Yellen pushes for ‘bold action,’ more reforms at World Bank this year
U.S. Treasury Secretary Janet Yellen holds a roundtable with finance ministers from borrower and shareholder countries to discuss “ways to maintain momentum to evolve the multilateral development banks to better meet current challenges” at the International Monetary Fund Building, in Washington, D.C., U.S. April 12, 2023. REUTERS/Ken Cedeno
WASHINGTON -U.S. Treasury Secretary Janet Yellen on Wednesday called for the World Bank to implement further reforms this year to expand its ability to help developing countries meet global challenges such as climate change.
Yellen hosted talks with global finance officials to discuss an initial spate of balance sheet changes that will allow the World Bank to lend an additional $50 billion over 10 years while maintaining its top-tier AAA credit rating, and how to deepen those efforts with it and other multilateral development banks.
Yellen said the changes already approved had sharpened the mission of the World Bank to ensure it was striving to end extreme poverty, boost shared prosperity and build resilience, but more progress and “bold action” was needed.
“We should use the rest of the year to undertake additional reforms through a staged implementation approach that can be agreed upon by the Board and implemented on a rolling basis.”
Yellen said the changes were aimed at enhancing the bank’s work so it could better meet 21st century challenges like climate change, fragility and pandemics.
Zambian women she met during her visit in January understood how climate change reduced agricultural yields, Yellen said, adding, “We’ve all seen how threats to global health can disrupt entire societies and economies, and how fragility and conflict can lead to significant displacement and migrant flows.”
Yellen gave no specifics, but said upcoming events could be leveraged to keep momentum strong for the evolution of the World Bank. Those included the Summit for a New Global Financial Pact to be hosted by France in June, the Group of 20 Leaders’ Summit in India in September, the annual meetings of the World Bank and IMF in Morocco in October, and the United Nations COP28 climate conference to be held in Dubai in November and December.
In addition to bolstering the bank’s financing capacity, Yellen said it was also working to systematically integrate regional and global challenges into its country diagnostic reports and country engagement, while focusing more on raising additional private capital.
Outgoing World Bank President David Malpass, who will leave his post on June 1, said the bank had responded with “vigor and speed” to Yellen’s call for reforms.
“There was … wide recognition that progress toward these goals requires a sharper focus on sustainability, resilience, and inclusiveness as part of our mission,” he said.
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