The “BASIC” block of countries, including China, India, Brazil and South-Africa, representing a group of emerging economies have become a strong geopolitical force in global governance. This “political power shift” became apparent during the Copenhagen Climate Conference and has been observed as well in the vote reform within the Bretton Woods Institutions, such as the World Bank and the IMF1. While the US and Europe continue to have a strong and powerful voice within the International Finance Institutions (IFIs) and UN bodies, the BASIC countries are increasingly using their political and economic clout and influence, especially through informal alliances around UNFCCC negotiations, Major Economies Forum (MEF) and shaping of Green Climate Fund.
The world is entering a new period in global politics, where restructuring of global institutions and redesigning of political processes are taking place to incorporate the interests of emerging economies. Even the World Bank has to navigate through this new emerging dynamic, especially on issues like energy strategy, environmental and social safeguards, etc. The role of the World Bank as a lender in BASIC countries and other emerging economies is becoming limited, as domestic and other international financial resources are more readily available. However, a new president of the World Bank can transform the institution so that is can play a critical role as a “trendsetter” to promote new development models based on low carbon approaches and strategies rather than business as usual. The challenge of climate change, limited natural resources, and staggering poverty in Asia and Africa calls for a monumental shift in the Bank’s lending approach and projects.
The new leadership at the Bank will have to take bold steps to break the current inertia and over-reliance on the current development model, which is based on large centralized projects and trickle-down economics. The experience over the past decades has shown that at times the current model has done more harm to the local communities and environment than benefiting them.
There are many important upcoming events this year, for example UN initiatives on “Sustainable Energy for all” and Rio+20 are focusing on a green economy in the context of sustainable development and poverty eradication. They are trying to explore solutions to meet the challenge of providing basic needs to over 1.3 billion people without access to electricity and 2.7 billion people without clean cooking facilities. More than 95% of these people are either in sub-Saharan Africa or developing Asia and 84% are in rural areas. In this context, it is pivotal for new president of the World Bank to have a robust energy strategy and strong environmental and social due diligence process, which ensures that the services are delivered to the neediest while protecting their social, environmental and cultral rights.