Treasury Secretary Affirms U.S. Support of World Bank

U.S. Treasury Secretary Jack Lew, right, and World Bank President Jim Yong Kim participate in a meeting at the World Bank–International Monetary Fund spring meetings in Washington.
U.S. Treasury Secretary Jack Lew, right, and World Bank President Jim Yong Kim participate in a meeting at the World Bank–International Monetary Fund spring meetings in Washington.

By Kathryn McConnell
IIP Staff Writer
Washington,
April 22, 2013

The Obama administration will continue to work with the World Bank and other multilateral institutions to promote global prosperity and to help low-income countries build resilience to climate change, Treasury Secretary Jacob Lew said in an April 19 statement to the Development Committee of the World Bank and International Monetary Fund.

The committee gathered during the annual World Bank–IMF spring meetings April 19–21 in Washington.

Lew urged the World Bank to do more to promote reforms that assure that the benefits of growth are shared, adding that a country cannot sustain growth if it its policies include exclusion, inequity and corruption. He said that expanding incomes of the middle class and empowering women are key to sustainable growth.

Lew outlined challenges the World Bank faces. One is improving agricultural production, particularly among smallholder farmers in low-income countries who have poor access to credit, low quality or not enough seeds and fertilizers, poorly functioning local and regional markets, and weak infrastructure.

He said the United States has provided nearly $330 million to the Global Agriculture and Food Security Program to help low-income countries strengthen their agricultural sectors. He added that the United States will continue its support of the World Bank–based program and stressed that “addressing global food insecurity remains a long-term challenge.” He urged other donors to increase their financial backing of the program. The program was launched by the world’s top 20 economies in 2012 to coordinate donor support for strategic, country-led agricultural and food security plans.

Lew also urged the Bank to give more attention to building rural infrastructure and to improving health care systems, especially those that serve women and children. He noted that the two are linked in that rural roads provide access to health facilities. World Bank support would complement the support of other donors in these areas, he said.The treasury secretary said the World Bank is well-positioned to regularly assess the institutions and practices that are most effective in supporting the potential of women. He said studies have shown that women use their incomes to invest in their children’s health and education. He also said the United States would like the Bank to give more attention to gender-based violence.

Lew warned that climate change threatens to turn back much of the progress achieved in development and push some people back into poverty. The World Bank recently concluded that both advanced economies and growing economies that are fast becoming large emitters of greenhouse gases need to cut back on their emissions.

Lew said the United States will back the World Bank’s strategy of helping countries eliminate fossil fuel subsidies, incorporate climate-smart land use practices and design targeted safety nets for people affected by those changes. He suggested that the Bank’s International Development Association — its fund for the lowest-income countries — incorporate climate resilience into its programs for fragile countries.

Another area in which Lew said the Bank can be more active is in mobilizing local and foreign investment. “High and low income countries alike are searching for new ways to create jobs,” he said. He added that the Bank also can do more to maximize the impact of its investments.

“We will continue to press the World Bank Group to play a leading role in private-sector development,” he said.