GSO Commentary — World Bank/IMF Development Committee supports social safety nets

The joint World Bank/IMF Development Committee was the occasion for new directions on development policy, as well as an opportunity to bid farewell to outgoing World Bank President Robert Zoellick. See the Development Committee Communiqué of 21 April 2012 here. The Committee approved World Bank support for the development of “efficient and fiscally sound social safety nets”. The report in support of this initiative (available here) cites the success of safety nets to cope with the recent financial and economic crisis, as well as the growing interest in adopting safety nets in developing countries. While President Zoellick has reiterated that “the best safety net is a job” and that World Bank continues to endorse private sector development as the key strategy for social welfare generally, the role of helping countries to develop social safety nets is illustrative of the new direction being taken by the World Bank. The report highlights key messages, including the value of safety nets in times of systemic crisis but also on a continuing basis for effective management and affordability. We note that this is in line with the work of the International Labour Organization, which is developing its own policy on a global “social protection floor” at the forthcoming International Labour Conference in Geneva this June.

The Development Committee also recognized President Zoellick’s tenure for leading the Bank in its “timely and effective responses to the food and financial crises and natural disasters” as well as his “championing of issues such as gender equality, climate change, agriculture and infrastructure, as well as the institution’s work in fragile and conflict-affected situations”. Mr. Zoellick himself had highlighted his commitment to transparency and openness to the sharing of data and reports as a major part of his legacy, and the Development Committee reaffirmed his role in contributing to a “new era of ‘’modernized multilateralism’”. We see this new era as opening the door for the different background and perspective of Mr. Jim Yong Kim, such that his assuming the Presidency of the World Bank should actually contribute to this momentum towards a new era. While he has the challenge of overcoming critics of the selection process and skeptics regarding the “fit” of his credentials with the demands of leading the World Bank Group, we are optimistic that these new directions at the Bank are the prelude for a new “Development Strategy”.