World Bank's Potent Lending Shift Amid Global Aid Cuts

As the U.S. and Europe slash development aid, experts urge the World Bank to adjust its equity-to-lending ratio, potentially increasing its lending capacity by $30-$40 billion. This move aims to mitigate the impact of aid cuts on critical public systems and support NGOs facing financial strains.

Amidst significant developments, the World Bank faces calls to adjust its lending strategy following major aid cuts by the United States and European nations. As these regions pare down their foreign assistance, think tanks suggest revising the equity-to-lending ratio of the World Bank's principal lending division to unlock significant financial resources.

Eric Pelofsky, of the Rockefeller Foundation, highlighted that reducing the International Bank for Reconstruction and Development's ratio from 18% to 17% could amplify lending capacities by $30 billion to $40 billion. This alteration aims to bolster government efforts in addressing budget deficiencies and enhancing critical public sectors without imposing extra burdens on taxpayers or shareholders.

In light of U.S. President Donald Trump's recent term commencement and resultant policy shifts, the aid landscape has altered considerably. The Jubilee USA Network and other advocacy groups emphasize the importance of swift action by the World Bank to counteract these budgetary reductions and prevent adverse impacts on millions relying on foreign aid for survival.

(With inputs from agencies.)