WASHINGTON, 14th April, 2023 (WAM) — Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, chaired the main session of the 107th meeting of the joint World Bank Group/International Monetary Fund Development Committee, which marks the first meeting since he became the committee’s chair for 2023. The meeting was held yesterday on the sidelines of the 2023 Spring Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) in Washington, DC. David Malpass, President of the WBG; Kristalina Georgieva, Managing Director of the IMF; and Mercy Tembon, Executive Secretary of the Development Committee, attended the meeting, along with a number of the Development Committee members from ministers and the Board of Governors of the IMF and WBG, during which they discussed issues of multilateral concerns in a world in which crises overlap. During his speech, Al Hussaini expressed his thanks for working with the members of the Development Committee on numerous issues and challenges related to international development that are jointly addressed by the WBG and the IMF. He noted that last October, the World Bank Group was asked to prepare an Evolution Roadmap to enhance its operating model and financial capacity to end extreme poverty, boost shared prosperity, address global challenges, and achieve the Sustainable Development Goals (SDGs). “Development Committee members took stock of this work. Governors welcomed the ambition and progress to date and look forward to additional constructive work to prepare and update a roadmap during the 2023 Spring Meetings and achieve major milestones by their meeting in October in Marrakesh,” he said. l Hussaini mentioned that the committee members commended WBG management and staff for responding at scale to the unanticipated crises, with historic surges in development financing that have sustained the fight against poverty. The WBG delivered a record US$330 billion during the last three-and-a-half fiscal years. It was also the world’s largest provider of climate finance to developing countries in this period, reaching almost US$90 billion, and has outlined its plan for alignment with the Paris Agreement. He highlighted that WBG and IMF governors recognised that WBG programmes have contributed to emergency response and longer-term resilience; boosted inclusive and sustainable growth; supported macroeconomic and financial stability; addressed water and energy access; tackled food insecurity and malnutrition; provided assistance for pandemic preparedness and response, including medical supplies and vaccines; expanded social protection for the poor and vulnerable; strengthened education systems; promoted job creation and private sector development; helped countries address debt transparency and sustainability issues; and fostered gender equality and the empowerment of women. l Hussaini pointed out that the WBG’s vision is a world free of poverty, and its goals of ending extreme poverty and promoting shared prosperity will remain at the core of its work. “Progress toward these goals requires a stronger focus on sustainability, resilience, and inclusiveness,” he said. He remarked that governors look forward to options for a strengthened approach to crisis preparedness and response, including contingent instruments to meet surge-financing needs. They called for proposals to deepen strategic partnerships, and for WBG-wide ambitious and integrated approaches to increasing private capital, facilitating investment, and leveraging the role of the public sector–while improving the business environment. They underscored the role of domestic resource mobilisation and called on WBG management to develop ambitious commitments in this area. He also said governors supported discussions on ways to effectively mobilise and allocate concessional resources, including utilising existing pools of concessional finance in WBG operations. They also look forward to continued discussions on how to build on the WBG’s core strengths: the country engagement model; the One WBG approach; a strong country presence; global knowledge creation and dissemination; and partnerships, including with the IMF and other Multilateral Development Banks, the United Nations system, bilateral partners, and the private sector. The minister noted, “Members are committed to ensuring that the WBG has adequate financial capacity to respond to development challenges and support its expanded mission. They strongly reaffirmed their commitment to boosting the WBG’s financial capacity, including through a revision of the International Bank for Reconstruction and Development (IBRD)’s minimum Equity-to-Loan Ratio to 19 percent, a Hybrid Capital pilot for capital-market investors, and a scaled-up bilateral guarantee programme.” He noted that Development Committee members expect further updates to the Executive Directors on the implementation of these initiatives, which have the potential to add up to US$50 billion of financing capacity over the next ten years. They agreed to consider a proposal to remove the Statutory Lending Limit (SLL) from the Articles of Agreement. He also mentioned that members look forward to continued work to explore a shareholder portfolio guarantee platform; optimising the use of FIFs, TFs, and co-financing; balance sheet optimisation for the International Development Association (IDA); developing options for enhanced callable capital and shareholder-purchased hybrid capital; and exploring a potential voluntary channelling of Special Drawing Rights (SDRs). He noted that members recognised the impact that the multiple crises have had on the poorest countries and expressed their strong support to protect IDA resources and will consider an IDA Crisis Facility. Members reiterated the importance of continuing income transfers from IBRD to IDA and avoiding increasing the burden on borrowing countries. They will further discuss and consider options to strengthen IBRD’s financial capacity toward Marrakech and beyond. Governors recognised the tragic loss of life and widespread destruction caused by natural disasters, and most recently by the earthquakes in Turkiye and Syria. Members were reassured to see the international community’s swift humanitarian response in cases of devastating natural disasters, and commended the Bank’s damage and needs assessments that have informed the response in Syria and provided timely and targeted support for recovery and reconstruction in Turkiye. He said, “Development Committee members expressed their deep appreciation to David Malpass for his strong and steadfast leadership of the WBG during a historically challenging period, including an unprecedented surge in financing in response to the multiple crises affecting global development outcomes. They value his commitment to the WBG mission, its strategic goals and country-level development outcomes. They also commended his support to staff, as well as his strong leadership, which has made possible the many significant accomplishments during his tenure. Governors wished him every success in his future endeavours. They look forward to the conclusion of the selection process for the next President of the WBG.” Following the main session, the Development Committee dinner was held under the chairmanship of Al Hussaini. David Malpass, Kristalina Georgieva, and Mercy Tembon attended the dinner, along with a number of the Development Committee members from ministers and the Board of Governors of the IMF and WBG, and they discussed the roadmap for the development of the WBG. In his two-year chairmanship of the Development Committee, Al Hussaini will work with its members to advise the Board of Governors of the WBG and the IMF on stimulating sustainable economic development, as well as building and improving resources in developing countries. The Development Committee meets twice a year; in the spring and in the fall at the time of the joint Bank-Fund Annual Meetings. The meetings of the Joint Development Committee and the International Monetary and Financial Committee (IMFC) will be held to discuss the WBG and IMF work progress. The next meeting of the committee will be held on 14th October 2023 in Marrakesh.
Source: Emirates News Agency (WAM)