This was a key message from the Development Committee, a ministerial-level forum of the World Bank Group and the International Monetary Fund, in a communique issued at the close of the institutions’ 2018 Spring Meetings in Washington, World Bank.org reported.
The committee reiterated its support for the group’s twin goals of eliminating extreme poverty and boosting shared prosperity, while recognizing that the group must strengthen its financial capacity to meet the aspirations of its shareholders, mobilize capital at scale, and respond to global development challenges.
The committee agreed to a capital increase for the International Bank for Reconstruction and Development and the International Finance Corporation as part of a package of fundamental reforms that will allow the Bank Group to deliver development results more effectively while becoming more financially sustainable and efficient. It will help the Bank Group continue to lead on global public goods and scale up its support in fragile and conflict-affected situations.
World Bank Group President Jim Yong Kim, in his remarks at the press conference that opened the Spring Meetings, also highlighted the financial strengthening of International Development Association, the World Bank’s fund for the poorest countries, through an inaugural bond issue that raised $1.5 billion from investors around the world this week.
“IDA’s entry to the global capital markets is historic–the latest transformational shift in how we approach development finance,” he said, adding that “IDA will be able to dramatically scale up financing to help countries meet the 2030 development goals, and deliver greater value to shareholders.”
Both the committee’s communiqué and Kim’s speech at American University prior to the meetings emphasized that the group must continue to crowd in private sector resources for development, as the main driver of investment, innovation, and jobs. The committee called on the World Bank, IFC, and MIGA to work closely together to mobilize private investment as part of maximizing finance for inclusive growth and poverty reduction.
While acknowledging a range of pressing challenges for developing countries–a rise in public debt levels for low-income countries, climate and disaster risks, and major gaps in gender equality, among others–the committee reiterated its support for the group’s role in building global solutions. The committee’s communiqué also noted that the capital increase is tied to adjustments that will update the balance in shareholding among the bank group’s member countries.