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Global crises: World Bank manager warns of decoupling: “Everything is becoming global”

Global crises: World Bank manager warns of decoupling: “Everything is becoming global”

The poorest countries in the world are hit particularly hard by global crises such as climate change or pandemics. The World Bank supports them. But it depends on the solidarity of its members.

Poorer countries must not be left behind when it comes to pressing problems such as climate change, according to a top World Bank manager. Development expert and senior managing director at the World Bank, Axel van Trotsenburg, warned that wealthier countries are decoupling.

“Nowadays, and unfortunately this has also been seen with Covid, nothing is local anymore, everything is becoming global. That means an international response is needed,” he said in an interview with the German Press Agency in Washington. The international community must continue to take care of the poorest countries in the world, said van Trotsenburg. It’s easy to “lock yourself in” and only worry about the problems in your own country. But van Trotsenburg emphasized that it is important to live in solidarity.

Multilateral organizations such as the World Bank play a special role, said the 65-year-old. “We have to be in constant change.” That is why it is important that the World Bank is currently undergoing a reform process. The aim of the reform continues to be the fight against poverty. But new criteria for allocating World Bank loans should make it more worthwhile for states to invest in projects that are not just for their own benefit – for example in the protection of rainforests and endangered species or in the fight against infectious diseases.

The World Bank is a kind of learning institution that always adapts to new circumstances, said van Trotsenburg. She not only passes on money, but also knowledge. However, the current global fragmentation is an enormous challenge, he said, also with a view to geopolitical conflicts. “I’ve been at the World Bank for a long time. I think you have to have the will and I know there are always new problems,” he emphasized. But he is an “eternal optimist” and is convinced that it is possible to bring different parties together. Van Trotsenburg has worked at the World Bank for more than 35 years.

Development aid and the fight against poverty as core tasks

The World Bank lends money to poor countries on favorable terms with the aim of strengthening their economies and reducing poverty there. The organization is supported by 189 countries worldwide. Initially, the main purpose of the organization based in Washington was to promote reconstruction, not least in Europe, and to create stable currencies in cooperation with the IMF. Since the 1960s, its core task has been development aid and the fight against poverty, and more recently also climate protection. As a rule, the World Bank helps with low-interest loans and so-called micro-loans.

It coordinates development projects, supports educational offerings, provides technical assistance and supports countries in need with investments in infrastructure or the fight against corruption. The World Bank has various financing instruments. The development organization IDA grants loans to the poorest countries subject to conditions. These countries now account for 90 percent of all people affected by hunger or malnutrition. According to a recent World Bank report, a third of the 75 IDA countries are poorer than before the start of the corona pandemic. More than half of the IDA countries are located in sub-Saharan Africa.

The member states of the World Bank are also the capital owners of the World Bank. The higher the share, the more voting rights the country has. The largest shareholder is the USA, followed by Japan and China. Countries like Germany and France also have great influence.

Source: Stern

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