Washington, DC, April 21, 2012

Archived - Statement Prepared for the Development Committee of the Boards of Governors of the World Bank and International Monetary Fund

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The Honourable Jim Flaherty, Minister of Finance for Canada, on behalf of Antigua and Barbuda, the Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines

I want to begin by thanking President Robert Zoellick for his leadership of the World Bank Group over the past five years through what has proven to be a critical and challenging time in the global economy. During his tenure, the World Bank Group has been an important partner to all of its member countries, including our constituency, providing a critical multilateral channel to support the poor, boost growth and leverage the private sector. He and the Bank have been instrumental in helping middle- and low-income countries respond to and recover from the global financial crisis. President Zoellick has also strengthened the governance and legitimacy of the World Bank Group and enhanced its responsiveness and relevance to countries’ progress towards the achievement of the Millennium Development Goals.

Following Through on Recapitalization and Replenishment Commitments

Our constituency fully recognizes the challenges that remain in the fragile global recovery and commends the World Bank Group for its ongoing role in helping low- and middle-income countries develop the capacity to address these challenges in an efficient and flexible manner. Our commitment to support the World Bank Group remains strong. As part of our five-year recapitalization commitments, the first such recapitalization of the World Bank since 1988, members of our constituency have increased their investments in the International Bank for Reconstruction and Development (IBRD) by $1 billion this year. Canada has accelerated nearly 60 per cent of its recapitalization, understanding that the Bank needs this support today. Furthermore, Canada, Ireland, the Bahamas and Barbados have also begun following through on commitments to the latest replenishment round of the World Bank’s International Development Association (IDA).

Strengthening Governance and Accountability

We commend the World Bank Group’s efforts to improve its capacity to measure, report on and learn from results. Accountability to stakeholders is essential. The Bank’s new Corporate Scorecard and IDA’s Results Measurement System, introduced last year, are critical components of this accountability. We will provide oversight and strategic guidance to ensure that targeted outputs and outcomes are being achieved. We encourage the process of continual improvement in order that lessons are being learned and best practices are shared.

The World Bank has made an important shift away from being solely an investment lending institution to actively taking on a global policy leadership role. The creation of linkages between individuals and groups working to address similar development challenges is welcomed. The Bank operates most effectively when it is able to disseminate its accumulated knowledge and make relevant connections on the ground between practitioners to ensure development solutions are tailored to local needs.

Key Objectives for the Coming Year

Our constituency will be signalling to President-Designate Jim Yong Kim a number of key issues that we view as being priorities for the Bank over the coming year.

Leveraging the Private Sector to Create Secure and Well-Paying Jobs

The private sector has become a dominant driver of international development through its central role in creating secure and well-paying jobs, increasing productivity and driving innovation. We want the World Bank Group to harness the private sector’s contribution to sustainable poverty reduction, which must involve close cooperation between the International Finance Corporation and IBRD/IDA to implement strategies that strengthen the environment for private sector investment. We look forward to the contribution that the next World Development Report, focused on jobs, will make towards this important goal.

Supporting the Deauville Partnership

The Arab Spring provides evidence of the importance of the creation of secure and well-paying jobs and finding ways to promote inclusive growth. The World Bank Group, together with other partner multilateral institutions, is making significant efforts to support the countries of the Deauville Partnership. In the coming year, we would encourage these institutions to continue working together to provide strong and coordinated support to countries in transition in the Middle East and North Africa. Similarly, we look forward to seeing the Bank’s new Global Center for Conflict, Security, and Development in Nairobi, Kenya, actively engage in mitigating and managing crises.

Laying the Groundwork for the IDA 17 Replenishment

By this time next year, we will once again be engaged in negotiations to replenish IDA. Given the importance of our replenishment contributions, we must begin now to lay the groundwork for a successful replenishment round in 2013. We will be working to identify structural and procedural best practices that can set the stage for success, and will also be working with the Bank to identify the substantive themes on which to focus discussions. A robust evaluation of IDA’s progress against the agreed-upon Results Measurement System will be a key element of this work.

Protecting the Most Vulnerable

Even as sustainable development can only occur through economic growth, it is important that the Bank continue to work with developing countries to ensure the most vulnerable are assisted both in times of crisis and on an ongoing basis. A prime example of the Bank’s ability to collect, produce and disseminate practical knowledge for development is its recent work in the area of social safety nets. This work convincingly shows that well-targeted and well-designed social safety nets can be both affordable and effective and should be a basic component of a government’s overall social protection programming and development strategy. This can be complemented by inclusive growth strategies which would facilitate a transition from social safety nets to jobs or entrepreneurship.

Safety nets are an important mechanism to improve food security and child nutrition in vulnerable communities. The World Bank Group has also played an important role in addressing food security through its leadership role on the Multilateral Development Bank Action Plan. We look forward to the continuing engagement of the Bank in contributing to innovative policy solutions in this critical area of vulnerability.

Beyond the fight against hunger and under-nutrition, safety nets can also make important contributions to climate adaptation, building climate resilience and women’s empowerment. Canada and Ireland have extensive experience with social safety nets in a number of African countries. On the ground we have greatly benefitted from our partnerships with the World Bank.

Building Resilience Within Small Island States

Small island states, including those in our constituency, face unique challenges. The majority of these Caribbean countries have attained middle-income status. However, their structural and geographic characteristics make them highly vulnerable to a number of macroeconomic shocks and natural disasters, which can severely constrain their ability to finance growth and development. The resulting effect is a vicious cycle of high debt, low growth and marginal developmental gains. These countries have been advocating for treatment that reflects these vulnerabilities, and we hope to continue to raise awareness on this issue going forward. The Bank’s work on disaster risk management and risk-pooling in the Caribbean, particularly through the Caribbean Catastrophe Risk Insurance Facility, should be applied to other disaster-prone areas.

Tackling Climate Change

Climate change is having a serious effect on developing countries, including the small island states in our constituency, putting at risk important gains in the fight against poverty, hunger and disease. Canada is increasing its contributions towards climate change activities as part of its $1.2-billion contribution towards supporting developing countries with their climate change mitigation and adaptation efforts under the 2009 Copenhagen Accord, including contributions to the Climate Investment Funds administered by IBRD.

The Smart Economics of Gender

The World Development Report 2012 (WDR 2012) focused on gender and the empowerment of women as an important element of development policy and “smart economics.” The momentum generated by WDR 2012 must be maintained and strengthened. Improving access, retention and completion rates for girls in education is critically important. Protecting women and girls from gender-based violence in all its forms, particularly in conflict and post-conflict societies, is a constant challenge. Establishing labour, property and business entitlements of women will raise growth, productivity and employment and reduce poverty. As implied in WDR 2012, the gender dimension must inform all World Bank activities and policies.

Continuing Support for the Bank’s Modernization Agenda

In a rapidly changing world, the Bank needs to pursue the modernization agenda agreed upon by Governors in 2010 to ensure it remains relevant and responsive to developing and transition countries. The World Bank needs to maintain the momentum in results and results measurement, transparency and openness. It also needs to maintain its strength as a centre of global development knowledge, recognizing that the Bank’s knowledge and expertise are often in as much demand from client states as its financial resources. We call on the Bank to continue to champion aid effectiveness, transparency and accountability, in line with the Busan Partnership for Effective Development Cooperation.

Welcoming President-Designate Jim Yong Kim

On behalf of our constituency, I would like to congratulate President-Designate Jim Yong Kim as the World Bank Group’s new President effective July 1, 2012. Mr. Kim is a noted physician and global health professional who has proven himself to be a capable leader in the not-for-profit and international public sectors and academia, devoting his career to championing the cause of global health. His experience as co-founder of the Global Health Delivery Project, the purpose of which is to systematically gather and analyze health-related knowledge and disseminate this knowledge to practitioners around the world, will no doubt provide the Bank with valuable insights as it continues its transformation into a knowledge institution. Mr. Kim’s record of achievement will serve the Bank and its clients well.

This is an important time of transition for the World Bank Group and its incoming President. The members of our constituency will fully support President-Designate Kim in order that together we meet with success as we continue to navigate the development challenges ahead.