A new mis­sion for the World Bank

Financial Mirror (Cyprus) - - FRONT PAGE -

The Green Revo­lu­tion is con­sid­ered one of the great suc­cesses in the history of eco­nomic de­vel­op­ment. In the 1960s and 1970s, the cre­ation and adop­tion of high­yield­ing ce­real va­ri­eties trans­formed the In­dian econ­omy and saved bil­lions of peo­ple from star­va­tion through­out much of the de­vel­op­ing world.

But to­day, the fu­ture of the in­sti­tu­tion re­spon­si­ble for the Green Revo­lu­tion – a con­sor­tium of 15 re­search cen­tres around the world called the Con­sul­ta­tive Group on In­ter­na­tional Agri­cul­tural Re­search (CGIAR) – is un­der threat. The World Bank, one of its pri­mary fun­ders, is con­sid­er­ing with­draw­ing its fi­nan­cial sup­port.

On its own, this de­ci­sion would be wor­ry­ing enough. CGIAR’s mis­sion is global food se­cu­rity, and ba­sic agri­cul­tural re­search holds huge po­ten­tial for pro­vid­ing eco­nomic re­turns to the world’s poor. But what is even more wor­ry­ing is the sig­nal the World Bank is send­ing: that it will no longer sup­port the un­der­funded global public goods that are cru­cial to pre­serv­ing the so­cial, eco­nomic, and po­lit­i­cal progress of the last cen­tury.

The pro­posed cuts at CGIAR are part of the World Bank’s ef­fort to de­crease its ad­min­is­tra­tive bud­get by $400 mln – a pledge made by the or­gan­i­sa­tion’s pres­i­dent, Jim Yong Kim, in 2013. The World Bank cur­rently pro­vides an an­nual grant of $50 mln to the CGIAR; that would be slashed by $20 mln, with the full amount pos­si­bly phased out en­tirely over a pe­riod of a few years.

On its own, the money in­volved would not be overly sig­nif­i­cant to ei­ther or­gan­i­sa­tion. The fig­ures be­ing dis­cussed are tiny com­pared to the $52 bln com­mit­ted in 2013 by the World Bank’s donors to help fight global poverty and pro­vide as­sis­tance to low-in­come coun­tries. For the CGIAR, the pro­posed cuts, though painful, would not be dev­as­tat­ing; in 2013, the group spent $984 mln to fund its ac­tiv­i­ties.

Still, the World Bank – the pre­em­i­nent global de­vel­op­ment in­sti­tu­tion – is es­sen­tially declar­ing that agri­cul­tural re­search is not a de­vel­op­ment pri­or­ity. In­deed, CGIAR’s fund­ing is not the only fund­ing that is at risk. The World Bank is also con­sid­er­ing cut­ting its small but cat­alytic con­tri­bu­tions to the Global De­vel­op­ment Net­work, which funds re­searchers in de­vel­op­ing coun­tries. Its sup­port for the Ex­trac­tive In­dus­tries Trans­parency Ini­tia­tive, which pro­motes dis­clo­sure of deals con­cern­ing nat­u­ral re­sources in the in­ter­est of re­duc­ing cor­rup­tion, is also at risk, as is its fund­ing for the Spe­cial Pro­gramme for Re­search and Train­ing in Trop­i­cal Dis­eases. These pro­grammes, and oth­ers, are sup­ported by the Bank’s De­vel­op­ment Grants Fa­cil­ity, which has been tar­geted as a pos­si­ble source of ad­min­is­tra­tive bud­get cuts.

The money pro­vided by the World Bank to sup­port the pro­vi­sion of de­vel­op­ment-re­lated global public goods has never made up a large part of its spend­ing. The roughly $200 mln a year that it spent on sup­port­ing CGIAR and other grantees pales in com­par­i­son to the $35 bln in loans that it pro­vided in 2012. But the pro­posed cuts would gut an area of the Bank’s ac­tiv­i­ties that should be ex­panded, not re­duced.

To be sure, at its in­cep­tion the World Bank was not con­ceived as a provider of grants to in­sti­tu­tions work­ing on global public goods. Its pri­mary mis­sion was – and still is – to pro­vide gov­ern­ments with loans and tech­ni­cal as­sis­tance. But it is worth not­ing that, rel­a­tive to sov­er­eign bor­row­ing, pri­vate in­vest­ment, and re­mit­tances by mi­grants, the World Bank’s rel­e­vance to de­vel­op­ing coun­tries’ fi­nances has been se­verely di­min­ished in the twenty-first cen­tury.

Be­cause its loans or guar­an­tees are bun­dled with ex­per­tise and ad­vice, the World Bank still has a vi­able prod­uct. But, as I have ar­gued pre­vi­ously, it should have another. As the world’s premier and only fully global de­vel­op­ment in­sti­tu­tion, it is well placed – and in­deed has the re­spon­si­bil­ity – to help spon­sor, fi­nance, and set pri­or­i­ties man­age­ment of global public goods.

It is time for one or more of the World Bank’s mem­ber gov­ern­ments to take up the cause.

The or­gan­i­sa­tion’s quick re­sponse to the re­cent Ebola pan­demic pro­vides an im­pres­sive ex­am­ple of its abil­ity to ad­dress global con­cerns. Fur­ther­more, this year, the in­ter­na­tional com­mu­nity will agree to the Sus­tain­able De­vel­op­ment Goals – tar­gets that would be well served by in­vest­ments in ar­eas like agri­cul­tural re­search and de­vel­op­ment, ef­forts to op­ti­mise land and wa­ter use, and forestry pro­tec­tion.

The United States, in close col­lab­o­ra­tion with Ger­many, the United King­dom, and China, should be able to pro­vide a clear man­date for the World Bank in this re­gard. The Bank’s 20th-cen­tury mis­sion – to help coun­tries fi­nance their de­vel­op­ment – will re­main vi­tal for the fore­see­able fu­ture. But there is also room for the World Bank to ad­just its fo­cus for the twenty-first cen­tury, with an in­creased em­pha­sis on one of the core pre­req­ui­sites of de­vel­op­ment: the care­ful man­age­ment and pro­tec­tion of global public goods.

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