The World Bank has said its shareholders endorsed a capital increase package, a series of internal reforms, and a set of policy measures to strengthen the international lender’s capabilities.
The $13 billion capital increase package includes $7.5 billion of paid-in capital for the International Bank for Reconstruction and Development (IBRD), the group’s primary lending arm, and $5.5 billion for the International Finance Corporation (IFC), the group’s private sector lending arm, said the World Bank in a statement on Saturday, Xinhua reported.
World Bank shareholders also endorsed a $52.6 billion callable capital increase for IBRD, the statement said.
“Through the historic agreement endorsed today, our shareholders have clearly demonstrated a renewed confidence in global cooperation,” World Bank Group President Jim Yong Kim said.
“This capital package allows for greater responsiveness to risks to global stability and security, particularly in poorer countries and fragile states,” Kim added.
Following the capital increase plan announced Saturday, the combined financing arms of the World Bank are expected to reach an average annual capacity of nearly $100 billion between fiscal year 2019 and fiscal year 2030, said the World Bank. Kim said at a press briefing this week that the capital increase package doesn’t target changes of loans to any specific country.
“It’s about how we think about income levels and how the World Bank Group can continue to be a partner and to support all of our member countries who are still clients,” he argued. He said that the multilateral lender would increase lending to lower middle-income countries over time. IANS
World Bank President Jim Yong Kim has announced that he is stepping down as the head of the premier anti-poverty institution putting the likely choice of its future leadership in the hands of US President Donald Trump, a sceptic of international development.
Trump’s role is expected reinvigorate challenges to Washington’s monopoly on appointing the Bank’s head.
Announcing his decision on Monday, Kim said in a tweet: “It’s been the greatest privilege I could have ever imagined to lead the dedicated staff of this great institution to bring us closer to a world that is finally free of poverty.”
Kim, 59, who is dropping out 19 months into his second term on February 1, would be joining a private company and focus on infrastructure investments in developing countries, the Bank said.
The Bank’s CEO Kristalina Georgieva will become the interim president till a successor to Kim is appointed.
As the largest share-holder, the US by tradition appoints the head of the Bank, while Europeans determine the chief of the International Monetary Fund.
Kim was nominated for the job by former President Barack Obama in 2012.
Before Trump’s election, Kim was hastily re-appointed in September 2016 to a second term that began in July 2017 with an eye on pre-empting a possible Trump nominee getting the job.
Now, however, Trump will get an opportunity to nominate the Bank’s head.
Trump’s role will resurrect and strengthen challenges to the post-World War II model of the leadership of the 189-member bank that has always been determined by the US .
Already the US nominee was challenged for the first time in 2012 by two contenders.
Colombian economist Jose Antonio Ocampo Gaviria eventually withdrew from the race, while Nigeria’s then-Finance Minister Ngozi Okonjo-Iweala lost when the Bank’s directors rubber-stamped Kim’s appointment.
Now there will be robust demands for reconsidering the US leadership of the Bank and stronger non-American contenders for the job.
Kim, a South Korea-born US citizen, was an unusual leader for the Bank: He was a medical doctor by training, a specialist in public health and an academic with a Harvard doctorate in anthropology who had led the Ivy League Dartmouth College.
But his background in health was a plus for the Bank’s mission of fighting poverty and promoting development.
Under his leadership, the Bank adopted in tandem with the UN the goal of ending extreme poverty by 2030 and focusing on the bottom 40 per cent of the population in the developing world.
The Bank’s International Development Association, which funds programmes in the least developed countries, achieved two record replenishments during his tenure, the last one in 2016 for $75 billion.