Policy paper

World Bank Development Committee October 2021: statement by Foreign Secretary and Chancellor of the Exchequer

Published 19 October 2021

Statement by: Rt Hon Liz Truss Secretary of State for Foreign Commonwealth and Development Affairs and Minister for Women and Equalities; and Rt Hon Rishi Sunak Chancellor of the Exchequer

United Kingdom of Great Britain and Northern Ireland

104th Meeting of the Development Committee, 15 October 2021, Washington, DC

The 2021 Annual Meetings take place more than 18 months since the declaration by the World Health Organization of COVID-19 as a pandemic. The next 18 months will be critical in Developing countries’ response and recovery. Strong, sustainable and inclusive economic growth will be critical to this and supporting the future prospects for their people. The United Kingdom is seeking to build stronger economic ties globally to support a greener, safer, freer and more resilient world and are working with our partners, including through our G7 Presidency this year and hosting the UN Climate Change Conference (COP26) in Glasgow to support this. We call on the World Bank Group (WBG) and International Monetary Fund (IMF) to support further action in the following areas:

Economic development and trade

We encourage the WBG to:

• support developing countries to participate in the global trading system, strengthen supply chains and build their capacity to meet global standards, ensure openness, and compete in a digital trade environment; and
• mobilise investment and build a pipeline of investible deals in the poorest countries and most challenging sectors including to build markets of the future

Build back better

The WBG should work effectively with other multilateral development banks (MDBs) to provide financing at scale to support quality investments to support national climate, development and poverty plans. We call on the WBG to play its part, including through supporting effective country platforms, to drive partnerships and mobilise private finance as we all strive to build back better.

Women’s economic empowerment and girls’ education

The WBG should support:

• global targets to support 40 million more girls into school and 20 million more girls to read by age 10 by 2026 in low and lower-middle-income countries; and
• increased access to social protection systems that empower women and link to wider services that promote inclusion, including access to childcare

The WBG should also increase its support for action to tackle Gender Based Violence, including sexual exploitation, abuse and harassment.

COVID-19 vaccines, treatments and tests

The WBG should:

• rapidly implement its $20 billion package of support; take more risk on its balance sheet, including to support Advance Purchase Agreements (APAs); and
• deepen its cooperation with COVID-19 Vaccines Global Access (COVAX) and the African Union African Vaccine Acquisition Trust (AVAT).

We encourage the WBG to continue its work as part of the Multilateral Leaders’ Taskforce on Scaling COVID-19 Tools and continue to work with different parts of the international architecture to ensure a better delivery plan.

Climate change

We welcome the WBG’s Climate Change Action Plan and its commitment to align all its projects with the Paris agreement and to ensure that, on average, at least 35% of its financing to 2025 supports action on climate change. We call on the WBG to go further before COP26 by:

• presenting an ambitious plan for increasing the amount of private sector climate finance that it mobilises
• develop a methodology to track and report on its nature financing; and
• jointly commit with other MDBs to mainstream nature into its operations

Crisis preparedness

The WBG should also do more to ensure that developing countries are better prepared to respond to future pandemics and other crises and to support ideas promoted by relevant reports by the G7 and G20 expert panels on this issue, including through the 20th replenishment of the International Development Association (IDA20). Specifically, we encourage WBG to:

• strengthen existing mechanisms to surge financing effectively, including lifting limits on WBG contingent financing, and taking steps to increase the speed of disbursements
• increase the level of investment in crisis preparedness; and
• support enhanced access to risk pools

Debt sustainability

We support the continued implementation of the G20 Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative, welcome the establishment of creditor committees for Chad and Ethiopia and urge swift implementation of future requests for debt treatments.

Additional financing

IDA20 should make greater use of IDA’s existing balance sheet to meet IDA countries’ financing needs. We also welcome the G20’s launch of the Independent Review of the MDBs’ Capital Adequacy Frameworks, which will identify scope for the MDBs to use their capital levels to further increase their financing capacity in the coming years, while protecting their financial sustainability.

Finally, we urge the WBG and IMF to monitor and clearly communicate the impact of their vital work to support the global economic recovery and tackle climate change.