World Bank’s Kim Sees ‘No Appetite’ to Increase Capital
World Bank President Jim Yong Kim said he sees “no appetite” among shareholders for a capital increase and said that he will instead try to change the institution’s culture to make loan decisions faster and to focus more on results.
“It’s a tough environment,” Kim told reporters in Washington today ahead of the annual meetings of the bank and the International Monetary Fund in Tokyo next week. “I think it’s not the time for us to have a discussion about capital increase.”
In 2010 the bank’s member countries approved the first capital increase in more than 20 years to meet demand from economies hit by the global slump that followed the 2008 financial crisis. This time, its largest shareholders are under pressure to reduce their fiscal deficits as European nations struggle to quell their debt crisis.
Kim said he will outline his vision for the Washington- based lender when officials from the 188 member nations convene in the first annual meeting since he took over the bank’s helm in July.
“If we’re going to be really serious about ending poverty sooner than currently projected, if we’re going to be serious about being the most effective organization we can be in helping individual countries boost prosperity, there’s going to have to be some changes in the way we run the institution,” Kim said.
In particular, Kim said he wants the bank, which made loans worth almost $53 billion last year, to be able to act more quickly and to be held accountable for its results.
“Every country that we deal with wishes that our procedures took less time,” he said. “We have to really rethink what we pay attention to, the number of steps that we have to go through to get a loan approved, or to change policy.”
Kim said he was concerned about the effect the European turmoil and rising food prices could have on the poorest countries. He repeated that the World Bank is ready to offer technical advice to European nations based on the experience it built during the Asian crisis.
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