World Bank President Ajay Banga is in Canberra this week. This is the first visit by a World Bank President to Australia in seven years.
Why is he here? This goes to the heart of the World Bank’s purpose.
The World Bank, created after World War II to finance reconstruction, is now tasked with creating a world free from poverty on a livable planet. It has 189 member countries .
What does the World Bank do?
The bank funds projects in developing countries through a combination grants and preferential loans that countries pay. Last yr he assured 136 billion Australian dollars to 75 countries in the type of grants and loans.
One of her funds, International Development Agencysupports projects in 76 of the world’s least developed countries.
Thanks to this initiative, 36 countries have advanced from least developed to middle-income country status, and plenty of of them, like South Korea, have grow to be donors themselves.
This signifies that a big a part of the World Bank president’s job is to secure financing. The International Development Agency’s fund is currently in its three-year round of “replenishment” where it seeks financial support from donor countries.
The World Bank has determined ambitious goal raising roughly AUD 44.2 billion from donors who (*10*)announce your commitments at the December meeting of the bank.
If we will persuade donors to reach this amount, it will be possible influence turn it right into a fund price A$149.9 billion, using its AAA credit standing to proceed borrowing money international capital markets.
Why Australia’s role is necessary
From a bank perspective, Australia plays a major role role. It is a very necessary donor in the Pacific, for instance, giving money for the fund contributing to a 50 percent increase in the variety of World Bank staff in the Pacific and a seven-fold increase in the variety of projects in the region.
It supports over 95 projects in agriculture, digital development, education, fisheries, health, renewable energy, transport and employment.
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Compared to other countries, Australia gives relatively low share of its development financing through multilateral organisations equivalent to the World Bank – channelling the majority of its financing through bilateral channels.
The World Bank needs coalition of nations including Australia, which has made large pledges to finance the bank’s operations.
Who is Ajay Banga?
Banga is not your typical candidate, having been born and raised in a developing country and having assumed the presidency, which has traditionally been held by an American, is an American citizen.
He comes from a business background, he has previously He was chairman and CEO of Mastercard, and likewise held positions at PepsiCo, Citigroup and Nestlé India. He was chairman of the International Chamber of Commerce.
He is known for his work at Mastercard in launching the Center for Inclusive Growth, which goals to promote equitable and sustainable economic growth and financial inclusion worldwide.
He also stands out from his predecessor on climate change, adding the words “a livable planet” to the World Bank’s mission.
In addition to visiting Australia, this trip included visiting Fiji and Tuvalu, where he saw destruction attributable to climate change first-hand.
With this experience – and access to all the facts and data from the World Bank – he is aware of the realities of people’s lives and the most serious threats to this planet.
Bangui’s top priorities
This week the president said:works“was his top priority.
According to data he presented to the think tank, in just over a decade, 1.2 billion young people worldwide will be of age to search for work. Lowy InstituteWith current projections of 400-500 million jobs being created, the gap is huge.
This means there is an urgent need to create jobs in order that young people don’t grow to be a reason for migration, drugs or conflict.
Banga said we need “cooperation between governments, philanthropic organizations and multilateral development banks” to create more jobs.
This reminds us why it is so necessary for a developed country like Australia to invest in development aid to create a stable, prosperous region and the wider world.
Dealing with global poverty is preventative. It is cheaper and easier to invest in electricity, health care, and education now than to pay the costs of instability or chaos later.
The excellent news is that global investment in development has led to a major reduction in global poverty since 1981. Bangui’s message to Australia is:
Ultimately, the World Bank is an instrument that reflects the ambitions of those on whose generosity it relies, and the progress we seek to achieve requires more.