The first objective of the World Bank (WB) will be supporting emerging economies to continue to grow at a difficult time for the global economy, said the Korean-American Jim Yong Kim, the new president of the institution. ” We begin our work together at a crucial moment”, while the world economy “remains vulnerable… My immediate priority will be to intensify the Bank Group’s efforts to help developing countries protect growth and jobs”, reads an email sent by Kim to the WB employees, obtained by Bloomberg.
Jim Yong Kim, 52 years old, former president of Dartmouth College University, follows Robert Zoellick to lead the international institution, which is aimed at overcoming poverty and has loaned nearly 53 billion dollars last year. The official was announced by the U.S. President Barack Obama, in March as a candidate to lead the World Bank and received in April the approval of institution members for a term beginning July 1. The new president of the World Band, a physician with an M.D. from Harvard Medical School and PhD from Harvard University, has little time to adjust to a job that requires a different expertise, in the context of crisis in Europe on the world economy and slowdown in China.
Kim breaks the pattern of presidents appointed to the World Bank from areas such as politics or finances. The job of the new president is more complicated by the lack of resources after the bank accelerated in recent years the lending to countries affected by crisis. “We entered 2008 with a large capital reserve so that we were able to increase lending in a way that we can not repeat now,” said World Bank Vice President Joachim von Amsberg, in an interview last week.
Commitments during the crisis came to a record $73 billion in 2010 from only $38 billion in 2010 and the bank was forced to seek new capital injections from the member states. Additional funds and gradual decline of lending have helped WB to maintain the ratio between capital and loans within the projected values. Maintaining this level is important for maintaining maximum possible rating of the bank needed to borrow funds at low costs. Therefore, WB explores ways to use the maximum possible resources available, said von Amsberg. There hasn’t been an increased demand for loans yet, but more countries are interested in preventive lines of credit.
The bank warned in June that developing economies should prepare for a long period of volatility in the global economy and reduced economic growth forecast to 3% from 3.1%. This year, the world economy will grow by 2.5% – the estimate is not altered compared to January, after the intensification of financial market volatility caused by Greece and Spain, has rescinded the positive effect of a slight stabilization in the first months of the year.
Reply