The World Bank’s double challenge: responding to crises without losing sight of strategic commitments

FROM THE CORRESPONDENT IN WASHINGTON. Axel van Trotsenburg is senior managing director of the World Bank, responsible for Development Policy and Partnerships. He has dual Austrian-Dutch nationality and is a veteran of the Washington institution which this week is in the spotlight with the Spring Meetings. In his office at the headquarters of the BM he has carved out space to reason with La Stampa on the hottest dossiers on the table: public debt, poverty and the mission of the World Bank that the US Treasury secretary, Janet Yellen, would like to see reformed with a portfolio expansion and greater focus on issues such as climate change. “The Bank’s financial support offers a first impression of what has been achieved in recent years – explains Van Trotsenburg -. Basically since the outbreak of Covid we have gone from an average of 42 billion dollars to about 70 billion dollars. And the main reason is that the World Bank is an organization that has long-term goals, but at the same time it has to manage crises. So we need to be able to face a double test: responding to emergencies without losing sight of the overall objective”.

However, the senior official of the World Bank underlines these are issues that are connected and that in any case have relationships: “Working on the response to Covid and at the same time moving in a scenario of climate crisis” is necessary. And it imposes a growing role on the part of “donors”. In the last two years, for example, the trend in loans has been steadily on the rise, as have the projects sponsored by the BMW which grew threefold between the three-year period 2013-2015.

One of the nodes of the last year leads to Ukraine. In the 2022 Spring Meetings in Washington, one of the hottest debates concerned the decoupling and fragmentation of the world, between the creation of alternative supply chains and the birth of a highly polarized and multicentric world. “Clearly this is a challenge for the World Bank, we live in a world full of geopolitical tensions. And this affects not only the WB but also the other international institutions”, says Van Trotsenburg who highlights how the focus of the World Bank remains “development” and the challenge lies in understanding “how we can keep alive the idea of ​​multilateralism and cooperation international both when looking at poor countries and on new emergencies”. Climate change, the official explains, is not in fact something that a single nation can overcome on its own.

From a concrete point of view, what Van Trotsenburg notes is that each country has contributed to the funds for poor countries, there are 23.5 billion dollars allocated to which everyone, including Russia and China, has contributed. And the same can be said of the G20’s efforts to prevent a new pandemic. “The World Bank is working closely with the G20 and WHO to build a pandemic prevention fund that has received $1.6 billion in financial commitments from a number of donors.”

The most pressing challenge is that of the debt of poor countries, a recurring theme in discussions and panels in Washington. Fragmentation and climate change have a major impact on disadvantaged economies, and these problems, the official points out, cannot be solved with a sectoral approach, they need to be addressed in their complexity. The region that poses the greatest challenges is Africa which absorbs – the numbers provided by Van Trotsenburg – today 50% of the contributions, 35 billion dollars.

The plan, or at least the ambition, is to be able to replicate the successes of the support plans in Asia which in several countries have managed to eradicate “extreme poverty”. This is the case – explains the managing director – for example in China where a few decades ago extreme poverty was 80% and is now eradicated. Or Vietnam, where poverty has been drastically reduced since the reform process began”.