Capital markets have helped the World Bank to increase lending on better terms to lower-income countries, Mr Jim Yong Kim, President of the World Bank Group, told the media Thursday at the briefing within the IMF/World Bank Spring Meetings in Washington DC.
Answering the question of Armenia News – NEWS.am on future policies along its two sovereign lending arms: IBRD (which lends on closer-to-market terms) and the IDA (concessional lending to lower-income countries), he told that the first entry of the IDA into the capital market helped to make a record replenishment of its funds.
In September 2016, the International Development Association (IDA) published its first-ever public credit rating with Moody’s and S&P, both parked at the top spot of triple A.
Assistance of donor countries has stayed the same, around $51-52 billion, but on top of this, fundraising through the stock market helped to bring the total to $75 billion.
World Bank is now the largest lender of Armenia, accounting for almost exactly a half (49.9%) of its government’s external debt.
The WB management has talked about capital increase with shareholder countries.
“The decision is theirs to make, but we are making the case strongly”, he said.
He reminded that over the course of the World Bank history, for every dollar it invested for development it managed to involve hundreds more.
The IFC (the WB private sector development arm) has only had $2.5 billion of capital throughout its entire 60 years, but managed to raise hundreds of billions of investments in private sector in developing countries.
The IBRD has too made a considerable spillover effect with the $14 billion, which had to be shared globally over 70 years.
“To meet our aspirations, we need to increase capital also with the IFC and the IBRD. And we will make that case strongly before our shareholders”, he said.