2010 Tutu Fellow Bright Simons has written an article in the Global Policy Journal called What the World Bank Needs More than Cash.
In the piece, he argues that the main bottleneck that the Bank's new President Ajay Banga, must address is the absorption channel for development finance, rather than fundraising. Bright thinks that more fundraising by the World Bank won’t make it any easier for needy countries to actually absorb this funding, unless compliance and capacity issues are also fixed, which constrain current disbursements. The new World Bank president, was the former Chairman of Mastercard.
To buttress his argument he offers the example from 2011 when The World Bank offered $3.75 billion for South Africa's main power utility to develop improve power supply to the country. The report on the project can be downloaded from the World Bank website. In the project, the full disbursement could not be achieved. Bright says that 13 years after the project, it wrapped up with nearly $600 million undisbursed, of which $408 million were for clean energy interventions, including a critical grid-scale energy storage solution. Those funds have been rolled over into a new scheme but reports indicate that problems persist. $100 million slated for capacity reforms had to be cancelled outright.
Despite taking more than double the estimated time to complete, project challenges were never fully resolved.
The World Bank consists of two distinct entities. IBRD lends money to the middle income and more credit-worthy low-income countries. The IDA, focuses on the poorest of the poor countries, and provides grants and loans. But while grants being given have doubled in the last decade, Bright says that it has been clear that weak capacity in various poor countries to prepare projects to exacting standards of integrity has been a continuing problem. He says the World Bank’s utility is to ensure that borrowing countries don’t waste money by lowering the risk of default - thereby allowing funds to continue flowing. But since this is not easy to do, disbursements are constrained.
Bright is the President of mPedigree, a social enterprise working on three continents in partnership with governments, several of the Fortune 500 companies and grassroots organizations to spread innovative technologies that secure communities from the harmful effects of counterfeiting, especially in such sensitive sectors like health, agriculture, cosmetics and automotive.He has shaped mPedigree's relentless innovation cycle for more than a decade, helping steer the organization from a focus on authentication and supply chain technologies into the broader spaces of smart sensors, analytics, and intelligent decision support systems. His latest work on the application of "smart polymers" to health cold chain problems has been supported by the Harvard Innovation Labs, among others.
You can read the full article in the March 20th edition of the Global Policy Journal.
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