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A pivotal moment in the World Bank's history

Peter Stephens's picture

These Spring Meetings will probably be remembered for the capital increase – the first in 20 years – and the historic changes to the voice and representation of developing countries within the Bank. They are important milestones, and deserve to be recognized. But something much more profound is happening within the Bank, something that historians will look back on and regard as a pivotal moment in the organization’s evolution.

The key to understanding what is underway is Mr. Zoellick’s speech to the Woodrow Wilson Center on April 14. This was probably the most important speech by a Bank president since McNamara’s Nairobi speech of 1973 – even more important, I would argue, than Mr. Wolfensohn’s 1996 speech on corruption.  For the first time in many years, the Bank is at the leading edge of thinking about global trends. Mr. Zoellick’s blunt declaration that the era of the Third World is over and a new, more complex arrangement is emerging, challenges everyone at the Bank and everyone working in development to think and act differently. It sets in context why the reforms underway across many areas of the Bank are really necessary, why we need a new approach to investment lending, to knowledge, to our location and operation as a global bank. 

Peter Stephens on World Bank Reform

The end of the Third World does not mean that there are no poor countries, or that all countries are equally advantaged. It means the landscape has changed so much that our thinking and behavior must shift. To think of China, India, Brazil, Mexico, Russia, South Africa and Malaysia as developing countries seems anachronistic. Yes they have poverty and challenges, but… “developing”? They play a regional and global role of real significance. They have civil servants, academics and businesspeople as skilled as (and many more skilled than) World Bank staff. Developing just doesn’t capture it.

World Bank gets capital increase and reforms voting power

Sameer Vasta's picture

2010 World Bank Group / International Monetary Fund Spring Meetings Development Committee Meeting.

At a press conference earlier today, World Bank President announced that the Development Committee approved a capital increase, as well as proposed voting reform for the Bank. In his remarks, Mr. Zoellick talked about how these changes will affect the institution, as well as international development on the whole:

"This extra capital can be deployed to create jobs and protect the most vulnerable through investments in infrastructure, small and medium sized enterprises, and safety nets. The change in voting-power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players. In a period when multilateral agreements between developed and developing countries have proved elusive, this accord is all the more significant."

A summary of the changes approved by the Development Committee:

  • An increase of $86.2 billion in capital for the International Bank for Reconstruction and Development (IBRD).
  • A $200 million increase in the capital of the IFC.
  • A 3.13 percentage point increase in the voting power of Developing and Transition countries (DTCs) at IBRD, bringing them to 47.19 percent.
  • An increase in the voting power of Developing and Transition Countries at IFC to 39.48 percent.
  • An agreement to review IBRD and IFC shareholdings every five years with a commitment to equitable voting power between developed countries and DTCs over time.

Bank VP Obiageli Ezekwesili on the importance of the capital increase

Angie Gentile's picture

 
This weekend, shareholders gathered for the Spring Meetings in Washington, DC, will decide on a request to replenish the World Bank Group’s capital base. The request comes in the wake of unprecedented demands for the Bank’s financial assistance stemming from the global economic crisis.

In a recent speech at Harvard University, Africa Region Vice President Obiageli Ezekwesili outlined the importance of the capital increase as a critical source of funding for the International Development Association (IDA), the concessional window of the World Bank that provides grants and interest-free credits to low-income countries; the majority of which are in Africa. IDA will be seeking its 16th replenishment in 2011.

Zoellick: ‘Spring Meetings a turning point for World Bank’

Angie Gentile's picture

April 22, 2010 - Washington DC., World Bank/ IMF Spring Meetings. World Bank President Robert B. Zoellick, opening press conference. Photo: Simone McCourtie/World Bank.Bank President Robert Zoellick just gave his traditional pre-Spring Meetings briefing to the press, where he talked about a multipolar world economy and how the World Bank is changing to meet the needs of a new reality.

“Economic and political tectonic plates are shifting,” he said. Developing countries are key sources of demand for recovery from the crisis, and “over time, they can become multiple poles of growth.”


 

Zoellick said the Spring Meetings represent a turning point for the World Bank. Over the weekend, the institution’s 186 shareholders will be considering four issues:

  • the first capital increase in more than 20 years
  • whether to give developing countries a bigger say in the running the institution
  • the Bank’s post-crisis strategy, and
  • the most comprehensive reform program in the Bank’s history.

"Agreement on this package of measures, if successful, would represent a multilateral success story,” he said.

 
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Spring Meetings 'Can Represent a Landmark in Bank's History'

Angie Gentile's picture

Delegates, civil society members and press from around the world are set to converge in Washington for  the World Bank-IMF Spring Meetings. (See the schedule of events.) The week is packed with meetings, briefings and lectures covering topics ranging from strategies for post-economic crisis recovery to the first effort in 20 years to raise capital for the World Bank.

But many continue to wonder what the fallout will be of the eruption of Eyjafjallajokull in Iceland last week--from the effects on countries to disruptions in international air travel.

Bank Group receives support for more funds, expanded ‘voice’

Angie Gentile's picture

October 5, 2009 - World Bank/IMF Annual Meetings Istanbul, Turkey. Press Briefing. World Bank President Robert B. Zoellick. Photo credit: Simone D. McCourtie/World BankThe joint World Bank-IMF advisory body, known as the Development Committee, committed to the G20’s call for more resources for the Bank to help developing countries respond to the global economic crisis.

Concluding its first day of talks on the Bank’s work and impact at the 2009 annual meetings, the committee expressed support for a general capital increase, a multibillion multilateral food trust fund, and a new crisis facility for the world’s 79 poorest countries.

The Development Committee also agreed to “voice” reform to ensure developing countries get a bigger say in how the institution is run—an increase of at least 3 percentage points in voting power, in addition to the 1.46 percent already agreed. This would give them a share next year of at least 47 percent.

In a statement issued Monday, the Development Committee set a definite decision point for shareholders for Spring 2010 on IBRD and IFC capital needs and “committed to ensure that the World Bank Group has sufficient resources to meet future development challenges.”

The committee noted the Bank’s “vigorous response” to the crisis, including a tripling of IBRD commitments to $33 billion this year and IDA reaching a historic level of $14 billion. They also said that IFC, which has invested $10.5 billion and mobilized an additional $4 billion through new initiatives, “combined strong innovation with effective resource mobilization.”

Zoellick: Protection for most vulnerable must be permanent part of financial architecture

Angie Gentile's picture

World Bank President Robert B. Zoellick. 2009 Annual Meetings, Istanbul, Turkey. Photo credit: Simone D. McCourtie/World BankBank President Robert Zoellick told an overflowing room of journalists this morning that these annual meetings come at an important time for the work of the Bank Group and its members.

“The G-20 summit last week provided clear markers for the work of the World Bank. But more than 160 countries were not at the G-20 table,” he said. “These meetings can therefore ensure that the voices of the poorest are heard and recognized. This is the G-186.”

Zoellick began his remarks by expressing his sympathy for the people of Indonesia, the Philippines, Samoa and Tonga and others in the region, who have been battered by a series of cataclysmic natural disasters.

The Bank’s President told reporters that developing countries are still suffering from the global economic crisis, and it is important for the G20 to scale up support. He said the meetings offer a platform to follow up on the proposal for a crisis facility for low-income countries—critical to ensuring that protection for the most vulnerable becomes a permanent part of the world’s financial architecture.