World Bank plans to boost funding to help the poorest countries
02 April 2014, 08:03
Nairobi - The World Bank plans to boost its overall funds for development by around 40 percent per year in order to stay relevant and help the world's poorest people, the institution's president said on Tuesday.
The president, Jim Yong Kim, said the World Bank will focus its work on 10 countries - including India, China, Bangladesh and Democratic Republic of Congo - which are now home to 80 percent of the world's extreme poor, who live on less than $1.25 a day.
Kim said the bank's annual commitments should grow to more than $70 billion a year in the next decade, from about $45 to $50 billion now.
"The world's development needs, of course, far outstrip the World Bank Group's abilities to address them," Kim said, according to remarks prepared for delivery at the Council on Foreign Relations. "But we can do much, much more."
Kim spoke ahead of next week's spring meetings of the World Bank and the International Monetary Fund.
The growth in the World Bank's lending and investment guarantees, alongside planned staff and budget cuts, are part of its first major strategic realignment since 1997.
Since Kim assumed his post nearly two years ago, he has sought to energize the institution around a poverty-eradication goal and make it more nimble and useful, especially to middle-income countries.
The bank's growth will involve expansions in all major branches, including a $100 billion boost in the fund for middle-income countries, known as the International Bank for Reconstruction and Development. Reuters first reported this increase in February. [ID:nN9N0AR02D]
The bank's private sector arm, the International Finance Corporation, will boost annual commitments to $26 billion a year. And the Multilateral Investment Guarantee Agency, or MIGA, which provides political risk insurance, aims to increase its guarantees by 50 percent over four years.
"If we are going to help developing countries end extreme poverty and boost shared prosperity, we have to provide them with more financial resources, more solutions-based knowledge, and help leverage more private sector investment," Kim told reporters ahead of his speech.
A year ago, Kim committed the bank to the twin goals of eliminating extreme poverty by 2030 and boosting the incomes of the poorest 40 percent of the population in each country.
He has also said the bank should be more selective, focusing on "bold" projects and technical solutions where it can make the biggest difference. The World Bank must meet its goals amid greater competition for development funds and a tight budget.
"I believe we must get leaner in order to get bigger," Kim said. He said the bank was likely to have fewer staff over time, though he did not have a particular number in mind.
The World Bank in October announced it was cutting $400 million from its budget over three years.