected Kristalina Georgieva to the role. With contentious internal reforms behind him and a new CEO working to make the core World Bank institutions more nimble and modern, this could be not just the start of a new term, but a new beginning for the World Bank.
Many key questions remain to be answered, of course. In particular, how a transformation this dramatic can be executed in an institution that’s been doing business the same way for decades and how that impact will be measured. Will safeguards be diminished to entice private capital? Will new types of staff and consultants be required? Will old business opportunities for implementers be lost and new ones created? How much private capital does the World Bank Group mobilize today and how much could that increase given the urgency of the issues it needs to tackle? Kim has made clear this is not about “returning to the bad old days of privatization,” anticipating skepticism from civil society groups. But for a global development community eager to see its largest institution succeed, this is a vital moment.
As we kick-off our in-depth coverage of the World Bank Spring Meetings, Devex will be asking these and other questions of the many stakeholders in attendance. You can follow our reporting and a round-up of all World Bank media coverage and tune in for a series of Facebook live interviews Devex and the World Bank will be conducting over the course of the week. What do you think of this new strategy and what questions do you think Devex reporters should be asking? Follow our reporting team on Twitter and share your insights and ideas to help inform our coverage for this week’s meetings, a critical moment for the World Bank and for global development.