Leadership messages

wbg president
World Bank Group President
The world is facing dangerous crises that are hammering developing countries, hitting the poor and vulnerable, and worsening global inequality.

High inflation, war in Ukraine, large macroeconomic imbalances, and shortages of energy, fertilizer, and food have caused the sharpest global economic downturn in 80 years, compounding the death tolls, economic shutdowns, and school closures of the COVID-19 pandemic. Low- and middle-income countries now face surging prices for natural gas and fertilizer and the worst food crisis in a decade, as they work to achieve progress on long-term development needs–including clean water, electricity access, reading skills, quality infrastructure, and climate-related investments.

In the global fight to alleviate poverty and raise living standards, 2022 is likely to be one of the worst years in decades. Real median income has declined further in many countries, and the tragic reversals in development during the pandemic have worsened. Our June Global Economic Prospects report highlighted the risk of stagflation and the concentrated harm to the poor. Inequality is a prominent destabilizer, with global capital and income allocated primarily to high-income countries through their fiscal, monetary, and regulatory policy choices. Inequality is expected to worsen in coming years, leaving development goals out of reach for many.

The World Bank Group is responding to these challenges with speed, clarity, scale, and impact. We’ve committed two consecutive surges of financing, analytical work, advocacy, and policy advice to support people, preserve jobs, and restore growth—first, $150 billion in response to the COVID-19 pandemic, and now a 15-month $170 billion response to the food crisis as well as the war in Ukraine and its spillover effects. Since the start of the pandemic through fiscal 2022, the Bank Group has provided over $14 billion to help more than 100 countries respond to the health impacts of COVID-19 and vaccinate their people.

In fiscal 2022, IBRD committed $33.1 billion, including support for more than 45 middle-income countries. This includes $300 million to help Türkiye scale up private sector investment in geothermal energy. IDA committed $37.7 billion for grants and highly concessional loans to over 70 countries, including $645 million to support food system resilience and emergency response in Burkina Faso, Cameroon, Mali, Mauritania, Niger, and Togo. I welcomed our IDA partners’ agreement in December 2021 to advance the IDA20 replenishment by one year. Their record three-year contributions of $23.5 billion will anchor IDA’s financing of $93 billion for fiscal 2023–25 and help the poorest countries address urgent priorities—including jobs and economic transformation, human capital, the reversal in learning and literacy, gender, climate change, and fragility, conflict, and violence (FCV)—and move toward restoring growth.

Despite challenging economic headwinds, IFC provided strong support to the private sector with commitment volumes totaling $32.8 billion (including mobilization) in fiscal 2022, building on $31.5 billion of investments in fiscal 2021 and focusing on maximum impact. As banks cut back on trade finance, IFC is stepping in to keep import/export businesses operating despite the constraints they face. In fiscal 2022, IFC’s commitments reached $9.7 billion in trade finance, the highest level ever; nearly 75 percent of this was invested in IDA countries and countries affected by FCV. In one example, Coris Bank in Burkina Faso received IFC trade finance to import rice from various countries.

MIGA issued $4.9 billion in guarantees to help countries achieve their development goals. These efforts will provide some 15 million people with new or better electricity service and enable $1.9 billion in loans, including to local businesses. MIGA remained focused on its strategic priorities, with 85 percent of its projects in fiscal 2022 dedicated to countries affected by FCV, IDA countries, and climate mitigation and adaptation.

Fragility, conflict, and violence are rising in much of the world, including Afghanistan, Ethiopia, the Sahel, and Yemen. In Ukraine, the war has led to lives, homes, and livelihoods being lost, millions of refugees, and infrastructure destroyed. The costs of reconstruction are already in the hundreds of billions. As of August 2022, we have mobilized and facilitated the transfer of $13 billion in emergency financing, with more than $9 billion already disbursed to help Ukraine finance critical government services and lessen the human and economic impacts. This includes a $1.5 billion World Bank package, including $1 billion in exceptional support from IDA, to help pay wages for government and school employees. Bank Group support also extends to countries that are hosting Ukrainian refugees.

With the increase in energy and food costs and Europe’s huge unmet demand for natural gas, developing countries are facing new strains on people and economies. The sudden spike in food prices threatens to worsen political and social tensions in many developing countries, with devastating impacts on the poorest and most vulnerable. In parts of Eastern and Southern Africa, for example, about 66 million people are at risk of a food emergency or famine. In May 2022, we announced support for a global response to the food security crisis, with up to $30 billion in financing through August 2023, including $12 billion in new projects, to cushion the effect of higher prices and boost agricultural production and supply. The response builds on our experience from the last food price crisis and incorporates our data and analytical work, including the Commodity Markets Outlook. And in July 2022, I joined leaders of the IMF and UN agencies in calling for urgent action to improve global food security by providing quick support to the vulnerable, facilitating trade and international food supplies, boosting production, and investing in climate-resilient agriculture.

The disruption of energy supplies is lowering growth, especially for economies that depend on fuel imports. Higher prices for natural gas and shortages are putting fertilizer supplies and crop yields at risk, destabilizing electricity grids, and increasing the use of heavily polluting fuels. The world urgently needs to increase the supply of energy and massively expand reliable access to electricity in poorer countries. This will require major new investments in cleaner energy, energy efficiency, and electricity grids and transmission. The fundamental realignment of Europe’s energy sources away from dependence on Russia requires major increases in electricity generation from natural gas, hydropower, geothermal, and nuclear power to provide a less carbon-intensive baseload to maintain and expand electricity grids.

Climate change and extreme weather are steadily increasing their pressure on economies and societies, particularly in fragile settings. The Bank Group’s Climate Change Action Plan 2021–25 seeks to integrate climate and development, identify and develop the most impactful projects to reduce greenhouse gas emissions and adapt to climate change, increase direct financing throughout the Bank Group.  It will provide avenues for the global community to provide the huge flow of new grant funding needed for global public goods in poorer countries. Innovative financial tools, such as green bonds and the Wildlife Conservation Bond we launched in March 2022—the first of its kind—will need to expand. The Climate Change Action Plan has also introduced a new core diagnostic: Country Climate and Development Reports. As of the end of July 2022, we had published the first of these reports for Türkiye, Vietnam, and the G5 Sahel region. I’m also pleased that, with this annual report, we are introducing much greater transparency in the Bank’s climate disclosures.

A major consequence of the current crises is the huge buildup in government debt. For many of the poorest countries, the debt burden is unsustainable or at high risk. Deep debt reduction will be necessary to allow new investment and growth. We work closely with the IMF and other partners to help countries strengthen their transparency, governance, and accountability—all key steps in debt sustainability. We also continue to call on official and private sector creditors to participate quickly and fully in efforts to reduce debt stocks. Under current creditor-country policies, expected debt payments by the poorest countries to their creditors in 2022 and 2023 will greatly exceed all the development assistance available to these countries. Our World Development Report 2022 examines polices to mitigate interconnected financial risks and steer the world toward a sustainable and equitable recovery.

I was pleased to welcome many colleagues back to our offices this year. We continue to adapt our work model to protect staff health and well-being while recognizing the value of physical interaction in delivering high-quality results for clients and career development. The Bank Group’s anti-racism task force continues our important work to fight racism and racial discrimination within our institution and in countries where we work. I remain committed to fostering a culture of openness and trust and improving diversity and inclusion across the organization, also through our task force on workplace culture.

The crises affecting our client countries are deep-seated, but I am confident we can make a difference. To meet these challenges, we must draw on the innovation and dedication of our staff, the strength of our partnerships, and the resolve of the global community. The World Bank Group remains committed to helping countries overcome these challenges and work toward a more resilient and sustainable future.

David Malpass
President of the World Bank Group 
And Chairman of the Board of Executive Directors

 
Miga directors

Seated (From Left to Right):
Katharine Rechico, Canada; Koen Davidse, The Netherlands—Co-Dean; Monica E. Medina, Peru; Abdulmuhsen Saad Alkhalaf, Saudi Arabia; Merza Hussain Hasan, Kuwait—Dean; Matteo Bugamelli, Italy; Nigel Ray, Australia; Lene Lind, Norway; Richard Hugh Montgomery, United Kingdom; Rajesh Khullar, India

Standing (From Left to Right):
Alphonse Ibi Kouagou, Benin; Katarzyna Zajdel-Kurowska, Poland; Roman Marshavin, Russian Federation; Mohd Hassan Ahmad, Malaysia; Abdelhak Bedjaoui, Algeria; Takashi Miyahara, Japan; Adriana Kugler, United States; Arnaud Buissé, France; Eva Valle Maestro, Spain; Nathalie Francken, Belgium (MIGA Director and Bank/IFC Alternate Director); Michael Crake, Germany; Taufila Nyamadzabo, Botswana; Erivaldo Gomes, Brazil; Armando Manuel, Angola; Junhong Chang, China

Message from the Board of Directors
Over the last year, our shareholders asked the World Bank Group to provide exceptional support in response to the compounding crises of the COVID-19 pandemic and the war in Ukraine, in addition to its ongoing and extensive portfolio of work.

This resulted in unprecedented levels of financing by the Bank Group in fiscal 2022, including $70.8 billion by IBRD and IDA, $32.8 billion (including mobilization) by IFC, and $4.9 billion in guarantees by MIGA. By financing health operations, vaccine procurement, and other initiatives, the Bank Group has helped developing countries and their people and businesses continue to address the impacts of the pandemic on poverty, health care, human and economic development, and well-being. The Bank Group has also rapidly addressed the far-reaching consequences of a new crisis, the war in Ukraine. The spillover effects are many—beyond the impacts related to refugees, food security, and energy, the conflict poses uncertain and potentially lasting consequences on trade channels, foreign investment, global confidence, and financial stress. Anchored by the Bank Group’s twin goals of poverty reduction and shared prosperity, with a focus on fostering green, resilient, and inclusive development, the Board discussed and approved several important initiatives and programs to respond to these crises.

But the needs are many, and more can be done. The Bank Group is working with donor countries to mobilize financial support through diverse channels, including the Fund for Pandemic Prevention, Preparedness, and Response, as well as special guarantees and grant financing for Ukraine. The Bank Group is also working with stakeholders on the ground to implement important programs, such as the World Bank Group Climate Change Action Plan (CCAP), IFC’s Global Health Platform, MIGA’s Fast-Track COVID-19 Response Program and the Bank’s COVID-19 Strategic Preparedness and Response Program, as well as efforts to address debt vulnerabilities, boost the resilience of food systems, and support energy access and transition. We continue to stress the need to address the key drivers of fragility and poverty—in Afghanistan, Haiti, Sudan, Yemen, and elsewhere—in order to build human capital, reduce inequality, promote jobs, and foster economic recovery.

Given the immense need for financing, the IDA20 replenishment process was advanced by a year, and a $93 billion replenishment package was agreed to in December 2021. This financing is the largest ever mobilized in IDA’s 61-year history and will help low-income countries respond to today’s multiple crises and build a greener, more resilient, and more inclusive future. Donor countries also agreed to a review of IDA voting rights, resulting in a significant adjustment to its voting rights framework. This will help ensure fairness among all donors while protecting and enhancing recipients’ voting power.

At the 2021 Annual Meetings and 2022 Spring Meetings, the Development Committee asked the Bank to help countries address immediate food security and social protection needs; to help manufacture and deploy vaccines, invest in diagnostics and therapeutics, and strengthen health systems; to continue supporting debt sustainability and transparency; to build on the CCAP to protect natural capital and biodiversity; to promote digitalization; to increase private sector financing mobilization; and, with the IMF, to coordinate actions and orient country engagements toward a green, resilient, and inclusive economic recovery. It urged the Bank to work toward these objectives while remaining focused on the twin goals of ending extreme poverty and boosting shared prosperity as well as helping countries achieve the Sustainable Development Goals.

We strongly support the important efforts undertaken this year by Bank Group senior leadership and staff to address racial injustice and workplace culture through recommendations from the staff task forces. We welcome these improvements as we transition to a hybrid work model. We were also pleased to travel as a group to client countries in fiscal 2022—the first time since the pandemic started—and observe in person the impact of the Bank Group’s engagement.

We sincerely appreciate the ongoing commitment of staff across the institutions, including our own teams, to the Bank Group’s mission and their hard work during these exceptional and challenging times. We also extend a special thanks to the Emergency Management Team, who worked tirelessly to bring us back into our offices safely and securely after an extended period of home-based work.

Amid the many current crises, the World Bank Group stands ready to help countries and people across the globe as they work to address human and economic challenges and achieve progress on the path of development.

 
Miga VP
MIGA Executive Vice President
In times of crisis like this year, MIGA’s mission has become even more important and impactful: to promote foreign direct investment (FDI) in developing countries by insuring against political and noncommercial risks.

Amid the uncertainty and turbulence related to the ongoing effects of the COVID-19 pandemic and the war in Ukraine, MIGA delivered a solid program of nearly $5 billion in new guarantees. Working with clients and partners, we leveraged $6.5 billion in total financing (from private and public sources) through guarantees to cross-border private investors in developing countries. Of our gross issuances, 33 percent supported projects in International Development Association (IDA) (that is, lower-income) countries, up from 25 percent in FY21; 12 percent went to fragile and conflict-affected situations (FCS), tripling from 4 percent in FY21; and 28 percent of our guaranteed investment contributed to climate change adaptation or mitigation, up from 26 percent in FY21. In each of those priority areas, MIGA has demonstrated support for investments and lending for the countries that need it most.

As a result, MIGA issuances in FY22 are expected to help provide new or improved access to power to some 15 million people, support nearly 20,000 jobs, and enable $1.9 billion in loans, including for small and medium enterprises (SMEs) and climate-related activities.

Although FDI and demand for MIGA’s political risk insurance (PRI) decreased because of the COVID-19 and Ukraine crises, demand for our financial sector products increased, showing how useful MIGA is during times of crisis. Through the projects we supported, we remained focused on encouraging private investors to work with host governments by helping manage and mitigate political risks.

In addition, MIGA has used its convening power to host several events promoting FDI. A public event in December 2021 focused on “Driving Foreign Direct Investment to Africa,” and a high-level dialogue in March 2022, cohosted with the government of Togo, promoted FDI into West Africa. The multicountry roundtable brought together foreign investors with government representatives from Togo, Côte d’Ivoire, Guinea, and Senegal, among other countries.

On the climate front, global carbon dioxide (CO2) emissions continue unabated, with infrastructure in developing countries particularly vulnerable to extreme weather events. By some estimates, solar and wind power capacity needs to grow from 1,400 gigawatts (GW) today to 17,000 GW by 2040—with two-thirds of this new capacity coming in developing countries. At the same time, investing in climate resilience presents an enormous economic opportunity: on average, a dollar invested in resilient infrastructure yields $4 in benefits. Over a lifetime, this results in a total net benefit of $4.2 trillion of new infrastructure assets in low- and middle-income countries.

Although the challenges are real, so are the opportunities, and MIGA did its part to take advantage of them:

  • To support climate adaptation, we ensured that highways in Serbia as well as Kenya will be resilient to flooding brought on by climate change. We also supported power projects in Bangladesh and Gabon and a port in Colombia to ensure that they will be resilient to the impacts of extreme weather.
  • To ensure alignment with the Paris Agreement, we began screening our real sector projects for alignment with the Agreement’s low-carbon and climate-resilient goals. We are also starting to mainstream Paris Alignment requirements across MIGA to ensure that all stages of the project cycle factor into climate considerations.
  • To expand private investment, we also launched two climate-related trust funds this year. The Fund for Advancing Sustainability supports investor efforts to boost impact in priority areas such as climate and gender and achieve enhanced standards on environmental, social, and governance (ESG); corporate governance; and integrity. The Renewable Energy Catalyst Multi-Donor Trust Fund aims to catalyze additional private sector investment into this critical area and help developing countries hasten their transition to climate-friendly, green energy. These two trust funds, along with two previously established funds, are now housed under MIGA’s Strategic Priorities Facility, which aims to significantly increase the share of low-income and fragile economy-based projects as well as guarantees in support of climate change projects.

The COVID-19 Response Program, which we launched in April 2020, has delivered some $7.6 billion in guarantees issued across 47 projects since inception—$2.1 billion of which were issued this fiscal year. The program has been a testament to the countercyclical role that MIGA can play in mobilizing private investment in the face of global crises.

Last year, MIGA launched its first Gender Strategy Implementation Plan, reinforcing its commitment to integrate gender into all aspects of MIGA’s business. At the corporate level, MIGA awarded its seventh annual Gender Leadership Award to Lucy Heintz, partner and head of energy infrastructure at Actis, for her work on gender in the energy sector. At the project level, MIGA worked with its clients to integrate actions to narrow gender gaps. For example, MIGA signed a guarantee with the National Bank of Canada, supporting its Cambodian subsidiary, ABA, for lending to women-owned SMEs. The project was MIGA’s first with gender commitments in an IDA country.

MIGA also continued to innovate. In Colombia, we issued our first guarantee on a local currency loan offered by a sub-sovereign government entity, the District of Bogotá. Our support was a critical enabler of the district’s COVID-19 response and will enhance emergency health care response capacity. In the Arab Republic of Egypt, we worked with the European Bank for Reconstruction and Development (EBRD) to enhance the first climate-certified project bond being issued in the country. The bond was offered to refinance six operational solar power plants, and with our support, secured a credit rating six notches above the sovereign rating, paving the way for institutional investors to support climate projects in developing countries.

Although we are living through challenging times, I am heartened that, working with our clients, we are helping deliver impact on the ground.

I am particularly proud of our staff, who came together under difficult circumstances to meet the challenge. I am delighted that Junaid Ahmad joined MIGA this year as Vice President of Operations. With deep experience in international development and an exemplary track record working across the World Bank Group (most recently as the World Bank’s country director for India), Junaid will lead the effort to pursue meaningful, impact-driven projects and deliver on mobilizing private finance for development projects.

Reflecting his dedication to greater equality, Ethiopis Tafara, MIGA’s Vice President and Chief Risk, Legal and Administrative Officer, assumed the important role of chair of the World Bank Group Anti-Racism Task Force. And as FDI continues to wane, Ethiopis recognized a need to facilitate conversation between governments and investors so they can learn from each other. Under his leadership, MIGA and the government of Togo hosted the first MIGA FDI Roundtable Dialogue, aimed to encourage investors to take on projects that serve the public interest and are supported by the private sector. With this continued effort, I am confident that governments and investors will find effective ways to attract investment to those countries most affected by the economic downturn.

I extend my thanks to our clients and Board, who have remained steadfast partners and helped us deliver results through the pandemic.

While the challenges ahead are many, we have the capacity to tackle them head-on. I remain hopeful that the work we do day in and day out will help us not only to withstand the challenges of our current times but also to deliver long-term results.