World Bank Chief signals major changes ahead for lender

Saturday, 6 October 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The head of the World Bank said on Thursday he will signal to member countries at meetings in Tokyo next week he is preparing broad reforms at the development lender to make it more effective in fighting poverty.

The annual meetings of the International Monetary Fund and World Bank from 12 to 14 October will be the first opportunity for Jim Yong Kim to outline his vision for the lender since taking the reins of the institution in July.

“We’re not ready to ask for specific changes yet... but if we are going to be really serious about ending poverty earlier than currently projected... there are going to have to be some changes in the way we run the institution,” Kim told reporters.

Kim said he wants the poverty-fighting institution to be less focused on pushing development loans out of the door, and more on making a difference on the ground.

“Specifically, I am going to ask the governors to work with us so the organisation can move to a model where we move more quickly, we can make mid-course corrections more easily and where our board and our governors focus much more on holding us accountable for results on the ground in countries, rather than focusing so much on approval of large loans,” he added.

Kim said he would be more specific about specific reforms at the next meetings of member countries in April.

“The need for these changes have been clear for a very long time,” he added.

With large donors like the United States and countries in Europe wrestling with low growth rates, growing deficits and greater market turmoil, Kim said it would not be appropriate to ask countries for a capital injection.

“At this point I see really no appetite ... it is not the time for us to have a discussion about a capital increase, this is something I don’t think the donor countries are ready for,” he added.

Developing countries, which have so far weathered the global crisis well, are now seeing a clear slowdown in economic activity as the euro zone debt crisis persists and uncertainty is driving more volatility in financial markets.

“All of us are rooting for the Europeans to quickly find a path toward solidarity in a way to resolve their problems,” Kim said.