MARRAKESH: The World Bank’s new president, Ajay Banga, said Wednesday that the global lender must become “better” and “bigger” to boost its capacity to help developing countries battle climate change, poverty and pandemics.
Banga, who was appointed in June, made his plea at the annual meetings of the IMF and World Bank in the southern Moroccan city of Marrakesh where reform of the Washington-based institutions is a major agenda item.
The former CEO of Mastercard has previously vowed to “fix the plumbing” at the bank, saying it was “dysfunctional” despite a dedicated staff.
Banga said at a press conference on Wednesday that a “deep cultural change” is needed at an “institution that has a proud history and done an amazing job over the last 78 years.”
He noted that countries have to deal with various departments and that it can take 27 months between the time a project is discussed and is finally approved.
“The idea of a better bank is a bank that works better with itself, is more efficient in its own processes,” Banga said.
The Indian-born, naturalised US citizen has vowed to made climate change a top priority after he took over from David Malpass, a former US Treasury official who stepped down early from his five-year term amid questions about his stance on the issue.
Banga wants to redefine the vision of the bank towards “eradicating poverty on a livable planet”.
He said poverty, pandemics and climate change were “almost like a perfect storm” that can no longer be treated separately.
The bank also needs more financial firepower, he said, adding that measures underway could boost its lending capacity by $150 billion over the next decade.
“It’s a substantial number, but it’s not going to be enough for the kinds of challenges the world has,” he said.
“There is no doubt that we need to be a bigger bank,” Banga said. He cited an independent expert group commissioned by the G20, which recommended the tripling of financing of multilateral development banks.
“The G20 expert group has put out its own thinking on that. That has not yet been accepted by the G20,” Banga said. “I’m definitely going to go back to our shareholders to seek a bigger bank because I believe that is what the world needs for the next coming decades,” he said.
US President Joe Biden has asked Congress for support to unlock concessional financing for the World Bank, which Treasury Secretary Janet Yellen said could amount to $27 billion.
But work in Congress is being held up as Republicans look for a new House speaker following the ouster of Kevin McCarthy by hardliners last week.
Banga, however, said he was “hopeful” that Congress would approve the measure.
“There are plenty of people on both sides of the House, as well as both sides of the Senate, who understand the value of multilateral banking system as a key to way for the Western and developed world to continue to do the right thing around the world,” he said.
Other countries such as Germany have contributed while Nordic nations and Saudi Arabia are discussing ways to contribute through various instruments, he said.
Yellen said at a separate press conference that she would ask other countries to provide immediate concessional finance for the World Bank.
“We’re receiving some positive responses,” she said. “This is a very important priority for the president.”
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