In November 2013, the World Bank published a draft of a proposed new operational policy on guarantees. Guarantees are designed to help extend the reach of private financing by mitigating perceived risk and encouraging private sector involvement in developing countries. The proposed reform aims to “support a fuller and more effective use of Bank guarantees in country engagements to leverage Bank resources in delivering critical infrastructure and reform programmes to reduce poverty and foster shared prosperity.” It has been proposed that guarantees will be governed as an alternative form of financing within a single policy framework that governs both guarantees and loans. The draft reform would open access to all types of Bank guarantees; lift unwarranted restrictions that currently limit the Bank’s opportunities to help mobilise financing for development needs; incorporate Bank guarantees into Investment Project Lending and Development Policy Lending; clarify aspects that were inhibiting the use of Bank guarantees; and modernise the policy to make it more flexible. If approved, the new policy will take effect in July 2014.
16 October 2013
Renewed calls for a substantial SDR allocation raise urgency of reforming the inequitable global reserve ‘non-system’.
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The Bretton Woods Project is a UK-based NGO that challenges the World Bank and IMF and promotes alternative approaches. We serve as an information provider, watchdog, networker and advocate. Our flagship publications are the Bretton Woods Observer, a quarterly critical review of developments at the World Bank and IMF, the Dispatch, a biannual analysis of the World Bank and IMF Spring and Annual Meetings, and the NewsLens, a bi-weekly roundup of key news and critical viewpoints published about the World Bank and IMF.
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