Cash in the Bank
April 26, 2010 5:44am
by Alan Beattiemg
It’s often the fate of the World Bank to be overshadowed at the spring meetings, since its sibling, the IMF, is generally in the thick of a faster-moving story (Greece, currencies, bank taxes, etc).
But in a weekend when the IMF basically avoided discussing all the big questions, the bank actually made some real concrete progress: it secured the $5.1bn capital increase that its president Robert Zoellick has been seeking for the best part of a year. So, like the IMF with its tripled firepower, the bank is having a shot at keeping up with the growth in the global economy.
The slightly unreal thing is the gigantic amounts of attention paid (and tortuous negotiations dedicated) to the really quite small shifts in voting power on the bank’s executive board that were needed to get these things through. As at the IMF, most votes at the Bank are unanimous anyway, so shifting up Korea by 0.6 percentage points or whatever is almost entirely symbolic. Symbols are important, yes, and symbols of emerging markets’ influence are particularly important for the bank’s legitimacy, but could the members not find a less time-consuming way of generating them?
There was an even bigger rise in capital, by the way, for the African Development Bank, which has been improving its image in recent years under its president Donald Kaberuka. I breakfasted with Mr Kaberuka on Saturday, and he was remarkably gung-ho about the continent, which he reckoned had mainly survived the financial crisis pretty well, with the odd exception like Botswana who suffered from a collapse in demand for diamonds. And the AfDB has 60 per cent of the voting weight on its board reserved for African countries, so there are few local complaints about legitimacy there.
April 26, 2010 5:44am
by Alan Beattiemg
It’s often the fate of the World Bank to be overshadowed at the spring meetings, since its sibling, the IMF, is generally in the thick of a faster-moving story (Greece, currencies, bank taxes, etc).
But in a weekend when the IMF basically avoided discussing all the big questions, the bank actually made some real concrete progress: it secured the $5.1bn capital increase that its president Robert Zoellick has been seeking for the best part of a year. So, like the IMF with its tripled firepower, the bank is having a shot at keeping up with the growth in the global economy.
The slightly unreal thing is the gigantic amounts of attention paid (and tortuous negotiations dedicated) to the really quite small shifts in voting power on the bank’s executive board that were needed to get these things through. As at the IMF, most votes at the Bank are unanimous anyway, so shifting up Korea by 0.6 percentage points or whatever is almost entirely symbolic. Symbols are important, yes, and symbols of emerging markets’ influence are particularly important for the bank’s legitimacy, but could the members not find a less time-consuming way of generating them?
There was an even bigger rise in capital, by the way, for the African Development Bank, which has been improving its image in recent years under its president Donald Kaberuka. I breakfasted with Mr Kaberuka on Saturday, and he was remarkably gung-ho about the continent, which he reckoned had mainly survived the financial crisis pretty well, with the odd exception like Botswana who suffered from a collapse in demand for diamonds. And the AfDB has 60 per cent of the voting weight on its board reserved for African countries, so there are few local complaints about legitimacy there.