Forgotten sibling

After the G-20 met in London on April 2nd,Robert Zoellick,the World Banks president,described the summit as a promising beginning....

After the G-20 met in London on April 2nd,Robert Zoellick,the World Banks president,described the summit as a promising beginning. He may have chosen his words carefully,however,because the feeling in Washington,DC,is that the bank did not do nearly as well out of the jamboree as its Bretton Woods sibling,the IMF.

Since January Mr Zoellick has lobbied hard for Western governments to put aside a small fraction 0.7 per cent of their stimulus packages to help fund programmes in poor countries. But though there was endorsement in the G-20 communiqué for the banks proposed Vulnerability Framework,there was no hard cash. The IMF,however,emerged from the meetings with a promised tripling of its capital. As the two Washington-based institutions head into their joint spring meetings on April 25th and 26th,the mood at the IMF is almost jolly. At the World Bank,however,there are murmurs of discontent.

Some think that Mr Zoellick blundered by focusing on the vulnerability fund,rather than securing a lump sum at the summit. But that may be unfair. The bank is one of the multilateral development banks that will help disburse up to 100 billion of new lending promised by the G-20. Mr Zoellick himself says the bank does not need new capital but he does emphasise the need to turn commitments into tangible financial support.

The bigger issue is that poor countries,when it comes to access to funds,complain that they have been pushed even further down the global pecking order because of a problem that was not of their making. They fear that rich countries debt problems will mean that less money is available for poor ones. The banks economists reckon that the crisis could push 53m more people into extreme poverty in poor countries,but some of those countries feel the bank itself could help more and will make that point loudly this weekend.

For instance,many of the shovel-ready projects in poor countries that the bank had intended to support in future years could be brought forward to this year. Nancy Birdsall of the Centre for Global Development,a Washington think-tank,believes that the bank should also temporarily suspend internal rules that prevent loans being disbursed quickly.

Even if that were to happen,plenty of problems lie ahead. The worlds poorest countries rely mainly on interest-free loans or grants made through the International Development Association IDA,an arm of the bank. IDAs funds are replenished every three years,and the latest round of commitments worth 41 billion,made in December 2007,determine its ability to lend until mid-2011. But Americas promised contribution of 3.7 billion has yet to be approved by Congress. Getting this through may just have become trickier: the banks Independent Evaluation Group recently found an important weakness8230;in the complex of controls to manage the risk of fraud and corruption in operations supported by IDA. Yet another potential blow to the poor.

The Economist Newspaper Limited 2009