The World Bank, with a 75-year history, has played pivotal roles in global economic recovery, such as rebuilding Europe after WWII, reconstructing Iraq and Afghanistan, and assisting poor countries during economic downturns. Recently, it was selected to manage climate reparations to developing countries. Formally endorsed during COP28, the loss-and-damage fund raised over $650 million within days. However, many countries expressed opposition to this due to lack of trust in the World Bank and its role in previous debt crises. Moreover, its status as a major investor in fossil fuels raises questions about its suitability in battling climate change.
The World Bank functions as a credit institution, leading to concerns about the bank’s core ability to manage grantmaking and fund management. The slow disbursement of climate funds, such as the Green Climate Fund, further adds to the apprehension. Its bureaucratic nature and high fees have also hindered the process, causing worries about the bank’s transparency and cost structure.
Critics have attributed the Bank’s past programs as a factor in impoverishing developing nations. The Bank encouraged heavy borrowing in the past, leading to a global debt crisis. Despite creating the problem, the Bank was then tasked with solving it.
In conclusion, the World Bank’s history, governance, and track record have led to skepticism about its management of the loss-and-damage fund. The concerns raised by both experts and developing countries suggest the need for a reevaluation of its role.
