Business & Economy

World Bank’s new senior managing director: More is expected of us

By Jorge Dastis

Washington, Apr 7 (EFE).- Axel van Trotsenburg assumed his new role as senior managing director of the World Bank earlier this month and he is already anxious to boost the scale and impact of that organization’s operations.

“The international community wants us to do more,” the No. 2 official of the world’s largest multilateral creditor institution said in an interview with Efe.

During a just-concluded trip to China, Van Trotsenburg discussed debt restructuring processes for lower-income countries and other matters.

And later this month, at the joint World Bank Group/International Monetary Fund Spring Meetings in Washington, he will be presenting the new World Bank leadership’s reform plan, one centered precisely on the idea of doing more.

“The World Bank is one of the few institutions that is able to lift its game. And the challenge is that there are so many challenges, you cannot only talk. You have to act,” he said.

A reversal in the sustained reduction in extreme poverty, the food crisis, climate change and economic uncertainty are just some of the global challenges the Bank faces, according to Van Trotsenburg.

He stressed that in meeting them it will be necessary to mobilize more public and private resources because “we don’t need a couple of billions, we need literally trillions.”

Van Trotsenburg said the World Bank governors will soon decide on whether to approve a new 10-year, $50 billion loan package for middle-income and credit-worthy low-income nations.

The Bank also will continue its focus on improving debt sustainability because that affects low-income countries’ development outcomes, he added.

“If you get into a debt crisis, you risk years lost,” said the Dutch-Austrian economist, who called on creditor nations, particularly China, to act quickly to alleviate the debt burden of African countries that are now on the brink of default.

The World Bank recently joined the IMF and India’s G20 presidency in creating a new roundtable for reviewing debt restructuring processes under the G20’s Common Framework.

In reference to Latin America, Van Trotsenburg said that region’s enormous potential has been stymied by the lack of a stable policy environment.

“I’ve always been convinced that Latin America has a huge potential, but sometimes the policies are not continuous and that creates stop-and-go, and (that) then also has often adverse effects on the investment climate, and then through that lower growth projections,” the senior managing director said.

“That is something that is a major challenge for Latin America,” he added.

Van Trotsenburg referred to a “very sticky level of poverty” in the region and noted that Argentina is currently battling high inflation, which “is the worst enemy for the poor.”

He also said it is important not to lose sight of “longer term issues,” referring to structural reforms necessary to provide better equality of opportunity and allow countries to become more inclusive. EFE


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