The 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.”
“I am very pleased that the meeting that we had today at the Development Committee provided significant support for the World Bank’s work,” said Bank President Robert Zoellick.
“We need to make protection for the most vulnerable a permanent part of the world’s financial architecture,” he said. The global economy still suffers the risk of a potential setback, Zoellick said, and we still face the possibility of growing unemployment lines and rising protectionism.
The Development Committee requested several updates for consideration at its next meeting in Spring 2010:
- a review of general capital increase needs, bearing in mind that additional capital will likely be raised from a special capital increase for voice reform.
- an update on the Bank’s post-crisis strategy.
The committee said that core spending in low-income countries, on health and education, for example, needs to be protected, and asked that the a new crisis response mechanism be discussed at an upcoming mid-term review of IDA performance.
The committee also called on the Bank Group to work with the regional development banks to assess their respective roles and methods of collaboration, and said it viewed “continuing improvements in the corporate governance, accountability and operational effectiveness” of the Bank Group as essential for confronting the development challenges of the 21st century.
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