World Bank Chief Advocates for Change in Global Lending, According to Reuters

By Kirsty Needham

SYDNEY (Reuters) – In a recent address, World Bank President Ajay Banga emphasized the need for the global financial institution to accelerate its efforts and streamline its operations in response to increasing global polarization. This statement followed his visit to 27 countries, ranging from Peru to Tuvalu.

Delivering his remarks at the Lowy Institute in Sydney, Banga reflected on his recent trip to Tuvalu, which concluded a year-long journey dedicated to understanding the perspectives from various regions served by the Washington-based organization.

"While the aspirations of people worldwide are universal, we are living in a time of heightened polarization and extremes," Banga stated. He acknowledged that nations he visited are calling for a faster, simpler, and more impactful approach from the World Bank. Leaders from the Pacific Islands, whom he met in Fiji, highlighted the difficulties small island states face in meeting the Bank’s requirements.

During his visit to Fiji, Banga observed the challenges confronted by under-resourced health clinics dealing with rising non-communicable diseases, such as diabetes. This underscores the significance of the bank’s renewed focus on job creation, with a goal of providing affordable healthcare to 1.5 billion people by 2030.

Banga noted that global challenges such as climate change, inequality, and fragility are interconnected. "We recognize that the issues faced by Pacific Islands reflect wider global dynamics," he remarked.

According to the Lowy Institute, the Pacific Islands are the most vulnerable to global warming effects and rely heavily on foreign aid. Banga pointed out that recent reforms within the World Bank have begun to yield positive outcomes, including reducing corporate objectives from 150 to just 22 and cutting project approval times by an average of three months.

He also mentioned innovative strategies that secured an additional $120 billion in lending over the next decade.

Addressing the pressing need for job creation, Banga stressed the importance of collaborative efforts among governments, philanthropies, and multilateral development banks to alleviate a projected shortfall between 1.2 billion young people seeking jobs in emerging markets and the anticipated 420 million job openings.

He highlighted the necessity of a substantial replenishment of the International Development Association (IDA) from the bank’s shareholders, scheduled for December.

The leaders within the Pacific Islands Forum, a regional coalition of 18 nations, indicated that the IDA has been essential for enhancing climate resilience and developing infrastructure, including aviation links. They urged donor nations, despite facing economic challenges, to bolster their commitment to assist vulnerable countries.