Dubai: The World Bank has plans to shorten project approval times from 19 months to 12 by the end of this year, the bank’s President Ajay Banga told audiences at the World Government Summit on Monday.
The bank takes 17 months to approve projects, from initial discussions with the countries to board sign-off. Before that, the World Bank had a 19-month approval process. “It takes another nine-10 months before the first dollar goes out the door. This has a lot to do with the capacity of countries to absorb projects and get their approvals. But the first 19 months are ours. While there are good reasons for some of that time, it can be slashed,” said Banga. “I don’t know if I’ll get to 12, but I’ll get to 13 or 14. But I’ll get to a much lower number than 19. To be development delayed is development denied, and that has to change,” he said.
Banga revealed these plans when asked how the World Bank adapts to global geopolitical challenges internally.
“The second task is to invest in the capacity of those countries so that the nine months they take in turn to get approvals and sometimes the years it takes to complete a project can be brought down,” said Banga.
“We have amazing subject-matter experts in the bank to discuss different topics. Getting those experts to be be available to devote their time to building capacity in the receiving country is the second part of what I’m trying to do,” he added.
Banga also revealed that the World Bank is actively addressing internal collaboration, emphasizing the need for improved cooperation across different segments within the institution.
Starting in July 2024, the bank plans to establish a unified system, serving as a single window for services offered by the entire World Bank Group. This group encompasses the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Financial Cooperation (IFC), and the Multilateral Guarantee Agency (MIGA). These entities represent the World Bank’s lending arms for developing countries and the agency responsible for political risk guarantees.
Banga expressed the intention to expand this initiative if successful, aiming to reshape incentive systems within the bank to foster collaboration across silos.
Aims for the region
The challenges of instability across the region (MENA) and Europe, including the Gaza-Israel war, the Russia-Ukraine war, and the Red Sea crisis, have resulted in the lowest growth rate of the last 35-40 years. Banga said, “That’s something we must keep a close eye on. We cannot have economic growth without peace and prosperity.”
The multilateral bank’s President said the institution had changed its vision from being only in the business of eradicating poverty to saying, “We will help to eradicate poverty, but we will ensure it is a liveable planet”.
“We cannot imagine eradicating poverty without tackling these intertwined challenges, including climate change, caring about pandemics, fragility, conflict, soil degradation, forestry loss and biodiversity loss,” he added.