The Multilateralist

World Bank Headed Into the Danger Zone

World Bank president Jim Kim has frequently called on the institution he leads to become less risk-averse. In a recent speech, he made clear that part of a new, bolder lending policy will be more engagement with conflict-ridden and fragile states: Kim pledged that he would direct more funding to fragile and conflict-affected states. He ...

World Bank president Jim Kim has frequently called on the institution he leads to become less risk-averse. In a recent speech, he made clear that part of a new, bolder lending policy will be more engagement with conflict-ridden and fragile states:

Kim pledged that he would direct more funding to fragile and conflict-affected states. He said it his hope to increase the share of [International Development Association] core financing – the Bank’s fund for the poorest – to fragile and conflict-affected states by about 50 percent in the next three years. He also said that the IFC, the Bank’s private sector arm, also would increase funding by 50 percent over three years for low-income and fragile states. The IFC increase could amount to more than an $800 million increase over three years; the IDA amount could not be determined until countries made pledges later in the year. 

This strategy is in some ways natural for the Bank, as several of its largest client states are graduating from eligibility for IDA loans. But it does create tension with other areas of emphasis for the lender, including the crackdown on corruption associated with Bank projects. Operating in the most fragile states may require dealing with less scrupulous official and non-official partners.   

World Bank president Jim Kim has frequently called on the institution he leads to become less risk-averse. In a recent speech, he made clear that part of a new, bolder lending policy will be more engagement with conflict-ridden and fragile states:

Kim pledged that he would direct more funding to fragile and conflict-affected states. He said it his hope to increase the share of [International Development Association] core financing – the Bank’s fund for the poorest – to fragile and conflict-affected states by about 50 percent in the next three years. He also said that the IFC, the Bank’s private sector arm, also would increase funding by 50 percent over three years for low-income and fragile states. The IFC increase could amount to more than an $800 million increase over three years; the IDA amount could not be determined until countries made pledges later in the year. 

This strategy is in some ways natural for the Bank, as several of its largest client states are graduating from eligibility for IDA loans. But it does create tension with other areas of emphasis for the lender, including the crackdown on corruption associated with Bank projects. Operating in the most fragile states may require dealing with less scrupulous official and non-official partners.   

David Bosco is an associate professor at Indiana University's School of Global and International Studies. He is the author of books on the U.N. Security Council and the International Criminal Court, and is at work on a new book about governance of the oceans. Twitter: @multilateralist

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