The newly-appointed India-born USA-nominated World Bank President Ajay Banga had expressed concern over the deepening of inequality in the world while speaking at the G20 finance ministers’ meeting in Gandhinagar, the capital of Gujarat, western state of India, on Tuesday. He said that the poor countries have been dealt a blow by the Covid-19 pandemic, followed by the Russian invasion of Ukraine. The fuel and commodity prices have been hit by these crises, and this is impacting the economic recovery of the poor countries. He said, “The thing that keeps me up at night is a mistrust that is quietly pulling the Global North and South apart at a time when we need to be uniting.”

 The reason for the split between the rich and poor countries is mainly due to the refusal of rich countries to keep to their commitments to pull the poor countries from their economic problems. He has pointed out that this attitude of the rich countries is also affecting the measures to cope with climate change, and that it is the poor countries that are affected by climate change. And he described the situation in stinging language: “The Global South’s frustration is understandable. In many ways they are paying the price for our prosperity.”

It is unlikely that Banga’s words will have any effect on the G20 ministers who belong mostly to advanced economies of the G7 group and emerging economies. Unless these two groups cooperate with each other, fund flows to poor countries to shift to greener technologies will not happen. Banga has detected the major contradiction. He understands the need for economic recovery and better growth rate for poor countries, but this created a set of problems because untrammelled economic growth comes at a price – that of harming the environment, which is unacceptable. So the world has to find ways of economic growth which are compatible with environment-friendly methods. But that is almost an insuperable challenge because the world is yet to find a way of marrying economic growth to environmentalism.

There has been talk of strengthening the World Bank with fresh infusion of capital and to make its projects more flexible. One of the challenges that Banga faces is that of restructuring the World Bank to make it an effective instrument of helping the poor and developing countries to cope with the challenge of economic growth and that of climate change simultaneously. The poor countries today do not have the luxury of achieving economic development first and then pursue environment-friendly modes of economic well-being. The two ends have to be achieved together. The World Bank, and not the International Monetary Fund (IMF), has a crucial role to enable the poor countries to make transition to a green economy.

Neither the United Nations nor the rich countries have found a way of funnelling the necessary technological and financial aid to the poor countries to grapple with the twin challenge of getting out of the cycle of poverty and of shifting to a mode of economy that keeps the disaster of economic change at bay. It is the World Bank that has to pilot the vulnerable countries towards development through technical and financial assistance. It is indeed the case that the World Bank had created trouble in the poor and developing countries by recommending wrong programmes, and not paying enough attention to local know-how and needs. Along with many other things, the World Bank will have to abandon the blinkers of Western developmental models, which have created the climate disaster that the world is facing today. Banga seems to be aware of the challenges that the Bank faces, and he fully understands the plight of the poor countries. That gives rise to the hope that the right man is helming the World Bank.