Seventy-five years ago, representatives from 44 countries met at Bretton Woods to create the World Bank and its sister institution, the International Monetary Fund.
The two institutions inaugurated a new system of international cooperation to help countries recover from World War II through long-term economic growth for both recovering and developing countries alike.
As then US President Frankly Delano Roosevelt famously remarked, ¡°Evidence will be furnished at Bretton Woods that men of different nationalities have learned how to adjust possible differences and how to work together as friends. The things that we need to do, must be done ¡ª can only be done ¡ª in concert.¡±
On the occasion of the 75th anniversary of this historic meeting, some Board members offer their reflections on the World Bank ¨C its successes, its challenges and its impact.
Dean Merza Hasan representing Bahrain, Arab Republic of Egypt, Jordan, Iraq, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, the West Bank and Gaza, the United Arab Emirates and the Republic of Yemen.
What do you think is the greatest achievement of the World Bank over its 75-year history?
The twin goals of eradicating extreme poverty and boosting shared prosperity is a major achievement. The Board is committed to having the institution be more effective to ensure priority outcomes are met from tackling climate chance, to gender equity, to mobilizing new markets. The Forward Look supports serving all clients, especially, in fragile communities, those emerging from conflict and the most vulnerable to provide the best solutions to development challenges, leveraging and mobilizing more financial resources to our client countries. Our shareholders¡¯ support of the capital increase is a real vote of confidence that we can deliver effectively and efficiently in global priorities.
What has been the biggest challenge of the World Bank?
Debt vulnerability in emerging and low-income economies continues to be a concern. Public debt in emerging markets has been rising, reaching levels not seen since the 1980s. The IMF and the Bank Group are pursuing a wide-ranging approach to help countries contain public debt vulnerabilities. A multi-pronged approach proposes to improve assessments of public debt vulnerabilities, enhance early warnings systems, increase debt transparency and scale up debt management capacity building. Quality job creation for youth and women is key.
How has the institution impacted your ED¡¯s constituency?
The regional strategy for the Middle East and North Africa addresses the ongoing fragility and conflict affecting parts of my constituency. The strategy¡¯s objective is to promote social stability and peace in the region. Its four pillars ¨C renewing the social contract, regional cooperation, reconstruction and recovery, and resilience -- address the underlying causes of conflict as well as urgent development needs that foster financial inclusion. The region needs to create almost 300 million jobs by 2050. We are far from that target at the current growth rate. We need to use all our convening power to fulfill our citizens¡¯ aspirations.
If the Bank was not established, would you support creating it now?
Yes, most definitely. The mission of the World Bank Group attracts the best and the brightest in their fields to work on ending extreme poverty and boosting shared prosperity. Its convening power is unprecedented bringing together Governments, the private sector, donors, CSOs, academia and other partners to solve the world¡¯s most pressing development problems. The knowledge it generates and shares also benefits all global citizens. It¡¯s achievements, willingness to take risks and evidence-based solutions make it the premier development institution in the world. Our client countries have progressed through different stages of development with the assistance of the World Bank Group.
What do you hope for the World Bank¡¯s future?
As the nature of work changes, investment in human capital ¨C or the potential of individuals ¨C is the most important investment that any country can make for its people¡¯s future prosperity and quality of life. More information and better measurement of human capital is needed. The Bank Group recognizes that investing in human capital requires a global team effort from donors, policymakers and citizens alike. Improving our country system analysis is required for better development solutions and outcomes.
Executive Director Jean-Claude Tchatchouang representing Benin, Burkina Faso, Cabo Verde, Cameroon, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Republic of Congo, C?te d'Ivoire, Djibouti, Gabon, Guinea, Guinea-Bissau, Equatorial Guinea, Madagascar, Mali, Mauritania, Mauritius, Niger, Sao Tome and Principe, Senegal and Togo.
What do you think is the greatest achievement of the World Bank over its 75-year history?
ľ¹ÏÓ°Ôº Group has been very instrumental in the fight against poverty around the world. Back in October 2015, the institution announced the number of people living in extreme poverty, on less than $1.90 a day, was projected to drop below 10 percent of the world¡¯s population. The Bank¡¯s preliminary forecast today is that extreme poverty has declined to 8.6 percent in 2018. In the 1950¡¯s those living in extreme poverty was more than 70 percent. Over the last 25 years alone more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time.
What has been the biggest challenge of the World Bank?
The biggest challenge has been to remain relevant in a fast-changing global economy. This means finding ways to preserve its position as a leading global institution tooled and equipped to respond not only to its clients¡¯ development needs, but also to global development challenges. For this, the Bank Group needed to reform itself to remain fit for purpose to tackle challenges across regions and globally.
About half of the world¡¯s countries now have poverty rates below 3 percent, but the world is not on track to achieve the target of less than 3 percent in extreme poverty by 2030. In the 25 years from 1990 to 2015, the extreme poverty rate dropped an average of a percentage point per year ¨C from nearly 36 to 10 percent. But the rate dropped only one percentage point in the two years from 2013 to 2015.
The deceleration in global numbers stems mainly from an increasing concentration of extreme poverty in regions where poverty reduction has lagged. In Sub-Saharan Africa, poverty will remain in double digits by 2030, absent significant shifts in policy. According to Bank forecasts, 87 percent of the world's poorest are expected to live in Sub-Saharan Africa in 2030.
It is essential that solutions provided by the World Bank Group, through its instruments, programs and policies, remain effective to foster peace and prosperity everywhere in the world, which are the foundations upon which the Bretton Woods institutions were founded 75 years ago.
How has the institution impacted your ED¡¯s constituency?
I believe that one of the most important impacts on my constituency has been to assist countries in designing better development policies. Other successful interventions include:
¡¤ Eradicating River Blindness in 1974.
¡¤ Drought food relief for sub-Saharan African countries in 1984.
¡¤ The Heavily Indebted Poor Countries initiative in 1997.
¡¤ ľ¹ÏÓ°Ôº war on HIV/AIDS which started delivering through the Global Alliance for Vaccines and Immunization in 2000.
¡¤ The joint IFC- and World Bank-initiative to build a network of submarine cables in Africa in 2007.
¡¤ Support to the West Africa Ebola crisis in 2014.
If the Bank was not established, would you support creating it now?
My answer is yes with some qualifications. I know that the World Bank is not a perfect institution. Ever since its creation in 1944, it has undergone major policy shifts and administrative reforms. These changes have clearly improved its capacity to deal with global challenges. While many of its Structural Adjustment Programs failed, we should give credits to the Bank for the developments some European, as well as East and South-East Asian states, experienced because of integration in the world market economy.
Demand for Bank¡¯s products is strong, and the institution has an absolute advantage of being the sole development institution which combines both knowledge and money and keeps the flame of multilateralism burning. It can respond swiftly to crises and address global issues such as climate change. But the Bank needs to continue to adapt itself to the changing landscape.
What do we hope for the World Bank¡¯s future?
A nimble institution that continues to adapt and to be more responsive to its client needs and to global development challenges while focusing more on results and impact.
German Executive Director Juergen Zattler
What do you think is the greatest achievement of the World Bank over its 75-year history?
Two achievements stand out: Firstly, the Heavily Indebted Poor Countries (HIPC) initiative laying the groundwork for countries successful economic development. Debt relief was linked to poverty reduction strategies, owned by the countries with development partners to aligning their contributions. This sort of alignment is lacking nowadays, where increasing fragmentation of donor contributions is a growing concern.
Secondly, acknowledging the key role of institutional change as well as transparent efficient institutions was a big step forward. It was a milestone, when (Former President) Jim Wolfensohn emphasized that the Bank would help fight corruption.
What has been its biggest challenge?
Perhaps the biggest challenge is to keep the Bank relevant in a rapidly changing environment: Think tanks, increasingly competing with the Bank¡¯s knowledge related work, banks providing access to capital for a growing number of countries and other multilateral development banks offering similar packages. The Bank¡¯s great comparative advantage is to do the most difficult and complex work, even if this is very often not the costliest option. With the capital increase, the Bank must meet this challenge.
How has the institution impacted your ED¡¯s constituency?
The impact is not very visible. This is another challenge the WBG faces regarding non-borrower countries. The Bank needs continued support, but its footprint in these countries is not very visible. One option would be to systematically invest in a new business line offering attractive knowledge products to developed countries. There is a case for cross fertilization and learning between industrialized, emerging and low-income countries.
If the Bank was not established, would you support creating it now?
Yes, but probably not with the same design. The Bank Group must become a ¡°Global Public Goods¡± Bank, maintaining its country focused model, but better integrating global challenges beyond poverty reduction. The Bank is uniquely placed to work at the interface of development and global challenges like climate change, fragility and pandemics. Many national development banks already have such a mandate.
What do you hope for the World Bank¡¯s future?
I hope the institution becomes a real ¡°Global Public Goods Bank.¡±
Executive Director Kulaya Tantitemit representing Brunei Darussalam, Fiji, Indonesia, Lao People¡¯s Democratic Republic, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga and Vietnam.
What do you think is the greatest achievement of the World Bank over its 75-year history?
The greatest achievement of the Bank has been its role in raising living standards throughout the world. The Bank played a vital role post-World War II in the reconstruction of what are now advanced economies. Growth in global income per capita has helped many low-income people escape poverty and become more economically secure.
What has been its biggest challenge?
Although there have been many successes, poverty remains one of the most challenging issues which is expected to become more complex as climate change increasingly affects the poor. Technological progress is proving to be a key ally in addressing many of the challenges we face. The Bank will also need to continue to closely engage with its individual client countries.
At an organizational level, the biggest challenge is in sustaining multilateralism and advocating for the benefits of international co-operation. Global co-operation is especially important today in a highly interconnected world, yet it has also become more difficult with the recent rise of protectionism and nationalism. It will be important to maintain confidence in global partnerships, by demonstrating how working collectively to solve problems can deliver better outcomes than if nations and communities go it alone.
How has the institution impacted your ED¡¯s constituency?
The Bank has played a significant role in the growth of countries in our constituency. We now have better access to global best practices which can help address development challenges. Some of the countries in our constituency have developed from poverty-stricken, low-income nations over the last 75 years to become confident middle-income nations today. Others are still IDA recipients, but with adequate financial and technical assistance from the Bank are on a path to becoming middle-income countries.
If the Bank was not established, would you support creating it now?
Yes. Even with the World Bank¡¯s efforts over the last few decades, the infrastructure gap in our region remains large and there is substantial scope for greater investment in human capital. This is evident from the recent establishment of the Asian Infrastructure Investment Bank (AIIB), modelled after the best practices of the World Bank and regional development banks. This is an indication that the World Bank¡¯s model remains relevant and in high demand, even in a region like Asia that has experienced relatively high growth.
In addition to financing, there is also great value in the Bank¡¯s technical expertise which is an accumulation of practical experience through projects across the world. The Bank is best placed to lead on the provision of global public goods and address critical challenges such as epidemics and climate change that could set back the development of fragile and vulnerable countries.
What do you hope for the World Bank¡¯s future?
As more countries climb the development ladder, the Bank¡¯s twin goals of eliminating extreme poverty and boosting shared prosperity could gradually evolve into an agenda of sustainable development facilitated by modern technology. With financial markets having evolved substantially and more sources of development finance becoming available, more focus could be placed on helping countries maximize the impact of available resources for the best development outcomes. The Bank¡¯s priority could move from being a dominant global lender to the best development knowledge powerhouse backed by a collection of comprehensive lessons, rigorous analysis, and practical recommendations suitable for the specific condition of each locality.
Russian Executive Director Roman Marshavin
How has the institution impacted your ED¡¯s constituency?
Stalin decided momentously to forgo the USSR's membership in the World Bank and IMF. This decision now looks inexplicable, because the USSR had actively participated in the lengthy negotiations, which led to the new global financial architecture and was guaranteed a prominent share equal to that of the UK and second only to the US.
There is virtually no doubt that in the Cold War environment the global confrontation would have found its way into the inner operations and proceedings. The principle of non-politization and consensus-building remains at the core of Bank Group. Deviations from this consensus and non-politization principle do happen, but I believe that the principle itself still stands, and we are sincerely looking forward to seeing it fully restored to its glory.
When the Soviet Union underwent the most dramatic transformation of its history, and the Russian Federation inherited its international rights, there was no legacy to overcome and no bad blood between the members. The economic transition was a learning process for all parties involved. Looking backwards, this decade of transition was an astounding success of truly historic dimensions. So many countries, with dramatically diverse economic and cultural backgrounds, all embarked on the revolutionary transformation of their planned economies almost simultaneously, and one cannot deny they practically all have completed it.
Executive Director, Koen Davidse representing Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, Moldova, Montenegro, The Netherlands, North Macedonia, Romania and Ukraine.
What do you think is the greatest achievement of the World Bank over its 75-year history?
We have seen great progress in the fight against poverty. ľ¹ÏÓ°Ôº has also been crucial in advocating for the interests of client countries to ensure they have the means and policies to achieve greater prosperity for all. This is especially important for smaller countries and conflict-affected countries, that are sometimes forgotten.
What has been its biggest challenge?
Climate change risks making the problems of poverty even worse. Other problems remain, including fragility, conflict and violence and inclusion to give women and youth more of a stake in sustainable development.
How has the institution impacted your ED¡¯s constituency?
The Bank has been a trusted partner in the transition to market economies, fostering economic growth and regional integration. It has also been a partner in helping countries recover from the horrors of war and major economic crises. Currently, it is helping constituency countries invest in human capital for more inclusive growth, facilitating trade, generating investment and creating new markets.
If the Bank was not established, would you support creating it now?
Last year¡¯s capital increase ¨C a record amount of $13 billion ¨C illustrates shareholders support remains very strong. We hope the IDA replenishment this year will also generate substantial resources for the poorest countries. The Bank Group is still very much needed to help governments and societies attain the Sustainable Development Goals. In partnership with others, the WBG will continue to tackle remaining poverty and help countries create shared prosperity.
What do you hope for the World Bank¡¯s future?
¡®Mission accomplished¡¯ would be my greatest hope for the World Bank and the world! But we are not there yet and new challenges, such as the ones related to climate change and conflict, are to be tackled. We must keep our focus, with our advocacy, advice and operations, on the end goal: a more sustainable, just and prosperous world without poverty.