2023-05-03 21:48:32
Alone in the running, Ajay Banga has unsurprisingly become the new president of the World Bank (WB).
The US candidate, a 63-year-old business executive who was born and raised in India, will begin his term June 2.
US President Joe Biden immediately congratulated Mr. Banga, ensuring that he was ready to “support his efforts to transform the World Bank, which remains one of the most essential institutions in the fight once morest poverty in the world”.
Traditionally, the WB is the preserve of the United States, a citizen of which has always led the Bank since its creation, in the wake of the Bretton Woods agreements in 1944. But this hegemony was increasingly called into question, in particular by the major emerging countries, led by Brazil, China, India and Russia, who have been wishing for several years to see their place in international financial institutions strengthened.
Amid rising geopolitical tensions, the US decision to nominate Mr Banga, who was born and raised in India, was anything but trivial, as the US tries to get closer to the other giant Asia to counter Chinese influence in the region.
In a context where more than sixty poor and emerging countries are on the brink of or hit by a debt crisis, financing from the two institutions is even more essential to avoid a collapse of their national economies. Especially since the rise in the rates of the main central banks affects the access of these countries to financing, while strongly increasing the costs, further complicating the budgetary situation of these countries.
However, the hardest part now remains to be done for Ajay Banga, who will have to meet expectations on two burning and linked issues: the reform of international financial institutions, starting with the WB, and an increase in the financing of the fight once morest global warming. climatic. Especially since the needs are enormous, as the IMF has repeatedly pointed out: a minimum of 1,000 billion dollars per year will be necessary, over the next few years, to help emerging and developing countries to cope with them.
During the spring meetings, the main contributors to the WB agreed to increase its financing capacities by 50 billion dollars over the next ten years, a significant effort but notoriously insufficient compared to the needs.
In response, Ajay Banga made no secret of his desire to involve the private sector. “There is not enough money, whether in the multilateral development banks, in the big governments of the developed world, in civil society, even with the most philanthropic intentions”, he insisted at the beginning of March.
Among the recommended solutions, Mr. Banga envisaged in particular rethinking the funding approach by specific projects, so as to be more incentive for the private sector. He will now have the opportunity to move from theory to practice.
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