Doing everything to make the machinery of the World Bank faster and more efficient is the goal of the president of this financial institution. Its cumbersome bureaucracy is not in line with the challenges posed by disruptions, especially climate-related, and the urgency in certain regions of the world, particularly in Africa.
Having taken over the leadership of the World Bank (WB) last June, Ajay Banga has been pushing for a "more efficient and better-funded" bank since he assumed office. This bank should be capable of meeting its updated mission: "eliminating poverty on a livable planet." To achieve this, the "Bank must change and evolve, as clearly emphasized even before my arrival," notes its president in an interview with AFP. This evolution is essential, according to him, to "create the necessary credibility and inspire financiers to contribute money" to projects supported by the WB.
The institution must notably shorten the time required for the implementation of its projects, one of the main objectives advanced by Ajay Banga, who hopes to reduce by 30% the current 27 months needed between preliminary discussions and the first expenditures. More broadly, the ongoing reforms should make the overall daily operation of the institution more efficient while allowing it to continue "doing its good work: remember that we provided $120 billion in financing last year, and we cannot cut that." Ajay Banga the plumber
In response to the interviewer's questions, Ajay Banga describes himself as a "plumber" who wants to ensure that the Bank "runs like a well-oiled machine" so that "my successor, who will face other problems, can focus on them, not on plumbing." However, it is also important to show the poorest countries that the fight against climate change does not take precedence over poverty reduction, the primary mission of the Bank, admits Mr. Banga.
"The countries in the South recognize that we cannot fight poverty without addressing climate change, but the difference is what we mean by 'climate change,'" he emphasizes. "For developed countries, it means limiting climate change, and that involves greenhouse gas emissions, while the developing world thinks of adaptation because they see the impact of warming in terms of irrigation, precipitation, soil degradation, loss of biodiversity," explains Ajay Banga.
To address this, the Bank has announced that 45% of its funding will go to projects for "limiting or adapting" to climate change, "half for limitation, the other half for adaptation." "This is important for beneficiary states because they see that half of the 45% goes to issues that concern them, and the remaining 55% is still available. For donor countries, knowing that half of the 45% goes to limitation projects is something that matters," he emphasizes. "We have to reach these compromises to show donors and beneficiaries that the Bank is trying to move in the right direction."
However, it is also necessary to reassure "the countries in the South, who are still waiting for the money promised at the Paris COP," namely $100 billion to finance their climate transition, which has never materialized. The big misunderstanding
More recently, the massive aid to Ukraine has sparked criticism in Africa, seeing it as a sign that the institution prioritizes issues deemed important by Western countries. A "misunderstanding," assures Ajay Banga, pointing out that "the World Bank puts significantly more money in sub-Saharan Africa than in Ukraine," with the vast majority of funds coming directly from donor countries via the WB. But there is now a "will" among Northern countries to "make the necessary financing available for the poorest countries; the message has reached developed countries," says Mr. Banga.
The energy transition and the fight against climate change, requiring trillions of dollars, will only be possible with the financial support of the private sector, insists Banga. However, to convince businesses to support it in this area, the Washington-based institution must continue its reforms and move faster in the implementation of its projects, he adds, acknowledging the need for the Bank to be "faster and more focused on results."
"Governments and multilateral banks do not have enough money" to finance the fight against climate change alone, recalls the former American-Indian business leader: "we need the private sector to get involved."
A G20 report published last June highlights the need to triple the capital of the World Bank, "an excellent idea," according to its president but "which will not be enough to bring us to the trillions" required "simply for the energy transition."
