WASHINGTON — The World Bank Spring Meetings begin today in Washington, D.C., under a threatening cloud of international conflict that raises the stakes for an institution dedicated to marshalling a global commitment to ending poverty.
World Bank President Jim Yong Kim, entering the second year of his second term, will showcase the institution’s public face in a week of sessions highlighting the bank’s contribution to tackling global challenges of conflict and fragility, climate change, and health. Behind the scenes, Kim and other bank leaders will seek to marshal support from 188 member country shareholders who have the power to grant the institution more capital to undertake more projects — and the power to demand institutional reforms.
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While global crises including the wars in Syria and Yemen continue to evade diplomatic solutions, the bank is working to adapt its financing tools for use in countries still in the midst of conflict — or those threatened by its fallout. For an international community desperately seeking levers to bring some stability to fragile places, the bank’s unique ability to transform risk into investment opportunity offers a rare path forward that will be in the spotlight.
Here are a few of the major stories Devex will be following at the World Bank and International Monetary Fund Spring Meetings this week.
President Kim’s capital push
After months spent negotiating with the bank’s largest shareholders, Kim appears poised to announce a deal to inject more capital into the institution’s lending pool. An agreement first reported by the Financial Times would see the bank accept a condition that the United States and some other major shareholders have pushed for — that the institution stop making low-interest loans to China, which the Trump administration, in particular, has argued can access capital without the World Bank’s help. In exchange for creating a higher-interest lending category for China and taking on some reforms to become more efficient and cost effective, the bank stands to receive $13 billion in additional capital from its shareholders for the International Bank for Reconstruction and Development and the International Finance Corp., the FT reported. At the same time, China would see its ownership stake increase from 4.45 percent to 5.7 percent.
With a potential capital increase deal as the backdrop to these meetings, bank leaders will have a chance to give some sense of how they plan to use that additional $13 billion to advance the institution’s twin goals of ending extreme poverty and boosting shared prosperity. Kim has championed a new “human capital index” that the bank is creating, aimed at ranking countries according to their investments in spheres like health and education — and linking those scores to global credit ratings.
Kim will speak alongside Bill Gates and United Kingdom Secretary of State for International Development Penny Mordaunt on Saturday to highlight the human capital push. Some development advocates see an opportunity in the bank’s capital boost to see the institution drive more of its own financing to health and social services that benefit the poorest, as opposed to hard infrastructure projects.
World Bank President Jim Yong Kim charts his vision to maximize finance for development — an approach that involves enabling more private sector investment, helping create markets, and using the bank's full range of resources to de-risk projects, sectors, and entire countries.
If Kim is successful in brokering a capital increase deal it could mark a new phase in the relationship between the World Bank president and a Trump administration that has been broadly skeptical of committing U.S. resources to multilateral institutions. As details of the deal emerge this week — though the final agreement is not expected until after the Spring Meetings — questions about any additional internal reforms are likely to arise as well. In his testimony to a congressional committee last week, U.S. Treasury Secretary Steven Mnuchin said the U.S. continues to encourage reforms at the international financial institutions, while other outlets reported these could include constraining bank staff salaries.
Fragile states, refugees, and reconstruction
The World Bank has been lauded in recent years by humanitarian groups who view the institution’s pivot to fragile and conflict-affected states as one of the lone bright spots in the international community’s response to confronting conflict-induced poverty and displacement around the world. Devex spoke to Franck Bousquet, senior director of the bank’s fragility, conflict, and violence group, who described fragility as a “top priority” for the institution, which has doubled its financing to these countries from $7 to $14 billion in the International Development Association fund for poorest countries.
Bousquet described the bank’s effort to put more staff on the ground in fragile and conflict-affected states by creating career incentives that reward bank employees for deployments to those countries. The bank’s investments, meanwhile, are increasingly geared toward upstream conflict prevention, guided by “fragility risk and resilience assessments.”
The meetings will feature a discussion of the security-development nexus — with participation by the mayor of Baghdad, Thikra Mohammed Jabir Alwash — as well as an independent evaluation of the role of the IMF in fragile states.
Women top the agenda
This year’s agenda is also dominated by sessions devoted to gender, gender-based violence, and women’s economic participation. This is unsurprising considering the recent revelations of sexual abuse and harassment in Hollywood and beyond, including in the aid sector, which dominated news headlines earlier this year. Furthermore, a government crackdown on gender pay gaps in the United Kingdom also highlighted disparities of up to 45 percent in the amount being paid to men compared to women within some U.K. aid agencies, as Devex reported.
Against this backdrop, the World Bank and IMF are seeking to position themselves as thought-leaders when it comes to gender.
Highlights from the week are likely to include $1 million in grants being awarded to innovative approaches to tackling GBV as part of a Development Marketplace initiative launched, and as usual, the schedule includes high-level sessions featuring big name speakers such as one on “Disrupting the Gender Divide,” focusing on how tech platforms can help women entrepreneurs access markets and finance. A series of smaller sessions, featuring just one or two speakers, called “Gender Coffee Chats,” have also been organized by the IMF.
The World Bank's new financing facility to support women-owned businesses in the developing world — inspired by Ivanka Trump — is officially open for business and accepting proposals. Devex finds out more details about the new initiative, known as We-Fi.
More information can be expected about the much-vaunted Women Entrepreneurs Finance Initiative, or We-Fi, a new facility to support women entrepreneurs announced last year to some controversy having been conceived at the suggestion of U.S: President Donald Trump’s daughter and senior adviser, Ivanka Trump. We-Fi was set to announce its first round of funding earlier this year but as yet no announcements have been made.
Facebook fallout could spell a smaller focus on ‘Big Data’
The word “data” is littered across the agenda for this year’s meetings, including a high-level session featuring United Nations Deputy Secretary-General Amina Mohammed on “The SDGs and Big Data.” Other events cover a range of topics from the LGBTI data gap, how gender data can improve gender equality policies, and also the role of big data in macroeconomic forecasting and digital trade agreements.
However, the fallout from the recent revelations that social media giant Facebook allowed a political consultancy group to harvest information on 87 million users without their permission could put a damper on some of this “data for good” enthusiasm. In response, some development groups now questioning the reputational and security risks associated with partnering with Facebook — be it on expanding internet access, fundraising, or communication.
The World Bank, which has previously been at the forefront of the data for good drive, launching the Big Data Innovation Challenge last year as well as partnering with Facebook to develop population density maps, may be forced to subdue its enthusiasm.