My pitch to build a brave new World Bank

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April 4, 2012

My pitch to build a brave new World Bank


By José Antonio Ocampo

The World Bank has evolved since its creation in 1944 into the primary multilateral agency pursuing balanced, inclusive and peaceful development for all countries. The world has made progress in this regard, but too many people in the developing world still live in poverty, countries have made very uneven progress and the gap between developing and developed countries remains unacceptably big.

This means, first and foremost, that the Bank’s core mandate must remain that of reducing poverty. This relates primarily to the poorest countries, but also to middle-income countries, where most of the world’s poor live. It is a responsibility that has to be tackled not only with economic growth and job creation, but also by addressing inequalities that have risen in most countries in recent decades, and by eradicating all forms of gender inequality.

To this end, the Bank should strengthen support for small-scale agriculture and feeder roads for rural producers; develop a minimum level of social protection; and make gender equality central to all its activities.

The recent food and financial crises, and the already visible effects of climate change, have painfully reminded us that the world also badly needs global institutions that can address, in a co-operative way, the enormous challenges ahead.

In this regard, the Bank has great potential to contribute to the supply of global public goods, particularly in management of the global commons. By far the most important challenge is to mitigate and adapt to climate change: this requires a revolution in the global energy system and huge investments. The Bank is crucial as its main clients, developing countries, will be the biggest source of new global energy demand.
In all these tasks – and especially in the energy sector, where there are huge financing requirements – the Bank must co-operate closely with the private sector. The Bank will thus have to enhance its key catalytic role in this regard, especially for non-natural resource investments in low-income countries.

A new area in which global co-operation is needed arises from the importance that big emerging economies now have in generating global growth. We need an inclusive forum for policy makers from both developed and developing countries to discuss the issues this raises.

The Bank, with its analytical resources, can provide a forum to discuss how changing trade and investment patterns, and the production sector restructuring taking place across the world, can be made compatible with faster global economic growth.
In playing these roles, the Bank must see itself as part of the global system of governance: a specialised agency of the UN system and a support to the Group of 20 leading economies; a key part of the global financial architecture; and the apex of a system of multilateral development banks. The Bank must build and maintain its place as a strong, credible and trusted partner if it is to provide global leadership.

To achieve all this, however, it is necessary to re-establish the Bank’s long-term financial sustainability. The institution is a very successful, indeed profitable, global financial co-operative, but its recent response to the global financial crisis, in the absence of a substantial capital injection, has diminished its lending capacity. The Bank must therefore agree a new capital injection, based on a clear, shared set of priorities.

Yet the Bank can only fulfil its potential if it maintains the support of all its members. This will require reforms, not least in the selection process for its president, to enhance the commitment of members whose voice is at present incompatible with their share in the world economy.

I come to this first competition for the presidency of the World Bank with 36 years in development. I have led three ministries in my home country, Colombia, and headed both a regional and a global organisation – the Economic Commission for Latin America and the Caribbean, and the UN Department of Economic and Social Affairs. I have moved between policy and academia throughout my professional life. And I have had to deal with all the main areas of development policy: economic, social, environmental and political. I want to put this unusual mix of expertise at the service of the world’s leading development co-operation institution.


The writer is a professor at Columbia University and a candidate for the presidency of the World Bank.

Copyright The Financial Times Limited 2012.