US Treasury Secretary Janet Yellen called for major reforms at the World Bank on Thursday, saying the seven-decade-old multilateral development bank was not designed to deal with multiple global crises like climate change.
According to the news agency Reuters, Yellen told the media that the World Bank and International Monetary Fund are not designed to deal with the multiple global crises they now face, including Ukraine and Russia war and the Covid-19 outbreak, and they lack the resources to tackle climate change.
Yellen said the IMF, which has about $1 trillion in total lending resources, was intended to help individual countries deal with isolated crises, while the World Bank was created to finance development projects in countries that lacked access to capital markets.
“We face challenges that will now require investment on a scale that an international institution can’t manage on its own, like climate change,” Yellen said. “The investments for climate change will add up to just trillions and trillions of dollars.”
She said she couldn’t say what reforms are needed to make organizations bigger, but said they need to be able to tap into more private capital.
Institutions should be able to offer “public goods” such as better public health infrastructure to manage future outbreaks, which may require changes to the World Bank’s mandate.
The World Bank’s lending totalled $99 billion in fiscal 2021.