Macroscope | How the new World Bank chief can stop ‘mission drift’
- While the multilateral organisation has sometimes behaved like a social lending institution, the new president should pull the institution back onto a more bank-like track
- If he can persuade its government shareholders to allow the bank to ‘securitise’ some of its projects, it would open the door to a new hybrid form of private and state capitalism
The World Bank was an ingenious invention under the Bretton Woods monetary architecture launched in 1944. It was, however, designed originally to finance reconstruction in post-war Europe rather than being a “world” bank as such and its Western orientation has created an identity problem ever since.
Others among the World Bank Group’s 189 shareholder countries still have time to propose an alternative candidate. The economically powerful Asian nations should seize this opportunity to ensure that whoever is chosen will combine Asian pragmatism with Western development ideology.
This is yet another change of course for a nearly 80-year-old institution that has swung from being a European infrastructure bank to a lender to the “third world”, a poverty alleviation bank and then through incarnations such as health, education and other services provider.