The evolving conversation on World Bank relevance

World Bank Group President Jim Yong Kim at a high-level panel leading up to the 2015 Spring Meetings. Photo by: Simone D. McCourtie / World Bank /  CC BY-NC-ND

The streets of downtown Washington, D.C., are abuzz with signs of the World Bank’s spring meetings. Banners line the outside walls of the global financial institution’s headquarters, and meeting participants from around the world representing the public, private and NGO sectors are crowding the sidewalks.

But despite the pomp and circumstance, conversations within the halls of the world’s largest multilateral donor center on the institution’s very real struggle to stay relevant in a rapidly evolving fight against poverty.

Such conversations about the World Bank’s relevance are nothing new. President Jim Yong Kim’s controversial reforms that began in 2013 have raised concerns among staff about the future direction of the bank. And new development actors in the private and public sectors have created a crowded community of poverty-fighting organizations vying for their place in the industry. But at this year’s spring meetings, questions about the World Bank’s relevance have evolved to a new level — wrought with a mix of heightened concern and cautious optimism.

Less than one month ago, the new China-led Asian Infrastructure Investment Bank gained the support of major European powers, including Great Britain, France, Italy and Germany — a signal of growing prominence for new multilateral institutions that some say pose a threat to the 70-year reign of the Bretton Woods-anchored World Bank. Rumors are floating around this week that AIIB representatives have come to the spring meetings in Washington, D.C., in part to recruit disgruntled World Bank staff to their ranks.

And if so, they might find plenty of potential candidates.

Most recently, many current and former bank staffers are upset over the bank’s decision to place lesbian, gay, bisexual, transgender and intersex activist and World Bank Senior Country Officer for the Maghreb Fabrice Houdart under investigation for allegedly leaking a draft of the bank’s social and environmental safeguards.

Staffers and social activists accuse the bank of fostering a culture of retaliation — a culture that would threaten to undermine bank legitimacy and staff inclusion. Houdart, known for organizing staff protests within bank headquarters and for being critical of bank reforms and of senior management via blog posts, is regarded by many as a whistleblower who was unfairly singled out for leaking an internal document, an act he denies and industry insiders say happens all the time at the bank and other large institutions in Washington, D.C.

Currently, Houdart is forbidden from speaking to the press about the investigation while it is underway.

Civil society leaders at this week’s spring meetings are eyeing the investigation carefully and are continuing to push for robust World Bank safeguards protecting the environment and the rights of minorities, including LGBTI individuals. A final version of the new World Bank safeguards is expected to be put into place by the end of the year following a review by the board.

On Wednesday, Devex President and Editor-in-Chief Raj Kumar sat down with the World Bank president and discussed a variety of topics, including the growing strength of the new China-led investment bank.

Kim has publicly welcomed the new China-led bank as a partner in the fight against poverty. In his interview with Devex, Kim highlighted that support for AIIB from Western governments such as the United Kingdom will mean that the new institution will have to address safeguards and listen to the demands of civil society organizations.

“I’ve said to all of the leadership in China ... that we’re willing to do anything we can to help them, because multilateralism is always complex, and among the multilateral things that we do that are complex, development is the most complex,” Kim said.

But as Scott Morris, senior associate at the Center for Global Development, told Devex last month, support of AIIB by major world powers “suggests that growth is going to happen through new institutions.”

“And that has to be a troubling prospect if you are among the leadership of the old institutions,” Morris added.

Other developments at this week’s spring meetings signal a more positive trend for the World Bank and, for many, suggest a stronger institution more equipped to tackle poverty and to grasp a bigger role in a cluttered development space.

Procurement reformers at the bank are in the process of revamping how contracts are awarded and how goods and services are purchased for development projects. They promise greater flexibility, more thoughtful contract decisions, more efficient tools, a new complaint mechanism and more hands-on support.

Procurement reform is well underway following an extensive global consultation process, and reforms are expected to be put into action early next year. Chief Procurement Officer Christopher Browne and his team are expected to give an update on their work this week.

Furthermore, following recent discussions at the World Bank’s board, the institution’s new lending instrument known as Program for Results will be more systematically engrained throughout the World Bank matrix according to program leadership.

PforR, which is designed to support local government-run development programs, disburses funds only when results are delivered in an effort to improve the efficiency of locally driven programs and bolster local institutions’ capacities.

Critics of the program fear it lacks enforcement of social and environmental safeguards, but proponents, of which there are many at this year’s spring meetings, feel the instrument is critical to spreading World Bank influence when other development actors are demonstrating results with little attention to social or environmental regulations.

According to supporters, a growing PforR, which will be made available across global practices and country units at the bank, will be essential in keeping the institution relevant at a time when development is becoming increasingly competitive.

Devex will be at the World Bank spring meetings throughout the week and will continue to bring you the latest coverage and analysis, including an exclusive interview with Kim.

What do you think about the spring meetings and the evolving discussion on the relevance of the World Bank? Let us know by leaving a comment below.

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About the author

  • Jeff tyson 400x400  1

    Jeff Tyson

    Jeff is a global development reporter for Devex. Based in Washington, DC, he covers multilateral affairs, U.S. aid and international development trends. He has worked with human rights organizations in both Senegal and the United States, and prior to joining Devex worked as a production assistant at National Public Radio. He holds a master's degree in journalism from Columbia University and a bachelor’s degree in international relations and French from the University of Rochester.