This year countries grappled with a cascade of shocks and economic turbulence, from ongoing conflicts and economic uncertainty to catastrophic weather that tested communities. Yet in the face of these challenges, nations proved far more resilient and adaptive than predicted.

In this episode of The Development Podcast, we look back at what shaped 2025 and look ahead to 2026 and beyond. As the global landscape rapidly shifts, we explore how Multilateral Development Banks (MDBs) are adapting and how different parts of the World Bank Group, including the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), are working as one to maximize our development impact.

Join us for insights on these issues and more from Anna Bjerde, the World Bank's Managing Director of Operations and Raj Kumar, the founding President and Editor-in-Chief of Devex.

Timestamps

[00:00] Challenges and takeaways from 2025

[06:11] How development organizations are evolving and adapting

[12:27] What can we expect from 2026?

[16:26] Wish for the next year

[17:30] 2025 through the eyes of a Kenyan farmer

To learn more about the World Bank Group’s work check out: How to Drive Intelligent Outcomes in an Age of AI

Welcome back to The Development Podcast. I'm your host, Toni Karasanyi. And today, we're looking back on 2-0-2-5 and also pulling out our crystal balls to take a peek into the future.

Anna Bjerde: The issue of jobs is everywhere. And it's either because there's not enough jobs or population is asking for better jobs, or there's change to the job nature.

Cathy Kamanu:So many have left the industry. And the reason for that is because many people have counted losses, I included.

Raj Kumar: We thought things could be much worse. I know it may not feel that great for many people around the world, but actually it's a lot better than things could've been.

Toni Karasanyi: I am so delighted to be joined by Anna Bjerde, World Bank's Managing Director of Operations and Raj Kumar, President and Editor-in-Chief of Devex. Devex is a leading media platform and news organization focused on global development. Welcome and thank you both for joining us.

Raj Kumar: Thank you.

Anna Bjerde: Thank you. Great to be here.

Toni Karasanyi: So, it's been quite a year, full of a cascade of shocks and economic turbulence, but also adaptation and adjustments. So, let's start with a positive. Anna, what's one thing that you would list as a positive moment or takeaway from this past year?

Anna Bjerde: No, great. One thing would have to actually be the resilience of the economies and the countries that we work with. Because as you say, if you look back, it's been a year of uncertainty, turbulence. And one thing that's been pressing on our minds, of course, has been the high level of indebtedness in countries around the world. But what we've also seen is that the outlook or the performance on growth has actually ended up being a bit better than we expected. As the year went through, we were quite worried. But we've seen that growth has actually been quite strong. And of course, it's not strong enough, but developing countries have performed quite well. The second thing is that we've also seen that countries are starting to see an easing of inflation, which is good. And that helps, of course, on populations. And the other thing is that there's a bit of softening on the access to finance in terms of terms. So, bond markets have opened up a bit more, which is also good.

But ultimately, what we've really seen is that countries have been relatively quick to adapt. And seeing that they need to digitize, take new opportunities like AI and digital that it offers, but also the shift in markets and diversification. So, a tough year. Not enough growth for sure, but better than we were at one point anticipating it to be.

Raj Kumar: We got to agree with Anna on this. If you think back to the beginning of the year, we thought things could be much worse. I know it may not feel that great for many people around the world, but actually it's a lot better than things could've been. I'll just add to the list, philanthropy. Philanthropy really stood up in a big way. And we now have several philanthropists that are bigger than individual countries in terms of their annual giving. And that gives us some hope as we try to construct this new future in 2-0-2-6.

Toni Karasanyi: Thank you both. All great reasons to be hopeful and positive at the end of this year. But looking back also, what do you think, Raj, are one of the challenges that developing countries continue to face?

Raj Kumar: Well, they face a whole host. Most of these countries are really facing massive debt or inflation, as Anna mentioned. If you talk to ministers of finance, they're not seeing a pretty picture right now. They feel like they are constrained. It's a very tough environment. Aid cuts have hit a number of countries as well. I'd say the biggest thing is just the uncertainty. The environment feels really uncertain. There's a lot of geopolitical tension, and countries are trying to face this uncertain environment with very few tools and figure out what to do. It's why institutions like the World Bank are so important in a moment like this.

Toni Karasanyi: Anna?

Anna Bjerde: I totally agree. There's so many challenges happening and at the same time. And I have to go back for a moment just on debt because we're monitoring this so closely. And if you look at the last three years, developing countries actually paid more than they received. And this was three years in a row. And that's really hard at a time when fiscal space is already small and there's so much need for development. And add to that, that resources for development, of course, are in a position where we're seeing a lot of competing demands for development support around the world. So, that is difficult. But what I also, and I think our institution heard, and it also actually led to a huge push for us to set a North Star, is that everywhere you go, whether it's a low income country, a middle income country or even a higher income country, the issue of jobs is everywhere. And it's either because there's not enough jobs or population is asking for better jobs, or there's change to the job nature. So, everyone is concerned about this. Add to that, the fact that there's a demographic shift happening, particularly in Africa, where you have a massive emergence of young people coming out on the job market in working age. We estimate about 1.2 billion over the next 10 years. So, for us, we really set an articulation of our overall mission, which is to create jobs. And we thought about it in a very structured manner, which we've never done before, by the way. Jobs has been something we have focused on, but we have never operationalized it the way we have now. Which is we're looking at what pillars need to be in place, foundational infrastructure, enabling policies and regulation, and then private capital mobilization. And then we identified five sectors, if you will, that we think are conducive to job creation. So, infrastructure, we believe that the whole area around healthcare, both for healthy population, but also the jobs it creates. We believe that agriculture is huge in many countries we work in, but it needs to be higher productivity. We believe that value added manufacturing that has a really strong local component can do it, and then tourism. So, we are really shaping our strategies around the world, around this idea of jobs. We're mobilizing partnerships around it. And we're trying to really focus on this concept of three pillars that enable, and five sectors that can help create the jobs and by investing in those.

Raj, you've spoken already about the shrinking foreign aid budgets across the globe, as well as philanthropy stepping in. How else have development organizations adapted to this new landscape?

Raj Kumar: I mean, some of them are adapting in the only way they can, which is to cut. They're firing people, they're shutting down offices, they're closing programs, and projects. Whether they're effective or ineffective, they're just closing them. Their budget doesn't allow it. I think there are others. Fewer, but there are others that have some other resources. They have other sources of funding, they have assets. And they are using this as a moment to really reimagine what they do, and to think about how can we have more impact than we had in the past. Now that we don't have the constraints of so much government-based funding, are there other ways we can adapt our business model? Can we act more like a social enterprise? And so, a lot of the nonprofit CEOs I speak to are really thinking about adapting in those ways. And it's a very tough time. I'm not trying to sugarcoat that, but they're thinking about how do you take this moment of crisis and turn it into some kind of an opportunity. And I think that's a reckoning happening across the space. When you talk to leaders across this space, this is what they're working on and thinking about, is how do you adapt in a new environment?

Anna Bjerde: Can I add to that-

Toni Karasanyi: Please.

Anna Bjerde: ... just from the World Bank Group's point of view? I think it's such an important point, because of course, we're also operating in this environment. And what we've really thought about is we have to be extremely efficient as an organization. So, we have to think about how we make sure the resources that we have for our clients, but also for our administration of the World Bank Group has the most impact. So, that means that we think much more now as a World Bank Group. And that is because the public sector side that I oversee, IBRD and IDA has to enable much more of the private side, which we believe is the growing part of the pie. And that's what countries need. We also know that jobs get created more through the private sector than the public sector, so it makes a lot of sense. So, I'm working so closely now with the team at IFC, with Makhtar, and of course, the team at MIGA to see how do we craft solutions together that really, really maximize the impact of the public sector side so that the private can take a bigger share. The other thing that we're seeing is this partnership needs to also extend externally. If we want to have real impact in the countries, we need to mobilize partners. And we're trying to focus on major initiatives, like Mission 300 or AgriConnect, or most recently the 1.5 billion people we want to reach with better healthcare. And this takes all of us to pull in the same direction. Now, luckily, we have great partners who see the same areas of focus to be able to respond through their mandates and through their organizations. But it's really about focus, selectivity, and getting the most out of what you have, and being accountable to your shareholders in doing so.

Toni Karasanyi: Thank you, Anna. Very well put. Even from sitting within the organization, hearing the way you explain it, I'm understanding the changes a little bit better. So, thank you. Raj, I'd curious to hear from your perspective, from the outside looking in, how has the World Bank's journey over the past year looked?

Anna Bjerde: Oh, I'm curious also.

Raj Kumar: Yeah. I think there's been a lot of change actually. Look, the World Bank and all the MDBs, the main critique you hear from the outside. I'm not talking about the protestors outside, but people who know these institutions. What do they say? They say these are institutions that are very insular. They're slow moving. They might have the right mission. They might have a lot of the right tools, but they're not using them in the right way. And I think where the World Bank and other MDBs have gone in the last 18 to 24 months has been pretty quickly toward a couple of things that Anna described.

One is working more together. So, that was a concept that was spoken about just a couple of years ago. And there was a lot of skepticism about how well the MDBs would actually partner. You're actually seeing real results from that now. Things like originate to syndicate, taking some of the assets to the bank, the bank goes out and does a project, it gets some debt. Can it sell that debt to private investors to free up space on its balance sheet to do more projects? That's actually happening now. It was just a concept a couple of years ago.

A lot of what Ajay Banga has been calling for internally, which may be hard to understand from people outside the institution, which sound like corporate scorecards and metrics, but those are pretty key to knowing if the Bank's actually working in the right direction for its shareholders and for its borrowers. So, I think there's been a lot of progress in that direction. The main critique you'll hear from people on the outside is it's a moment of crisis and we're not moving fast enough. The operations have maybe merged on paper, but now the really hard job, Anna has this very hard job, is how do you get the culture, and the people to go behind those operational changes to really drive the kind of success and the pace of change that the world is demanding?

Anna Bjerde: Yeah. No, Raj is absolutely right. And of course, he expresses it much better than I could from outside-in. But I think the pressure on speed in delivering development solutions is pressing. It's been for a long time. We have started addressing it. We reduced our preparation time by about 26%, which is good. We still want to go further, so that's good. We are able to think about innovation, like you said, on the financial side, which is good. The issue is that it becomes one or two projects when we want 30 to 50.

Raj Kumar: Yeah. How do you get to the scale?

Anna Bjerde: Exactly. So, now with all the changes we're making to what we call our Knowledge Bank, I'm really, really encouraged to see the direction that's taking. Because we will have best practices both on policy, regulatory, technology front. And then, okay, these are the types of projects we need to do. And let's do 30 of them right now so that we really get that scale and the impact. That's critical. And then I think we also need to realize that our clients... And this is something I think a lot about, which is we have increased actually our support to lower capacity, more fragile settings, because the world has turned that way. The most extreme poor in the world live in these settings. So, how do we make sure as we get faster, as we get more focused, more selective, we mobilize more partners, we also build that local capacity? So, we need to focus quite a bit with our clients to help them get stronger when it comes to execution, administration, using new tools that can help monitor results and course correct when needed.

Toni Karasanyi: Thank you, Anna.

I think that leads well to my next question, which is going to be using your crystal ball, looking forward to 2-0-2-6, what is one key trend or issue that you think we're going to be talking a lot about in the next year?

Anna Bjerde: I think we're going to talk about AI. I think we talked about AI this year. And I think what we have found is, and I just saw it firsthand when I traveled recently, the power of small AI. I'm talking about Rosalind, the farmer I met in Kenya a few weeks ago, who took us to her field. She was showing us around and she said, "Look at this one. It doesn't look well." And she said, "But I call the village next that I have to call, and they come and diagnose, but they haven't picked up the phone." And there was a guy there in the group who said, "You don't have to call. It's on your phone. Give me your iPhone." He downloaded this app and helped her take a picture. And within a few seconds, it came up with the plant and it came up diagnosed as black rot. And Rosalind says, "I know black rot. I know actually what causes it and I know what I need to do now about it." So, she said, "I'm never calling the village again. Now I know what I need to do." And the power of that is huge. And likewise, when I was in Zambia, I went to the copper belt and I was talking to people who work in the mining sector. And they said, "What has changed our world completely is that we're able to actually use digital and geospatial data to be able to see where might the next finds be." And they're also able to see illegal mining from using technology choices or technology options. So, I think we're going to be talking about this. And what I'd love to see us talk about it is in such a practical way that puts the solutions in the hands of the people that we're working with. And I do think small AI is a revolution that's happening throughout the developing world, particularly in Africa, which I'm so focused on.

Raj Kumar: Yeah. I'd agree with that. And I would just add, I think it's digitization broadly. If you think about the world we were in before the aid cuts hit this year, before so many OECD countries decided this is the direction they're going to go in. That world was when we saw a problem, we increased aid budgets. And there was a lot less focus on the way the aid was spent. And I think what's happened now is as budgets are shrinking, there's one maybe silver lining, which is organizations have to figure out how do we get a lot more bang for our buck. And the answer is often going to be digitization. They need to better track the results of what they're doing. There's still a lot of paper and pen clipboard activity. Think about the global health space, for example, and tracking which child gets an immunization or receives ready to use therapeutic food. A lot of that is still paper-based. So, moving to digital systems, being able to track that from anywhere in the world, see what's working, fund more of that, less of the things that are not working. AI is a piece of it. I think AI is going to allow for massive leapfrogging in health, and education and agriculture, exactly as Anna says, but I think it's even broader than that. It's changing the systems through which development gets delivered. More local, of course, more market driven, but also more tech enabled. And I think we're going to see more of that in 2-0-2-6.

Anna Bjerde: And if I can add one more, I think we'll continue to talk by talking even more about demographics. Because we have this young population, working age population in many parts of the world, particularly in the lower income countries that are working to become middle income countries. And I think if they don't find meaningful jobs or jobs, incomes, livelihoods, hope, dignity, we have a real problem on our hands. And I think we've seen around the world the restlessness of young people, the desire to be making a meaningful contribution, but also to be in control of their own destinies. So, I think we need to recognize most of the world is aging, but Africa and a few other countries actually have a very, very strong young population coming into working age and we need to really pay attention to that.

Toni Karasanyi: This has been an incredibly insightful conversation.

Just one final question, and I'll start with you, Raj. If you could have one wish for 2-0-2-6, what would it be?

Raj Kumar: I mean, this is blasphemous to say as a journalist. I'd love a slow news year. I can't say that. I mean, last year was the busiest year for Devex in our history. We broke the story that USAID was going to get shut down and it's been just nonstop ever since. So, let me at least wish for a slow news period over the holidays, so our team of journalists around the world can take a little bit of a break. And then let the volatility and chaos continue into 2-0-2-6 and we'll cover it.

Anna Bjerde: We have a chance to really make a dent. We have everything now lined up, internal coherence, and also the partnerships and the compelling argument of why we're selecting a few really, really big flagships to work on. And it's resonating so well with clients. So, I want to see traction on that and I'm going to work extremely hard next year to get there.

Toni Karasanyi: Anna, Raj, thank you again. This has been a great conversation. I hope everyone listening has enjoyed this conversation as much as I have. And I want to wish everybody a happy holidays. Thank you.

Raj Kumar: Thanks.

Anna Bjerde: Thanks so much.

Raj Kumar: Yeah, happy holidays.

Producer Sarah here. As regular listeners to the podcast will know, every month we get the views of someone from around the world and how the really big issues that we discuss on the podcast relate to them. So, as the year comes to an end, I wanted to catch up with someone who I spoke to a couple of years ago, a farmer in Kenya who actually entered the world of agriculture after a career in accounting. She's in her 20s. She's got a very young baby. I wanted to hear how 2-0-2-5 has been and what her hopes are for 2-0-2-6.

Cathy Kamanu: My name is Katherine Camano. I'm based in Muranga County, that central part of Kenya. I'm a full-time farmer. I do greenhouse farming. Also, lately this year, I went to open food farming, where I'm doing zucchini and a little bit of chili that is habanero ... my choice of crops... Okay, forgive the chicken. I'm a farmer, so I'm surrounded by all type of sounds.

Sarah Treanor: Cathy, it's wonderful to catch up with you again and congratulations on the birth of your baby. 2-0-2-5 has been quite a turbulent year in the global economy. And fluctuations in prices have certainly impacted an awful lot of people in an awful lot of professions. How's the year been for you?

Cathy Kamanu: Sarah, thank you for that. 2-0-2-5 has been a wonderful year for me, because when it comes to my farming journey, I came to understand the need for taking care of my soil. It has been one of my breakthrough. The country and the economy has been very bad. And when it come to agriculture, production has been up and down, prices, a lot of fluctuation. You cannot even predict something is going to happen this season, so there's a lot of fluctuation has been going on. Farmers have been making losses, so many have left the industry. And the reason for that is because many people have counted losses, I included. I have made a lot of losses. When it rains, it rains too much. There's a lot of flooding. When it is dry, it dries too much and there's drought. I came to know that if you take care of your soil, you're going to produce more.

One thing I came to know is that if I work with nature, it's going to favor me. And what I mean by working with nature is taking care of my soil, taking care of the water sources around me, taking care of the bees that are coming to enable pollination in my farm. And I have seen the change.

Sarah Treanor: So, Cathy, it really sounds like you've been able to manage the uncertainty, and the fluctuations that are really part and parcel of your new career. How do you feel about 2-0-2-6?

Cathy Kamanu: I want to do that more. I want to educate people. I want to create awareness that you don't have to fight the nature. Work with nature. Do not eliminate the bees. You need them. You reduce your cost of production at the end of the day. And that way you're able to caution yourself against the fluctuating prices. I'm very hopeful for 2-0-2-6. I'm going to continue with what I'm doing to create more awareness.

Sarah Treanor: Thank you, Cathy. It's a pleasure to speak to you.

Cathy Kamanu: Thank you, Sarah.

Toni Karasanyi: Well, that's all from us today. But if you'd like to hear more about how the World Bank Group is changing, check out How to Drive Intelligent Outcomes in the Age of AI. Here's Lisandro Marti­n, Director of the Outcomes Department.

Lisandro Martín: In the World Bank, we have a series of outcomes, targets that we are very ambitious targets, like giving 1.5 billion people access to health services by 2-0-3-0 or giving 500 million people access to social protection services. Then when we analyze those targets, we can really already predict what is the likelihood of delivering on those targets using AI and data. And not only predict whether we will deliver on them or not, but what we need to change to deliver on them.

Toni Karasanyi: We'll put a link to that podcast in the description. And of course, don't forget to like and subscribe to The Development Podcast wherever you listen. See you in 2-0-2-6.