Climate change and gender issues are taking a back seat at the World Bank, overtaken by an economic agenda that has been spurred by a global youth uprising that is shaking governments in nations from Asia to Africa to South America.
The new talking points were on display at last week’s World Bank meetings in Washington, DC, which took place among federal buildings closed by the government shutdown. Protesters mostly stayed away, perhaps saving their energy for the US’s own popular protests, the weekend’s nationwide “No Kings” demonstrations.
“The energy of these young people to me, that’s what will define this century,” World Bank Group president Ajay Banga told a gathering of civil society organizations at the start of the meetings. “If we match it with the right investments, if we focus not just on need, but on opportunity, I think we can unlock a tremendous engine of growth.”
“But if we fail to act, the vigor and the optimism of this generation will turn to despair. It will fuel instability, fuel unrest and fuel mass migration.”
By mid-century, some 1.2 billion young people, mostly in cities in developing nations, will be entering a labor market woefully unprepared to absorb them. Banga predicted an 800 million shortfall in jobs.
The subtext: a US administration that is aggressively imposing its agenda on global as well as domestic institutions. With climate action out of favor with the Trump administration, Banga may be trying to slip in financing for climate projects in emerging markets as an engine of employment.
“It’s just jobs, jobs, jobs,” said one participant at the World Bank meetings, referring to the week’s drumbeat of messaging.
Banga’s comments came as youth uprisings have swept the globe, fueled by frustration with economic inequality, water and energy shortages, corruption and a sense that aging leaders are out of touch with the needs of today’s youth. Weeks of Gen Z protests in Madagascar led last week to the toppling of its president, Andry Rajoelina, in a military coup. Youth protests led to the resignation of Nepal’s prime minister in September. Morocco, Indonesia, Kenya, Peru and and the Philippines have also seen unrest.
Banga singled out agriculture as a key sector that can create jobs as well as food security. The bank announced a new “AgriConnect” initiative announced to boost the livelihoods of the world’s 500 million smallholder farmers. Banga also said the bank would double its funding for agribusiness to $9 billion a year by 2030 and mobilize an additional $5 billion from other funders. Fewer than one in 10 small farmers have access to finance, he said.
The focus on jobs was mostly well received. “Whether through energy, culture and music, or investing in job creating industries resilient to AI, there seemed to be something that resonated with everyone,” Michael Sheldrick of Global Citizen told ImpactAlpha from Washington. “It’s a clear agenda that brings it back to what actually is key to eradicating poverty.”
Political pressure
Banga arrived at the bank in 2023 with a clear mandate to address climate change, replacing David Malpass, who was widely criticized for his refusal to acknowledge that fossil fuels have contributed to global warming. Banga set a new vision for the bank: “A world free of poverty on a livable planet.”
The shift to economic issues reflects a balancing act as Banga and the bank come under pressure from its dominant shareholder, the US. The jobs agenda is more in tune with the Trump administration’s own rhetoric and avoids hot button issues like climate and gender equality.
As the bank’s largest shareholder, the US holds enormous sway over how the World Bank doles out loans, grants and guarantees to less developed nations to fund long term development projects and alleviate poverty. Its sister organization, the International Monetary Fund, is focused on global financial stability and intervenes when specific countries need assistance, for example after a severe storm impacts their ability to pay back debt.
US Treasury Secretary Scott Bessent has decried the “mission creep” that he says has knocked the World Bank and IMF off course. One area he has targeted: the bank’s goal of directing 45% of its funding to climate, either directly or via co-benefits, such as funding for climate-resilient infrastructure.
In a speech to the World Bank and IMF committees last week, Bessent said that to get back on track, “the Bank must remove its 45% target, “which skews projects away from country priorities and distorts projects away from the goal of increasing access to the affordable and reliable energy needed to increase growth and productivity.”
The target is enshrined in the bank’s five-year Climate Action Plan, which is set to expire next year. A new plan will be formulated in the coming months. The US is pushing for a “full energy mix” that includes fossil fuels and nuclear power.
Development experts and researchers largely agree that climate risks are macroeconomic risks.
“From more frequent and extreme weather events to financial destabilization and price shocks, climate both multiplies pre-existing risks and exposes and worsens previously ignored vulnerabilities in the global economic and financial system,” Claire Peraldi Decitre and Salvatore Serravalle of climate at the climate think tank E3G wrote in a September research note.
Economic reality
Changes are already afoot.
Key World Bank units, including the International Bank for Reconstruction and Development, International Development Association, Multilateral Investment Guarantee Agency and International Finance Corp., are combining their climate programs into one office.
At the IMF, climate and gender programs are being rolled into a larger program focused on macro-financial and structural policies. The organization has eliminated what Bessent called “extraneous, non-core issues” from its program.
Shhhh. The bank’s climate and gender work is still ongoing and underway,” albeit in a more quiet way, said one practitioner.
The Bank’s target to reach 300 million people in Africa with energy access by 2030 also remains front and center, said Sheldrick.
Falling costs and speed of deployment mean that, “most expect that given the economics and deployment speed, solar and battery will do the heavy lifting if the 2030 goal is to be met,” Sheldrick said, despite the US insistence on a broader energy mix.
As French development minister Eleonore Caroit put it, “It has to be jobs on a livable planet. Otherwise, why even think of jobs.”
