World Bank will expand benefits to finance international debt

The World Bank will expand its international aid “tools” with new instruments, its new president, Ajay Banga, announced this Thursday, June 22 in Paris, at a summit dedicated to rethinking climate finance.

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“We announce a global approach that significantly expands the tools of the World Bank to prepare the response to crises“said the Indian-American manager.

The novelty groundsHe, he said, will be “offer a pause on debt payments so countries can focus on what matters when there is a crisis, and stop worrying about the bill that is comingr”.

Specifically, The institution plans to integrate this new clause in its agreements with the most vulnerable countries.

The proposal is very close to an idea promoted by the Prime Minister of Barbados, Mia Mottley, present at the Paris summit, who advocates such a pause in the payment of the debt in the event of a natural catastrophe in a developing country, linked to global warming. global.

other measure announced by the head of the multilateral institution is orOffer guarantees to countries to carry out development projects.

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In a statement, the World Bank also announced the creation of a mechanism that seeks to alleviate “barriers to private investment in emerging countries”,
to associate said investment to the fight against climate change.

Promoted by the United States and supported by numerous countries, the reform of international financial institutions has been under negotiation since the end of 2022.

ANDhe The objective is to improve its functioning, giving more power to the large emerging countries, reinforcing its effectiveness and expanding its mandates, clearly integrating the issue of financing the fight against climate change.

According to the formulated schedule, the reform must be ready at the next annual meeting of the IMF and the World Bank, next October in Marrakech.

(See: Panorama: the delicate situation the world economy is going through).

The World Bank has already announced that it will increase its financing capacity by 50 billion dollars over the next ten years.
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​At another table at the Paris summit, the managing director of the IMF, Kristalina Georgieva, stressed the need for “a change of mentality” in the functioning of the large multilateral organizations.

“Our mandates are fundamentally the same, but the way of applying them changes radically”, because it is necessary to include “the resilience of society, not only of the financial system“, and “the resilience of the planet.”We have learned the hard way, with covid-19 (…) that countries cannot invest in tackling poverty and in their development” if at the same time they suffer “shocks” from “climate change, pandemics and conflicts“, Janet Yellen abounded this Thursday in Paris.

(See: Global growth expectation rose to 2.1% by 2023 according to report).

AFP