The World Bank needs new strategies to prevent aid recipients being swamped by an ever-growing roster of donors, senior officials and development finance experts said in Washington this week. New Bank president Robert Zoellick said the range of challenges represented an opportunity to reassess strategies and bring in new allies, in a surprise intervention at a seminar on aid architecture.
“I prefer to look at this as a network model – architecture is too formal a structure,” Zoellick said, and emphasized the need to work more closely with foundations and civil society groups. The average African country deals with 33 separate donors over 800 to 1,000 projects, which was “too much for any country”, Zoellick observed.
The Bank’s incoming managing director, Ngozi Okonjo-Iweala, told Emerging Markets yesterday that “the World Bank must use its convening power” to facilitate projects and simplify procedures for recipients.
Ghanaian finance minister Kwadwo Baah-Wiredu noted that the two years, or more, needed to put together a classic World Bank or African Development Bank facility was too long, in a world where aid recipients too wanted flexibility. Newer financiers like China and India were “quicker and fast” at arranging funds, and “also provide appropriate technology”.
Only 38% of IDA assistance was “useable aid”, Okonjo-Iweala told a seminar on Friday – the rest goes back to donor countries in the form of technical assistance fees and wages. “We’ve got to look at the composition of aid in the architecture,” she said. Center for Global Development (CGD) president Nancy Birdsall laid out a raft of suggestions, including support for national impact evaluation and measures to help subsidise the wages of talented individuals so they stay in their own administrations.
An example of evolution in the donor community is the International Finance Facility for Immunisation (IFFI), an initiative kick-started by the Bill and Melinda Gates Foundation. It last year raised $1 billion on international markets, and has this year so far has disbursed $800 million to vaccinate vulnerable children.
IFFI and Ulster Bank Group chairman Alan Gillespie said that the fund’s success in launching an AAA-rated capital markets instrument showed Wall Street’s appetite for worthy schemes and had stimulated pharmaceutical industry interest, leading to “more research and keener pricing”. Okonjo-Iweala yesterday told Emerging Markets that the IFFI was a model that could be replicated.