The World Bank Spring Meetings in Washington DC later this month are expected to include substantial discussions between shareholders and World Bank management on the operationalisation of the Bank’s Evolution Roadmap, with an emphasis on increasing lending volume, its related Evolution Playbook, the streamlining of its Corporate Scorecard, and exploration of the use of hybrid capital. These discussions will likewise influence the process of the 21st replenishment of the International Development Association (IDA), the World Bank’s low-income lending arm, which will also feature prominently during the Meetings (see Observer Spring 2024).
At the October 2023 World Bank and IMF Annual Meetings in Morocco, Bank management presented to its Development Committee an update of the Roadmap titled, Ending Poverty on a Livable Planet: Report to Governors on World Bank Evolution (see Dispatch Annuals 2023). The Meetings also saw the launch of a new Playbook.
While much is being made of the promise of the Roadmap and related processes to transform development finance, the Bank’s executive board and management have steadfastly refused to engage with the demands contained in a July 2023 briefing endorsed by 74 civil society organisations and academics, which called for an external and independent review of the World Bank Group’s development effectiveness; the inversion of the Bank’s private sector bias in order to support global public goods; and the development and funding of a human rights policy. Efforts to sidestep the failure of the G7 to meet its overseas development assistance (ODA) and climate finance commitments have led to the reviving and reinforcing of the failed ‘billions to trillions’ agenda, and has predictably resulted in a clear focus on creating bigger rather than better multilateral development banks (MDBs). Some of the implications of the Roadmap’s heavy reliance on private finance are reflected in discussions that will likely feature prominently at the meetings, including the exit strategy of the International Finance Corporation (IFC), the Bank’s private sector lending arm, the establishment of a remedy fund and allegations of IFC’s retaliation against whistleblowers (see Observer Winter 2023).
[The Roadmap] is founded on avoiding discussions of accountability for economic interventions that undermined social and economic rights, including to self-determination and development.Rodolfo Lahoy, IBON International
Roadmap fails to address persistent lack of economic transformation in low- and middle-income countries
In addition to obscuring the G7 failures mentioned above, calls for the tripling of MDB financing to $390 billion per year by 2030 – including through the Roadmap – are also in part a reaction to increasing pressure on World Bank shareholders from the Bridgetown Initiative and other calls from the Global South states and civil society. Both have demanded urgent reforms to the international financial architecture in the wake of the unequal response to the Covid-19 pandemic and the climate crisis, which continue to negatively impact economic performance, essential social spending and investment in the green transformation, and have cost countless lives in the Global South.
While calls for reform from the Global South included a strong demand for a significant increase in development finance, with an emphasis on concessional and grant resources, they also strongly focused on reform of undemocratic governance structures to create ‘better’ institutions that are more responsive to the needs of low- and middle-income countries (LMICs). The outcome document of the January 2024 meeting of the Third South Committee in Kampala, which brought together 135 members of the G77, noted “with great concern that the international financial architecture has not kept pace with a changing global landscape and…call[ed] for urgent reform of the international financial architecture.”
Unfortunately, as the analysis above makes plain, the Roadmap has remained squarely focused on increasing World Bank finance with little evidence-based analysis of the policies and governance reforms required to ensure better institutions that meet the pressing development needs of LMICs. Alluding to the inability of the current international development system, including the World Bank and IMF, to stimulate the economic transformation necessary to end commodity dependence among LMICs, the Third South Committee document stressed, “the critical importance of industrialization for developing countries, as a critical source of economic growth, economic diversification, and value addition” and stated the group’s support for “the United Nations in playing a central and coordinating role in international development cooperation, in accordance with national development policies, plans, priorities and needs.”
While UK-based Overseas Development Institute (ODI) praised the Roadmap document for some positive steps – such as the integration of sustainability into the World Bank’s mission and vision, acting on proposals from the G20 Independent Expert Group on strengthening multilateral development banks (MDBs) to increase lending capacity by lowering the equity-to-loan ratio, and exploring the use of callable capital – ODI nonetheless noted much remains to be done.
An October analysis by US-based Center for Global Development (CGD) contrasting the Roadmap initiative with its predecessor, the Forward Look approved in 2018, concluded that “the Evolution Roadmap offers more detail than the Forward Look but nevertheless the level of ambition in most categories is modest.” Echoing ODI’s conclusion of the potentially significant, if vague, inclusion of ‘a liveable planet’ in the Bank’s mission and vision, the analysis also noted the focus on eight ‘Global Challenges’: Climate/adaptation, fragility and conflict, pandemic prevention, energy access, food security, water security, digitalisation and protecting biodiversity and nature. CGD highlighted the shift in focus from low-income countries (LICs) in the Forward Look to a stated desire to support middle-income countries (MICs) in the Roadmap as the greatest difference between the two.
As global civil society prepares to engage with shareholders and World Bank management on operationalising the Roadmap’s proposals for increased lending through the use of hybrid capital and a push for a ‘historic’ IDA21 replenishment at the Spring Meetings (see Observer Spring 2024), it remains essential that it continues to support the calls above by LMICs and their marginalised populations for a ‘re-routing of the Roadmap’ (see Observer Summer 2023), and to produce significant changes not only in financing volumes but in the policies and approaches supported by the Bank and the incentive structures within it.
Responding to the process, Rodolfo Lahoy of IBON International stressed, “Upon which foundation does the Bank’s ‘evolved’ development mandate stand? It stands on self-ascribed claims which repeat the same development paradigm that created harsh crises. It is founded on avoiding discussions of accountability for economic interventions that undermined social and economic rights, including to self-determination and development.”
