BY JONI AKPEDERI
CHAIRMAN of the Annual Meetings Plenary and Ukraine’s Minister of Finance, Sergii Marchenko, probably set the tone for the most important session of the entire economic-financial talkathon. Ennobled, perhaps, by the trauma of the socio-economic challenges his war-ravaged country is enduring, he went straight for the collective conscience of the world: “Let us not forget we have enough to solve the world’s challenges; the problem is our priorities,” he said rather gravely.
And sure enough, a moment later, World Bank President Ajay Banga picked it up from there, adding a tad lugubriously: “We face declining progress in our fight against poverty, an existential climate crisis, food insecurity, fragility, a fledgling pandemic recovery, and are feeling the effects of conflicts beyond the front”. He went on to spew a litany of unflattering human development and well-being statistics.
Bank President Banga told the packed audience: “Looking across the world, it is easy to be consumed by a sense of despair”. Then, in a burst of optimism, he revealed that “the World Bank is turning to face the wind” in a “revolution that began months ago”. What is the new vision and mission for the World Bank? To create a world free of poverty on a livable planet A truly ambitious goal, if ever there was one.
The World Bank boss, just like his counterpart at the International Monetary Fund, Kristalina Georgieva was simply reacting to the concerns of the world, eloquently enunciated by His Royal Majesty King Mohammed VI in his opening address, delivered by his representative, Omar kabbaj, one-time President of the African Development Bank, a multilateral development institution in the mould of the Bretton Woods institutions.
The Royal Majesty challenged the Bank and Fund to improve and scale up financial assistance to needy countries while giving a commensurate, equitable voice and quota to emerging and developing economies.
It was an excited Banga that revealed the “new direction of the World Bank”. By adjusting the loan-to-equity ratio, the Bank has freed up $40 billion over 10 years from its balance sheet. Taken together with other smart tools, the Bank should be able to provide $157 billion more in lending capacity over a decade. Happily, Germany, the US, and the Nordic States are funneling more resources into the Bank to boost IBRD and IDA lending. The real cinch is that the Bank hopes to leverage each new dollar 6 to 8 times over 10 years. And to top it all, the Bank is exploring maturities of 35 to 40 years to help countries navigate longer-term horizons for social and human capital investments.
The Fund is also working to improve lending, especially to the poorest member countries, through its latest instrument, the Resilience and Sustainability Trust, and the use of strong member Standard Drawing Rights. Fund MD Georgieva says about $100 billion in new financing has been realized from these initiatives.
The final word on the positive outlook on the war on poverty goes to the last line of the exquisite Malhoun poem on which Georgieva anchored her address:
”There is then no closed door to which you will not find a key”