During the G20 leaders’ summit, U.S. President Joe Biden called on G20 leaders to support the World Bank and other multilateral development banks to increase their ability to support low and middle-income countries. From left, World Bank President Ajay Banga, Brazil’s President Luiz Inacio Lula da Silva, India’s Prime Minister Narendra Modi, South Africa’s President Cyril Ramaphosa and U.S. President Joe Biden in New Delhi on Sept. 9, 2023.
Evan Vucci | Afp | Getty Images
World leaders have called for the expansion of the World Bank in order to enhance its lending capacity. However, the bank stated that this cannot happen without funding from the private sector.
In addition to its focus on eradicating poverty, the World Bank is now addressing other global challenges such as pandemics, climate change, and food insecurity. In an exclusive interview with CNBC, World Bank President Ajay Banga emphasized the need to involve the private sector’s capital and ingenuity to drive the necessary changes amidst these multiple crises.
Ajay Banga stated at the G20 leaders summit that the World Bank is working on expanding its concessional financing to help low-income countries achieve their goals. The bank is also exploring creative ways to encourage cross-border cooperation and address shared challenges.
Biden supports World Bank
During the summit, U.S. President Joe Biden urged the G20 leaders to provide further support to the World Bank and other multilateral development banks. He has requested an increase of over $25 billion in the World Bank’s financing through Congress, enabling the bank to assist developing countries in achieving their economic and development objectives.
“The world needs institutions to work together.”
Kristalina Georgieva
Managing Director, IMF
The White House stated that the funding increase will strengthen the World Bank and its ability to address global challenges and the needs of the poorest countries. The World Bank, established in 1944 for post-war reconstruction, has grown to include most countries worldwide.
Biden has stressed the importance of providing developing countries with more funding options to reduce reliance on China and assist in their recovery from the impact of the Ukraine conflict. The administration has requested $3.3 billion to bolster development and infrastructure finance through the World Bank.
The White House emphasized the need for an alternative to China’s coercive lending and infrastructure projects, while the World Bank’s expansion also aims to support countries in their transition to renewable energy. Ajay Banga expressed confidence in the private sector’s interest in investing in renewable energy projects in developing nations.
‘Collaboration is key’
The World Bank and IMF have both pledged to strengthen their partnership in order to assist countries with debt struggles, sustainability goals, and the digital transition. IMF Managing Director Kristalina Georgieva highlighted the increase in the number of lenders and their varied conditions compared to a decade ago.
Georgieva stressed the pressing nature of the debt problem and the increasing number of countries in distress. She emphasized the need for institutions to work together to find solutions. The IMF and World Bank will collaborate with others to set an example of collective strength.
Georgieva explained that the World Bank’s sectoral expertise and the IMF’s focus on fiscal and monetary policies complement each other. The institutions aim to leverage data and collaborate with others to address current and future challenges.
Working together is crucial as it enables institutions to achieve more collectively than they would individually.
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