Private donors could buy into the International Development Association, new World Bank president Robert Zoellick suggested yesterday. He made clear to reporters in Washington that closer cooperation with the private sector will be a key theme, as the World Bank group seeks financing for the 15th International Development Association replenishment (IDA-15). The idea of private donors joining the fund is at a very early stage, Zoellick said, but it is gaining momentum after a couple of companies approached us.
This needs to go through the board process, Zoellick said, but he did not anticipate major problems for this good statement of confidence in what we are doing. Zoellick name-checked the Gates Foundation several times, as an example of an evolving partnership, which not only brings money but some very interesting ideas as well. He mentioned a current project involving the Bank, Gates and Vodaphone Kenya.
In addition, IFC is providing half the WBGs record $3.5 billion contribution to IDA 15 more than double the $1.5 billion pledged by the Bank in 2005. Lars Thunell, the IFCs chief executive, told Emerging Markets in an interview that the corporation had decided to support the success of IDA-15 to show that we put our money where our mouth is, having long emphasized the importance of IDA activities to enable private sector activity. He added that the contribution formed part of a larger agreement to intensify cooperation between the IFC and the World Bank on initiatives that would help generate economic growth.
Coordination was especially helpful in the high risk opening phase of activities such as mining, where significant transport infrastructure investment from the World Bank might be needed before a private investment in extraction could become financially viable. Thunell said that differences in culture between the two branches of the group should continue, even though we have the same ultimate customers, namely the poor, and the same mission.
The World Banks work with governments involves a different set of skills and a different project cycle, he explained.