World Bank's van Trotsenburg: Serious support to Africa through locals and trust
By Deborah Castellano Lubov
The second-in-command at the World Bank, Axel van Trotsenburg, the World Bank’s Senior Managing Director, insists that the international community must seriously support Africa, and do so in a way that best involves local populations and builds on trust.
In a wide-ranging interview with Vatican News - Vatican Radio, Mr. van Trotsenburg, responsible for the World Bank's Development Policy and Partnerships, reflects, ahead of his attendance at the Italy Africa Summit, on how there must be continued support for Africa, and engagement that truly helps those in need "not just when there are cameras," but remains committed even when no one continues watching.
A Dutch-Austrian national, he directs the World Bank’s core development work captured by the Bank’s Global Practice groups—including equitable growth, finance and institutions, human development, infrastructure, and sustainable development—and ensures its integration into operations, with a special focus on climate change, fragility, human capital, and debt sustainability issues.
In this interview, he shares his expertise on the situation of the African continent, whose debt has grown four times as much as its growth and now has reached 1.8 trillion, as well as development in the various continents, and especially low-income nations, where he has worked in these decades. He also discusses the success of a program that has helped and empowered young women in the Sahel.
He also discusses shared priorities of Pope Francis and the Pope's appeals for peace, welcoming his concreteness in working to help societies and nations in need.
Q: Mr. van Trotsenburg as Senior Managing Director at the World Bank, the second in command, you're here in Rome for the Italy Africa Summit. And based on your long history at the Bank, including your continued attention to and your investment in Africa, how would you assess the current economic and social situation facing the continent?
The situation is a complicated one, as the last couple of years we have seen setbacks, that were probably first triggered by Covid and, subsequently, we have also seen an increase in fragility. This is partly caused also by conflicts, particularly in the Sahel or the Horn of Africa. But you're also seeing the effects of climate change that are affecting these countries.
The African continent is only responsible for 3% of the emissions, yet is disproportionately affected. We have seen over decades, progress, particularly in the areas of poverty reduction. This has stalled, and, particularly in the fragile countries, it's on the rise. That's a matter of concern. Therefore, we need to focus as an international community on Africa. That's also the reason that we very much welcome the proposal by the Italian government to focus on Africa during the G7 presidency.
Q: You mentioned that the international community should be focusing more on Africa. Do you see that as not being the case?
There are areas of concern. We need to stay engaged with Africa. Africa needs a partnership. And one good indicator is what we call ODA, the official development assistance money going to Africa. That [indicator] has shown that it fell in 2022 by 7% in real terms. That is an area of concern.
Despite all the difficulties we have, we need to continue our strong support for Africa.
This is the case for the World Bank. We have been significantly expanding the African engagement. Just to give you a sense, 20 years ago, maybe only 15% [of our overall commitments], would go to Africa, maybe 3 billion. Now we are touching close to 50%. And the last couple of years we were putting $33 or $34 billion per annum into Africa. Strategic directions are very clear that we will stay very strongly involved in Africa.
Q: Africa, despite being an impressive source of resources, has suffered greatly as a result, as you mentioned, of crises, wars, exploitation. Its public debt now, according to 2022 statistics, is 1.8 trillion and its debt rate is growing significantly quicker than its development rate. What in a way that best takes into account what is best for the African people, would be the most pragmatic way to bridge this gap. Is it a matter of debt relief? Is it a matter of restructuring of debt?
I have led the Heavily Indebted Poor Countries initiative, almost 30 years ago, to relieve the unsustainable debt, particularly in Africa. We are, again, facing a pretty serious situation where about half of the countries are either in debt distress or in high risk of falling in debt distress; where countries are spending more than 7.5% of their GDP on that service. And that is more than what they would spend on education and health combined. I think what we'll need is to look at those cases that have solvency problems. One will need to find workouts, and these workouts have become more complicated for a couple of reasons.
First, the domestic public debt has increased enormously. Secondly, unlike 20 or 30 years ago, the so-called Paris Club creditors, that are mainly from the OECD countries, are no longer dominant, these are now largely non-Paris club countries like China. Also, the Arab countries are very important. They have different priorities also. Bond issues that have been made that are difficult to restructure. So this is one of the areas where we need to do this.
I think there is no alternative. There is a common framework that was created under the G20 presidency of Saudi Arabia a couple of years back. We are involved in this. There's some progress, but it is far too slow and we need to ensure that there are positive flows to Africa. Second, [we must ensure] that these flows are not expensive in terms of financial burden, if you wish. What we are providing are largely, what we call, concessional credits. They go over 40 years. [For the first] ten years, they have no interest. They have only a cover charge, for our own operation, of 0.75%. This is one possibility. And for the very poor, and those who are really hit by conflict, we are providing increasingly grants. Just to give you a notion, that system of grants has almost tripled from about five billion dollars, six years ago to 16 billion, last year.
Q: The wars have always been all over the world, creating, major concerns. But we've seen now the outbreak of the war in Ukraine, the humanitarian crisis in Gaza. How have the wars impacted your work and your mission? Pope Francis appeals often for peace in these places. But how does the World Bank work to help?
Well, first of all, we couldn't agree more about the pleas for peace by the Pope. We need always to be mindful that the World Bank was created on the ashes of the Second World War. It was about the reconstruction. I always say that ultimately it is an organization that is built on peace, and peace is the only way that we can actually be successful in our development work. Now, we are also mindful that there is conflict. That doesn't mean that you can just walk away. We have a strategy also in place so that we stay engaged, amid so much humanitarian suffering.
There are basic needs and countless people don't get access to these services. This requires engagement.
I always say, it is one thing to be there when there is a catastrophic event, like natural disasters, and when all the cameras are there; we stay however when the cameras are gone. You need to be committed to the long-term development.
If you look at education or health, that is not something for two weeks. It is basically building health systems, building education systems, and being committed to being a partner for the long run. That makes a difference. All these difficulties have affected our operating environment. Nobody has ever argued that development is easy. You have to face those facts and stay committed in the long run, and see how you can work with the different partners. This is not only the government, but also private-sector NGOs, and there are church groups that can still make a difference.
Q: You've been in Myanmar, Asia, Africa, Latin America. You've seen globally how the operations operate. And aside from wars, just looking at the situation of, in particular, low income nations. The World Bank has been dedicated to helping develop in the areas of food security, climate change mitigation, helping refugees, themes that are very close to Pope Francis's heart as well. How are these initiatives helping in these places? And is there a certain policy that you've observed during your experience abroad that you see as sort of a model that could be helpful in some of the situations of suffering happening today?
I think the most important element in all these areas that you just mentioned, but in general in the development area, is that you have to rely on the people that are living there and that you build on what they need. There is too much of a notion that people know better. You need to learn from the local circumstances, and you need the ownership.
That means that you need a partnership, that is determined by sharing the experiences and by building on the strengths of what government, of what the local population, can offer. There is the culture, there is the language, there's the history, and the art is to complement that effort. That is where one can have great success.
Whereas a lot of failure lies in thinking you can just fly in and figure out it all out in five minutes, and think you have the solution.
We need to be very much aware of our responsibilities globally, particularly on climate change, when a continent like Africa is not responsible for all those emissions, yet is disproportionately affected. We need to be aware that we also need to be willing to provide the necessary relief to deal with this problem and help these countries be more resilient against climate change. We need to be committed to provide the necessary resources for those countries.
Q: Could you elaborate or share with us an example, based on your experiences, of where locals were benefited by being directly involved in projects and development?
What we have seen is, very often, how you involve the local populations, is key. A wonderful project is called the Sahel Women's Empowerment Project that works with women in the countryside. They are involved in agricultural activities, and work to protect young girls, who either don't have chances to go to school, or there are concerns regarding child marriages. So how you can actually help them with these empowerment projects, often helps avoids the negative effects that many of the young girls are exposed to.
Many areas you cannot address from outside, but require you working with the groups where there is already an established level of trust, and where you can actually provide the framework in which these groups can thrive and truly improve their livelihood and self esteem through empowerment. This is just one example and there are many others. This is something we have learned over time and I think works best.
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