That model is insufficient to meet the moment. The MDBs’ core model involves countries borrowing to make specific investments aimed at addressing development constraints in their own countries. They don’t all accrue to a single country. The costs and benefits of addressing global challenges are diffuse. They spill over to neighboring countries. These effects are not just local to countries in conflict. Many African leaders have noted to me the impacts of conflict on their economic growth. In Zambia, smallholder farmers told me that extreme weather events like droughts and floods have dampened agricultural yields – exacerbating hunger and food insecurity. The COVID pandemic, for example, led to a rise in extreme poverty for the first time in over 20 years. In today’s world, sustained progress on poverty alleviation and economic development is simply not possible without addressing the global challenges that face us all. And they’ve funded the construction of modern roads and bridges.īut even before the onset of the COVID pandemic, our tremendous progress on poverty reduction was beginning to lag. They’ve helped farmers get more crops to market. Projects like these have connected millions to electricity and clean water. I saw first-hand the impact of these banks’ direct financing of national development projects. Last month, I visited three countries in Africa. They’ve done so successfully for a broad range of countries, including those facing persistent poverty and those recovering from disaster and conflict. Since the aftermath of the Second World War, the development banks have played a critical role in alleviating poverty and spurring economic development. These goals are all essential, and they are closely linked. But it’s also important that they take decisive action on global challenges like climate change, pandemics, and conflict and fragility. In today’s world, it’s important that the MDBs make progress on their core mission of poverty reduction and inclusive economic growth. My reasoning was simple: the world has changed, and we need these vital institutions to change along with it. Last fall, I issued an urgent call ahead of the World Bank and IMF Annual Meetings - for the evolution of the multilateral development bank system. I’m pleased to be here at CSIS with all of you.
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