World Bank approves historic $13 billion increase in capital
(Sourced from PTI)
In a major development, the World Bank Group has endorsed an ambitious package of measures that include a $13 billion increase in paid-in capital. The decision was announced yesterday along with various internal reforms, and a set of policy measures that greatly strengthen the global poverty-fighting institution's ability to scale up resources and deliver on its mission in areas that need the most assistance.
World Bank President Jim Yong Kim hailed the decision as "historic" as International Monetary Fund Managing Director Christine Lagarde welcomed the move. The package approved by the Development Committee of the Board of Governors consists of $7.5bn paid-in capital for International Bank for Reconstruction and Development (IBRD) and $5.5bn paid-in capital for International Finance Commission (IFC), through both general and selective capital increases.
The package also includes a $52.6 billion callable capital increase for the IBRD. The capital boost will be augmented by a broad range of internal measures, including operational changes, effectiveness reforms, loan pricing measures, and other policy steps to create a stronger World Bank Group.
Following the decision, combined financing arms of the World Bank Group are expected to reach an average annual capacity of nearly $100 billion between fiscal 2019-2030, benefiting all Bank Group members across the income spectrum. "Through the historic agreement endorsed today, our shareholders have clearly demonstrated a renewed confidence in global cooperation, and we greatly appreciate this strong support from member countries," Kim said.
"This boost in capital was essential for us to advance our efforts to mobilize additional finance for development to meet aspirations of the people we serve," Kim stated. The package endorsed by the Development Committee follows through on shareholders' commitment to the World Bank Group to better assist all client countries in addressing global challenges while deploying scaled-up assistance to areas that need financing.