WO2RLD BANK
DEVELOPMENT COMMITTEE
(Joint Ministerial Committee
of the
Boards of Governors of the Bank and the Fund
on the
Transfer of Real Resources to Developing Countries)
ONE HUNDRED AND TENTH MEETING
WASHINGTON, DC - OCTOBER 25, 2024
DC/S/2024-0045
October 25, 2024
Statement by
H.E. Luis Caputo
Minister of Economy
Argentina
On behalf of Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay


Statement by
H.E. Luis Caputo
Minister of Economy
Argentina
On behalf of Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay
110th Meeting of the Development Committee
October 25, 2024
Washington, DC
We are at a pivotal moment, with the global economy giving apparent signs of resilience, with modest
but steady growth and slowly declining inflation, suggesting the world is nearing a 'soft landing' after
years of economic turbulence. However, most developing nations face a different reality, as growth
rates largely remain below pre-pandemic levels and are insufficient to achieve key development goals.
The challenges we face are profound, with a quarter of developing economies still reeling from the
pandemic's impact, and the majority expected to grow more slowly than in the previous decade. This
situation is compounded by high global interest rates, which exert pressure on already limited fiscal
space, hindering investments to propel economic growth.
There are glimmers of hope, with some economies demonstrating resilience and persistent growth. But
growth rates remain too slow for progress, and this is particularly the case in Latin America, constrained
by structural challenges, notably declining productivity, low capital accumulation, and weakened
private sector investment, in the context of more frequent and extreme weather events and intra-regional
migration. In this context, the World Bank Group (WBG) has a pivotal role to play, as its financial and
technical support is vital to enable us to tackle these challenges and address the need for difficult reforms
to avoid becoming stuck on this slower path of recovery and growth.
With Latin America being home to 40% of the planet's biodiversity, and holding key potential for the
global energy transition, it is crucial for the WBG not only to continue, but to expand its activities in
the region, as part of its efforts to renew its relevance in supporting Middle-Income Countries (MICs)
and High-Income Countries (HICs). Relevance means not only being a preferred development partner,
but also participating in increasingly ambitious, high-impact projects that enhance the WGB's portfolio,
are fully aligned with its vision and significantly contribute to the fulfillment of its mission. We see this
approach as an integral part of a results-oriented, impact-driven, and future-ready WBG. In this spirit,
we look forward for an expanded and strengthened WBG engagement with our countries.
We acknowledge and appreciate the DC Paper as a comprehensive and balanced account of the
deliberations, agreements and achievements that have emerged since the Spring Meetings. The
document reflects that excellent work has been done to make progress on many fronts at the same time.
Nevertheless, some of these issues deserve a more in-depth consideration and discussion.
It tends to be overlooked that over 60% of the world's extreme poor live in MICs, and that one of the
biggest hidden challenges in the fight against poverty lies in tackling the significant inequalities within
these countries. Therefore, we strongly support the decision to develop a WBG strategy for MICs. We
expect this strategy to include actions to boost productivity, support energy access and transition,
forestry, and nutrition, promote nascent industries and entrepreneurship, innovation, and employment,


diversify economies, encourage trade and investment, and enhance governance and institutions without
neglecting human capital development. Hence, we also envision a stronger role for IFC and MIGA as
an effective mobilizer of private capital. We look forward to actively contributing to the design of this
strategy.
It is also essential that the WBG remains sensitive to its clients' cost of borrowing, particularly in times
of increased indebtedness, exacerbated by these last years of high interest rates and restricted access to
alternative sources of funding. While we welcome the recent adjustments to IBRD's pricing structure,
we hope that continued discussions on this important issue adequately consider the key role of IBRD as
a relevant and affordable development partner, including for HICs in our region.
We further acknowledge efforts to maximize IBRD's lending capacity while protecting its triple-A
rating through a comprehensive set of capital adequacy measures, including the recent adoption of the
Framework of Restoration Measures (FRM). While we acknowledge that the FRM has enabled further
lowering the IBRD's Equity-to-Loan Ratio policy minimum to 18%, we believe that the expansion of
lending volumes should be subject to careful monitoring, and that generating development impact
should be prioritized over net income maximization.
To further ensure that IBRD and IFC remain strongly engaged with their client countries, it is also
crucial to strengthen the voices of these shareholders. Amplifying these voices will allow the WBG to
better navigate the complex trade-offs between global priorities and country-specific needs, ultimately
fostering a more responsive and impactful development partnership with each of its clients. We hope
that the upcoming IBRD and IFC shareholding reviews will be conducted in this spirit and in close
observance of the Lima Principles, including the avoidance of further dilution of client countries' voting
power.
Among the numerous development challenges our world faces, food security is undoubtedly among the
most prominent, and even more so for our region. Latin America is affected by a complex interplay of
factors that contribute to its vulnerability. Extreme weather events pose a significant threat to
agricultural production, leading to crop failures and food shortages. Furthermore, agriculture's
susceptibility to price fluctuations in global markets makes it particularly vulnerable to external shocks
because it is a non-subsidized sector and one of the main drivers of the economy of the majority of our
countries.
At the same time, Latin America has a crucial role to play in improving global food security. It possesses
vast agricultural resources and a diverse range of climates, making it a key supplier for both domestic
and international markets. By fostering investment, innovation, and collaboration in the agricultural
sector, Latin America can contribute significantly to global food security while also promoting
economic growth and poverty reduction within the region. The WBG's role is crucial in capturing this
potential, the benefits of which reach far beyond our borders. Therefore, we welcome that this issue will
be addressed in the Global Challenge Program (GCP) on Food and Nutrition Security, with IFC and
MIGA operations supporting the private sector's expansion of production and distribution and helping
to mitigate constraints on supply by creating economies of scale.
We further welcome the commitment to dedicate half of IBRD and IDA's climate change financing to
adaptation, especially given the declining trend in adaptation lending since FY22. We believe that this
commitment should extend across the entire WBG, which would help affirm the Group's leadership in
addressing climate change.
Climate Change involves all countries, across borders and income groups, and many countries in Latin
America are suffering the most from natural disasters caused primarily by the industrial activities of
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developed countries. Within the UNFCCC framework, there is a recognized imperative for countries
with a significant historical contribution to global warming to take a leading role in funding developing
nations' efforts to fulfill their NDCs. This principle was underscored by the pledge made by developed
countries at COP 15 to mobilize $100 billion annually for climate finance. As we approach COP29, there
is an expectation for these developed nations to enhance their financial commitments in response to the
escalating challenges of climate change.
Concerning operational efficiency and effectiveness, concrete reforms have been undertaken for a
faster, simpler, and more client-focused WBG. We particularly appreciate the tangible results in the
reduction of time in approval process of public sector projects. However, there are still areas for
improvement. For instance, further efficiencies could be obtained during project execution through
strengthened project monitoring and support of Implementing Units. It is also crucial that all operational
and institutional changes implemented contribute to enhancing synergies to make the One WBG
approach a reality. While we see the last Spring Meetings' Update on Operational Efficiency and
Effectiveness as an important milestone, it exclusively pertained to IBRD and IDA. We believe that the
Board should also discuss initiatives undertaken by IFC and MIGA in this area and would particularly
like to see them define specific goals during the periodic country programming exercises to guarantee
constant engagement and allow countries to assess all instruments offered by the WBG and their
potential for their respective economies.
We welcome the continued emphasis on the Country Partnership Framework (CPF) as the central pillar
of the relationship with client countries. We expect the forthcoming discussion on the strategic
alignment and streamlining of the Country Engagement Model (CEM) to focus on strengthening country
ownership (demand-driven) with an emphasis on outcomes. The CEM should also provide adequate
financial capacity to address both GCPs and priorities related to the Twin Goals. Additionally, the Bank
should offer client countries the right price and volume incentives to align GCPs with their national
priorities. We believe that the CEM should systematically integrate and link knowledge products and
lending operations for greater development impact.
We endorse the launch of the six GCPs aimed at helping clients address key global challenges with
greater scale, speed and impact. The inclusion of all IBRD countries is particularly significant, as
countries above the Graduation Discussion Income (GDI) threshold play a crucial role in effectively
addressing these challenges and successfully implementing the GCPs. As we look forward to the
implementation of these programs, we believe that all global challenges should be considered equally
important.
In this context, we also appreciate the structuring of platforms like the Global Solutions Accelerator
Platform (GSAP), the Framework for Financial Incentives (FFI) and the Livable Planet Fund (LPF), as
they offer additional resources under more favorable conditions to incentivize investments to tackle
global challenges and foster transborder benefits. We are keen to have greater clarity on how these
highly promising initiatives are intended to be operationalized at the country level to attain the expected
results.
As noted in the DC Paper, the FFI is an important component of any strategy aimed at MICs, due to the
pivotal role of this country group in overcoming global challenges. Therefore, we expect client countries
both below and above the GDI to be eligible for incentives under the FF1. In order to ensure transparency
and fairness, the Board should actively participate in deliberations regarding these and other pending
issues concerning the FFI before moving forward with its implementation.
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We also welcome the launch of the LPF in FY25, helped by a $200 million allocation form IBRD's net
income as well as donor funds. Given the key role of the LPF in enabling price incentives under the
FFI, it is crucial to secure additional commitments from donor countries to scale up our ambitions.
Another challenge that needs to be pointed out is the looming job crisis in the Global South, where 1.2
billion young people will enter the workforce in the next decade, while only 400 million jobs are
expected to be created. This adds to preexisting challenges that we have yet to tackle, such as the high
employment informality, and the insufficient quality of education. The resulting disparities risk
exacerbating poverty, fueling migration, and destabilizing regions. We strongly support the WBG's
actions in this field, like the creation of the High-Level Advisory Council on Jobs, the Gender Strategy's
focus on unlocking the full potential of women as drivers of economic growth and prosperity, as well
as the Private Sector Investment Lab (PSIL) in its ambition to enhance mobilization of the private sector,
a key player in financing development and fostering economic growth. Initiatives like the PSIL aim to
remove bottlenecks to multiply private investment in emerging markets. We also support the WBG's
approach to this significant challenge as part of the Scorecard. With its disaggregated data, it will help
track progress on job creation and identify areas for improvement.
We strongly support the WBG's continued commitment to gender equality, which reflects the crucial
role of women in breaking the cycle of poverty and achieving sustainable development. We
acknowledge the new Gender Strategy 2024-2030, and its enhanced ambition focused on fundamental
pillars to tackle gender inequality, incorporating an array of results to guide the work of the WBG.
Beyond these initiatives, we look forward to additional details on strategies to enhance women's
participation in the labor market such as interventions to redistribute the burden for elderly care. For the
implementation of the strategy, we emphasize the importance of country-driven engagement to enable
more transformative interventions. It is essential to account for country contexts, identify opportunities
for prioritization, and use evidence-based solutions to promote the effectiveness of interventions, noting
that culturally sensitive approaches can lead to more sustainable results. Furthermore, to accelerate
progress, we call for the WBG's continued support to developing countries with concessional finance
and technical assistance for data collection and monitoring results.
Knowledge plays an essential role in most of the issues highlighted above. It is critical for project
preparation and execution and can significantly improve the quality of adopted solutions. Successful
projects, in turn, provide valuable insights into effective practices and the impact of various
interventions. In the past, WBG support for countries of our constituency has facilitated significant
knowledge sharing with clients in other regions and continents in areas such as energy, health, social
security, and education, showing that the virtuous cycle of design, implementation, and learning is not
only relevant for MICs and HICs, but is also driven by these client countries in many cases. We strongly
support the World Bank Academy in its ambition to equip the next generation of development leaders
with the tools, skills, and expertise needed to address global challenges and create lasting impact. We
also welcome the emphasis on South-South learning and, as part of the implementation of the
Knowledge Compact, we advocate for the Academy to maintain a balanced representation of diverse
perspectives from both the North and the South.
Notwithstanding the challenges faced by many developing countries, including those in our
constituency, we are also aware of the worsening situation faced by many of the poorest countries, and
therefore appreciate the Bank's relentless efforts to design a strong policy architecture and financial
framework for the IDA21 replenishment. We agree with the direction taken by IDA2 1, and we believe
that it creates a good opportunity for a vigorous replenishment that, together with IBRD's continued
transfers, could translate into strong financial support for the most vulnerable populations worldwide.
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