“The new boss of the World Bank will have to explain to his client countries that it is not them who decide, but the shareholder countries”
QOnly a few days after the announcement in mid-February of the resignation of the President of the World Bank, David Malpass, the United States created a surprise by designating Ajay Banga as his candidate for succession. This 63-year-old naturalized American Indian was the boss of MasterCard, which he transformed into a global payment platform. He has no experience in development, let alone in an international institution. The United States has instead chosen a specialist in organizational transformation. As US Treasury Secretary Janet Yellen explained in a February 23 statement welcoming the appointment, the new president “must evolve the World Bank to meet global challenges such as climate change”.
Development banks have an important role to play in low- and middle-income countries, which attract only 20% of the planet’s investments in the renewable energy sector, whereas they alone total 90 % of world needs. David Malpass, placed at the head of the World Bank by former US President Donald Trump, did not have the right profile. Several NGOs had accused him, in the fall of 2022, of being a climate skeptic, when, when asked about the role of fossil fuels in global warming, he replied that he did not” (was) not a scientist”.
While the United Nations assesses investment needs at 125,000 billion dollars (117,000 billion euros) by 2050 to achieve carbon neutrality, the World Bank is called upon to redouble its efforts in the field. Even if it already devotes a third of its financing to it, the rich countries would like this share to be greater and, above all, for it to increase its financing capacities… without this costing them anything. A report by a G20 working group, published in 2022, explains that the multilateral development banks could increase their efforts to the tune of 500 to 1,000 billion dollars, in particular by increasing their fundraising on the markets.
Investing in resilience
Problem: poor countries are not of the same opinion. First, they fear that the institution, by lending more without increasing its capital, will see its rating downgraded by the financial rating agencies, which would force them to borrow at higher rates. Second, they fear that these efforts will be detrimental to development.
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