For the US to back an American candidate as president disrupts an arrangement that has been fundamental to the bank’s effectiveness as a development institution investing in better lives and livelihoods in its borrowing member countries.
CGD Policy Blogs
A simple way to guarantee an adequate flow of long-run, sustained funding for health surveillance and disease control, and to prepare for the next novel virus in the world’s poor countries, is to create an endowment dedicated to that purpose. A $10 billion endowment could generate income of $500 million a year.
There is much to cheer about in last week’s announcement by the World Bank’s shareholders to increase its paid-in capital by $13 billion. It is a healthy signal that multilateralism is alive and well, at least in the development space. And on a practical level it is sufficient to ensure that at a minimum World Bank lending to sovereign borrowers can be sustained at current levels, and private sector operations can continue to grow.
I’m disappointed by the update. But I’m also hopeful. Here are three concrete issues that the group could raise regarding the MDBs.
Finance and development ministers gathered in Washington this weekend at the World Bank’s annual meetings have an ambitious agenda of topics to discuss. But the truth is, it is not nearly ambitious enough. A new CGD report by a high level commission of development and finance experts explains why and what should happen.
Last week the World Bank Board closed the three-week window, announced in late August, for member countries to nominate candidates for the presidency of the World Bank. Jim Kim, the US nominee and incumbent since his election in 2012, was formally nominated by the United States at 12:01 a.m. at the opening bell, so to speak. He is the sole candidate in what appears to have been a kind of insider coup by the United States (called a “charade” in a World Bank Staff Association letter to its members) of the procedures agreed by World Bank members in 2011.
When President Takehiko Nakao of the Asian Development Bank (ADB) visited CGD earlier last year, he described management’s groundbreaking proposal for a major restructuring of the bank’s financial model that we view as both sensible and creative.
This week Senate appropriators failed to include an OK for an International Monetary Fund quota increase in the Senate version of the continuing resolution—the spending bill to keep open the US government for the remaining six months of the fiscal year 2013. The administration had requested Senate appropriators approve a transfer of previous US commitments from one IMF account to another -- a transfer involving virtually no cost for US taxpayers.
Last week our CGD and Peterson Institute colleague Arvind Subramanian called on the IMF to speak truth to power, in an elegant cri de coeur in the Financial Times. The IMF, he notes: “has not provided independent intellectual leadership, most evidently on the eurozone crisis. And it is unprepared to provide stability for the next big global crisis.”
World Bank president Jim Kim delivered a speech and responded to questions today at Brookings in his first public event since taking the helm at the world’s top development organization on July 1. He struck me as thoughtful, well-informed, articulate and dedicated to multilateralism and the bank’s mission of reducing global poverty. You can see his speech and the Q&A here.