The World Bank’s Radical New Mission

The World Bank at its meeting next week plans to unveil a new mission, one far removed from the one it was given at the Bretton Woods conference at the end of World War II. It’s the latest signal of an effort to transform the lender into a climate bank. Its mission now stresses “shared prosperity” and “reducing poverty.” The new bank chief, Ajay Banga, aims, the Financial Times reports, to add to the list “climate, food insecurity, and pandemics.” This is precisely the kind of mission creep that was prefigured when the bank’s former chief, David Malpass, was pushed out by the Biden administration. Mr. Malpass was committed to the mandate established under the Bretton Woods agreements that forged the bank in 1944, not to mention the idea that promoting growth, and not lavishing billions to change the weather, was the best way to alleviate global poverty and help the developing world. Mr. Malpass’ tenure ended after a kind of trial of his orthodoxy reminiscent of the Spanish Inquisition. Vice President Gore denounced him, falsely, as a “climate denier” and Secretary Kerry accused him of not lending enough to Mr. Kerry’s favored causes. A Times reporter urged the bank chief to recite the climate catechism that insists human endeavor is causing the globe to warm “rapidly,” yet Mr. Malpass maintained his independence of thought.The FT’s Gillian Tett reckons that Mr. Malpass was “pushed out for his caution on climate finance.” No such qualms appear to impede Mr. Banga. His ambition is to transform the global lender into a kind of global climate bank, or, as Ms. Tett puts it, a “more relevant and credible” agency. To that end, Ms. Tett reports, he is pushing the bank to change its “official mission statement” to “tackle wider problems.” The bank meets next week at Marrakech. The bank’s emphasis, as Mr. Banga explained at the Council on Foreign Relations the other day, will move beyond “the elimination of poverty” to encompass the vision of a “liveable planet.” It’s a far cry from the bank’s mandated goals under the Bretton Woods agreements, which speak not of weather but of “facilitating the investment of capital for productive purposes,” the promotion of “private foreign investment,” and pushing for more global trade.The bank, for its part, tells the Sun that the word “poverty” doesn’t appear in its charter, but alleviating the plight of the world’s poor has been at the heart of its mission since the early 1970s, when Secretary McNamara — ay, there’s the rub — took the helm. That, however, may more reflect the distractions that have preoccupied the global lender since McNamara’s tenure than offer a rationale for further mission creep.“My logic is that the climate aspect is not separated from development,” Mr. Banga has said. That raises concerns that the bank, by distracting itself with green boondoggles and tilting at ecological windmills, will lose sight of the critical aim of the bank, promoting free enterprise so that growth can propel the developing world out of poverty. The bank tells the Sun that Mr. Banga doesn’t need to seek a formal rewrite of the bank’s charter to do any of this.Then there is the danger the bank would loosen its historically conservative lending principles to open the floodgates for climate finance. Ms. Tett notes that Mr. Banga “hopes to raise the Bank’s new lending capacity” by up to $125 billion in the next decade and says he will “stretch my balance sheet” with “all the financial engineering I can do.” No doubt Mr. Banga is an honest man, but Willie “The Actor” Sutton couldn’t have put it better.

The World Bank’s Radical New Mission

The World Bank’s Radical New Mission

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