U.S. wants to see quicker progress on World Bank reforms- Yellen

LUSAKA, January 22. (Reuters) – U.S. Treasury Secretary Janet Yellen said on Sunday the United States wants to see faster progress on World Bank plans to expand its lending capacity to tackle climate change and other global crises.

The World Bank’s “evolutionary guidelines,” reported by Reuters earlier this month, require the bank to negotiate with shareholders ahead of April meetings on proposals that include a capital increase and new lending facilities.

The World Bank’s leadership is being urged to come up with concrete proposals to change its mission, operating model and financial capacity, which could be approved by the joint World Bank-International Monetary Fund Development Committee in October.

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The plan marks the beginning of a negotiation process to change the bank’s mission and financial resources and shift it away from the country-specific and project-specific lending model used since its creation at the end of World War II.

Yellen said the bank’s action plan is a “constructive document” and a good basis for discussion, but more work is needed.

“We have some concerns,” she told Reuters on her way to Zambia from Senegal. “We would like to see some progress on a faster timeline. And I think there are some things that could be done to expand lending given the current capital release.”

Yellen said working on reforms, first at the World Bank and later at other multilateral development banks, was one of her top priorities this year.

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The bank’s largest shareholder, the United States, in cooperation with other countries, pushed the World Bank to prepare a reform plan, which was discussed by the bank’s board on January 11.

“In 2023 is a year where concrete progress can be made in the short term at the spring meetings (April) … and lay the groundwork for more fundamental/complex reforms before the October meetings,” said a senior Treasury official.

The United States and other stakeholders favor a phased implementation approach, with proposals for some reforms released before spring meetings of the IMF and World Bank, to allow for “quick wins,” the official said.

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This would focus on the World Bank’s vision and mission, building its financial capacity… and private sector mobilization work, the official said.

More work was also needed to reorient the World Bank’s operating model to focus more on global challenges, the use of incentives and a strengthened framework for the use of concessional or low-interest resources, the official said.

Treasury also sought more information on how the bank could work with supranational and subnational entities.

Report by Andrea Shalal; edited by Diane Craft

Our Standards: The Thomson Reuters Trust Principles.

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