‘Solidarity’ is key to facing multiple crises, World Bank official says

With the world facing numerous shocks at once, from spiking food prices to heavy debt burdens, the World Bank’s Axel van Trotsenburg is eager to show the situation is under control while also stressing the urgency of the moment. It’s a balancing act that the bank’s managing director of operations has honed in his 25-plus years in leadership at the anti-poverty lender. As he starts the interview with Devex on Tuesday, he mentions that he has some 60 meetings on his calendar this week during the Spring Meetings. About half of them are country-specific, a sign of the needs across lower-income nations. “We’re living through multiple crises,” he says, in what has become the meetings’ common refrain, heard on everyone’s lips from ministers to bank officials to policy analysts. “We are trying to do what is, in my mind, a dual task. We do crisis support. But we also are very mindful of the really hardcore development agenda that needs to be supported,” he says. This includes the longer-term poverty reduction programs that are core to the bank’s work. The bank estimates that 97 million more people are living below the poverty line of less than $1.90 a day compared to before COVID-19 hit. Years of progress in fighting extreme poverty have been lost. Van Trotsenburg repeatedly comes back to education. He notes that low-income countries saw huge learning losses during the first two years of the pandemic, which will lead to long-term economic damage. Some 24 million children risk never returning to education after initial school closures, according to a bank study done with United Nations agencies. Similarly, he notes rising insecurity around the world that is locking millions of people in cycles of extreme poverty — citing Afghanistan and Yemen as acute examples. Van Trotsenburg says he wants to find opportunities in the crises. Russia’s invasion of Ukraine exposed “vulnerabilities” around energy security, he says, which could be an impetus for a faster transition to renewable energy sources. But it would be a “heavy lift” to get to 60% of all energy coming from renewables by 2030, he added. That ambitious goal — which is laid out in a G-7 report for its own wealthy members to achieve 2010 net-zero targets — is coming up often in his meetings this year, and it would take all hands on deck to get there. The World Bank has faced criticism from climate advocacy groups at times, who accuse it of acting too slowly to fund the energy transition in low-income countries. At the 26th U.N. Climate Change Conference in November, Selwin Hart, a U.N. special adviser on climate, called the bank an “ongoing underperformer.” Van Trotsenburg, however, says the bank is pushing ahead with a climate agenda that takes into account the needs of the world’s lowest-income nations. The bank is developing analytical tools so that its financing is fine-tuned to each country. Officials expect to announce these tools later this year. “You cannot say on climate, ‘Oh there is another crisis, so let’s have a little pause.’ That is not acceptable,” he insists, returning to his mantra of not letting the Russian invasion of Ukraine overshadow all else. Since COP 26, the bank has mobilized about $15 billion in climate finance, he says. For 2022, the bank is targeting $26 billion. Just over half of the money is going toward adaptation measures meant to help countries cope with the realities of climate change. “I challenge anybody to show who has actually done more in climate financing. People are talking and millions are being heard, but I haven't seen the billions being committed,” he says. One of his jobs at the bank has been leading the replenishment of IDA, the bank’s fund for the lowest-income nations. Normally, it’s a three-year cycle, but IDA19 was wrapped up in two years as the bank frontloaded the money during the pandemic. “We are trying to do what is, in my mind, a dual task. We do crisis support. But we also are very mindful of the really hardcore development agenda that needs to be supported.” --— Axel van Trotsenburg, managing director of operations, World Bank Is he concerned that the donors might get fatigued, particularly as they face economic headwinds and slowing growth in their own countries? “Look, we're not here at the World Bank to get tired,” he says, declining to speculate what the bank’s shareholders might do this year. The bank will continue to push the donors based on lower-income nations’ needs, he adds: “If I don't ask, who will?” But the reality is that the needs are especially great. Food and energy inflation are battering the world’s poor, and no one knows how long the war in Ukraine will last. A longer conflict will create additional price pressures. Fertilizer prices have already doubled in some parts of the world, and this means farmers on tight margins might produce lower yields. When speaking about Ukraine itself, he stops for a moment to consider the extent of the destruction and lives lost. “We were created from the ashes of the Second World War,” says van Trotsenburg, a dual Dutch-Austrian national, who speaks in a raspy voice tinged with a European accent. “It's actually very personal for the World Bank.” Before he runs off to the next meeting — after noting that he enjoys the “personal touch” of having face-to-face events again — van Trotsenburg takes one last question about what he hopes to see come out of this year’s Spring Meetings. His one-word answer? “Solidarity.” He jokes that people always expect him to say money, but that’s not what he really wants. “It's about solidarity and staying engaged. And I tell you, people get distracted from a lot of things. But if you have developing countries struggling, we have got to show solidarity and we need to stay engaged,” he says. “What I think, sometimes, is these kinds of meetings can create some momentum that in the end, we are in this together.”