In a move that will nearly double its lending to Mexico over the next ten years,the Washington-headquartered World Bank will increase capacity as part of a progressive strategy to strengthen the world’s economy and the bank itself as a whole. This follows a prediction released by the World Bank in mid-March of 2014 that predicts Mexico will enter the world’s top 10 largest economies by 2020.
“We now have the capacity to nearly double our annual lending from $15 billion to $28 billion a year,” World Bank Group President Jim Yong Kim told the Economic Times. “We are strengthening our financial house to make sure that we have the capacity and financial firepower to scale up our revenue and build our capital if we are going to meet some of the great needs in the developing world.”
The new measures will include an increase of more than $100 billion over the next ten years,supporting new innovations in financial management and boosting resources that are available to the private sector. This commitment comes in addition to a pledge of more than $52 million in grants – the largest replenishment on record – from the International Development Association (IDA),which provides interest-free loans and government grants. Also,the International Bank for Reconstruction and Development (IBRD) has increased Mexico’s single annual borrower limit by $2.5 million.
The IBRD provides financing,risk management products and other financial services to strong emerging economies such as Mexico. The organization has also promised to reform the terms of its loans to reflect improvements in portfolio credit risk and offer longer maturities with increase differentiation in an effort to encourage more efficient utilization of shareholder capital while protecting its own financial core.
At the Council of Foreign Relations summit in Washington last week,Kim outlined in detail the World Bank’s goal of boosting shared prosperity,encouraging closer cooperation between the Bank’s various arms and better serving its clients,with an aim to virtually eliminate extreme poverty by 2030. In all,the World Bank has more than doubled its financial support for the world’s strongest emerging economies over the last decade,with total numbers rising rising from $25.8 billion in 2004 to more than $52.6 billion annually at the end of 2013.