5 takeaways from the World Bank Spring Meetings
After months of negotiations — including with a skeptical Trump administration — Kim was able to announce a $13 billion capital increase that will allow the bank to lend more money and finance more projects. The capital increase deal dominated this year’s Spring Meetings, and it came with a package of financial and policy reforms that will continue to fuel discussions about the bank’s evolving role. The meetings also showcased efforts to drive investment in health and education, and to harness technological disruption for economic benefits in developing countries.
Here are five Devex takeaways from the 2018 World Bank and International Monetary Fund Spring Meetings:
1. More money for more problems
Kim has argued that as the bank’s shareholders have asked it to play a central role in some of the world’s most pressing challenges — climate change, support for refugee hosting countries, fragile states — they must also help the institution scale up its financial resources accordingly.
The capital increase deal, agreed by the bank’s governors and announced during the meeting of the Development Committee on Saturday, includes $7.5 billion of additional shareholder capital for the International Bank for Reconstruction and Development, the branch of the bank that makes loans to middle-income countries, and another $5.5 billion for the International Finance Corp., the bank’s private sector arm.
The “Sustainable Financing for Sustainable Development” report, which describes the financial and policy commitments that accompany this deal, outlines how different branches of the bank will dedicate more of their financing to projects related to climate change.
Much of the debate leading up to the agreement focused on how IBRD allocates its lending between countries at the higher and lower ends of the middle-income bracket. The Trump administration has taken issue with World Bank lending to China in particular, arguing that the country can secure financing on its own from other sources. This agreement stops short of any direct prohibition on lending to specific countries, as Kim noted in his press conference.
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