WASHINGTON: The United States (US) Treasury Secretary Janet Yellen has said that ongoing reform at the World Bank could result in an extra $50 billion of lending over the next decade.
The bank’s evolution will be discussed at the International Monetary Fund and World Bank’s spring meetings, which will involve central bankers, finance ministers and stakeholders from over 180 member countries.
Yellen said she expects the bank’s mission to be updated to include building resilience against climate change, pandemics, conflict and fragility as core goals.
She also anticipates an announcement that the bank is stretching its financial capacity to meet these objectives, which could lead to an additional $50 billion in additional lending capacity over the next decade.
Yellen said that the bank’s operational model would be updated to orient it towards the new goals, creating more incentives for mobilising domestic and private capital.
She added that further reforms were being sought throughout 2023. Last month, the World Bank submitted an evolution plan to be discussed with its development committee on April 12.
World Bank’s additional lending
The extra lending would represent a significant resource boost, marking a 20% increase in the International Bank for Reconstruction and Development’s (IBRD) sustainable lending level. The International Bank for Reconstruction and Development is the World Bank’s middle-income lending arm.
Yellen also discussed the challenges facing the poorest economies, which face sluggish growth due to heavy debt burdens and weak investment.
Discussions will take place regarding support for war-torn Ukraine and debt restructuring.
A global sovereign debt roundtable is set to gather during the meetings, and China has shown signs of participating in debt restructuring for Sri Lanka.
Yellen said that technical discussions on important elements of debt restructuring were ongoing and that China was participating, but that improvements were being pressed for.
On Ukraine, Yellen stated that the US would work with allies to insist on a cessation of Russia’s “brutality”.
