JAKARTA, Indonesia – Less than a month after criticizing the World Bank and other multilateral financial institutions, President Joko “Jokowi” Widodo on Wednesday, May 20, welcomed World Bank Group President Jim Yong Kim in his office.
In his speech at the opening of the Asian African Summit on April 22, Jokowi said the institutions had failed to solve global inequality, with rich nations, which comprise a mere 20% of world’s population, consuming 70% of world resources.
“Views stating the world’s economy can only be resolved by the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) are outdated and need to be thrown away,” he said.
Kim, who is on his first trip to Indonesia since becoming president in July 2012, told reporters his message to the president was: “We heard you.”
He said he, too, was once a harsh critic of the World Bank, but added that the institution had changed a lot in the past 20 years.
“Twenty years ago, I was part of a protest movement called ’50 years is enough’ on the 50th anniversary of the World Bank group. We were calling on the world to closed the World Bank,” Kim said.
“I felt the World Bank was too focused on GDP growth, and not enough on investment on human beings through education and health.”
Since then, he said, much has changed, and internal discussions on how the World Bank should adapt to the changing world is still ongoing.
“It is a complicated and sensitive discussion,” Kim said. “I can’t dictate what happens because we are a multilateral institution.”
$11 billion pledge
Kim also pledged up to $11 billion in new financing in the next 3 to 4 years to Indonesia, $8 billion of which will be from the World Bank through the International Bank for Reconstruction and Development (IBRD), and $3 billion from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
The proposed $8 billion in IBRD financing represents a 25% increase over the lending by IBRD to Indonesia from the previous 4-year period.
The financing will support large investments in human capital, healthcare, and tourism, as well as areas like energy, infrastructure, road, and ports, Kim said.
“In many ways, the World Bank is focused on being more relevant to Indonesia. Indonesia is a sophisticated country. They don’t need the World Bank to tell them what to do,” he added.
Kim, who is in the country until Friday, May 22, will also visit Yogyakarta to meet Yogyakarta Governor Sri Sultan Hamengkubawono X and discuss healthcare and sanitation.
On Thursday, he will visit Sunda Kelapa Port and Tanjung Priok Port in Jakarta.
“The two ports tell the story of Indonesia. One is the traditional port and the other is a modern port,” he said.
“We are absolutely committed to building and expanding our partnership with Indonesia. Indonesia is going in the right direction.” – Rappler.com