By Andrea Shalal
LUSAKA (Reuters) – US Treasury Secretary Janet Yellen said on Sunday that the United States wants to see faster progress on the World Bank’s plans to expand its lending capacity to address climate change and other global crises.
The World Bank’s “evolution roadmap,” reported by Reuters earlier this month, calls for the bank to negotiate proposals that include a capital raise and new lending tools with shareholders ahead of April’s meetings.
It calls on World Bank management to develop specific proposals to change its mission, business model and financial capacity, which could be approved by the joint World Bank and International Monetary Fund Development Commission in October.
The plan marks the start of a negotiation process to change the bank’s mission and financial resources, moving away from a country- and project-specific lending model that had been used since its inception at the end of World War II.
Yellen said the bank’s roadmap was a “constructive document” and a good basis for discussion, but more work was needed.
“We are concerned,” she told Reuters as she traveled to Zambia from Senegal. “We would like to see some progress on a faster timeline. And think there are a number of things that can be done to expand lending given the current capital release.”
Yellen said working on the reforms – first of the World Bank and then of other multilateral development banks – was one of her biggest priorities this year.
The United States, the bank’s largest shareholder, worked with other countries to push the World Bank to develop the reform plan, which was discussed by the bank’s board of directors on January 11.
“2023 is the year to make concrete progress in the near term with the spring meetings (in April)… and lay the groundwork for more fundamental/complex reforms by the October meetings,” said a senior Treasury official.
The United States and other shareholders favor a phased implementation approach, with proposals for certain reforms released in time for the spring meetings of the IMF and World Bank to allow for some “quick wins,” the official said.
These would focus on the World Bank’s vision and mission, increasing its financial capacity… and intensifying work on private sector mobilization, the official said.
More work was also needed to refocus the World Bank’s operating model to focus more on global challenges, the use of incentives and a strengthened framework for using concessional or low-interest funds, the official said.
Treasury was also seeking more details on how the bank might work with supra- and sub-national entities.
(Reporting by Andrea Shalal; editing by Diane Craft)