US Treasury: World Bank Could Lend $50b More Over Decade With Reform

US Treasury Secretary Janet Yellen - AFP
US Treasury Secretary Janet Yellen - AFP
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US Treasury: World Bank Could Lend $50b More Over Decade With Reform

US Treasury Secretary Janet Yellen - AFP
US Treasury Secretary Janet Yellen - AFP

The World Bank's ongoing reform could result in a $50 billion lending boost over the next decade, US Treasury Secretary Janet Yellen told AFP ahead of stakeholders' meetings next week where key changes are expected to be announced.

Central bankers, finance ministers and participants from more than 180 member countries are expected to gather in the US capital for the International Monetary Fund and World Bank's spring meetings in the coming week.

A key topic of discussion will be the World Bank's evolution, amid a push for lenders to revamp and meet global challenges like climate change. The United States is the largest shareholder of the World Bank Group.

"I expect there to be an update of the bank's mission to add building resilience against climate change, pandemics, and conflict and fragility to the core goals," Yellen said in the interview with AFP Thursday.

She added that there needs to be a recognition that these challenges aren't separate or conflicting but rather, inextricably linked.

"Second, there will be an announcement that the bank is stretching its financial capacity to meet these objectives, and adopting changes or endorsing changes that could result in an additional $50 billion in extra lending capacity over the next decade," Yellen said.

The move would be a significant resource boost marking a 20 percent rise in the International Bank for Reconstruction and Development's (IBRD) sustainable lending level. The IBRD is the World Bank's middle-income lending arm.

Yellen also said there would be an announcement on updating the bank's operational model to "orient it towards the goals that we're setting."

Among other things, this includes creating more incentives for the mobilization of both domestic and private capital.

"We seek additional reforms during the rest of this year," Yellen said.

In March, the World Bank submitted an evolution plan to be discussed with its development committee on April 12, during the spring meetings.

Noting that World Bank President David Malpass has laid a "solid foundation" for the ongoing work, Yellen added that she expects US candidate Ajay Banga to be elected to the helm of the organization and continue the revamp.

Banga was the sole nominee for the position after Malpass announced this year that he would step down early.

Also on policymakers' agendas next week are support for war-torn Ukraine and debt restructuring.

"We have seen some movement by China on participating in debt restructuring for Sri Lanka, which is a hopeful sign," Yellen said.

As global growth slows, the World Bank previously warned that the outlook is especially tough for the poorest economies -- which face sluggish growth driven by heavy debt burdens and weak investment.

Yellen had earlier said that China should move more quickly on some debt restructurings.

Discussions on this front will continue next week as a newly formed global sovereign debt roundtable gathers, she told AFP.

"We're having useful technical discussions on important elements of debt restructuring. China has been participating, and we all continue to press China for improvements," she said.

Washington will continue pushing for a speedier and more predictable operation of the G20 "common framework" for debt restructuring as well.

On Ukraine, Yellen said: "Once again, we will work with all of our allies to insist that Russia cease its brutality in Ukraine."

She added that the United States would press for economic support alongside its partners on this front.



US Job Growth Slowed Sharply in October amid Steady Unemployment Rate

A worker transports items during Cyber Monday at the Amazon fulfillment center in Robbinsville Township in New Jersey, US (Reuters/File)
A worker transports items during Cyber Monday at the Amazon fulfillment center in Robbinsville Township in New Jersey, US (Reuters/File)
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US Job Growth Slowed Sharply in October amid Steady Unemployment Rate

A worker transports items during Cyber Monday at the Amazon fulfillment center in Robbinsville Township in New Jersey, US (Reuters/File)
A worker transports items during Cyber Monday at the Amazon fulfillment center in Robbinsville Township in New Jersey, US (Reuters/File)

US job growth likely slowed sharply in October amid disruptions from hurricanes and strikes by aerospace factory workers, but a steady unemployment rate should offer assurance that the labor market remained on solid footing ahead of Tuesday's election.
The Bureau of Labor Statistics (BLS) showed that nonfarm payrolls increased by 12,000 in October from the previous month, after employment in September shot up by 223,000 jobs.
A Reuters survey of economists showed that nonfarm payrolls likely increased by 113,000 jobs last month after surging 254,000 in September. Estimates ranged from no jobs added to 200,000 positions created. October's anticipated payrolls count would be the smallest in six months.
Hurricane Helene devastated the Southeast in late September and Hurricane Milton lashed Florida a week later.
The Labor Department reported last week that there were 41,400 new workers on strike, including 33,000 machinists at Boeing and 5,000 at Textron, an aircraft company, when employers were surveyed for October's employment report. The remaining 3,400 were workers at three hotel chains in California and Hawaii.
Workers who do not receive a paycheck during the survey period, which includes the 12th day of the month, are counted as unemployed in the survey of establishments from which the payrolls number is calculated.
The Labor Department's closely watched employment report is the last major economic data before Americans head to the polls to choose Democratic Vice President Kamala Harris or Republican former President Donald Trump as the country's next president.
Polls show the race is a toss-up. Americans have not warmed up to the economy's strong performance, which has outshined its global peers, rankled by high prices for food and rents. Low layoffs have been the hallmark of the labor market's strength.
The unemployment rate was seen unaffected by the distortions as the striking workers would be counted as employed in the household survey from which the rate is derived. Workers unable to work because of bad weather would be reported as employed, “with a job, but not at work” as per the BLS' classification.
Economists said a marginal rise in the unemployment rate would not be alarming and expected the Federal Reserve to sort through the noise and cut interest rates by 25 basis points next Thursday.
A rise in the unemployment rate to 4.3% in July from 3.8% in March was one of the catalysts for the US central bank's unusually large half-percentage-point interest rate cut in September, the first reduction in borrowing costs since 2020.
The Fed's policy rate is now set in the 4.75%-5.00% range, having been hiked by 525 basis points in 2022 and 2023.
Though employers have pulled back on hiring, they are retaining their workers, underpinning wage gains and consumer spending.
Average hourly earnings rose 0.4% last month after gaining 0.3% in September. They were likely lifted by hourly paid workers dropping out of the payrolls calculation.
Wages increased 4.0% in the 12 months through October after advancing 3.9% in September.