Government supports capital increase for World Bank
The government has agreed to support the World Bank’s proposals for a substantial capital increase. Minister for Foreign Trade and Development Cooperation Sigrid Kaag announced the government’s decision in Washington, DC at the bank’s spring meeting. ‘This will give the World Bank greater scope to assist the poorest countries with funding and expertise,’ the minister said. ‘This assistance will play a crucial role in lifting many millions of people out of poverty, in accordance with international agreements on the Sustainable Development Goals (SDGs).’
The Netherlands is one of the bank’s many shareholders that have agreed to provide a capital injection totalling $13 billion. This will enable to bank to generate $100 billion in loans annually for the next decade, over a third more than it would be able to provide without the additional funding. Ms Kaag said, ‘It is exceptional that 189 shareholders have managed to forge this agreement during such a challenging time for multilateralism. This is an important step in the battle against poverty, conflict, climate change and gender inequality.’ In exchange for the capital contribution, the bank has ramped up its ambitions in all these areas at the urging of the Netherlands and other European partners.
Between 2020 and 2024, the Netherlands’ share of the capital increase will be between €200 and €250 million (approximately €50 million a year). ‘Under Jim Kim’s leadership the bank has become a “better bank”, by cutting bureaucracy, putting more people in the field and reining in salaries,’ said Ms Kaag. ‘And as minister for aid and trade I applaud the bank’s efforts to fund more projects with private money.’ This new approach, with a larger role for the business community, will yield billions of dollars in extra financing for sustainable investments in development between now and 2030.
Other important points on the agenda of the spring meeting were gender equality and preventing sexual misconduct by staff of international financial institutions and their partners. The World Bank has a strict code of conduct in this respect. ‘Other institutions must also adopt strict rules, and zero tolerance must be the norm,’ the minister remarked. ‘We also want to see those rules enforced more strictly by Dutch aid organisations operating in developing countries.’ Ms Kaag and her British counterpart organised a well-attended session on this subject.