DEVELOPMENT COMMITTEE
VbORLDBANK

T
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JOINT MINISTERIAL COMMITTEE
OF THE
BOARDS OF GOVERNORS OF THE BANK AND THE FUND
ON THE
TRANSFER OF REAL RESOURCES TO DEVELOPING COUNTRIES

1 818 H Street, N.W., Washington, D.C. 20433

Telephone: (202) 458—0388

Washington DC, April 13, 2019
1.

The Development Committee met today, April 13, in Washington. D.C.

2.
The global outlook foresees a moderate slowdown in economic activity, while lingering downside risks remain.
Global trade growth has weakened, investment prospects have softened. debt vulnerabilities persist, and policy uncertainty
weighs on confidence. We reiterate the important role of international trade and investment as engines of growth, productivity,
imiovation, job creation and sustainable development. We continue to support the World Bank Group (WBG) and the
International Monetary Fund (IMF) in their multipronged approach, with borrowers and creditors, to improve the recording,
monitoring, and reporting of public and private debt, as well as efforts to strengthen creditor coordination in debt restructuring
situations, drawing on existing fora. We stress the importance of adopting growth-enhancing policies while containing risks and
protecting the most vulnerable. We cali on both institutions to work jointly with policy makers to identify the right balance,
given country circumstances, between supporting demand and rebuilding fiscal space; to help countries improve debt
management capacity, sustainability, and transparency; and to strengthen domestic resource mobilization.
3.
We endorsed a transformative capital package for IBRD and IFC one year ago. This package and the Forward Look
guide the WBG’s strategic direction to 2030. We welcome the paper Update: The Forward Look and IBRD-IFC Capital
Package Implementation and the significant policy reforms delivered, including: IBRD ban pricing and Single Borrower Limit
differentiation, the IFC additionality framework, the IBRD Financial Sustainability Framework, and the revised methodology
for staff compensation. We also note the strong yet selective WBG engagement in countries above the graduation discussion
income as reflected in the revised guidance for country partnership frameworks. We encourage the Bank Group to continue
implementing and monitoring the agreed efficiency measures. We request management to continue tracking progress against
the Forward Look and capital package commitments and to update the Governors in one year.
4.
We welcome the ongoing work by shareholders to start the subscription documentation and payment process for the
IBRD capital increase launched on October 2, 2018. We urge that all outstanding adoptions of IFC resolutions be secured by
September 18, 2019.
5.
We remain committed to the twin goals of ending extreme poverty and boosting shared prosperity as well as the
WBG’s global role and the objectives set out in the Forward Look: (i) serving all clients; (ii) leading on the gbobal public goods
agenda, (iii) creating markets, and (iv) continually improving the business and operational model. Effective implementation
will require strong country partnership with IBRD and IDA clients with a focus on measurable development outcomes. The
capital package will enhance WBG leadership in the key areas of crisis preparedness, prevention and management; situations of
fragility, conflict and violence (FCV); climate change; gender equality; knowledge and convening; and regional integration.
6.
The Bank’s fund for the poorest countries, IDA, is critical to reaching the WBG’s goals as well as to achieving the
Sustainable Development Goals (SDGs). We welcome the strong delivery of the ambitious and innovative IDA18 package and
support recently proposed adjustments, particularly the reallocation across IDA windows. We cali on the Bank Group to
strengthen emphasis on jobs and economic transformation in IDA countries. one of the IDA 19 special themes. We also support
the other special themes governance and institutions, gender, climate change and FCV as well as the cross-cutting areas of
debt, disability. human capital and technobogy. We observe the rising debt levels in IDA countries and encourage measures to
enhance their debt sustainability. We look forward to the outcomes of the upcoming meeting of IDA Deputies and their
guidance on strategic directions and the IDA 19 Roadmap.
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—

We welcome the Mainstreaining the Approach to Disruptive and Transfor,native Technologies at the World Bank
7.
Group paper and the WBG’s efforts to make these technologies affordable and accessible for developing countries. We
encourage the WBG to create opportunities for the poor and mitigate risks associated with technology. We ask the Bank Group

to continue to work with countries as well as private and public sector partners to mainstream this agenda across sectors. We
particularly welcome its work on competitiveness, innovation and consumer protection by supporting agile regulations. We also
cali on the WBG and IMF to continue work on fintech issues, building on the momentum generated by the Bali Fintech
Agenda.
8.
Investments in human capital that produce better learning and health outcomes are critical to productivity and
economic weil-being. We welcome the strong start on the Human Capital Project and the fact that close to 60 countries have
joined thus far. We request further development of disaggregated data and refinement of indicators under the Human Capital
Index and an emphasis on policy reforms that achieve tangible results. We look forward to an update on the Human Capital
Project in October 2019.
9.
The private sector plays a key role in providing sustainable solutions to development challenges, creating markets,
mobilizing investment and generating jobs. We encourage the WBG to foster enabling business environments, leverage capital,
and implement the Cascade to maximize finance for development. We support the IFC 3.0 strategy to catalyze private sector
investments. We acknowledge IFC and MIGA efforts to increase investments in IDA countries and fragile situations, and we
support the use of the IDA Private Sector Window to reach the most vulnerable, recognizing that such projects come with
higher risks. We call on the World Bank, IFC and MIGA to be innovative and work together in mobilizing private sector
solutions and resources, leveraging sectoral reforms, and mitigating investment risks.
10.
Fragility, conflict and violence cause human suffering, vulnerability and displacement, and economic stress, all posing
challenges to delivering the 2030 Agenda. In addition, economic crises, natural disasters, and pandemics can test countries’
resilience and threaten development gains. Building institutional capacity, developing disaster resilience, and encouraging
knowledge sharing and south-south cooperation are also key priorities, particularly for small states. We support strengthening
domestic resource mobilization, addressing illicit financial flows and corruption, as well as investing in quality infrastructure
and enhancing energy security to improve the response to crises. We reiterate the importance of delivering on the WBG’s
Climate Change Action Plan. We look forward to the development of a strategy on FCV.
11.
As the WBG scales up work in high-risk scenarios, where institutional capacity is often weak, strong environmental
and social protections and accountability processes are critical, and we support the WBG’s continued commitment in these
areas. We acknowledge the important role that the World Bank’s Inspection Panel and the IFC and MIGA Compliance Advisor
Ombudsman play in accountability, lessons learned, and mitigating risks in an efficient and effective way.
12.
We urge the WBG to continue to work closely with public and private partners including international financial
institutions and the UN, on the most pressing development challenges. We note that heads of state will gather in September for
the UN summit focusing on climate, universal health coverage, SDGs, financing for development, and small island developing
states. We also underscore the importance of continued WBG and IMF collaboration in implementing their respective
mandates as well as the potential of multilateral development banks working as a system to improve their response to cornmon
challenges, inciuding through a coordinated country platform approach.
13.
We are encouraged by progress on diversity and inclusion among WBG staff and management, and we continue to
support the Board in its work to enhance and promote gender diversity at the WBG Executive Boards. Closing gender gaps is
smart economics, while balanced representation and full gender equality are central to the Bank’s mission. We urge continued
work on this front.
14.
We congratulate Mr. David Malpass on his selection as President of the World Bank Group and look forward to
working closely with him. We value his strong commitment to the Bank Group, its mission and strategy. We express our
appreciation to Dr. Jim Yong Kim for his leadership of the WBG and its significant accomplishments during his tenure. We
also thank Ms. Kristalina Georgieva for her leadership and effective management of WBG affairs as Interim President.
15.

The next meeting of the Development Committee is scheduled for October 19, 2019, in Washington, DC.

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flj

VORLD BANK

DEVELOPMENT C OMMITTEE
(Joint Ministerial Committee
of the
Boards of Governors of the Bank and the Fund
011 the
Transfer of Real Resources to Developing Countries)

NINETY-NINTH MEETING
WASHINGTON, D.C. APRIL 13, 2019
-

DC/S/20 19-0033
April 13, 2019

Statement by
Sigrid Kaag
Minister of Foreign Trade and Development Cooperation
Kingdom of the Netherlands
Representing the Constituency of Armenia, Bosnia and
Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel,
Macedonia, Moldova, Montenegro, The Netherlands, Romania and
Ukraine

Statement by
Sigrid Kaag
Minister of Foreign Trade and Development Cooperation
Kingdom of the Netherlands
Representing the constituency of Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus,
Georgia, Israel, Macedonia, Moldova, Montenegro, the Netherlands, Romania and Ukraine
1h
99

Meeting of the Development Committee
April 13, 2019
Washington, D.C.

The World Bank Group (WBG), as world’s largest, innovative and transformative development actor,
plays a central role in delivering on the Sustainable Development Goals, the Paris Agreement on
Climate Change, and the Addis Ababa Action Agenda on Financing for Development. The WBG is an
important development partner for many countries in terms of funding, knowledge, technical assistance
and expertise.
We particularly value the WBG’s continued support for countries in the Europe and Centra! Asia region,
inciuding the countries in our constituency. We encourage the bank to deepen its engagement in the
region, particularly by promoting private sector-led growth.
Update on the Capital Iniplenientation Package
For our constituency, continuous swift and thorough implementation of the agreed commitments as
specified in the Forward Look strategy and in the Capital Package for the IBRD and IFC remains crucial
for becoming a bigger, better and braver Bank and for strengthening the Bank’s support for delivering
the SDG’s. We are pleased to note that the Bank has already implemented several of these important
commitments, such as pricing measures, a more modest staff compensation policy and the Financial
Sustainability Framework (FSF) implementation approach. Our constituency strongly encourages the
Bank to continue implementing these commitments, first and foremost by stepping up and deepening
its engagement with all clients and to specify how the package will benefit them, inciuding our
constituency members as well as countries affected by Fragility, Conflict and Violence (FCV). We also
urge the Bank to continue identifying further efficiency measures and together with the Board further
implement the FSF, as part of its regular budgetary process.
It is promising to note that the Bank has already embarked on its path towards the agreed objectives and
policy targets on a variety of issues including gender, climate, and private sector financing.
We welcome in particular the Bank’s enhanced engagement in FCV-countries. This is particularly
important against the background of fighting poverty, as extreme poverty is increasingly concentrated
in FCV-countries. We would like the Bank to be more explicit and specific on what it will do more and
differently with its increased financial capacity in the years ahead. We call on the Bank to make more
progress 011 decentralization, including enhancing its presence in our constituency countries, and
develop its performance criteria to monitor progress. More particularly, with approximately 5% of Bank
staff working in FCV countries, the footprint of the Bank in FCV-countries remains insufficient for
reaching its goals. A crucial aspect will be to provide the right incentives to staff not only to do more
in FCV countries in terms of business volume, but also to focus on the often more challenging
operations in FCV affected sectors and regions.

With regard to climate, we are pleased to see that the Bank has made much progress towards achieving
the agreed targets as well as making these targets more ambitious. At the same time we would like to
encourage the Bank to consider to step up its efforts to assist dient countries to make their climate
strategies (National Determined Contributions) more ambitious, in terms of adaptation and energy
transition. We look forward to the successful outcome of the negotiations for the 1 9 IDA replenishment
which several of our members engage in. We encourage IDA management, together with IDA deputies
and the Board to make progress with regard to the IDA voting rights.
Finally, let me emphasize the importance of the Bank having strong policies in place to address the
issues of Sexual Harassment and Sexual Exploitation and Abuse, both within the World Bank Group
itself as in and around its operations in the field. In this context T encourage the bank to continue its
important work on further strengthening its policies, including on the issue of reporting, and to help
foster a culture of openness and ‘speaking up’ in the institution.
Report on Mainstreaming Disruptive Technologies
Our constituency supports the WBG’s view that disruptive technologies can offer opportunities for
sustainable, inclusive economic growth. However, we also see challenges to unlocking the full potential
of disruptive technology for developing countries which need to be addressed. These include
infrastructural challenges, such as limited access to broadband internet, and human capital challenges,
such as (digital) illiteracy. We calI on the Bank to take a holistic view of efforts to narrow the ‘digital
divide’. We emphasize the need for digital access to all, in particular for poorer groups and women.
While our constituency is positive about the mainstreaming agenda and the WBG’s commitment to
disruptive technology, including the GovTech Initiative and the Digital Moonshot for Africa, we would
like to see poverty reduction and inclusiveness better reflected in the Banks operations. An inclusive
approach with specific attention for marginalized groups is key to make the mainstreaming of
disruptive technologies a success. We see much scope for cooperation and information sharing with
partners, such as the private sector, that have the institutional and financial capacity and the relevant
knowledge and experience, to further develop and implement the digitalization agenda.
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Our constituency is specifically interested in discussing the use of digital platforms in education. They
can be used as a crucial tool to enhance access to educational programs and online tutoring in less
developed areas, with only limited access to quality schools and teachers. Our constituency would like
to see better reflected how the WBG will support digital platforms in these countries.
While digital development holds significant potential for development, our constituency encourages the
World Bank to further analyze the associated risks, such as those related to cybersecurity, misuse of
data, macroeconomic risks, fraud, money laundering and terrorism financing and unemployment, and
to work together with dient countries on an adequate response.
Global Economic Context Challenges and Policy Options
As pointed out in the report Global Economie Prospects 2019 and in the Development Committee
Lunch note, the expected global slowdown and the downside risks to the outlook present an increasingly
challenging environment for emerging market and developing economies, as well as for lower-income
countries that face additional challenges because half of them are also considered to be in fragile,
conflict and violent situations. Additional efforts are required in order to make progress towards
delivering on the Sustainable Development Goals by 2030. We can subscribe to the Bank’s observations
that these should be aimed at implementing structural reforms strengthening macroeconomic
management, improving governande, and fostering enabling business environments.
Especially budgetary resilience and needed investments in human capital and enhanced social
protection can only be paid for if governments mobilise substantial revenues. We welcome the Bank’s
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initiative to focus on improved public finance management and domestic revenue mobilization,
particularly in light of the debt vulnerabilities in many countries. This is an issue of special concern for
our constituency, particularly in many lower-income countries. The current international standards and
policies appear insufficient to prevent the buildup of debt sustainability risks in a considerabie number
of countries. We therefore welcome the WBG and IMF joint multi-pronged approach to address debt
vulnerabilities. Within this approach, we believe the WBG and IMF should also look into reviewing
their own policies and operations.
Our constituency also strongly believes that thorough analyses of issue related to debt sustainability and
debt transparency should play a central role in WBG policies, country strategies and operations. They
should serve not only as background to WBG actions, but also, more importantly, as key determinant
to those actions. Therefore, we encourage the Bank to walk the extra miie and to explore possible
additional measures, especially with regard to its own financing instruments, aiming at limiting further
debt vulnerabilities in dient countries as much as possibie. Of particular importance is also providing
the right support and incentives to countries with debt vulnerabilities with a view to enhancing debt
transparency, using the right type of debt instruments in their borrowing and making sure responsibie
borrowing contributes maximally to boosting inclusive and sustainable growth.
Our constituency expects the Bank to show leadership 011 related issues, such as local currency financing
and technical assistance, particularly in the areas of debt management and domestic resources
mobilisatiön. Regarding the latter, we urge the WBG to show leadership in this area by stepping up
technical assistance, by setting an example, and notably by preventing tax evasion through further
strengthening its own policies in accordance with the highest international standards. In parallel, a
strong approach is needed to step up coordination with creditors on improving information sharing and
addressing the lack of data transparency.
In the context of global economic deveLopments, our constituency would like to request special attention
from the World Bank for countries affected by Fragility, Conflict and Violence, particularly in the
Sahel, Horn of Africa and MENA regions. Although global poverty is declining, extreme poverty wiLl
increasingly concentrate in these areas and countries, which are hit relatively hard by the effects of
climate change and where socio-economic development is often under pressure due to a sharp increase
in population.

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