Development Banks Must Now Find a New Raison D’être

2- new raison d etre

Lets call a spade a spade. Development banks have done precious little to bring about meaningful development for their member states. Their members remain mired in poverty, their efforts have spurred little economic growth, and for the most part have done little to attract private capital or catalyze strides. These institutions have been parking places for bureaucrats, served as jobs programs for mediocre but well connected civil servants pursuing careers with cushy benefits, low expectations and job security with precious little accountability.

I did a back of envelop inventory of around 600 development banks worldwide. 40 are international, regional and sub-regional development banks and 560 national development banks.  To be relevant they need to do more than lend. They need to catalyze financial flows, beef up on new products, as well as mobilize newer resources.

And U.S. tax payer should stop funding such agencies.

 

Should the Business of Development Banks Change?

1-Should Dev Banks Business Change

 

 

European Bank for Reconstruction and Development (EBRD) President Suma Chakrabarti  has been critical of the U.S. which holds a 10 percent share of the bank’s capital. He says the U.S. has been remiss in leadership role. I agree, and with good reason. The EBRD was set up in 1991 and is now completely irrelevant as far as U.S. national interests go. My private opinion is the  U.S. tax payer $ should Not fund Development Banks except upon occasion. I urge withdrawal and de-funding.