Speech by Minister Sigrid Kaag at the meeting of the Development Committee of the World Bank Group
Speech by Sigrid Kaag, the Netherlands Minister for Foreign Trade and Development Cooperation at the meeting of the Development Committee of the World Bank Group, 9 April 2021
Madame Chair, Ladies and gentlemen,
My constituency thoroughly appreciates the Bank’s support for a green, resilient and inclusive recovery from the COVID-19 crisis. The Bank has a unique potential to make a difference and to get us back on track towards 2030. Let me make three points.
The Bank needs to become more people-centred and make sure to leave no one behind
Nowhere is this more urgent than in our collective effort to overcome the pandemic. We are pleased to see that the Bank got off to a good start with vaccine projects complementary to COVAX and we welcome its cooperation with the UN here.
Equitable and timely global access to vaccines, diagnostics and treatments is essential to said collective effort. No one is safe until everyone is safe. In that context, I am happy to announce that the Netherlands will make an additional contribution of 52 million euros to the Access to COVID-19 Tools Accelerator, ACT-A. . This brings our total contribution to Act-A to 137 million euros.
Of course, aside from a health crisis, this is also very much a humanitarian and a socioeconomic crisis. Therefore, we encourage the Bank to continue supporting safety nets for the most vulnerable; to strengthen its engagement on internal displacement; and to pay more attention to mental health and psychosocial wellbeing. The pandemic has an outsized effect on women, which is why we need additional analytical and operational measures to secure their rights and amplify their voices.
All of COVID-19’s adverse impacts are also enlarged in contexts of fragility, conflict, and emergencies. The Bank’s operational policy should therefore guide its staff towards a focus on conflict prevention and drivers of fragility.
The Bank needs to put green, resilient and inclusive development into practice
While we support the integrated approach of Green, Resilient and Inclusive Development laid out by the Bank, we also stress the urgency of acting on it now. This so-called GRID approach should be part and parcel of the Bank’s recovery package as soon as possible and no later than this Summer.
The World Bank is well-placed to be our global climate and development bank. My constituency welcomes the Bank’s commitment to Paris alignment by 2023. Nevertheless, we need clarity how and by when the Bank will phase out fossil fuel financing, while supporting client countries to reach their SDG7 targets and achieve a net-zero emission global economy by 2050.
We need an approach to debt that is coherent with a green, resilient and inclusive recovery
We support a final extension of the DSSI in order to move on to a more structural approach. Debt restructuring under the Common Framework should proceed on a case-by-case basis.
At the same time, we should do what we can to increase the availability of concessional financing. For this reason, I have decided to contribute an additional 20 million euros to the subsidy account of the IMF’s Poverty Reduction and Growth Trust now. I hope many of you will do the same. Concessional financing should aim at a green and inclusive recovery. In this regard, I look forward to proposals by the IMF to do so when discussing the Fund’s Climate Strategy and the Review of Concessional Financing.
It is also important to look beyond the Common Framework and the crucial day-to-day crisis management through especially additional concessional financing and the DSSI. In that context, the Bank should provide us with an in-depth analysis of the root causes of the current debt crisis. This will help us forge a coherent approach to the current debt vulnerabilities as we provide the finance needed to achieve the SDGs and the climate goals. In this context, we welcome the idea of an organising framework for official bilateral and commercial creditors that links debt relief to country strategies for green and inclusive development. We should start a conversation on how to further enhance incentives for countries to invest in implementing such a strategy. The Bank’s leadership in this field is greatly appreciated.
Before I conclude, let me say that I welcome the start of the crucial IDA-20 replenishment. In light of the current global emergency, we urge IDA to optimise the use of its balance sheet to mobilise more funding, while ensuring long-term financial sustainability.
In closing, I would like to reiterate that we are banking on the Bank’s leadership to get us back on track towards our global goals. As they say, leadership is the only safe ship in a storm.