World Bank President Ajay Banga just announced an organizational restructuring aimed at greater “urgency, collaboration, quality and efficiency.”
His counterpart at the International Monetary Fund, Managing Director Kristalina Georgieva, says Europeans need to rethink their culture of “long vacations.”
Some experts have dubbed this year’s gathering of finance ministers and development heavyweights “what to expect when you’re not expecting very much.”
But in a moment of fundamental transformation in geopolitics, trade, multilateralism, technology — and yes, global development — it’s hard not to also expect the unexpected.
My Devex colleagues and I are racing around Washington, D.C., this week to bring you the latest. We’ll be in and out of the Devex Impact House — our hub for development leaders and candid conversations — and hope to see many of you there. Drop a line if you’ve got a hot tip or just want to say hello — via michael.igoe@devex.com.
Here’s a look at where things stand as this week kicks off. I’ll be back in your inbox at the end of the annual meetings with a readout of the biggest takeaways.
If you’ve got 45 minutes to get up to speed on the biggest storylines heading into this year’s annual meetings, my colleague Adva Saldinger has you covered with this Devex Pro Briefing.
Here are a couple of the highlights from her recent conversation with Clemence Landers from the Center for Global Development and David McNair from ONE:
• Playing defense. We’re a long way from the heady days of a few short years ago, when then-U.S. President Joe Biden’s administration was pushing the World Bank and other international financial institutions to think bigger and tackle issues such as climate change and gender equality. Now the bank and its peers are trying to fly “under the radar,” said Landers, while trying to “figure out an agenda that can please [Trump’s] administration.”
• You go first. If there’s one issue that has dominated the agenda for lower-income countries in recent years, it’s debt distress — and the way it hamstrings governments’ ability to invest in other things, such as health systems. The G20 Common Framework for debt treatments is supposed to provide a pathway through some of these debt issues, but McNair said that process lacks incentives for “everyone to jump together.” As a result, he said, it’s begun to resemble that popular internet meme — the one with three different Spidermen all pointing at each other and waiting for one to make a move.
• White whales. Banga has planted his flag on a job creation agenda, even if it’s not entirely clear what distinguishes that from past economic growth goals. “Isn't this what the bank has been doing all along?” Landers asked. But behind that is a “resurgence of focus around the private-sector agenda,” she said, and that includes the “white whale of development finance”: mobilizing private capital.
Read: Will the World Bank-IMF meetings try to fly under the political radar? (Pro)
Read our curtain-raiser: Uncertainty ‘new normal’ as World Bank, IMF meet amid aid cuts, discord
Listen to our podcast: A look ahead to the World Bank and IMF meetings
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Just a few days before the start of the annual meetings, Banga sent an email to staff — obtained by Adva — announcing a plan to centralize a range of functions currently housed within different arms of the World Bank Group.
“By breaking down silos, we will unlock resources, strengthen internal partnerships, learn more from each other, and ultimately deliver better results for our clients,” Banga wrote.
As you may recall, Banga’s presidency has featured a sharp focus on “streamlining” and updating the 80-year-old institution’s “plumbing.” Among other things, the bank chief has repeatedly trumpeted his efforts to shorten the institution’s project approval process. That has all come within the context of Banga’s effort to center the World Bank’s operations around a vision for creating jobs in its client countries.
These latest changes — some of which are already underway but which officially go live on Jan. 1 — will affect knowledge teams, treasury operations, human resources, communications, and more, Adva reports.
It’s not clear at the moment whether this will have an impact on staffing. But in Banga’s eyes, it’s more than a small tweak.
“This is a fundamental shift — from a model that rewards production to one that rewards impact,” he wrote in the email.
Exclusive: World Bank president announces restructuring in staff email
Over at the IMF, Georgieva — in a curtain-raiser speech last week — painted the panorama of a world gripped by “exceptionally high uncertainty.”
You might think that would make the former Bulgarian economics professor the bearer of bad news, but Georgieva’s mood heading into this week was … surprisingly sunny?
The big economic picture is “better than feared, but worse than we need,” Georgieva said, describing a “world economy that has generally withstood acute strains from multiple shocks.”
But, of course, there are blinking red warning lights — and some of them have been blinking for a long time (see: debt distress). Add to that the decline of development assistance from advanced economies, which Georgieva described as “one of the most dramatic casualties” of constrained spending.
In response, she said, aid recipient countries have to rely more on “self-help,” and that means stronger domestic revenue systems.
“You cannot have a functioning economy if your tax-to-GDP is 9%, 10%, 11%,” she said, calling for a minimum target of 15% of gross domestic product.
But the picture looks different in different places. Sub-Saharan Africa is primed for business-friendly reforms and regional integration, Georgieva said — the combination of which she believes “could lift the real GDP per capita in a median African country by 10%.”
But because many investors still lump African countries together in “one big pot,” Georgieva said the continent needs to see more neighbors helping neighbors.
“It is not any more viable to have a country in Africa deciding to go for a coup and then destroy the institutions and the neighbors to [not do anything about it],” she said.
India, meanwhile, is a “key growth engine,” thanks to policy reforms and digital infrastructure — including a digital ID system that Georgieva said has proved the doubters wrong.
And then there’s Europe, to which the IMF chief dished out some “tough love” in the spirit of boosting the continent’s economic competitiveness.
“Where I come from, we actually plan our vacations around work, not work around our vacations,” Georgieva said, adding that the golden age of generous European vacation schedules should be “kind of over.”
The IMF’s SDRs are a key instrument for keeping the SDGs on track during a crisis. That sentence was brought to you by: reasons people tune out development jargon.
But actually, despite their desperate need for a catchier moniker, these Special Drawing Rights — a pool of reserve assets held by the IMF — are a big deal. If you recall, during the COVID-19 crisis, SDRs were tapped to the tune of $650 billion to help countries weather the economic fallout.
And there’s been a persistent call to make them an even bigger deal.
In a letter to the IMF Executive Board today — and shared with me prior to public release — over 65 NGOs call for the body to make good on commitments to develop an “SDR playbook” that would strengthen the role of these currency reserves during crises. For example, the development finance crisis currently underway.
“From the accelerating climate crisis, to the consistent failures of the Global North to support the development needs of the South, to the recent threats to global economic stability resulting from the unilateral actions of singularly powerful nations, the need to boost development finance and strengthen the global financial safety net has rarely been clearer,” the letter reads.
Since the SDR “lifeline” that was thrown during COVID-19, these assets have not fulfilled their potential due to a variety of structural limitations, the organizations argue.
“The development of an SDRs Playbook would provide an opportunity to change that — to maximize the impact and efficacy of the SDR system as an indispensable part of the global financial system,” they write.
From our archives: How the World Bank can turn dormant SDRs into billions in new lending
Maybe I’m biased — journalists are human, too — but I think Devex Impact House @ WB/IMF is the place to be on Oct. 15 and 16, and I hope you’ll join me and my colleagues there.
We’ve got a lot of big names who have carved time out of a busy week to bring you the latest on what they are thinking, hearing, and doing at a critical moment for multilateralism and global development finance. That includes U.S. Rep. French Hill, the World Bank's Axel van Trotsenburg, Hannah Ryder from Development Reimagined, Samaila Zubairu of the Africa Finance Corporation, and many, many more.
We’re talking about multilateral reform in an age of great power competition; rethinking aid and philanthropy from the ground up; unlocking domestic resources for development; can the Group of 20 major economies deliver for Africa; the promise and pitfalls of digital public infrastructure, and much more.
And hey, I’ll even be up on stage recording a live edition of our podcast with Adva and Devex President and Editor-in-Chief Raj Kumar.
For information or to register, just click here.
Good luck this week — and stay hydrated.
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