Widening the World Bank’s mandate risks shifting the multilateral lender’s focus away from helping poor nations reduce poverty and accelerate development, South African Finance Minister Enoch Godongwana said.
(Bloomberg) —
Widening the World Bank’s mandate risks shifting the multilateral lender’s focus away from helping poor nations reduce poverty and accelerate development, South African Finance Minister Enoch Godongwana said.
The global development lender issued an “evolution roadmap” in December that sets out proposals to broaden its objectives, review its operating model and enhance its financial capacity. The planned reforms, backed by US Treasury Secretary Janet Yellen, are aimed at focusing more on combating climate change.
Godongwana said he’s discussed his reservations about the expanded mandate with Yellen, who visited South Africa last month. The Washington-based institution lends tens of billions of dollars a year to low- and middle-income countries.
“The key question which is emerging, which I’ve raised with the secretary, is: careful about shifting the mandate of the World Bank so that whatever additional mandate is being taken does not avert its focus on poverty reduction” and the United Nations’ Sustainable Development Goals, he said in an interview with Bloomberg Television’s Haslinda Amin in Bengaluru, India on Saturday. “All of those things must remain in place.”
Reforms at the bank are expected to be implemented by whoever replaces David Malpass as its president. He announced his early departure from the lender last week and a successor is expected to be announced by May.
Read more: World Bank Board Expects to Pick Malpass Successor by Early May
Godongwana is in Bengaluru for a meeting of finance ministers and central bank governors from the Group of 20 rich countries. The bank and the International Monetary Fund also held a sovereign debt roundtable to discuss bottlenecks that have prevented the quick restructuring of fragile nations’ debt.
Godongwana said the talks explored ways to accelerate debt reorganizations under a G-20 mechanism known as the Common Framework, which is being used by countries including Zambia, Ethiopia and Ghana. Disagreements on how to handle some debt have restructuring talks, with China calling for multilateral lenders’ loans to be included in any reorganization — a move the World Bank has rejected.
“There are other challenges which we want to explore,” Godongwana said. “The first one is why is there slow take-up? We need to have a better sense of why that is the case and, if needs be, make proposed necessary adjustment to the current framework.”
Read more: Why a Plan to Rework Poor Nations’ Debt Isn’t Working: QuickTake
–With assistance from Michelle Jamrisko, Yoshiaki Nohara and Kurien Abraham.
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