Notes of a meeting with World Bank Managing Director Caroline Anstey

Participants

Summary of opening thoughts from Caroline

Informal roundtable meeting organised with key CSO counterparts during her trip to London.

IDA17 Replenishment

Next IDA17 meeting is in early July in Nicaragua, but the overall theme is set already as “maximising development impact” and we are continuing with special themes on gender, fragile and conflict states and climate change. An additional theme is being added on “inclusive growth” which is likely to have three areas of focus: jobs, financial inclusion, sharing the benefits of extractives. There is a lot of work being done on the financial structure of IDA and graduation questions.

World Bank goals & strategy

The World Bank’s president Jim Yong Kim set out two core goals: ending extreme poverty and boosting “shared prosperity” which must be sustainable for the welfare of current and future generations. The first goal aims to  reduce the percentage of people living on less than $1.25 a day to 3 per cent by 2030. This is going to be challenging. The second goal is on boosting income growth of the bottom 40%. To do this we will be measuring GINI coefficients for example. The key point is that we will be building a Group-wide strategy. Our comparative advantage as the World Bank Group is in combining knowledge creation with public AND private sector work. Myanmar is one  example of this approach.

We aim to have more synergy, a broader set of instruments, more focus on fragile and conflict states, more focus on climate change, and sharper selectivity on picking projects. We recognise that the UN process will be setting its own goals soon, and we may have to tweek ours as a result.

Discussion

World Bank strategy-related questions

Questions on this came from Oxfam, Bretton Woods Project and Save. The issues focussed on why inequality was not explicitly included in the goals, about redistribution, and about how the IFC fits in with a group-wide strategy to help the poorest, especially with so much finance going through financial intermediaries where the ultimate impact is unknown.

Summary of Caroline’s responses:

• Thereare differences of views amongst shareholders on things like inequality and redistribution though all have signed off on the 40% goal.
• We are doing a lot of work with conditional cash transfer programmes
• To measure progress against our 40% target, we will need to look at GINIs, and especially have much better and annual data. We need to work with other agencies to improve that data, and we are thinking about how to do beneficiary counting to see who is benefiting from projectsincluding through disaggregated data
• We are going to have integrated indicators across the World Bank Group – this should help with development impact measurement at the IFC – it is not going to be perfect at first, and we are trying to build in feedback mechanisms and changes in the project cycle so we can be more dynamic. But the IFC specific points I will have to bring back to the IFC
• Our goals are going to have to work with the UN goal setting process. We are engaged with this, we want to make sure financing is discussed early and is not just about aid flows

IDA-related questions

IDA related questions came from Oxfam, ODI, Save, CAFOD. The issues raised were around free universal health coverage, how small business is key for inclusive growth, IDA allocation for fragile states.

Summary of Caroline’s responses:

• The Bank has a role to play on health systems, and we are looking to scale up on health and education, but we are working on a more preventative care/basic health care model rather than a focus on specific diseases or procedures
• The continuation of IDA themes on gender, FCS and climate change are a good thing – these are really going to be about human development, even if we are not picking traditional human development sectors as themes. “Inclusive growth” is an additional theme for this replenishment. But remember IDA is client demand driven on the project side. While there has in the past been an emphasis on access we want to emphasise quality as well.
• We don’t have clear IDA indicators on small business now, but maybe we can get at this through financial inclusion, especially women’s access to credit – this is something we will take back
• On the allocation issues – how to reward progress and not hurt good performers is a riddle we are trying to solve, for fragile states we are thinking about different criteria . For  fragile states we also  want to work with governments to improve their systems
• We are not facing a decreased demand for IDA because of competition in the aid architecture, donors have expressed their support for IDAand clients are also requesting stroing IDA support ; we should look at IDA graduation as a success

Other topics

Safeguards review

Caroline’s response to a question about human rights frameworks in the safeguards:

• We have to be non-political at the Bank given our Articles of Agreement. If we wanted to include human rights we would have to show the contribution of human rights to development, the economic and development value added. We made this case on issues like transparency, gender and corruption so they are no longer considered so political.
• We need to focus on development outcomes and relate these to the issue of human rights Environmental/land issues

Caroline response to questions about land and land grabs, fossil fuel subsidies, energy and climate finance:

• We are working on the voluntary guidelines on land now
• Eliminating fossil fuel subsidies is politically tricky in many countries – we are trying to help with willing countries on transition arrangements and safety nets, this is also being discussed at the G20
• We need to crack the energy deficit, we think some of this can be done with hydro power
• We know there are concerns about coal financing in the Bank’s portfolio, we agree that more can be done with renewable energy and the Bank will be looking at this
• We are aiming to have robust indicators and publish  – this will help with transparency, including about results and impacts on people
• Donors have very different opinions about climate finance and IDA – we have things to do like climate-smart agriculture, climate-smart cities, natural capital accounting

Transparency and governance

Caroline response to questions about good governance and the relationship with donors:

• The governance agenda is part of the Bank’s agenda – we want to build up country systems; we have to be demand led but in alignment with our corporate goals
• We are very much in favour of more transparency – this is coming in areas like land and extractives

Implementation

Response to a question about how incentives within the Bank change:

• We agree on the need for internal incentives, and again transparency will help, we also need incentives for cross-group work within the Bank Group; with strong data and results tracking, people can be held to account.