Zoellick faces aid shortfall
24 September 2007
World Bank President faces an uphill battle to raise money from donors to support the Bank’s work in poor countries.
The International Herald Tribune (IHT) reported today that World Bank President Robert Zoellick is facing a difficult task raising a preliminary target of $39 billion, over the next three years, from rich member governments to support the Bank’s work in poor countries.
"Large donor countries are balking because of their own budget problems and persistent questions over the bank’s future relevance, priorities and effectiveness," the IHT reported.
While the Bank’s image has been harmed by the recent Wolfowitz scandal, it has not helped Zoellick that the United States has fallen behind in its commitments to the Bank by $375 million, according to the article. Additionally, European governments are increasingly targeting their lending to specific projects such as HIV-AIDS, health care for women or environmental problems, and are doing so through their own development agencies rather than through the Bank. As a result, International Development Association (IDA) loans, the Bank’s mechanism for channeling aid to poor countries, continues to decrease.
Despite this recent trend, Zoellick argues that IDA still serves a purpose of being a “unifier” of global aid. He continues to look for more funding from inside the Bank as well as playing to the interests of large donors interested in funding climate change such as the Europeans, by arguing that they do not want to be seen as denying aid to Africa.
Still, Zoellick faces a struggle to raise money. Although Europeans consider him to be easier to work with than his predecessor, they are still not ready to contribute large amounts of money to fund Bank projects. According to a senior European development official quoted in the article many donor countries are waiting for Zoellick to "come out with his vision for the Bank." Until he does, wealthy countries are reluctant to commit large sums of money to the Bank.