From Amechi Ogbonna, Washington DC, USA
Miffed by the high incidence of corruption and misappropriation of aids and development assistance from global partners and multilateral agencies, the World Bank, yesterday, said it was opening a new financing window to enable Nigeria’s private sector as well as those of other low income countries access trillions of idle low interest funds to finance investments in infrastructure and job creating ventures.
Addressing the opening press conference of the 2017 Spring Meetings of the IMF/World Bank in Washington DC, USA, Thursday, President of the World Bank Group, Dr. Jim Yong Kim, while expressing delight at the stronger economic prospects across the world after years of disappointing global growth, explained that that there was an urgent need for more partnership with the private sector since rising public sector corruption in developing countries appears to have blighted the effectiveness of aids and development assistance to some countries.
“We have to start by asking whether the private sector can finance a project. If the conditions aren’t right, we will work with our partners to de-risk that project or, if needed, de-risk entire countries or sectors. This won’t be easy. It will require agreement across the entire international development finance system – multilaterals and bilaterals – to move the global development architecture in this direction. But this is the only way we can act with the speed and scale that these times require.
“Here’s the good news, there’s never been a better time to find those win-win solutions. There’s trillions of dollars sitting on the sidelines earning little interest or even negative interest and investors are looking for better returns. That capital should be mobilised to help us meet the exploding aspirations of people all over the world. And with the crises we face, our task is much more urgent than we ever thought,” he said.
The World Bank boss further said, “one of the things we found is that foreign direct investment often has a much higher impact, much stronger impact on improving institutions and government than aid by itself.
“This is why we’re trying to bring together the financing we provide to governments and also the financing that comes from the private sector to create better institutions, more investments, more jobs, more economic growth, in a much more synergistic way.”
He said the World Bank Group would be working to both help institutions evolve so as to de-risk entire countries with policy reform, and improving the business environment, while facilitating the movement of private capital in a way that will lead to more economic growth throughout the developing world.”
On corruption and misuse of loans and grants that don’t give any outcomes, Kim advised countries to stop fighting each other for the low hanging fruits projects but to go for projects that look commercially viable, that could be financed by the private sector and the development agencies.
He said, “we’ve been competing with each other for the low hanging fruit projects as opposed to stepping back and saying the low hanging fruit projects, we should let the private sector fund that, and then we should work on the higher hanging fruits that will boost the economies even more.”
Kim also pointed out that in addition to fragility, accelerations in technology are changing the landscape, stressing that an estimated two-thirds of all jobs that currently exist in developing countries will be wiped out by automation soon.