World Bank’s Georgieva: Venezuela needs tens of billions of dollars

Kristalina Georgieva is interim president and CEO of the World Bank. [European Commission]

As the Venezuelan crisis unfolds, the World Bank is ready to act as soon as its members give the green light, said the institution’s new interim president, Kristalina Georgieva. In an interview with, she estimated that the financial needs to cover would be around tens of billions of dollars.

Kristalina Georgieva is the chief executive and interim president of the World Bank. Prior to that, she was the EU Commissioner for humanitarian aid and for budget.

She spoke with EURACTIV’s Jorge Valero.

On Monday, several European countries recognised Venezuela’s president of the National Assembly, Juan Guaidó, as the legitimate president of the country. Would the World Bank take a similar step in the next few days?

The IMF and the World Bank have 189 member nations. By our articles of agreement, we are actually prohibited to take a political stance. We concentrate on serving people. Our objective now is to be prepared to provide all the support we can, once there is a call to us that is supported by our membership. We actually have been helping the Venezuelan people that have fled the country. We provided last week a grant to support Colombia to be able to better host Venezuelans in their territory. We are also looking into what would be priority needs, especially in terms of social services. As I said, the moment our membership gives us a green light we will absolutely be there. As somebody who had lived a dramatic [political] transition, I still have vivid memories of getting up at four o’clock in the morning to queue for milk for my daughter. I have a great deal of personal empathy for the Venezuelan people who have been so dramatically impacted by the decline in economic performance.

How should the request be made?

We have to be called by Venezuela in a manner that our membership accepts. The political side of the story is very rapidly evolving. As I said, we take the views of the membership. From our side, we have our assessment of the situation and prioritization. The number one priority is to meet the basic needs of people and make sure that the economy is functioning.

EU leaders recognise Guaido in Venezuela

A dozen EU countries formally recognised Venezuela’s opposition leader Juan Guaidó as the country’s interim president on Monday (1 February), after their ultimatum for calling elections in the Latin American country expired.

What are the financial needs of Venezuela?

It really depends on factors like how quickly a credible reform plan would be put in place. The longer this lingers, the higher would be the needs. For the basic needs, it would be in the order of tens of billions of dollars for the country to function. But beyond that, I can’t really say.

What is your comment on Europe’s failure to have a unified position on Venezuela because one single country blocked it?

I cannot comment on that.

EU to establish contact group in Venezuela, Guaidó recognition up to member states

The EU will establish an international contact group to mediate in the crisis but leaves to member states the decision to recognize  Juan Guaidó as the president of Venezuela, EU28 agreed on Thursday (31 January).

Speaking of Europe, are you concerned about the paralysis that could follow EU elections next May if Eurosceptic and populist forces make great gains?

I am more optimistic about Europe. It is a very powerful union. Europe continues to be the most attractive place to live and it continues to rank at the top of the place for reaching your potential. Indeed, we have seen since the crisis an erosion of confidence and the rise of populism. It is driven, to a very high degree, by the sheer speed of change and the inability of some businesses and people to adapt to that change. According to a report we drafted with the EU, over the last 15 years, 15% of jobs were lost, mainly low skill jobs, and 15% of new skills jobs were added. The problem is that those who lost their jobs don’t have the skills to move into the new ones.

So Europe has a tremendous task, as the rest of the world, to focus on investing in its human capital. For that, Europe needs its collective force. It needs to have its institutions leaning forward in that new competitiveness area. While there would be perhaps some temptation to be more domestically focus, these are areas where only together Europe can succeed. We have to be more concentrated on the world around us. On that basis, make the right choices around who we send to Brussels and how they work.

Your predecessor Jim Yong Kim left the World Bank to join the private sector three years before the end of his mandate. His decision came as multilateralism is struggling to survive. Was it the right move at such a sensitive moment?

The most important indicator to look into is the trust our shareholders place in the World Bank. They voted strongly with their wallets that the bank matters. Last year, we got the largest capital raise in the history of the World Bank, a 50% increase. Europe plays a decisive role in these discussions because two very important priorities that we pursue are tremendously important for the EU. Firstly, the World Bank has increased significantly the capacity to address fragility. Since I came back to the bank two years ago, we have doubled financing for fragile countries from $7 billion to $14 billion. We do that because fragility has a tremendous impact on the lives of people, but also in neighbouring countries. And it spills over all the way to Europe.  In a world where extreme poverty has declined dramatically, the number of people in this situation in Sub Saharan Africa has doubled from 273 million to 450 million. Europe is directly impacted because of the inevitable pressures for people to move.

A new EU-Africa partnership

A new EU-Africa partnership is needed in order to tackle common challenges and fight for sustainable development without leaving anyone behind, according to EU Socialists and Democrats.

What is the other priority?

The World Bank is also absolutely determined to prevent the gap between rich and poor to continue growing. That means helping developing countries to catch up or even stay ahead in the new digital economy. We find a tremendous opportunity, for example, for Africa to leapfrog. We are launching together with African institutions, and we will be discussing in Brussels today [for Monday] what we call ‘a digital moonshot for Africa’. It is a high ambition to bring every African citizen, business government and institution the world of digital no later than 2030. It is about connecting everybody to the internet. For EU businesses that are striving to compete in that fast-moving world, this presents a platform of opportunity.

Is there a risk of mishandling data or letting some big companies including Facebook or Google to control the markets if this transition to the digital world happens too fast?

It does require a very comprehensive approach, including the physical and the capacity of citizens to fairly participate. In Africa, this is related to the issue of identity. We need to move towards identification in a prudent way so there is no risk of individual data being manipulated or stolen. That requires a tremendous concentration of attention and efforts. In addition, we are partnering with companies on a very broad base, so there is no risk of monopoly: financial institutions, telecom companies, content providers on the Internet. We have to be always careful that this is done by opening up space for local players and preventing the risk of any one company to dominate by sheer.

Edited by Zoran Radosavljevic

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