Daily Management Review

US Treasury Secretary Will Advocate For More World Bank Reforms This Year


US Treasury Secretary Will Advocate For More World Bank Reforms This Year
On Wednesday, US Treasury Secretary Janet Yellen will urge the World Bank to make more changes this year to improve its capacity to support developing nations in addressing global concerns like climate change.
On Wednesday, Yellen convened meetings with representatives from the world's financial institutions to discuss ways to keep improving the World Bank and other multilateral development banks so they can better assist poor nations in dealing with climate change and other global challenges while attempting to combat extreme poverty.
Yellen added that modifications already authorized had made the World Bank's goal more clear, ensuring that it was working to eradicate extreme poverty, increase shared prosperity, and foster resilience.
"This does not mean we are moving away from the Bank’s traditional work. Rather, our incorporation of global challenges enhances the Bank’s work on poverty reduction and development. These goals are all interconnected," she said.
During her visit to Zambia in January, Yellen said she had spoken with people who were aware of how climate change was reducing agricultural harvests. Additionally, she added, "we have all seen how risks to global health may upend entire societies and economies, and how instability and conflict can result in substantial emigration movements.
Yellen praised adjustments to the bank's balance sheet that might increase its borrowing capacity by up to $50 billion over the course of ten years while preserving its AAA credit rating and long-term financial stability.
"These are very significant achievements. We should acknowledge and celebrate that," she said in the prepared remarks. "And then we need to push for more progress. We should use the rest of the year to undertake additional reforms through a staged implementation approach that can be agreed upon by the Board and implemented on a rolling basis."
In the extracts, Yellen suggested future events may be used to maintain momentum for the World Bank's evolution but she did not provide any examples. These included the World Bank and IMF's annual meetings in Morocco in October, the Summit for a New Global Financial Pact, which France will host in June, the Group of 20 Leaders' Summit in India in September, and the United Nations COP28 climate conference, which will take place in Dubai in November and December.
In addition to increasing the bank's ability to finance projects, Yellen stated that the bank was concentrating more on raising extra private money and striving to systematically include regional and global concerns into its national diagnostic reports and country engagement.
This week, a US Treasury official referred to the financing adjustment as a "downpayment" on future World Bank and other multilateral development bank reforms.
Yellen's roundtable is anticipated to include former World Bank President David Malpass, who will step down from his position on June 1, as well as Indian Finance Minister Nirmala Sitharaman and Japanese Finance Minister Shun'ichi Suzuki.