<\/p>\n
Source<\/span><\/b>: The post is based on the article \u201cOpportunity for reforms at World Bank<\/strong><\/span>\u201d <\/span><\/b>published in \u201cBusiness Standard<\/strong><\/span>\u201d <\/span><\/b>on <\/span>21st March 2023<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n Syllabus: <\/span><\/b>GS 2 – Important International institutions, agencies and fora- their structure, mandate.<\/span>\u00a0<\/span><\/p>\n Relevance<\/span><\/b>: Institute of global economic governance<\/span>\u00a0<\/span><\/p>\n News<\/span><\/b>: <\/span>With Ajay Banga nominated to be the next World Bank president, there is great hope in his abilities to revamp this vital global institution.<\/span>\u00a0<\/span><\/p>\n Today, the world needs a <\/span>global institution for global transformation towards a sustainable planet and promoting shared prosperity<\/span><\/b>. The WB is largely missing in action in the climate fight.\u00a0<\/span>\u00a0<\/span><\/p>\n Instead, the WB is now seen as a<\/span> multi-purpose development bank<\/span><\/b> that tries to provide support to countries for their perceived needs. It does not have a<\/span> broad strategic vision.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n It used to be a <\/span>leader in thinking on economic developmen<\/span><\/b>t<\/strong> but has not been able to address these issues.<\/span>\u00a0<\/span><\/p>\n WB is<\/span> overly conservative and too risk-averse<\/span><\/b> in the<\/span> use of its capital base<\/span><\/b>. It has not been able to <\/span>leverage private capital flows<\/span><\/b> for infrastructure and climate change.<\/span>\u00a0<\/span><\/p>\n It has <\/span>underutilised its guarantees and focused largely on loans<\/span><\/b>. It has not <\/span>financed insurance facilities<\/span><\/b> as much as it could have.\u00a0<\/span>\u00a0<\/span><\/p>\n It\u2019s also been criticised for being too slow. <\/span>Bureaucratic procedures<\/span><\/b> of the WB cause costly delays to its borrowers.\u00a0<\/span>\u00a0<\/span><\/p>\n Its country focus has improved performance but neglects its ability to meet <\/span>global and regional financing needs.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n The WB and other regional banks now provide a small share of net flows to emerging markets. They have been <\/span>overly conservative in their equity-to-loan ratios<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n It needs a <\/span>substantial overhaul of its objective<\/span><\/b>s and much more <\/span>innovative use of its capital base and financial instruments.<\/span><\/b>\u00a0<\/span><\/p>\n There is a need for actions on a much larger scale internationally for <\/span>energy and ecological transformation for a more sustainable planet.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n Its new role should be as the <\/span>global institution for climate change and sustainability<\/span><\/b>. It must also be able to provide<\/span> monitoring and advice on climate action<\/span><\/b> in the entire world. These include a range of issues such as c<\/span>limate adaptation, mitigation, carbon pricing, environmental, social, and corporate governance and net-zero transformation.<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n It is not sufficient to create a<\/span> climate change department<\/span><\/b> in the WB to continue with a business-as-usual approach. The <\/span>entire organisation<\/span><\/b> must be transformed to make it the premier <\/span>global institution for dealing with climate change and shared prosperity.<\/span><\/b>\u00a0<\/span><\/p>\n The WB must also shift the focus from <\/span>lending to catalysing resource flows<\/span><\/b>. It must help build the <\/span>institutions and regulatory systems<\/span><\/b>. These will help to draw in more capital from the private sector and from sovereign wealth funds.\u00a0<\/span>\u00a0<\/span><\/p>\n Its success must be judged how much resources it can <\/span>catalyse to address social and physical infrastructure and climate finance needs.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n More<\/span> innovative use of its financing instrument<\/span><\/b>s is needed especially in the way it books and uses guarantees and insurance backstops.\u00a0<\/span>\u00a0<\/span><\/p>\n The International Finance Corporation<\/strong>, is also a big player in private finance. It should spend much more effort on <\/span>helping develop systems for SME finance<\/span><\/b>, which can attract international capital.\u00a0<\/span>\u00a0<\/span><\/p>\n The WB must continue its country-based assistance and also focus more on <\/span>global problems.<\/span><\/b> The WB has huge power to address these issues by working in <\/span>partnership with specialised agencies at the UN<\/span><\/b>. It may need new and <\/span>more innovative sources of financing<\/span><\/b> for this purpose, including green bonds.<\/span>\u00a0<\/span><\/p>\n The <\/span>WB\u2019s capital bas<\/span><\/b>e must also be increased, and there must also be changes to the way it uses its capital.\u00a0<\/span>\u00a0<\/span><\/p>\n The emerging economies could also be allowed <\/span>more leeway in the use of capital<\/span><\/b> by changing their <\/span>capital adequacy ratios<\/span><\/b> without <\/span>hurting their credit ratings<\/span><\/b>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Source: The post is based on the article \u201cOpportunity for reforms at World Bank\u201d published in \u201cBusiness Standard\u201d on 21st March 2023.\u00a0 Syllabus: GS 2 – Important International institutions, agencies and fora- their structure, mandate.\u00a0 Relevance: Institute of global economic governance\u00a0 News: With Ajay Banga nominated to be the next World Bank president, there is… Continue reading Opportunity for reforms at World Bank<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,212],"class_list":["post-233157","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-2","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/233157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=233157"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/233157\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=233157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=233157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=233157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What are the issues with the functioning of the World Bank?<\/span><\/b>\u00a0<\/span><\/h2>\n
What is the way forward to improve the functioning of the World Bank?<\/span><\/b>\u00a0<\/span><\/h2>\n