World Bank, in a Changed Economy, Pushes Focus to Building a Middle Class (Washington Post)
The Center for Global Development is referenced in a recent Washington Post article on the new world bank strategy and the way forward for the remaining IDA countries.
In its six decades, the World Bank has helped rebuild Europe and expanded its anti-poverty efforts to the most remote parts of the planet, but today it may be wrestling with its toughest issue yet: irrelevance.
The developing world is succeeding faster than expected, and the countries that are among the World Bank’s biggest borrowers and best sources of profit — including Brazil, Mexico and China — don’t really need the money anymore.
So as World Bank President Jim Yong Kim convenes the bank’s spring meetings this week, he will have in mind a subtle but significant shift in the $330 billion institution’s mission — expanding its effort to build the global middle class.
“It is going to be a laser focus” to ensure that bank projects directly address either benefits for the poor or better incomes for those approaching the middle class, Kim said in an interview last week. “We have a lot of evidence. . . . We actually know what works.”
Given equal weight in Kim’s evolving strategy is “inclusive growth” — expanding economic progress for the bottom 40 percent of wage earners regardless of where they live. That would serve not just a moral end — capturing the billions of people worldwide who may have gained an economic foothold but are a single mishap away from trouble — but also would secure the bank’s role in the large middle-income countries that are growing smartly on their own, rather than risk a winnowing of its mission to a few pockets of severe poverty.
Those nations have access to private capital markets on terms that are often more convenient, if slightly more expensive, than those offered by the World Bank Group’s main lending arm, the International Bank for Reconstruction and Development (IBRD).
The strategy is meeting criticism from a number of directions — from civil groups worried that the bank is poised to weaken some of its safeguards to encourage development, and others who say that Kim is using ambitious language to describe incremental change. Analysts at the Center for Global Development have argued that Kim should be bolder in admitting that the bank’s core mission is contracting: A number of the countries that qualify for concessional lending, for example, are expected to “graduate” in coming years, leaving the IDA with a remnant group of fragile and conflict states.