Some thoughts on Ukraine and the World Bank

February 24, 2023 marks exactly one year since Russia invaded Ukraine, sparking a conflict which has had global ramifications. Much has been written here and elsewhere about the impact of the conflict on global food security, energy security and geopolitics. The disruptions in these areas remain largely in place, and are likely to stay that way for as long as the conflict continues.

In a show of support for Ukraine, this past week, United States (US) President, Joe Biden, made a surprise visit to the Ukrainian capital – Kyiv. Biden’s visit was symbolic in many ways, but chiefly because it demonstrated America’s commitment to its ally. However, there was also substance beyond the symbolism, as the US pledged more military aid to Ukraine worth $500m, in addition to the more than $50bn already provided in US assistance.

The geopolitical stakes also seemed to increase with Biden’s visit to Ukraine, since soon after, Russian President Vladimir Putin said that he was suspending his country’s participation in the nuclear arms control treaty with the US. Under the treaty, both the US and Russia are permitted to conduct inspections of each other’s nuclear weapons sites. It also provides for limits on the deployed strategic nuclear arsenals of both countries.

The US and Russia have the world’s largest nuclear weapons arsenals. According to the Guardian, “The decision to suspend participation in the arms treaty would mark a new low in US-Russia relations and arms control, one of the few topics on which Moscow and Washington DC could find common ground.”

Jon Wolfsthal, who served as a senior adviser to former US President, Barack Obama for arms control and non-proliferation at the National Security Council, said in a tweet that “the loss of agreements will increase uncertainty and chances of misunderstanding, inflate threat perception and fuel accelerating arms race…”.

Elsewhere, another major recent development came about with the announcement by the current World Bank President, David Malpass, that he will leave his position on June 30 this year.
The World Bank is a global institution, comprising 189 member countries. According to its own website, “it is one of the world’s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.”

The Bank and its peer organisation, the International Monetary Fund (IMF), were created nearly 80 years ago, close to the end of the Second World War. At the time, the Americans and the Europeans agreed that the former got to choose the head of the World Bank, while the latter would pick the managing director of the IMF.

Since Malpass’ announcement, several observers have renewed calls for democratisation of the selection process to choose his replacement, and for there ultimately to be a non-US President. This is unlikely and the US has not yet demonstrated, at least openly, any appetite to acquiesce to such calls.

Nonetheless, the calls go to the heart of the cry of many developing countries, including those comprising the Caribbean Community (CARICOM), for reform of the global financial architecture to bring about greater fairness and equity. Such fairness and equality invariable extend to greater representation in the leadership of key global financial institutions.

Guardian economics editor, Larry Elliott, has stated that there is a campaign on the way to persuade a prominent Caribbean Prime Minister to be the World Bank’s candidate for the developing world. Whether this will materialise is left to be seen.

Whoever succeeds Malpass will be faced with the task of steering the Bank at a time when there is a clarion call for multilateral development banks to increase their lending by hundreds of billions of dollars to help developing countries to meet the Sustainable Development Goals. There are also ongoing debates about what role, if any, the World Bank should play in emerging areas such as climate financing.

Global challenges and concerns continue to mount in many spheres. One can only hope that there will be renewed commitment by those with the wherewithal to act, to do so constructively.

Joel K Richards is a Vincentian national living and working in Europe in the field of international trade and development.
Email: joelkmrichards@gmail.com