World Bank President Jim Kim said he wants to go beyond changing the way his own giant multilateral works and influence how other major development finance institutions operate when it comes to helping the world’s poorest people.
Kim drew a thundering round of applause at a recent screening in San Francisco of Bending the Arc, a documentary film on the story of Partners in Health, when he said he had never stopped being an activist, and explained how he plans to bring that activism to the upcoming Spring Meetings for the World Bank, where he will outline changes to the way the multilateral operates.
The World Bank is undergoing a transformation from traditional project lender to modern financial catalyzer, working to incentivize private investors to pitch in the trillions of dollars needed for global development. While questions still remain, the shift in thinking and operation could position the institution for a new era of relevance.
He also talked about the impact he hopes to have on all of the development finance sector, by referencing the preferential option for the poor, a principle of Catholic social justice teaching that is core to the mission of Partners in Health, a global health organization he co-founded. Kim wants to see the World Bank, along with other major development institutions, shift toward asking what is best for the poor, rather than carrying out policies more designed to benefit their own institutions or other groups.
“We're having this discussion about how to change development finance,” he said after a question from Devex on plans for the meetings this week. “Development finance is really a bunch of institutions making preferential options for their own institutions. A bunch of people making preferential options for their own getting a loan out the door, as opposed to really what's best for the poor.”
Kim said that his stance has made him unpopular at times within the World Bank itself, as well as the broader development community.
"If you Google me, you'll see that lots of people at the World Bank have been angry at me for a long time,” Kim said. “People in the development world are angry at me too because I'm continuing to push."
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Kim said that major DFIs needed to enlist the private sector to take on more projects that were suitable to them. If there's an airport that can be done on commercial terms, meaning the private sector can finance the project and pay the government, then it is best for the private sector to fund that airport, he said. Meanwhile the World Bank — and other DFIs — should direct dollars toward areas that are much harder to pay for, such as health or education or social protection, he added.
Kim described a recent meeting he had with Chancellor Angela Merkel in Germany, host of the upcoming G20 summit in July. He explained that she asked him, "What are you talking about? Isn't that what you're doing already?”
What Kim said he explained to Merkel was that development agencies too often compete for the low hanging fruit projects because they are easier.
“We actually fight each other for low hanging fruit financing because it gets money out the door more quickly,” he said. “I'm telling you when I say these kinds of things which happen to be true, the other development institutions aren't very happy. Even our own bank, even our own people, are not very happy. So we're trying to have a completely different discussion where we all agree, anything that can be done by the private sector where they actually finance it themselves, we should let them do that.”
“There are so many tricks rich people use to make themselves richer every single day. We have to use them for the poor.”— World Bank President Jim Kim
Broadening the discussion from what DFIs should do differently to what others, including members of the audience, should do differently, he said: “If you're really going to make a preferential option for the poor, you've got to understand finance.”
“There are so many tricks rich people use to make themselves richer every single day. We have to use them for the poor,” he said.
Just think about us as a partner in tackling some of the difficult problems you see in the world because we have connections in every country in the world and we also know how to use all these tricks of the finance world to stretch the dollars and really make them work,” he said.
Explaining to the audience that the challenges we face today require us to act like activists, not “as dawdling bureaucrats,” he said changing all of development finance is not the kind of thing you take on if you want to “cruise in life.”
“I don't know how it's going to go,” Kim said, closing his response to the question from Devex on the World Bank meetings. “It's a big idea. And it requires institutions like mine to change in a pretty fundamental way.”