The World Bank seeks to expand its balance sheet to be able to better fund development projects and plans to add an additional lending capacity of $150 billion over the next decade, its president has said.
The Washington-based lender is looking to become a better, and more efficient bank and will utilise instruments such as portfolio guarantees and hybrid capital to expand the pool of funds at its disposal for lending to developing nations, Ajay Banga told a press briefing on the sidelines of the World Bank and International Monetary Fund annual meetings in Marrakesh on Wednesday.
“A great deal of work has already gone into capital adequacy” and the lender was able to “move its loans to equity ratio that generated additional $40 billion-plus lending capacity for the next decade”, Mr Banga said on Wednesday.
The instruments such as portfolio guarantees and hybrid capital, which are also used by other multilateral development banks, are ways for countries to put capital into institutions such as the World Bank without changing the shareholder structure of the institution.
“We believe that with these instruments … we could get to $150 billion odd incremental lending capacity over the coming decade,” he said.
“If you put that in contrast to what we do every year, this is 15 [per cent] to 20 per cent additional lending capacity, which we do today.”
Although it is a substantial number, “it is not going to be enough” for the kind of challenges the world is facing today, Mr Banga said.
The World Bank, the biggest global funding institution for developing countries, is looking to grow its balance sheet and build additional lending capacity to help its clients deal with challenges including climate change, food security, health care, human and knowledge capital development and disaster recovery.
It is looking to use various instruments to increase its funding pool, as well as additional equity from shareholders to help it fund and deliver more projects.
Mr Banga said he will “definitely go back to shareholders” to seek more funding to become a “bigger” bank, “because I believe this is what the world needs”.
US Treasury Secretary Janet Yellen said on Tuesday she backed efforts to increase the lending firepower of the IMF and World Bank to combat poverty and climate change.
The World Bank's board of governors will endorse at this week's meetings in Marrakesh a new vision to “end poverty on a liveable planet”, she said at Mohammed VI Polytechnic University in Ben Guerir, north of Marrakesh.
“It has become common sense that addressing climate change and other global challenges is key to achieving development,” she said.
The US, the world’s biggest economy, has already committed large funding as part of the capital adequacy programme, however, that funding is subject to approval by US Congress.
“Am I hopeful? Yes, I am,” Mr Banga said of the Congress approval for the planned funding for the World Bank. “There will be arguments” but this is the nature of the democracy, he said.
He added that Germany has also committed funds, which has given the bank $2.5 billion in additional lending capacity.
The World Bank president said the global economy has shown itself in a “better light” with inflation trending down from last year’s peaks. However, challenges remain, and interest rates are likely to remain higher for longer, which makes investments difficult.
The rising geopolitical uncertainties and wars are also making it extremely difficult for the central banks that are trying to find a way to steer their economies towards “a soft landing”.
The mounting debt burden is also a challenge the world is facing, however, heavily indebted nations, and even those who are not in debt distress, should work hard on macro-fiscal reforms, according to Mr Banga.
“There is no doubt that debt burden hinders development,” he said. “I wish there was a magic wand”. However, it is not a simple thing to wipe the debt off for any country.
The World Bank is trying to bring all creditors to one table and transparently negotiate how to reduce debt burdens.
The idea of replacing the Common Framework – the multilateral mechanism for forgiving and restructuring sovereign debt – should be weighed carefully.
“The question is should you replace common framework with something? You should have a very clear idea what that something else is before you blow up the only thing that’s beginning to work,” Mr Banga said.
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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It’ll be summer in the city as car show tries to move with the times
If 2008 was the year that rocked Detroit, 2019 will be when Motor City gives its annual car extravaganza a revamp that aims to move with the times.
A major change is that this week's North American International Auto Show will be the last to be held in January, after which the event will switch to June.
The new date, organisers said, will allow exhibitors to move vehicles and activities outside the Cobo Center's halls and into other city venues, unencumbered by cold January weather, exemplified this week by snow and ice.
In a market in which trends can easily be outpaced beyond one event, the need to do so was probably exacerbated by the decision of Germany's big three carmakers – BMW, Mercedes-Benz and Audi – to skip the auto show this year.
The show has long allowed car enthusiasts to sit behind the wheel of the latest models at the start of the calendar year but a more fluid car market in an online world has made sales less seasonal.
Similarly, everyday technology seems to be catching up on those whose job it is to get behind microphones and try and tempt the visiting public into making a purchase.
Although sparkly announcers clasp iPads and outline the technical gadgetry hidden beneath bonnets, people's obsession with their own smartphones often appeared to offer a more tempting distraction.
“It's maddening,” said one such worker at Nissan's stand.
The absence of some pizzazz, as well as top marques, was also noted by patrons.
“It looks like there are a few less cars this year,” one annual attendee said of this year's exhibitors.
“I can't help but think it's easier to stay at home than to brave the snow and come here.”
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
