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World Bank's new boss must push ahead on reforms, fight poverty-French minister

Published 04/13/2023, 06:37 PM
Updated 04/13/2023, 06:41 PM
© Reuters. FILE PHOTO: Ajay Banga, President and CEO Mastercard, attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 19, 2017.  REUTERS/Ruben Sprich
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By David Lawder

WASHINGTON (Reuters) - France's development minister said on Thursday she will tell the World Bank's expected next president, Ajay Banga, to maintain the bank's anti-poverty mission while forging ahead with next steps by October in its evolution to fight climate change and other global crises.

Chrysoula Zacharopoulou told Reuters in an interview that she wants Banga, the former CEO of Mastercard (NYSE:MA), to use an international finance summit in Paris to develop ideas and plans for expanding climate finance and harnessing private sector funds.

Zacharopoulou, a Greek-born gynecologist and former European Parliament member who was appointed France's Minister of State for Development, Francophonie and International Partnerships 11 months ago, is due to meet with Banga on Friday during World Bank and International Monetary Fund meetings in Washington.

"What I am going to tell him - or what I'm going to encourage him - is that he will have our support in his mission to finalize an ambitious reform of the World Bank by Marrakech, using the June summit in Paris like an important step," Zacharopoulou said, referring to the World Bank and International Monetary Fund annual meetings in Morocco in October.

"This is the first thing. The second is that we have to continue to fight extreme poverty," she said. "That means the poorest countries and their populations have to remain at the center of the agenda of the World Bank and of all of us."

France on June 22-23 is hosting the "Summit for a New Global Financial Pact," which aims to boost crisis financing for vulnerable countries in the Global South.

Zacharopoulou said the conference would focus on ways to create innovative new financing resources for climate change, public health, biodiversity and other public goods and to build political momentum for changes beyond a $5 billion annual lending increase adopted this week by World Bank shareholders.

DE-RISKING INVESTMENTS

Zacharopoulou said that there was a major focus on bringing in private sector funds to scale up climate financing to the vast amounts needed to meet emissions reduction goals.

"Public money has a role to play in de-risking investments in the most vulnerable countries. We can use the public money to de-risk but the private sector has to come," she said.

Banga was a "good match" for the World Bank job, with strong private sector finance and management experience. Because he was born and educated in India, "He knows well about the challenges of emerging and developing countries."

But Banga, who has promised to deliver more lending resources beyond the initial balance sheet changes, will attend the Paris finance summit only a few weeks after he is expected to start in early June.

© Reuters. FILE PHOTO: Ajay Banga, President and CEO Mastercard, attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 19, 2017.  REUTERS/Ruben Sprich

Zacharopoulou said Banga would be able to build on the work of World Bank staff who advanced the bank's initial reform steps in just six months.

"Starting from this important moment, he has some momentum to put his signature on it and give his vision," she said. "I think that he will have all of the international community with him."

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