(Archived Content)
WASHINGTON – Since the Development Committee met last October, our shared priority has been delivering on the bold vision for achieving the World Bank’s twin goals – reducing extreme poverty and boosting shared prosperity. The United States strongly supports the World Bank’s efforts to strengthen its own capacity so that it can provide more strategic, evidence-based solutions, grounded in the best global knowledge, to its clients. Progress is being achieved on a number of fronts, from financial measures that will improve the World Bank’s long-term financial sustainability to better tools that will diagnose a country’s constraints to achieving durable growth.
A strong and reliable World Bank is in our collective interest. The headway that the world has made coming out of the financial crisis is cause for much optimism. However, the path to sustainable, inclusive growth should not be taken for granted. The World Bank plays a crucial role in shaping policies, partnering with the private sector and providing financing to spur growth, protect the most vulnerable and build resilience. We are particularly cognizant that the World Bank’s transformational impact is not confined to its lending; its ability to act as a thought leader and global convener is just as critical.
The stakes are high and the challenges are great, but the prospects for global inclusive growth motivate us to further deepen our cooperation with all World Bank member countries for the common good.
Leveraging the private sector
We know that we cannot realize our 21st century development goals with public dollars alone. Addressing the developing world’s infrastructure needs is a prime example of how the World Bank can help, providing expert advice on establishing an enabling environment that encourages private investment and preparing a pipeline of bankable projects. Achieving higher rates of public and private investment in infrastructure will require a focus on strong governance, sound macroeconomic policies and transparent regulatory frameworks. It is for this reason that President Obama’s Power Africa Initiative – which aims to add 10,000 megawatts of new, cleaner electricity generation over the next five years in partnership with sub-Saharan African countries and the private sector – emphasizes that the countries’ policy reforms are every bit as important as the financial investments.
Promoting social inclusion
Social inclusion is the basis for shared prosperity. Yet, more than 100 countries still discriminate against women and many more discriminate against minority groups. The gains from social inclusion are both intrinsic for human well-being and instrumental for sustainable economic growth. An economy cannot reach its full potential if some of its members are held back because of discrimination. World Bank projects can promote opportunities for all people – regardless of race, gender, religion or sexual orientation – by systematically including representatives from under-represented or minority groups in the design of its activities. Furthermore, one of the most transformative roles that the World Bank can play is to urge countries to improve legal frameworks to provide access to economic and social opportunities for all, ensure protection against discrimination and allow for recourse when needed.
Tackling global challenges
Given its convening power and global reach, the World Bank can bring together a broad set of stakeholders. This convening power is especially important when dealing with global challenges like food security or climate change, which are too vast and complex for any one country – or even a group of countries – to effectively manage on their own.
The World Bank, working with many development partners, is scaling up support to help the world’s poorest farmers produce more food and earn higher incomes through the Global Agriculture and Food Security Program (GAFSP). GAFSP is already working with 25 countries to support their efforts to reduce hunger and poverty. GAFSP’s financing is boosting crop yields, helping farmers become more resilient to climate change and piloting new approaches to nutrition-sensitive agriculture. The United States remains strongly committed to GAFSP and looks to other partners to make new financial commitments so that GAFSP can continue its successful and much needed work.
It is also time to redouble our efforts on climate change so as to protect the next generation. President Obama articulated our commitment to addressing this challenge, both at home and abroad, in his Climate Action Plan. We applaud the World Bank’s support of lower carbon growth and its efforts to help eliminate regressive fossil fuel subsidies.
Accelerating poverty reduction
Although the global extreme poverty rate has fallen by half since 1990, deep pockets of poverty persist in low income and middle income countries alike. The world needs a global institution devoted to eradicating poverty, and we are fortunate to have such an institution in the International Development Association (IDA). IDA is the single biggest source of development finance for low-income countries. One of IDA’s key strengths is its continued evolution, which helps to ensure that IDA remains at the cutting edge of development practice. As part of the seventeenth IDA replenishment, donors, clients and World Bank management agreed to increase funding to tackle the toughest issues in fragile states and to help those countries tip the balance toward stability. Going forward, IDA will also place a stronger emphasis on private sector development, enhance its focus on climate change, and press for greater integration of gender in its projects and outcomes. As ambitious as we were in making these forward-looking commitments, we must now be equally ambitious in implementing them.
The IDA replenishment came at an historic time, with the shifting development landscape, new development actors, and the implementation of the new World Bank strategy. At this critical juncture, the United States looks forward to engaging actively in the strategic thinking on the future of concessional finance and the long-term vision and financial sustainability of IDA.
Assuring accountability
As a global standards bearer, the World Bank plays a catalytic role in developing countries by serving as a model of best practices. Strong social and environmental safeguards promote long-lasting economic development. High quality procurement standards create a level playing field for all businesses while supporting good development results. We rely on the World Bank to work on the toughest problems in the toughest places on earth. This work in some of the riskiest environments underscores the importance of robust safeguards and procurement policies, bolstered by adequate and expert staffing, and complemented by independent accountability and oversight mechanisms.
Implementing World Bank reforms
Addressing these diverse development challenges requires an expert, nimble and well-performing World Bank that is responsive to its clients. The depth and breadth of the proposed reforms in President Kim’s agenda require a keen focus on implementation and tracking of progress. We applaud the efforts to develop a more evidence-based country partnership model and to strengthen the World Bank’s work on consultation and engagement with the beneficiaries of Bank-financed projects. And finally, the package of financial measures that we agreed on earlier this year will maximize the impact of the World Bank’s existing financial resources and improve its long-term financial capacity by boosting revenue flows and reducing administrative costs.
As the preeminent global development institution, the World Bank shapes the agenda for international development organizations around the world. We look forward to continuing to work with President Kim, World Bank management and staff, shareholders and other stakeholders to deliver on the promise of a World Bank for the 21st century.
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