CAMBRIDGE/DELHI – For the last several years, world leaders have made big promises and laid out bold plans to mitigate the climate crisis and help the neediest countries adapt. At this year's World Bank/IMF Spring Meetings, they must demonstrate that they can fulfill these promises, rather than simply touting new ones.

The world is facing the worst five-year span in three decades. Higher interest rates have left developing countries crushed by debt, and half of the poorest economies haven't recovered to where they were before the pandemic. Growth is weak across large swaths of the world, and inflation remains persistently high. And behind it all, the thermometer keeps inching up. Last year was the warmest on record, as is true of nearly every month.

For the last several years, world leaders have made big promises and laid out bold plans to mitigate the climate crisis and help poor countries adapt. They pledged that the World Bank would transform itself to work on climate change, and that the multilateral system would get new money and lend more aggressively with the resources it has, including to meet concessional needs. An agreement between creditors would provide debt relief to countries that most needed it. And where public money was insufficient, the multilateral system would be able to catalyze private investment in developing countries.

Despite the bold rhetoric, 2023 was a disaster in terms of support for the developing world. As the chart below demonstrates, the private sector collected $68 billion more in interest and principal repayments than it lent to the developing world. Amazingly, international financial institutions and assistance agencies withdrew another $40 billion, and net concessional assistance from international financial institutions was only $2 billion, even as famine spread. "Billions to trillions," the catchphrase for the World Bank's plan to mobilize private-sector money for development, has become "millions in, billions out."

To continue reading, Click Below.