Washington, April 24 (BNA) Indonesia’s Finance Minister Sri Mulyani Indrawati has joined a growing chorus of officials calling for reforms aimed at better equipping the World Bank to meet rising global challenges such as climate change and the changing nature of its clients.
“We can’t use the same business as usual,” Indrawati, a former managing director and chief operating officer of the Multilateral Development Bank, told Reuters in an interview. “If you ask if she needs to change, yes.”
Indrawati’s comments came a day after US Treasury Secretary Janet Yellen and a senior White House adviser called for major reforms at the World Bank, and major public and private groups said urgent reforms were needed, Reuters reported.
Yellen and the White House counsel argued that the seven-decade-old institution was not built to address multiple, overlapping global crises, including the COVID-19 pandemic, the war in Ukraine and climate change.
Indrawati indicated Friday that the World Bank faces much greater global challenges than it was created to meet, and that its client base has changed to include more middle-income countries.
Civil society groups, developing countries, and academics are also calling for reform of the Bretton Woods institutions, referring to the conference in that city in New Hampshire in 1941 that led to the creation of the International Monetary Fund and the World Bank.
Also on Thursday, public and private groups calling for reforms said more private capital was needed to tackle the multiple and overlapping crises now pushing 250 million people into extreme poverty.
“In the past, the power of the World Bank was really tied to state operations, but when you talk about global public issues, you can’t talk to a client on the basis of jurisdiction or sovereignty,” Indrawati said.
Indrawati, this year’s chair of the Group of 20 financial chiefs, said the changes are necessary to ensure the World Bank has the scale and resources to address myriad global crises, and to respond faster when crises arise.
World Bank loans totaled $99 billion in fiscal year 2021, but experts estimate trillions of dollars are needed to help countries adapt to changing climate conditions, tackle rising poverty, and prepare for future pandemics.
To help finance the work required, it will be necessary to tap public resources and attract more private capital, Indrawati said, referring to Indonesia’s use of “mixed finance” to raise funds from the government, multilateral institutions, bilateral lenders and the private sector.