Washington, D.C., April 20, 2013
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
Over the past five years, the World Bank Group and the International Monetary Fund have played a leadership role in implementing policy actions and making investments that address challenging economic circumstances, promote job creation and boost growth. This must remain the near-term focus of both institutions. At the same time, under President Jim Yong Kim, the World Bank Group is planning for the future and has proposed two overarching goals that will guide the direction of the World Bank Group through the next phase of the economic recovery and beyond:
- Eradicating extreme poverty within a generation by reducing the percentage of people living with less than US$1.25 a day to 3 per cent by 2030; and
- Promoting shared prosperity by ensuring that economic growth and job creation is experienced by those in the bottom 40 per cent of the population in every country.
We support these broad objectives. Economic growth and shared and inclusive prosperity are the building blocks that will form the foundation of a world that is free of poverty.
Our top priority is reaching a successful conclusion to the 17th replenishment of the International Development Association (IDA17). Achieving this outcome in the context of these proposed goals will require adjustments on the part of the World Bank Group’s institutions. I will elaborate on this theme in greater detail below.
The broad goals proposed by President Kim are particularly relevant to our constituency given stagnant economic growth in the Caribbean in the last two decades, reflecting entrenched competitiveness issues, high debt-to-gross domestic product ratios and structural fiscal problems, which have been worsened by the global financial crisis. The World Bank Group, along with other development partners, needs to help the region develop sustainable pro-growth strategies in the public and private sectors through the work of the Caribbean Growth Forum.
We must constantly bear in mind the extreme vulnerability of small island states, some of which are part of our constituency, and we need to continue to build resilience among our more vulnerable members as we renew the World Bank Group’s priorities.
Equally important to the goals themselves is how we achieve them. The implementation of these goals must be coordinated and aligned with the work of national and international development partners, including the United Nations, particularly as we approach the 2015 target date of the Millennium Development Goals (MDGs) and collectively define the agenda that will underpin our actions beyond 2015.
The World Bank Group needs to continue to find innovative solutions to help developing countries establish or expand key sectors, such as manufacturing, services and extractives, invest in the economic potential of women entrepreneurs and employees, and develop agricultural sectors that contribute to improved food security and nutrition. Given the nature of today’s development challenges, the World Bank Group must deepen and strengthen its engagement with the private sector as a partner in development.
The recently approved AgResults initiative is a promising example of an innovative solution. AgResults is a unique partnership between the World Bank and several contributors, including Canada, designed to encourage the private sector to find innovative solutions to global food security challenges. Under the initiative, governments determine how much to pay for a desired food security outcome, and private sector innovators come up with the best ways of achieving that outcome. We pay only once results have been achieved.
We also need to find creative ways of supporting fragile and conflict-affected states, especially in developing an economic basis for stability and growth. This means using the International Finance Corporation (IFC) as an instrument to facilitate the development of the private sector, particularly in sub-Saharan Africa, where conflict and fragility still impede progress on the MDGs. Ireland’s innovative partnership with IFC and other donors in the Conflict Affected States in Africa Initiative can provide valuable lessons for a programmatic and results-focused approach for private sector development in fragile states globally. This also means encouraging the Multilateral Investment Guarantee Agency (MIGA) to leverage more private sector investment in fragile and conflict-affected states.
Ireland, which currently holds the Presidency of the European Union (EU), has been a champion of making food security and nutrition an integral part of the EU’s development policy and in particular recognizing the importance of the Scaling Up Nutrition Movement, of which Canada is also a strong supporter.
Climate change and natural disasters are increasing the risk of hunger and under-nutrition. In this regard, we welcome Ireland’s EU Presidency initiative to highlight hunger, nutrition and climate justice challenges at the Dublin conference earlier this week. The importance of investing in agriculture for nutrition was also discussed at an event hosted jointly by Canada and Ireland yesterday.
Finally, achieving these goals will require that every dollar contributed through replenishments and trust funds be linked to demonstrable results within an environment of continuous learning and improvement. In particular, the World Bank Group must continue to improve the results monitoring, reporting and evaluation of trust funds supported by our constituency’s donors.
We look forward to further defining these goals in the Fall, including a discussion at the Annual Meetings of the World Bank Group’s proposed strategy for addressing them in the context of continued global economic recovery and job creation.
IBRD Support is Key to a Successful IDA Replenishment
We will pay particular attention at the World Bank Group this year to the conclusion of a successful IDA17 replenishment process. As part of this process, we will advocate for a strong focus on development impacts, improved support for fragile states, continued attention to advancing gender equality, and a significant role for IFC and MIGA in the poorest countries.
We will continue to encourage greater joint planning, delivery, learning and reporting across the World Bank Group. In this regard, I recognize the efforts of President Kim, under whose leadership the World Bank Group is beginning to show a stronger commitment to working as a single and coordinated entity.
Five countries are reaching the point in their development path at which they are eligible to graduate from IDA to the World Bank’s middle-income window, the International Bank for Reconstruction and Development (IBRD). We congratulate these countries on their success, yet we recognize that challenges remain. Through the IDA17 replenishment, we must ensure that these graduating countries experience a smooth transition to IBRD-only status. We must work together to ensure that IBRD is ready to expand lending to all five of these graduates as a demonstration of the unity of the Bank Group under the goal of eliminating absolute poverty.
Following through collectively on our 2010 recapitalization commitments is a necessary step in this process. This means an additional $1.6 billion in capital to support increased lending to middle-income countries, including countries graduating from IDA and those in this constituency. Ireland will also be contributing to the recapitalization in 2013 and the coming years in line with its traditional strong commitment to the World Bank.
Ending extreme poverty within a generation will require all parts of the World Bank Group to work together to use our scarce capital as efficiently as possible and to ensure that every dollar is linked to concrete and tangible results.