World Bank

The World Bank's outdated financial structure is a threat to its continued relevance. Paul Wolfowitz, the bank's new president, should begin closing the wing of the bank that lends to middle-income countries.

The World Bank Group was a child of World War II, conceived to help developing countries build infrastructure, establish the foundations of economic self- sufficiency, and indirectly nurture political stability. But it should not retire at the age of 50. The bank's mission should be revised to benefit from the colossal growth of private sector financial resources and to help coordinate the work of nongovern­mental organizations. A good first step would be more openness about its work.

Over the past year, the problem of the debt of less-developed countries has been of intense concern not only to the private banks which hold most of that debt, but to the governments of the LDCs and of the creditor countries and to the multilateral institutions that have had to play a major part in a well-coordinated initial set of measures to stem the problem and bring it gradually under control. These efforts remain of the utmost importance for the continuation of a worldwide economic recovery and for the stability and progress of the LDCs themselves.

On March 31 of this year, Robert McNamara completed the first five years of his ten-year term as President of the World Bank Group. He has almost doubled in real terms the volume of lending by the Bank Group. He has more than doubled the size of the professional staff. He has changed the administrative structure. He has improved the relations of the Bank Group with the other international and national aid agencies. He has given the developing member-countries significant new help in their efforts to reduce their birth rates and to reconcile economic growth with the protection of their environment. He has set new criteria for lending.