Global growth remains vulnerable, “with the pace of investment and trade softening, and downside risks persisting due to policy uncertainty, trade tensions, financial volatility, and rising debt,” according to a statement issued by the World Bank in the wake of the meetings of the bank and the International Monetary Fund annual meetings held in Washington recently.
Meeting attendees, policy-makers in particular, warned that risks posed by trade and geopolitical tensions could slow already-weakening global economic growth.
In addition, the IMF this month downgraded its outlook the global economic growth to 3 percent this year, down from 3.2 percent in July, due to the global economic tensions. That would be the slowest pace since the global financial crisis in 2008.
The World Bank Group, in cooperation with the International Monetary Fund, can help emerging and low-income countries bolster potential growth, increase their resilience to shocks, boost domestic revenues, and continue building policy buffers, according to the statement issued by the Development Committee, a ministerial-level forum of the bank and the IMF, at the close of the annual meetings.
"The two organisations have an important role to play in addressing the increase in debt vulnerabilities, and they can help countries meet a range of challenges to the international financial system, including tackling corruption," it noted.
The committee, which represents 189 member countries, noted that the World Bank is uniquely placed to address global development challenges, and they encouraged it to help implement country platforms that will make better use of development resources and mobilise private sector solutions.
They also urged ongoing efforts to protect the most vulnerable, spur job creation, and strengthen public sector efficiency.
Reducing poverty and climate change challenge
World Bank Group President David R. Malpass stressed the urgency of the organisation’s mission to reduce poverty and boost shared prosperity.
"With 700 million people still living in extreme poverty around the world and the increasing risks posed by climate change and fragility, today’s global economy is making this mission even harder," said Malpass.
Malpass called for “fresh thinking to ignite growth,” expressing optimism that well-designed reforms can deliver meaningful gains.
He emphasised that emerging markets and developing countries can unleash growth that would be broadly shared across all segments of society.
Both the committee and Malpass asserted the leading role played by IDA, the Bank Group’s fund for the poorest countries, in reducing extreme poverty, a challenge that is becoming more difficult in Africa.
They noted IDA’s strong implementation of its current three-year programme, and they urged continued strong support from donor countries/
In his plenary speech to the Board of Governors during the meetings, according to the statement, Malpass highlighted IDA’s growing focus on situations of fragility, conflict, and violence where the poorest people are also increasingly concentrated.
In addition, both he and the committee noted IDA’s joint work with International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency( MIGA ) to scale up private sector development, including in fragile situations .
The World Bank Group’s work supports better development outcomes across a wide range of sectors, Malpass said.
“We’re investing to help countries gain access to electricity and clean water, to ensure the full inclusion of girls and women, to address climate change and protect the environment, to improve health and nutrition, and to bolster infrastructure," he added.
He also stressed the rule of law, transparency, and peace and security, along with more effective debt management. But he observed that effective country programmes must fit the distinct needs of each economy, saying that “development cannot be imposed from outside, country leadership and ownership matter."