Finance ministers of developing countries have called on the World Bank to reconsider its operating practices, now that crises are no longer exceptional, but almost constant.
It must not only react more quickly when disaster strikes, but help foster resilience before it does, policymakers said, adding that existing methods were no longer fit for purpose.
Sosten Gwengwe, Malawi’s finance minister until he was removed from his post last week, said his country had suffered blow after blow, such as the devastating Cyclone Freddy. Having to constantly recover from these had made it increasingly hard to keep moving towards its 2063 vision goals.
“The climatic crises are here to stay... it is cyclone after cyclone after cyclone,” he said. “We have no fiscal or economic buffers to absorb such shocks. Every shock that hits us has a huge impact, and trying to recover becomes another challenge.”
Malawi needed to become resilient, so that it could rebuild more easily and be better prepared for the next cycle, Gwengwe said. “That is where the Bank needs to come in in terms of speed and response. Any delay is costly… by the time the money comes, there is another crisis.”
Anna Bjerde, managing director of operations at the World Bank, said it was keen to figure out how to help countries become more resilient. Infrequently frequent and severe shocks were having a huge human toll, she said.
“Some of the cost and damages that are being caused by these events is putting such strain on an already incredibly squeezed resource base for people to deal with coming out of Covid, multiple crises, and on top of so many other vulnerabilities — food insecurity at a level we haven’t seen before and the underlying and pressing impact of climate change.”
The Bank expects 60% of the extreme poor to be living in fragile, conflict-affected countries by 2030. “That means our playbook has to change,” Bjerde said. “There is a very important new vision, which is to end poverty on a liveable planet.”
Part of the Bank’s plan is to make resources available very rapidly in a crisis, using new instruments to give relief on debt repayment, or allow clients to draw down and move money around within portfolios.
Adama Coulibaly, minister of economy and finance of Côte d’Ivoire and outgoing chair of the G24 group of developing countries, said: “Beyond climate change, conflict, fragility and pandemic preparedness and prevention, we urge the World Bank to amplify support for initiatives such as access to affordable water and energy, human capital development, digital advancement and debt sustainability.”