The World Bank president wants to make a deal, Australia asks for U.K. aid to look east, and blended finance advocates launch an action plan. This week in development.
The Spring Meetings of the World Bank and International Monetary Fund are kicking into high gear, with attention focused on whether or not the World Bank’s shareholding countries will agree to a multi-billion dollar capital increase for the institution. President Jim Kim has made his case to the bank’s owners that the institution is being asked to do more than ever, and that in the face of climate change, conflict, and technological disruption it needs more money to achieve its goals. The bank’s shareholders appear poised to agree, but as part of that deal, some of them are making demands. As Devex first reported, one item up for discussion is World Bank salaries — U.S. government representatives believe bank staffers are paid too much. They want to see the bank curtail salary increases by 20 percent, a demand that has riled some of the institution’s staff representatives.
With 60 percent of people living in extreme poverty expected to be located in fragile states by 2030, the bank is showcasing its major pivot toward working in places that have typically been the domain of United Nations and humanitarian agencies. The most recent International Development Association replenishment doubled the amount of funding dedicated to fragile states, and the bank has a target of putting 150 staff members on the ground in FCV (fragility, conflict, violence) countries. One of Kim’s biggest priorities is convincing countries to invest more in “human capital,” by putting more of their domestic resources into chronically underfunded health, education, and social sectors. At the annual meetings in Bali in October, the bank will formally unveil its new “Human Capital Index,” which will rank countries according to those investments and their impact.
Australian Foreign Minister Julie Bishop has called on the U.K. government to direct more of its foreign aid to Pacific countries, at the same time Australia’s international development minister claims the country cannot increase its own aid budget because public opinion stands against it. Speaking at the Commonwealth Heads of Government Meeting in London, Bishop said, "Now that the United Kingdom is leaving the EU, we see it as an opportunity for the U.K. and its aid budget to be focused elsewhere," the Sydney Morning Herald reported. Faced with China’s growing aid and investment presence in Pacific countries, the Australian leader pointed out that many of these are British Commonwealth countries. Aid groups rejected Minister of International Development Concetta Fierravanti-Wells’ argument that Australia cannot increase its own aid spending because of public opinion polls that show it to be unpopular. "When Australians are given the facts about the number of people needing assistance in the world and that aid spending is actually very low, the level of public support for aid increases," said Helen Szoke, chief executive of Oxfam.
The Blended Finance Task Force, a group of leaders from the private sector, governments, multilateral institutions, and nongovernmental organizations, released a detailed program of action Wednesday, aiming to accelerate blended finance, particularly in support of sustainable infrastructure. The action plan recommends eight key initiatives, including new mobilization targets for multilateral development banks and development finance institutions, to increasing institutional investors and asset managers’ commitment to sustainable infrastructure investments, to improving regulatory hurdles, collecting better data, improving instruments, improving pipelines, and improving capacity in developing countries. Each of the initiatives has targeted outputs with deadlines in the next six to 18 months and spells out who is responsible for carrying them out. Read more from Devex about the plan on Friday.