“The Time to Act is Now”: Urgent World Bank Reforms Needed
Campaigners call for urgent World Bank reforms ahead of G20 Finance Ministers meeting
G20 Finance Ministers meeting in India this week have an increasingly full plate to deal with, says The ONE Campaign. These leaders will struggle to make progress in discussions around rebuilding Ukraine, responding to humanitarian crises, investing in economic development, or rising to the challenge of climate change, until they can free up the levels of investment needed to tackle challenges on this scale.
To deal with this to-do list effectively and efficiently, ONE is calling on G20 countries to show they’re serious by accelerating reforms at global institutions such as the World Bank and other Multilateral Development Banks (MDBs).
ONE is urging G20 finance ministers to use this week’s meeting to make concrete progress on callable capital – funds that donors pledge to the banks in case they need it. ONE is also calling for continued urgency and greater ambition in the World Bank Evolution Roadmap, a process that must include the priorities of borrower countries. Doing so will be critical to reforming the Bank to have the vision, operation and financial capacity to deliver for the future.
Amy Dodd, ONE’s Policy Director of Development Economics, said: “G20 countries are trying to respond to an ever-increasing number of global crises with one hand tied behind their back.
“The fastest way to unleash their ability to act decisively is through long-needed reform at the World Bank and other MDBs. There are clear steps* to boost their resilience and effectiveness, future-proofing these institutions’ ability to deal with the challenges the world faces.
“The time to act is now. The upcoming appointment of a new World Bank President provides an opportunity to accelerate plans to modernize the bank. The incoming president must deliver bold reforms needed to mobilize more resources to address the challenges of today and tomorrow.”
In addition to proposed reforms to the World Bank, the ONE Campaign is also supporting calls from the AU and others to address the lack of representation and power of low income countries on key international organizations and decision-making bodies.
Dodd continued: “If global institutions are going to be fit for the present – let alone the future – they need to better represent the world they were set up to serve. The proposal for the African Union to have a seat at the G20 – which has already been given the support of many members – needs to be accelerated. Countries which are being impacted by the bank’s approach need to be part of the conversation, and the best way to do that is with a seat at the table.”
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* The World Bank and others should:
- Adjust their risk appetites
- Give more credit to callable capital
- Innovate, working with private lenders more closely
- Work with credit rating agencies to improve their ratings
- Increase transparency and data.
For more information please see ONE’s Data Dive on MDBs
Key findings from the Data Dive show:
- The major MDBs hold over US$1.8 trillion in assets.
- MDBs could lend up to a trillion dollars more if they used their capital more efficiently.
- Since 1944, the World Bank’s International Bank for Reconstruction and Development (IBRD) has received US$19 billion from shareholders and turned it into over US$800 billion in lending.