World’s Risks Loom Large at Annual Meetings

Ebola, climate change, lack of money for crucial infrastructure – the world’s risks loomed large as the World Bank Group-IMF Annual Meetings drew to a close. But solutions, too, were on the table.

Among them: much swifter action on the Ebola epidemic.

“We have to get high-quality treatment and prevention services in those three countries immediately,”  said World Bank Group President Jim Yong Kim at a press conference following the Development Committee meeting.

“The humanitarian response, the public health response, and the response that can blunt the economic impact are all the same.”

With the epidemic accelerating, Kim organized a high-level meeting on the eve of the Annual Meetings to hear from the leaders of Ebola-stricken countries. Later, he called for a new pandemic emergency facility that could disburse money immediately to countries in the face of an outbreak.

Kim announced a new Global Infrastructure Facility to help close an estimated $1 trillion annual financing gap in developing countries. The partnership among some of world’s largest private funds, multilateral development institutions, and donor nations could help unlock billions of dollars for infrastructure in the developing world.

To fight climate change, the Bank Group won support for a price on carbon from 74 governments accounting for up to 54% of the world’s carbon emissions, as well as more than 1,000 companies and investors, in the days before the Climate Summit in September.

“We take very seriously our responsibilities in the area of global public goods like fighting climate change and will continue to do this work,”  said Kim.

The Development Committee, made up of 25 ministers of finance or development who represent the 188 member countries of the Bank and IMF, praised the World Bank Group’s work on the Ebola crisis, infrastructure, climate change, and other issues, but also served notice that they have high expectations for the ongoing reorganization and “change process” at the institution.

 “We expect an important shift in the way the WBG operates to deliver more efficient support to client countries, drawing on partnerships, integrated regional approaches, and knowledge sharing, including South-South cooperation, responding to client needs, and reacting quickly to unexpected shocks,” said a communiqué issued by the Development Committee.

“We will monitor the implementation of the change process and expect better lending quality with increased development impact.”

The committee also congratulated the Bank Group on its achievements while moving to a new organizational structure over the past year and implementing new processes – measures designed to enhance the institution’s ability to tackle the twin goals of reducing extreme poverty to 3% by 2030, and boosting the incomes of the bottom 40% in countries where the Bank Group works.

Among the areas eliciting praise was the Bank Group’s quick response and leadership on Ebola.  Bank teams fast-tracked $105 million in emergency assistance to the hardest-hit countries, completing complex negotiations with country officials in just nine days, said Kim. The amount was part of a $400 million assistance package.  As the epidemic worsened, Bank economists produced impact assessments indicating the economic impact of Ebola could be as high as $32.6 billion over the next two years.

 “Beyond the human tragedy, economic losses in these countries are devastating,” said the committee. “Swift and coordinated action and financial support are critical to contain and mitigate both direct and long-term economic impacts of the crisis, and build capacity to effectively deal with epidemics.”

Describing investment in infrastructure as “crucial” for sustaining economic growth, the committee said the new Global Infrastructure Facility was a “welcome step.”

“We look forward to increased cooperation to build a pipeline of commercially, ready-to-finance viable projects. We call on the WBG and IMF to support countries to deliver efficient, reliable, affordable, and sustainable energy, including through the Sustainable Energy for All Initiative.”

The committee also praised the Bank Group for delivering $60 billion in loans and investment in fiscal year 2014, and for beginning to track progress on the poverty and shared prosperity goals in the joint Bank-IMF Global Monitoring Report. A new website, the President’s Delivery Unit, is tracking 12 development targets in real time.

Panel discussions at the Meetings covered topics including building a global coalition to tackle youth employment, combatting favoritism and corruption in the Middle East to open up more employment opportunities, and financing global development post-2015.

“Shared prosperity will require inclusive economic growth, job creation, and a sustained multilateral effort to empower the poorest and most vulnerable,” said the committee.