‘World Bank could lend $50bn more with reform’

WASHINGTON

The World Bank’s ongoing reform could result in a $50 billion lending boost over the next decade, US Treasury Secretary Janet Yellen has told AFP ahead of stakeholders’ meetings this week where key changes are expected to be announced.

Central bankers, finance ministers and participants from more than 180 member countries are expected to gather in the U.S. capital for the International Monetary Fund and World Bank’s spring meetings this week.

A key topic of discussion will be the World Bank’s evolution, amid a push for lenders to revamp and meet global challenges like climate change.

The U.S.  is the largest shareholder of the World Bank Group.“I expect there to be an update of the bank’s mission to add building resilience against climate change, pandemics, and conflict and fragility to the core goals,” Yellen said in the interview with AFP.

She added that there needs to be a recognition that these challenges aren’t separate or conflicting but rather, inextricably linked.

“Second, there will be an announcement that the bank is stretching its financial capacity to meet these objectives, and adopting changes or endorsing changes that could result in an additional $50 billion in extra lending capacity over the next decade,” Yellen said.

The move would be a significant resource boost marking a 20 percent rise in the International Bank for Reconstruction and Development’s (IBRD) sustainable lending level. The IBRD is the World Bank’s middle-income lending arm.

Yellen also said there would be an announcement on updating the bank’s operational model to “orient it towards the goals that we’re setting.”    

Among other things, this includes creating more incentives for the mobilization of both domestic and private capital.