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CGD in the News

October 13, 2017

FT Health: World Bank Says ‘Go Big, Go Fast’ To Stub Out Tobacco (Financial Times)

From the article:

For most experts in public health, there is little doubt that higher excise taxes on tobacco would be a win-win, raising costs as a disincentive to smokers while generating additional income from those who continue to smoke.

Yet governments and international institutions have been ambivalent. They have often listened to advice — or succumbed to pressure — from corporations including the tobacco industry which has steered them away from more aggressive measures. As William Savedoff from the Centre for Global Development, a think-tank in Washington, argues, the International Monetary Fund has stalled and played down how best to use taxes to improve public health.
Now the World Bank goes further, suggesting policymakers “go big, go fast”, tax cigarettes based on quantity not price, and use “soft earmarks” that channel revenues to public health.
Ultimately governments decide on taxation. But international institutions presenting the evidence more vocally — offering technical advice and cajoling national policymakers as part of regular budget scrutiny — can only be positive.

Read full article here.

October 13, 2017

What's At Stake In The World Bank's Quest For A Capital Increase? (Devex)

From the article:

A U.S. Treasury official told Reuters this week that the U.S. believes the bank needs to examine its lending to “countries and to projects that already have ample borrowing capacity.” Some see that position as evidence the Trump administration is using the World Bank as a sort of battleground in its economic fight with China.

But Kim — and a number of World Bank experts — point to several reasons why it makes sense for the bank to continue lending to China and other large economies, even if those countries could find access to other sources of capital...

“If you’re going to prioritize those issues … that are global in nature, you can’t ring-fence the issue to a low income country,” said Scott Morris, senior fellow at the Center for Global Development...

Whether the World Bank should receive a capital increase for IBRD — and how the bank might have to rebalance its positions to convince its biggest shareholders to grant that — is one small piece of a much larger conversation about development capital and the multilateral development banking system...

Nancy Birdsall, president emeritus at the Center for Global Development, cited CGD projections that by 2030, 86 percent of countries eligible for the World Bank’s fund for the poorest countries — the International Development Association — will be located in sub-Saharan Africa. If that happens, Birdsall said, then IDA will become a de-facto “African Development Bank based in Washington.”

Birdsall suggested that the MDBs’ shareholders should consider what it will mean over time to see a regional development bank — the AfDB — relatively marginalized by an increasing concentration of World Bank funding in the region where that regional bank operates.

“Is that the right way to look at the MDBs as a system? Let’s think that through,” Birdsall said.

Read full article here.

October 13, 2017

World Bank Withholds Myanmar Funding, But Some Call For Sanctions (Devex)

From the article:

The World Bank announced Wednesday that in response to the “violence, destruction and forced displacement of the Rohingya,” it will delay the release of a $200 million loan planned for Myanmar.

The money was part of a credit deal reached with the fledgling democracy in August and represented the first instance of direct financial support from the World Bank to Myanmar’s government.

The World Bank is still delivering support to Myanmar and has “strengthened” its engagement in “education, health services, electricity, rural roads and inclusion of all ethnic groups and religions, particularly in Rakhine state,” the statement reads. This loan, specifically designed to support the government on issues of financial and public administration, however, will be withheld for an unspecified period of time...

“Given the scale of the humanitarian crisis there, the culpability of the government, it meets the test, in my mind, of a case where the owners of the World Bank ought to be looking at the World Bank as a potential sanctions tool,” Scott Morris, senior fellow at the Center for Global Development, told Devex prior to the bank’s announcement Thursday...

In Morris’s view, the World Bank’s assurances at that time that it would support humanitarian relief operations for people displaced by the conflict ignored the culpability of the government in committing violence against an ethnic minority, treating the situation, “as if it were a natural disaster.”

Even with its decision to withhold the $200 million loan until conditions improve, the bank’s shareholders are not doing enough to put pressure on Myanmar’s government, Morris said.

Read full article here.

October 12, 2017

On Myanmar, The World Bank Should Follow Its Own Policies On Keeping Hatred Out Of Projects It Funds (Quartz)

From the op-ed:

As the World Bank’s member countries convene in Washington this week, the institution’s stance on the humanitarian crisis in Myanmar deserves their attention. In its first public response to the exodus that has unfolded in Myanmar, which the United Nations high commissioner for human rights has labeled ethnic cleansing, the World Bank on Sept. 14 issued a maddeningly bland statement about its work in the country, acknowledging the “deterioration in security,” but pointing fingers at no one. The statement reveals a remarkable lack of direction within the institution coming from its largest country shareholders, and particularly the United States.

The bank is in the business of development lending to country governments, and since Aung San Suu Kyi’s release from house arrest in 2010, the World Bank has provided over $2 billion in assistance to the government of Myanmar. Suu Kyi is now state counsellor, after her party won a landslide in elections in 2015, but the military retains power over key areas.

The mix of projects supported by the bank in the country run the gamut from physical infrastructure, to health services access, to a highly popular model of support in development circles called community-driven development. The community development model disburses small amounts of money to many localities, empowering them to decide how to spend it. This model favors the local over the national in a way that has demonstrated success in various settings, but it also makes oversight more difficult.

And here lies just one of the challenges facing the World Bank. How much certainty does the bank have that its projects are safeguarded against abuses in Myanmar today, that no projects are enabling discriminatory treatment toward the Rohingya population?

Read full op-ed here.

October 12, 2017

US Demands World Bank Overhaul of Lending to China (Financial Times)

From the article:

But the US objections to World Bank lending policies suggest Mr Kim’s vision for the bank, which has been premised heavily on engaging China, faces more serious headwinds.

Scott Morris, a former US Treasury official now at the Center for Global Development, a think-tank, said the US position amounted to a challenge to the World Bank’s existing strategy, which has been to use lending to China to engage with Beijing and try to offset the impact of new institutions like the AIIB. 

It also amounted to the Trump administration “picking a direct fight with China” over the mission of a major international institution. 

“It’s really setting up some pretty deep divisions going forward,” he said. 

Read full article here.

October 11, 2017

Trump Is Giving Up a Crucial Part of American Power to China, Think Tank Says (CNBC)

From the article:

President Donald Trump's "America First" stance is making the U.S. more isolated on the world stage, with the country quickly losing soft power to China, a former U.S. Treasury official told CNBC Thursday.

That shift is readily apparent at this week's annual meetings of the World Bank and the International Monetary Fund in Washington, according to Scott Morris, who oversaw U.S. global development policy and worked with the World Bank while in the Treasury Department during the Obama administration.

"You have a China that is looking to showcase its multi-trillion dollar 'Belt-Road' initiative with very high-profile events and then you have American officials who want to say no to everything: No to ambition at the World Bank, no to trade agreements," Morris told CNBC's "Squawk Box."

"That's a message that is a hard sell to the rest of the international community," he added.

The meetings of the IMF and the World Bank — two multilateral institutions that support global financial stability and offer development assistance, respectively — come as Trump indicated again Wednesday he might exit the North American Free Trade Agreement.

Morris, who is currently a senior fellow at the Center for Global Development, a think tank, said the administration's varying messages on international relationships were "troubling" and he expressed concern about how it could impact U.S. influence, particularly through the World Bank and IMF.

Read full article here.

October 11, 2017

Q&A: The World Bank's Quiet Evolution on Tobacco Taxes (Devex)

From the article:

Tobacco taxes — when they are implemented with the express purpose of reducing the number of people who smoke — offer national governments an extremely effective policy tool for tackling negative health outcomes, William Savedoff, a senior fellow at the Center for Global Development who will also be in Wednesday’s meeting, told Devex.

Savedoff has pressed the international financial institutions to take a more proactive stance on tobacco taxes for years, and he is happy to see that the World Bank now seems to be taking that advice to heart. Devex spoke to Savedoff ahead of Wednesday’s meeting, where the bank will present a new paper it has produced, which argues for countries to make better use of this “underutilized” policy tool.

Savedoff described his early sense of awe at seeing the “knock-your-head-with-a-hammer” obvious association between smoking and health risks, and then the potential effectiveness tobacco taxes could have on mitigating those risks — especially among countries’ poorest populations.

Here’s an excerpt from our conversation with Savedoff, edited for clarity and length.

Read full article here.

October 10, 2017

5 Things To Watch At The 2017 World Bank Annual Meetings (Devex)

From the article:

WASHINGTON — “Capital” looks to be the watchword of the 2017 World Bank and International Monetary Fund annual meetings: Who has it? Who’s going to get more of it? And how can it be better deployed to achieve maximum development impact around the world?

These are the first annual meetings of World Bank President Jim Yong Kim’s second term in office, and they provide a venue for Kim to make the case for why the multilateral development institution still occupies a central place in a changing world — and why it should get more funding. That pitch, difficult at the best of times, has proven a hard sell to a U.S. president and administration wary of investing in multilateral cooperation...

“We are moving in a direction and the vast majority of countries now, we think, are onboard, and it's just a question of when the capital increase will actually happen,” Kim told reporters in a press call last week. “Now it's just a question of timing. And so we hope that there will be a discussion during these annual meetings, and that there will be a deadline as to when the final decision would be made.”

Kim has run into a skeptical U.S. Treasury Department, said Scott Morris, senior fellow at the Center for Global Development and a former deputy assistant secretary at Treasury. Some U.S. officials object to the World Bank’s lending to large economies such as China, Morris said, and they believe that instead of getting more capital, the bank should do less lending to America’s economic competitors. Kim’s task will likely be to strike a bargain that relates to the bank’s large country borrowers in exchange for a shareholder agreement to hand over more money, Morris said.

“They’re not going to get a firm ‘yes’ — or even a soft ‘yes’ — from the United States at this stage. They’re hoping to avoid anything that looks like a firm ‘no,’” Morris said.

He added that Kim’s aim will be to extract some kind of statement from the U.S. representatives to the bank that creates a timeline for deciding about the capital increase in time for the 2018 spring meetings in April.

One prominent World Bank staff member told Devex that the question of the capital increase is the one thing on bank employees’ minds during these annual meetings, because a ‘yes’ or ‘no’ from the bank’s shareholders “will determine whether we're in expansion mode or hunkering down.”

Read full article here.

October 5, 2017

World Bank's Kim Says Most Members 'On Board' With Capital Hike (Reuters)

From the article:

However, Kim has one major obstacle to increasing the bank’s capital base: a reluctant Trump administration, which as the World Bank’s largest shareholder, effectively holds veto power over its decisions.

“Everybody’s willing to do this except for the United States at this point,” said Scott Morris, a senior fellow at the Center for Global Development, a Washington-based think tank. “We have to convince a new administration on the basic case. I think all the evidence is that they’re not there yet.”

Morris, a former U.S. Treasury official who oversaw U.S. membership in the World Bank and IMF Fund during the Obama administration, said the administration likely has some objections to the World Bank’s continued lending to China and some other large emerging market countries.

Read full article here.

August 10, 2017

How Financial Incentives Can Boost the Number of Women Peacekeepers (News Deeply)

From the op-ed:

U.N. Peacekeeping Operations are a great deal. For the United States, they cost about half as much as a unilateral mission to implement, and the United States pays less than one-third of that cost, according to the U.S. Government Accountability Office. And the international evidence suggests they work to keep the peace by considerably reducing the risk of civil wars reigniting.

But these operations are far from free of failure and scandal – from bringing cholera to Haiti to child and sexual abuse. There were “145 cases of sexual exploitation and abuse involving all members of the U.N. in 2016,” and surveys suggest these are conservative estimates.

One important factor behind these failures is the gross gender inequality in security operations. Of the 106,286 U.N. military and police peacekeepers active in July 2015, a mere 4 percent were women.

The Security Council recently called for a doubling of women in peacekeeping by 2020 – but on current trends, we’ll hit gender parity in U.N. peacekeeping forces sometime around the year 2352. That suggests we need more than grand statements to foster change.

Read full op-ed here.