Bahrain Participates in IMF-World Bank Meetings

Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa, referred to the proposed capital package for improving the World Bank Group (WBG) as a transformational change in how the group deals with development challenges, and the scale of financing and engagement in this respect.

He stressed that its four main pillars remain extremely relevant: serving all clients, maximizing finance for development through mobilisation of private sector investments and solutions, leading on global issues, and improving the business model.

In his statement to the Development Committee, the Minister said that the package aims to provide the WBG with an average annual financing capacity of about $100 billion between the fiscal years 2019-2030. Further, the package would generate $ 315 billion of additional development financing over the same period, including an additional $110 billion mobilised from the private sector.

The statement was delivered on behalf of the Arab Group and the Republic of Maldives to the 97th meeting of the committee, held in Washington, D.C. on the side-lines of the spring meetings of the WBG and the International Monetary Fund (IMF).

Sustaining and accelerating progress towards global development goals necessitates a bigger and stronger WBG, with ample financial capacity, that addresses the myriad of global challenges, said the Minister.

He argued that expanding financial capacity for low-income countries through the transformation of the International Development Association (IDA) financial model, and for middle-income countries through the capital package, complements and strengthens the WBG’s reach.

Moreover, maximising financing for development and adopting private sector solutions, while assisting clients in strengthening their own domestic resource mobilisation and the effectiveness of their public spending, is crucial.

Strengthening the capital base of the International Finance Corporation (IFC) was strongly welcomed by the Minister, given that the WBG and the development community as a whole had clearly established that the future of development finance would be clearly slanted towards the private sector, requiring a much stronger and larger IFC, equipped with the financial means to mobilise untapped private capital, create markets, and expand deployment of private sector solutions.

In this context, he praised the leadership position that IFC is assuming among development institutions to mobilise capital from institutional investors.

As both low and middle-income countries face high levels of private and public indebtedness, resulting in no budgetary margin for capital expenditure on basic public services and infrastructure, the IFC will now be adequately equipped with the tools and the financial capacity to create the markets, and mobilise private finance for such projects through innovative financial models.

The Minister also called for maintaining the WBG’s leadership on global issues, particularly with regard to increased financing to fragile and conflict situations, and enabling regional integration.

In its communiqué, the Development Committee welcomed the fundamental reforms that have been negotiated as part of the proposed capital package, and that will allow the WBG to more effectively deliver development results in a financially sustainable manner.

The committee also called for a much greater role for the private sector in development activities, as it is the main driver of investment, innovation and jobs.

The World Bank, IFC, and the Multilateral Investment Guarantee Agency (MIGA) were urged by the committee to work closely together to tackle market and regulatory imperfections, strengthen institutional capacity, and collaborate to mobilise private investment for inclusive development.