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Speech by Managing Director and Chief Operating Officer Sri Mulyani Indrawati at Third Afro Arab Summit
Your Highness, Sheikh Sabah Al-Ahmad Al-Jaber Al-SabahYour MajestiesDr. Nkosazana Dlamini Zuma, Chairperson of the African Union CommissionDr. Nabil El Araby, Secretary General of the Arab LeaguePresi... Show More + dents, Prime Ministers, Ministers,Ambassadors, Ladies and GentlemenAllow me first to express my sincere thanks to our host, His Highness Sheikh Sabah, as well as to the people of Kuwait for the gracious welcome we have received at this Third Afro Arab Summit. It is a pleasure to be here today. This event is a key step toward a collective vision of integration and collaboration. Africa and the Middle East and North Africa regions are forever bound together by history, geography, trade, and traditions. In both regions there is a deep belief that cooperation and integration will greatly strengthen both and bring benefits to all. This Summit today embodies this belief.These are times of historic changes. Many countries in the Middle East and North Africa are experiencing momentous social, political and economic transformations. Many of you face challenges I know too well from my own country, Indonesia, where the transition towards democracy and a united society took more than a decade. I urge you to stay focused on your goals for more inclusion and resilience.At the same time, in much of Africa, we still see very high rates of extreme poverty along vigorous growth rates. High commodity prices and improvements in governance and in macroeconomic management have turned Africa into a major destination for foreign direct investment. But the fight against poverty needs to continue.The World Bank Group recognizes your challenges but also your opportunities. We have set two ambitious goals: to end extreme poverty by 2030 and boost shared prosperity for the bottom 40% of the population. These twin goals have direct relevance to all of you. Nowhere is the goal of ending extreme poverty more relevant than in Africa, where 48% of the population live on 1.25$ or less a day. And the Arab Spring showed just how critical it is to share the benefits of growth and prosperity by creating opportunities for all. By sharing your collective vision of integration and collaboration, African and Arab countries can address their problems, whether this is low intra-regional trade, the enormous infrastructure deficit, the challenges of climate change and desertification, insecurity or organized crime. Today, intra-regional trade in your regions is lower than anywhere else. So it will not only require actions and investments within each country, but much greater integration within and between regions - and with the rest of the world. When I was Minister of Finance in Indonesia, I experienced how integrating trade, as we had done under ASEAN, can reap huge benefits to all members of society in these countries. There are real synergies in building regional infrastructure. For example: Africa has the largest hydropower potential in the world. Together with our other partners we are supporting the development of the Inga hydroelectric dam, which will eventually provide enough electricity to serve about half of southern Africa. We see the potential of similar projects, especially through power pools and transport corridors, elsewhere.In a globally interconnected world, information superhighways are critical. So initiatives - such as the Libya-Chad-Sudan fiber optic network – will link the Maghreb and Sahel while reducing costs and improving connectivity. However, reaping the benefits from physical infrastructure requires also investing in the "soft" infrastructure. Your leadership in reforming policies will strengthen the economy, enable you to deliver quality services, and further improve the investment climate. With sound institutions in place, private investors will stay and social inclusion will grow. Enhanced integration and collaboration require your common vision, strong leadership and relentless pursuit of win-win solutions. We at the World Bank Group are standing ready to work with you on getting there. We are committed to scaling up our engagement in African and Arab countries by providing finances. But we also bring the experience and knowledge of other regions to the table. Regions all over the world that have grappled with similar challenges and have found solutions. Our collaboration with Arab development partners is showing results. Through these efforts we have mobilized nearly $8 billion in support of Yemen's recovery, and are mobilizing much needed support to Lebanon and Jordan to help respond to the spillover from the Syria conflict.We have adopted regional approaches to development in the Great Lakes and the Sahel, and are preparing a regional initiative in the Horn of Africa. During President Kim's recent visit to the Sahel he announced over $1.5 billion in additional funding for regional projects focusing on energy, agriculture, health services and connectivity. They will support peace, security and development. The importance of the funds from the International Development Association, IDA, in supporting Africa and countries facing fragility cannot be overstated. It has contributed significantly in the ongoing fight against poverty. It is also a sound investment in fast growing economies that will contribute to a higher goal of shared prosperity. Malaysia and Brunei used to borrow from IDA, this year they have pledged to be first time donors of IDA.We are grateful that some of the countries you are representing are generously contributing to this effort, while I also encourage others who are not yet IDA members to join this collective to support the global effort to end poverty. I would also like to take the opportunity to thank many of the countries here who have offered kind support to the relief efforts in the Philippines. Such displays of global solidarity reveal to the world, the generosity, commitment, and leadership of the African and Arab community.Excellencies, distinguished guests, Poverty is not a destiny. Many countries have pulled themselves out of poverty and are shining examples of what is possible. I am convinced that with the collaboration exhibited here, with solid and meaningful reforms and policies, and with sound investments, ending poverty and sharing prosperity will be part of your shared future.I thank you. Show Less -
Transcript of World Bank Group President Jim Yong Kim Opening Remarks at Neglected Tropical Diseases Conference, Washington DC
DR. KIM: Thank you, all, so much for coming and welcome to the World Bank.As always, I have some very nice prepared remarks, and so I will give them out of respect for the people who prepared th... Show More + em, but I'm also going to talk a little bit about from personal experiences. Hundreds of millions of children and adults in Africa live at risk of disfigurement, impaired development, blindness, and even death from seven major preventable, neglected--so called neglected tropical diseases, includes river blindness, elephantiasis, trachoma, and various types of [? 00:37] [unclear] parasites. It's not that these diseases really have been neglected. It's the people who suffer from them who have been neglected. Protecting poor people from preventable diseases and from acute suffering remains a part of our mission to end poverty and [unclear] shared prosperity. The bronze statue in our atrium, the child leading a man who has lost his sight from river blindness, is a daily reminder of our mission, and for me it's the second organization that I've worked for that has that very statue in the middle of its consciousness. Five other statues exist including in Burkina Faso's capital and of course the World Health Organization capital in Geneva.River blindness is a debilitating disease, transmitted through flies that breed in river waters, as you know. The fight against this disease is where our efforts in the preventable, neglected tropical diseases began. This fight, supported by many organizations and partners including the World Health Organization, the World Bank is a true success story, and today over 80 million people a year in Africa regularly receive drugs donated by Merck to prevent river blindness. Protection again disease is not just an investment in health but an investment in the economy. As river blindness has been controlled in large parts of West Africa, families have been able to return to 25 million hectares of arable land with the capacity to grow enough crops to feed 17 million people. River blindness has also been eliminated in several endemic areas in Africa, such as transmission zones in Senegal and Mali. At the beginning of this year, the Bill and Melinda Gates Foundation, several pharmaceutical companies, and many other partners, including some very active civil society organizations, united behind a common mission to control or eliminate the seven major preventable, neglected tropical diseases in endemic countries. I'm delighted that we at the World Bank are able to support the effort to tackle these diseases in a coordinated way. Tackling these diseases in a coordinated way in [unclear 02:50] Africa. It saves lives and money, and requires expanding lessons that we've learned from our efforts to eliminate river blindness. First, a simple community health system approach. And second, partnerships with pharmaceutical companies for the free supply of drugs. A key element of this extended effort is to strengthen community health systems in these endemic countries through national health strategies that aim to reach every citizen with good quality health services. We can bring about great change by working together efficiently. You know, I remember the very first time that this idea of donating drugs became to be, and it was actually in a video with Roy Vagelos of Merck, and Bill Fahey of, at that time [unclear 03:37] Carter Center by President Carter. And I'll never forget the conversation where President Roy Vagelos of Merck was asked directly, "You mean you will supply every person in the world who needs Mectizan with the drug forever?" And he said, "Yes, forever." Now, my understanding is that at first when the Merck folks about this they weren't very happy when he made that commitment, but I have to tell you, those of us in the public health world were simply blown away. I've since had the great pleasure of working very closely with Bill Fahey and also being measured [? 04:16] by him in a very substantial way. And just yesterday I was on the phone, a videoconference with Bill and with Mark Rosenberg, who now runs the Task Force for Global Health, which manages the Mectizan Donation Program. And I've also had the great, great honor of interacting quite a bit with Roy Vagelos, who continues his great work in trying to bring medicine and cures to the poorest people in the world. So I, mostly today, just want to thank everyone in this room for your effort to continue this extremely worthwhile fight. You know, I was involved in HIV and tuberculosis, malaria, much more high-profile diseases. But having spent so many years of my life actually seeing cases of elephantiasis, seeing cases of trachoma in places like Haiti, in three countries in Africa and all over the world, I understand very clearly the enormous morbidity, the enormous suffering that comes from these diseases, and I hope that through our joint efforts, we will one day look at these as no longer neglected tropical diseases. Thank you very much. Show Less -
Remarks at IMF/World Bank 2012 Annual Meetings Development Committee Press Conference
In honor of our Japanese hosts, I would like to start my remarks by making some comments in Japanese.Mina-sama Kon-Nichiwa. Okagesama-de, Sekai Ginkou-noSousai Toshite Hajimete-no Soukai-deSenda... Show More + i-nimo Iki, Mina-sama-noYasashisa-to Tsuyosa-ni Fure,Subarashii Kizuna-wo Tsukuru Koto-gaDeki-mashita.Arigato Gozai-mashita. [Hello everybody. Thanks to your help, I could complete my first Annual Meetings and visit Sendai as the President of the World Bank. I was touched by your kindness and resilience. I am glad that we could build a wonderful Kizuna. Thank you very much.]I don't know if there was translation, but if not, too bad.I want to first of all just thank you.I want to thank the Japanese people and the government of Japan for just a truly outstanding meeting. The Japanese government I think demonstrated to all of us the character of the Japanese people by responding to the great tragedy of March 11, 2011 by insisting that these meetings focus on ensuring that all countries – especially developing countries – have access to all the tools they need for disaster risk management. We're so grateful to them.I want to thank Christine for her eloquent plenary remarks and leadership, and also DC Chair Marek Belka for his leadership and contribution.I also want to congratulate my European colleagues. Many questions have been raised in recent years about the European Union. The Nobel Committee's awarding of the Peace Prize to the EU is a powerful reminder of just what the Union has done to shape history in a positive way.These Meetings were my first as World Bank president. From my discussions with Governors, Ministers, civil society representatives, and many other stakeholders, I've been impressed by the depth and breadth of views. In fact, many took to heart our campaign "What Will It Take" - and told me directly exactly what they think it will take! Many also wore our black T-shirts that had a simple phrase: End Poverty.For me, that message – End Poverty – is what I think about every day on my job as president of the World Bank Group. I think of that message and the message of boosting shared prosperity so that families or young people can have hope for a brighter future that includes a good job, access to health-care, and good education.The economic environment today is tough and very disconcerting. I believe that the World Bank Group has a role to play in all countries around the world, and all countries of the world can work with the World Bank to find solutions to some of the most difficult issues in development today. I want the Bank to be transformed from a knowledge bank to a solutions bank that will be a clearinghouse of ideas from the north and the south on how to most effectively deliver services to those who need them the most.Let me emphasize how important it is during these times to keep developing countries in the forefront. We still live in a world that has more than one billion people living in absolute poverty. We must all work to make sure that the impressive gains in Latin America, Africa, and Asia over the past generation are not lost now. In just the last few years, growth from developing countries accounted for more than half of global growth. It is in everyone's interest that these countries continue to grow and continue to be such strong contributors to the global economy.I would like again to thank our Japanese hosts and close by highlighting the winner of the World Bank High School/Junior High School development Slogan Contest. From more than 1600 entries, the winner is Ms. Mayu Muto, from Hiroshima Prefectural Yoshida Senior High School.Her slogan was Hinkon-de Kimi-no Mirai-wa Jama Sasenai.We will not let poverty hamper your future. Thank you very much. Show Less -
IMF/World Bank 2012 Annual Meetings Development Committee Press Conference Transcript
MR. MILLS: Good evening, everyone. Thank you for joining us for the Development Committee Closing Press Conference. Thank you all for coming. ... Show More + ; Each of our participants and speakers today will make an opening statement. Then we will be happy to take your questions. I would just like to remind everyone to identify yourself and your organization when you ask a question, and if you could make sure that your cell phones and pagers are turned off. The topic of today's press conference will be on the Development Committee and development issues. Thank you. Chairman Belka? MR. BELKA: Thank you. Good evening, ladies and gentlemen. I am the Development Committee Chairman. I am pleased to be joined by Jim Kim and Christine Lagarde. Today's meeting gave us a chance to exchange views on several important areas. First, the global economy remains vulnerable. Challenges persist in many developed economies. Growth is slowing in major emerging economies. We reiterated our commitment to taking decisive actions to promote growth and development, to continued support for an open global economy and to meeting our pledges of development assistance. Second, we discussed the new World Development Report on Jobs. Third, we shared views on ways that countries can better prepare themselves to minimize the impact of natural disasters on their development. We thank the Government of Japan for hosting these Annual Meetings as well as the Sendai Dialogue on Managing Risks from Natural Disasters. Finally, we took advantage of this opportunity to welcome President Kim, the Bank Group's new President, and to begin to explore the new thinking he is bringing to the Bank Group. More details are in the Communiqué, background papers, and Governors' statements, which are all publicly available. Thank you very much. Now I would like to pass the floor to Jim and Christine. DR. KIM: In honor of our Japanese hosts, I would like to start my remarks by making some comments in Japanese. [INTERPRETED FROM JAPANESE]: Good afternoon, ladies and gentlemen. With grateful support, I am attending the Annual Meetings as President for the first time. I have been to Sendai. I have enjoyed the hospitality and kindness of the Japanese people. I have enjoyed an extremely good bond. Thank you very much indeed. [IN ENGLISH]: I don't know if there was translation, but if not, too bad. I want to first of all just thank-- [Applause.] DR. KIM: --thank you--I want to thank the Japanese people and the Government of Japan for just a truly outstanding meeting. The Japanese Government I think demonstrated to all of us the character of the Japanese people by responding to the great tragedy of March 11, 2011 by insisting that these Meetings focus on ensuring that all countries, especially developing countries, have access to all the tools they need for disaster risk management. We are so grateful to them. I want to thank Madame Lagarde for her leadership, her mentoring of me, her eloquent Plenary remarks, and also to Development Committee Chairman Marek Belka for his leadership and contribution. I also want to congratulate my European colleagues. Many questions have been raised in recent years about the European Union. The Nobel Committee's awarding of the Peace Prize to the EU is a powerful reminder of just what the Union has done to shape history in a positive way. These Meetings were my first as World Bank President. From my discussions with Governors, Ministers, civil society representatives, and many other stakeholders, I have been impressed by the depth and breadth of views. In fact, many took to heart our campaign "What Will It Take?" and told me directly exactly what they think it will take to end poverty. Many also wore our t-shirts that had the simple phrase: "End Poverty." For me, that message, "End Poverty," is what I think about every day on the job as President of the World Bank Group. I think of that message and the message of boosting shared prosperity so that families or young people can have hope for a brighter future that includes a good job, access to health care and good education. The economic environment today is tough and very disconcerting. I believe that the World Bank Group has a role to play in all countries around the world, and all countries of the world can work with the World Bank to find solutions to some of the most difficult issues in development today. I want the Bank to be transformed from a "knowledge Bank" to a "solutions Bank" that will be a clearinghouse of ideas from the North and the South on how to most effectively deliver services to those who need them most. Let me emphasize how important it is during these times to keep developing countries in the forefront. We still live in a world that has more than one billion people living in absolute poverty. We must all work to make sure that the impressive gains in Latin America, Africa, and Asia over the past generation are not lost now. In just the last few years, growth from developing countries accounted for more than half of global growth. It is in everyone's interest that these countries continue to grow and continue to be such strong contributors to the global economy. I would like to again thank our Japanese hosts and close by highlighting the winner of the World Bank High School/Junior High School Development Slogan Contest. From more than 1,600 entries, the winner is Ms. Mayu Muto from the Hiroshima Prefecture Yoshida Senior High School. Her slogan was: "Hinkon-de kimi-no mirai-wa jama sasenai." "We will not let poverty hamper your future." Thank you very much. Managing Director? MS. LAGARDE: Thank you very much. Many of you have heard me before, and I am going to just limit my comments to three points. One is I am absolutely delighted to have Dr. Jim Kim as my neighbor across the street and as President of the World Bank. For those of you who would worry about our relationship, we are working together very well, and we are very, very pleased to do so, and we will continue to do so, particularly in the area of jobs and growth, with our respective expertise and in response to our respective membership as well. Second, last year, I had told you that I would commit to raise resources, and I did. In April, I came to you to confirm that I had raised $456 billion for the general resources of the Fund but that I was now embarking on my fundraising exercise for the low-income countries. Job done. The Poverty Reduction and Growth Trust Fund is now replenished. The first tranche of the windfall profit on the sale of gold done by the IMF has now been allowed into the PRGT. We reached the 90 percent majority that was required. And the second tranche that was necessary for the PRGT to be sustainable after 2014 has now been approved by the required majority of 74 percent of my membership. So, on the funding, we have--the membership has done the job--and there is no concern about the financing of the Poverty Reduction and Growth Trust going forward. Third, we have conducted a study of how efficient our facilities are for low-income countries. If the conclusion had been that they were not efficient, that they had to be improved, we would have changed them. The conclusion of the research--and we have done many, many programs over the years on low-income countries--is that the facilities we have available are fine and suitable for the job. More to the point, it also shows that those low-income countries that have used such facilities have in the main fared better than those low-income countries that have not used the facilities of the IMF. So I am not claiming credit for that, but it clearly shows that it has been efficient. And a final point in the area of what the Fund can do. We are just about to open a fifth Regional Training Center in Africa to respond to the very heavy demand on capacity building and training in the areas that the Fund is good at--that is, institution building in the field of public finance, essentially. Thank you. MR. MILLS: Thank you very much. Thank you for your patience. We started a little late. We would like to try to keep on schedule, so if you could keep your questions short, please. Yes, right there in the third row. QUESTION: Thank you very much. I am Toshiko Ogata with the Asahi Shinbun, a Japanese Newspaper. I have a question to Dr. Kim, and first of all, thank you very much for your kind remarks in Japanese. We all Japanese really enjoy your kind words. And first of all, my question is about disaster risk management, as you touched on. There has been a lot of talk on that issue throughout this meeting, but there were opinions or voices from developing countries which said that risk management, disaster risk management, would be important but there is a real need for food or health for them. So, it would be difficult for them to prioritize those needs. How can you strike a balance on those issues? And secondly, just quickly, on slowdown of the emerging and developing countries it is now clear that the emerging economies and developing economies face ripple effect from global crisis. How can you help those countries, how can you help those needs a World Bank President. DR. KIM: Did you say "ripple effect from food prices"? QUESTION: From global crisis, so financial crisis, European financial crisis. DR. KIM: Financial crisis? Okay. Let me start with disaster risk management. So, there are two parts of disaster risk management: There's the prevention and of course there's the capacity to respond. The effort that we're embarking on with the strong support of the Japanese government is to really tackle both of those issues. For example, the contrast couldn't have been more clear: Driving through Sendai, of course there was tremendous devastation along the coastline, but in the city, despite a 9.0 earthquake, the buildings were all standing, and that's because the building standards here are just the highest standards in the world. And contrast this with a country that I've worked in a lot, Haiti, everything collapsed with that earthquake, and it was actually a milder earthquake than the great East Japan earthquake, including the presidential palace. I mean, can you imagine? The presidential palace crumbled to the ground. So, the task is to now try to work into our building standards a different level of prevention. We understand very much that it's not easy, but we are supporting the poorest countries in going down that path. Moreover, once a catastrophe happens, the ability to respond quickly is usually not present. And so, we've set up something called catastrophe drawdown mechanisms, where the money we make available immediately--and so that, if there is a--it's like a form of insurance, and if there is a catastrophe they will immediate have access to it. So, both on the prevention side and in the response side, we feel that we're prepared. In terms of the overall effect of the global economic downturn, maybe Madame Lagarde can talk about it, but I can tell you what we're doing. One of the great stories of the last five to ten years is that the average growth in Africa has been 5 percent. Latin America has been growing and even with the crisis the growth has continued although at a lower rate, and many Latin America countries rebounded very quickly to the crisis. And so, our main concern is to ensure that the gains of the last ten years are not wiped out with this crisis, and we're doing it in many different ways, but the key for us is to continue to invest in developing countries and continue to help the countries down a path where it is not just responding to the crisis, but thinking in terms of long-term responses, as well. And when I say--is there's all kinds of ways of responding quickly. You can ban food exports, you can close down trade channels, and we think that's not a good idea, that they need to understand the fundamentals that help them have that growth over the last decade and continue down that path. MR. MILLS: Yes, right here. Thank you. QUESTION: Thank you very much. My name is Kim Chanam [phonetic], I am journalist. Would you know the [unclear 0:05:09] and I think of China and Korea and Japan, there are many, many problems. So, like European--EU--European Union, tradition of Asia Union I like--would you [unclear 0:05:41]-- DR. KIM: Well, it's what I--I'm sorry, I didn't understand. QUESTION: [In Korean – not interpreted]. DR. KIM: Well, so, it's--this is a very complicated question and, at this point, these are issues that have to be resolved by these governments and I--let me just say this: I think while there are conflicts now over territory and the like, I have to say that my own sense is that the forces that bind China, Korea, and Japan together are far more powerful than the forces that pull them apart, and I think that, in my discussions with leaders, all of them understand on a very deep level that increasing trade and increasing cooperation between these three countries is critical for the growth of all three. And I think that, over time, and maybe even very soon, the problems will be resolved and they will continue to find ways of cooperating more effectively. MR. MILLS: Yes, and to the back, please. Yes, yes. Thank you. QUESTION: Asit [phonetic] from Mint Newspaper, India. There have been concerns raised by many countries, including the G-24 recently, about the declining financial resources of the World Bank. So, Mr. Kim, do you--what exactly the World Bank is doing regarding this. DR. KIM: Well, we're actually in a very good financial situation. We've had very good financial management and I--at this point, there are lots of opinions about financial adequacy and we're actually doing very well. The management of the resources has been very good. Now, in a low interest rate environment, our income does go down. And so, if the low interest rates continue for a very long time, then I think we'll have to be creative. But right now, we're doing okay, and our capital is relationship to the demand. And so, we respond to the demand that we have. And right now, I would just say that we're keeping up. Any discussion of capital, though, has to include all of our member countries, because it's a very difficult and important issue. So, I don't think we need to have that discussion right now, but if we do, we'll be sure to have it with all of our member countries. MR. MILLS: Yes, sir, right here. QUESTION: [INTERPRETED FROM FRENCH] Thank you, I'm Bashir Sila [phonetic] from La Republique of Guinea Conakry. I would like to hear Madame Lagarde come back on the trust fund, the PRGT, what has constituted it and what will it be used for, and to what extent with the World Bank and the IMF be able to help countries with good natural resources to husband those resources and use them to their best. We in Guinea are working with the multinational corporations to have a cooperative approach so that we can use the proceeds to combat poverty. MS. LAGARDE: [INTERPRETED FROM FRENCH] Well, hello, and I will answer you in French, since I have that opportunity. As to the financing of the poverty reduction and growth trusts, it is a fund which provides concessional lending. The interest rate at present is zero, and this is provided to the countries classified as developing countries, so, where we have been able to have the first tranche, and this came from the windfall savings from the sale of gold, with more than $1 billion to finance this trust and we also have additional resources which were not scheduled but were able to be derived from the sale of gold, also to replenish and finance this PRGT trust, and this is something that enables us to have fairly clear sailing, financially speaking, for this trust. As to the husbanding of natural resources, we are working in terms of training and we are helping countries to manage their resources, particularly for the countries that you were referring to. MR. MILLS: Right here, in the second row. This will be our last question. QUESTION: This is for Mr. Kim. I am Amir Sakir from the Sandalidas [phonetic], Sri Lanka. Does the World Bank have a development agenda for Myanmar? DR. KIM: So, let me answer that question in several ways. First of all, we are very engaged in Myanmar right now. We're in the process of working with the government to really sort through the arrears there. We're working with them to have a full understanding of the nature of the arrears and we are very anxious to move forward, together with other donors. We are in Japan right now, and of course the Japanese are very eager to move forward, as are many other countries. And so, we are expecting that in the early part of 2013, we will have been able to sort through the arrears and put together a plan for clearing them and then move forward. In terms of a development agenda for Myanmar, it's really important to point out that it will be their development agenda. Myanmar has very clear ideas about where they'd like to go, infrastructural projects. I think that as in any country, the country has to take the lead, and we are already in discussions about what the priorities might be. I think there is a great concern about providing basic services to the people. And so, we will follow Myanmar's lead, and I would say this: The other thing that is very important, I have met with leaders of Myanmar, especially at the UN General Assembly meeting some weeks ago, and we're very impressed with reforms that they've gone through, but they are still a ways to go. I mean, there is still more to do and we are very supportive of the current government and we will be especially supportive as they go through with further reforms. MR. MILLS: Very good. Thank you very much. Show Less -
Transcript: Opening Press Conference Annual Meetings in Tokyo, Japan
MR. MILLS: Good morning, everyone. Thank you for joining us for our press conference with World Bank Group President Jim Yong Kim.President Kim will deliver some opening remarks, and then we wil... Show More + l be very happy to take your questions. I am sure you have been warned before, but if everyone could just turn off their cell phones and put their beepers on "vibrate," that would be great; and when you ask your question if you could please identify yourself and your news organization. President Kim.DR. KIM: Thank you for coming. I know many of you attended Annual Meetings before. This is my first, and I am looking forward to meeting with Governors and our stakeholders.First, let me thank the Government and people of Japan. The planning and work done and the hospitality extended to us has been just wonderful.I think it is especially meaningful, because this year marks the 60th anniversary of the strong relationship that the Bank and Japan have enjoyed over the years.Japan started out as our client in the 1950s and 1960s, borrowing a total of $863 million for 31 projects, including signature projects such as the "Bullet Train," the Kuroyon Dam, and the Tomei Expressway. Japan now is our second-largest shareholder and the third-largest donor to the International Development Association, the Bank's fund for the poorest.It is truly a success story and a remarkable show of generosity. But it doesn't end there. Japan has shared its knowledge and experience with the rest of the world as it evolved from a developing country to a developed country. I was just at one such platform, the Sendai Dialogue, yesterday. The Government of Japan has asked us to use the convening power of the World Bank to help them share the lessons learned on disaster risk management from the earthquake and tsunami in March 2011.Many nations take tragedy and improve. Great nations like Japan take tragedy and share lessons learned with others.We know the world is interconnected. Knowledge gained in one part of the world can apply to another. Things that are happening in one part of the world, such as in Europe, can have huge impacts in other parts of the world.We are in challenging times. Food prices remain high and volatile. Growth in high-income countries is weak. And developing countries, which have been the engine of growth, will not be immune to the increased uncertainty in the global economy.The economic announcements emanating in recent weeks have been sobering. Everyone is vulnerable during times of uncertainty, but especially the poor, who have few if any safety nets and resources and live from day to day.Our job at the World Bank Group now is to make sure the growth over the last five years that we have seen in developing countries in Africa and Latin America and Asia is not destroyed by further worsening in the situation.As part of starting a dialogue around barriers and solutions to ending poverty, the World Bank has launched a global online conversation, a "What Will It Take to End Poverty" campaign in the lead-up to these meetings, with crowd-sourcing ideas and comments through social media and video. It is a great way to drive a conversation around real, practical results, because ultimately, this is about results.I am asking our teams: What can we do to fundamentally change the arc of history to end absolute poverty more quickly than is currently predicted?It is our job to have a catalytic effect on poverty. The good news is that around the institution, the World Bank Group, the answer has been a very strong: Yes, we can bend the arc of history.That is why we came to work at the Bank. We want to fight poverty, and we want to make a difference in history. It has been my life's work, and I have worked in situations of great poverty. This organization has always embraced that work.I have been on the job for 104 days. While I am excited by how much the Bank has changed around openness and results and accountability, I believe the Bank can go further. We need to be more nimble and focused on delivery. During these meetings, I will not only share my thoughts on areas of reform, I will listen to the views of our stakeholders and look for ways to enact effective reforms.Thank you very much.MR. MILLS: Yes, sir; right here in the second row. There are microphones right in the audience.QUESTION: Thank you. Welcome, Dr. Kim, to Tokyo. So, first I want to ask you about the future hope for Japan in terms of the collaboration and the cooperation with the World Bank.Secondly, I just want to ask you about the relationship between the World Bank and emerging economies. As you know, the BRICS countries are now making the currency swap agreement within them, and also, there is a very basic idea of a BRICS Bank. So, clearly, they are making financing work within them by using their own currency, not by using the advanced economies' currency. But the role of development and crisis response has been played by IMF and World Bank since World War II, so what is your idea for the future of those kinds of global relationships? Will the World Bank and IMF coexist with them, and sometimes they might be competing, or will the World Bank and IMF will include them within and inside by increasing their money and their people? Thanks.DR. KIM: I think this meeting is a very good example of the kind of very effective cooperation that the World Bank can have with Japan. So, for example, we were at Sendai yesterday, and what I saw was a country that had faced just enormous tragedy, and the commitment of the government was that: In the context of our tragedy, we are going to do everything we can to help other countries, especially poor developing countries, get better at managing risk, and the focus is on several things.First, one of the things we know is that Japan has probably the best early warning system and the best prevention system of any country in the world, and still there was enormous damage.A country that I know very well, that I have worked in for years--Haiti--when they faced their own earthquake, most of the buildings collapsed, including the Presidential Palace.So the Japanese Government is working with the World Bank to try to find ways of improving prevention, that our buildings--not building buildings in flood plains. There are all kinds of things that we can do that the Japanese understand, I think, as well or better than any country in the world, and the explicit commitment is that we will work with the Japanese Government to help the poorest countries do better at prevention and then also do better at response once disaster happens.Another area of cooperation is on health care. So the Japanese are rightfully very proud of their health care system which provides universal access to very high-quality care. So there will be meetings today to discuss ways in which the Japanese experience in health care can be used to help countries all over the world build these kinds of comprehensive, universal access-type programs.So it is an ideal relationship in the sense that Japan continues to be a very generous donor, but what we are very excited about is the fact that specific areas where they have special expertise, we are going to help them spread those lessons to the rest of the world.And as far as the BRICS, you know, we still are deeply engaged with the BRICS countries. You know, many of the BRICS countries really don't need our money anymore, but what we find is that they consistently want to work with us because of our knowledge, because of the depth of experience we have in making projects work.The most recent example is that I just visited South Africa. And again, South Africa doesn't necessarily need our money, but we have agreed to build what we are calling a Delivery Knowledge Hub in South Africa.In other words, their biggest challenge right now--they feel that they have very good political processes, they feel that they have great policy, but they want to get better at actually implementing and delivering results for their people.So, what we are going to do is we are going to bring the breadth of our experience. The World Bank has what I could call "master practitioners" of development--people with wonderful academic backgrounds who have, for 10, 15, 20, 30 years sometimes, been working to actually deliver results on the ground, and they have experience in many, many different countries. So the breadth of experience we think will always be of value to the BRICs countries.So my sense is that we will always remain deeply engaged with the BRICS countries. And you can get some sense of the nature of my commitment to the BRICS countries by looking at some recent appointments.We recently appointed Jin-Yong Cai from China to be the head of our International Finance Company, our International Finance Corporation, IFC, our private sector wing; and we just recently appointed the distinguished scholar, Mr. Kaushik Basu, from India, who just finished his work as the Chief Financial Advisor to the Prime Minister of India. He is now our Chief Economist.So the presence of the BRICS in the Bank is profound, and my full expectation is that our relationship with them will only deepen over time.MR. MILLS: Yes, you in the front row, yes.QUESTION: Thank you. Marta Garcia [ph.] from La Nacion Paraguay. What is the scenario of food prices, and how is Latin America exposed to the situation?DR. KIM: So we are of course very concerned with food prices, and from our perspective, the response to the increases in food prices has to be multifaceted. So what we are doing immediately is making resources available to countries to support their--to provide an emergency capability of helping to purchase food.You know, the biggest issue for us is that increasing food prices often push the poorest families to having to make terrible choices--either feed my children or send the girls to school--and you have to choose between one and the other.So, through the provision of budget support-type loans and grants, and also through our emergency facility, we provide direct access to resources to purchase food.But that is really not the whole picture. What we think is even more important is to ensure that there is a long-term plan for agricultural sustainability. There was an agreement coming out of the latest--of the G20 Meeting--the Annual Meetings from last spring and also the G20 discussions, and we have now formed something called the Global Agriculture and Food Security Program.And so, while we will always stand ready to help with short-term needs for food security, we are also very engaged in trying to help each of our member countries build in long-term sustainability in their agriculture systems.MR. MILLS: Yes, sir, right there.QUESTION: Thank you. My name is Mo Khalif [ph.]. I am from the Islamic Development Bank Group.I would like to ask what strategy and programs does the World Bank have for supporting post-conflict countries that are emerging from conflicts in Sub-Saharan Africa, especially countries like Somalia, Ivory Coast, the Democratic Republic of Congo. Thank you.DR. KIM: As you may know, the subject of one of our recent World Development Reports was on fragile and conflict-affected states.I have a very special interest in and experience with fragile and conflict-affected states. I mentioned it earlier. I have worked in Haiti since about 1988.So I have shared with the development world deep frustration over our relative inability to lift fragile and conflict-affected states out of fragility.So I am going to make this a special part of my Presidency. We are going to move forward with much urgency, a great sense of urgency, in trying to find ways of lifting countries out of the state of fragility.It is significant that the very first country I visited as President of the World Bank was Cote d'Ivoire, and Cote d'Ivoire provides some very important lessons.First, this is a country that is about 40 percent of the West African economy. And it is also a country that had an educational system--artists, scholars--that was the envy of its neighbors. And then, 20 years of conflict have really set the country back.Now there is a President, President Ouattara, who used to be the Deputy Managing Director of the IMF, a very smart man who is deeply committed to his people. And when I visited Cote d'Ivoire, I saw right in front of me the nature of our task. There was a training program that I went to visit, and there, ex-combatants in the war were learning how to be electricians. And one young man stood up and said to me: "You know, this is great for me. I am learning how to become an active member of the society, to have a job, and it is great. But you know, my friends, my sisters, my brothers don't have this opportunity, and if they don't have the opportunity, when conflict happens again, they will pick up their arms again."So, for us, the task is urgent in the sense that we have to find ways of boosting economic growth. And in this particular case in Cote d'Ivoire, it was the cooperation of the government and our groups--both the World Bank itself, IBRD/IDA, and the International Finance Corporation, our private sector group--to provide the kind of training and create an environment in which small and medium enterprises can grow, in which smallholder farmers can get access to global markets.The task of building the economy so that ex-combatants can have jobs and see a different future for themselves was critical, and we have to move quickly.So we are aggressively searching for ways for us to be ever more effective at working in fragile and conflict-affected states.MR. MILLS: Yes, ma'am. Please raise your hand so the microphones can get to you.QUESTION: Good morning. Shahir Edriz [ph.] from Future TV Lebanon. Mr. Kim, in light of change in Middle East, what new policies does the World Bank have in mind, especially for the Arab Spring countries and regarding Syria?DR. KIM: Well, the changes that have happened in the Arab Spring countries I think also teach us critical lessons about development, and these are lessons that I have learned personally in the field over many years, but let me tell you what I think the most important ones are.First, I think that we have now--there is really no more question that if you have economic growth that is not inclusive, especially of young people, you are building instability into your system.Many countries and we at the World Bank for years have talked about inclusive growth, and that has never been made more clear. So I think that in many of the Arab Spring countries, there is a fundamental rethinking that is happening. For any country to grow in a way that is inclusive, in a way that is shared, you have to think about, for example, inputs. Are the educational systems set up so that young people can join the work force and get good jobs? This is what everybody wants, after all. Are the health care systems set up?Another major question in the Arab Spring is the participation of women. You know, we seem to learn over and over and over again that putting women at the center of development is critical. We learned a lesson from the Grameen Bank decades ago, that providing loans to women made the programs work. We learned the lesson again in Mexico and Brazil through the conditional cash transfer programs.And I think fundamental values like making sure that the inputs to spur further economic growth are in place, to ensure that economic growth is inclusive of young people, especially young women, that women in general are at the center of the development process--these are all critical issues. And you know, in countries like Yemen, of course, a very fragile country--I recently met with the President--there are so many things that we have to do to provide basic inputs, infrastructure development.So let me just say that there is no one-size-fits-all approach to the Arab Spring countries, but we are very much engaged with almost all of them--not yet in Syria--but we think that there are important lessons to be learned and that our engagement there is critical.MR. MILLS: Yes, perhaps we could go to the back, to the gentleman--yes, you. Thank you.QUESTION: I am from Myanmar. Good morning, Mr. Kim. Do you see any possibility to give more assistance to Myanmar from this Annual Meeting--and I mean debt forgiveness and bridging loans, proposals by the Japanese Government. Thank you.DR. KIM: Yes. I have met with officials from Myanmar around the UN General Assembly meetings, and I have to say that, like so many others, I am very encouraged by the reforms that have been taking place in Myanmar. There are still things to do--I mean, there is still more progress that needs to be made--but I am very encouraged by what I see in Myanmar.We have a team in Myanmar right now, and we are working with the government to really catalogue the arrears that have accumulated over the years, and our hope is that we can move forward very soon as a united global community to support the reforms and to help the people of Myanmar with things like health, education, infrastructure, and also to help Myanmar boost its private sector so that more businesses can grow in that environment.And for the sake of the people of Myanmar, I would simply encourage the Government to keep going in pushing forward important reforms.MR. MILLS: Yes, sir, right there.QUESTION: Good morning, sir. I am Jerome Radis [ph.] from the Philippine Star. Sir, it happens that several emerging markets, particularly in the ASEAN region, are very prone to disasters, to effects of climate change; so, moving forward, how do you see the World Bank in terms of its cooperation, actions, evolving in this region, and particularly in the Philippines, how do you see the actions of the World Bank work, operations, particularly in the Philippines? Thank you.DR. KIM: Yes. Let me address a couple of questions more generally.You mentioned that the Philippines especially is vulnerable to disasters and also to the effects of climate change, so let me start with climate change.You know, I am trained in science, and since becoming President of the World Bank, I have looked deeply into the data on climate change. And I have to say that I was surprised at--even in the last six months to a year, the data on climate change has become ever more frightening. Things that we thought would happen only with higher degree change in the average temperature are happening now. And as a scientist, I feel that it is my moral responsibility to be very clear in communicating the dangers of climate change.So, for the first time in history, the climate scientists declared that the drought that happened this past summer, that contributed to rising food prices, was the result of man-made climate change.Ninety-seven percent of climate scientists now agree that man-made climate change is real.Now, as a person trained in science, that is an almost frightening amount of unanimity. There are very few things in medicine, as a physician, that we agree 97 percent on.And so I think the question we have to ask ourselves is not simply is climate change real or not. I think we have to begin looking hard at what the world is going to look like for our children.I have a three-year-old son, and when I really dug into the data, when my three-year-old son is my age, he could possibly be living in a completely different world than we are living in today. If we get to where people think we are going to get, we are going to lose the coral reefs, the fisheries will change fundamentally, the water will rise. There are going to be changes that we simply have to face up to.Now, I think our task is to find ways of encouraging ever greater efforts at both mitigation and adaptation to climate change, but mitigation is really critical. Can we find ways of creating an enormous market for new technologies focused on mitigation of climate change? I think we simply must do it.So you are going to be hearing from me over the next six months and over the entire term of my Presidency--you are going to hear me talking a lot about climate change.Now, it is not--I am not going to just give you the Doomsday picture. I think there are tremendously exciting possibilities of what it would look like to live in a very low-carbon world, and we simply have to find those opportunities, and we have to encourage the best and brightest companies and countries to seize that opportunity and seize their--and understand that their path to economic growth could very well be engaging in finding new technologies and new approaches of mitigating climate change.MR. MILLS: Okay. We have time for one more question. Yes, ma'am, right there, please, in the third row; yes. Thank you.QUESTION: Mr. President, the World Bank has released a report in February saying that China should complete its--sorry--it is from Hong Kong, Hong Kong Economic Times--a report saying that China should complete its transition to a market economy and strengthen its private sector in order to achieve its goal of a new structure of economic growth.Given the large scale of China's economy and the world is still suffering in the crisis, in your view, how long do you expect the transition progress to take, and what challenge do you expect China to face during this transition? Thank you.DR. KIM: Well, right now, China, like just about every economy in the world, is facing particular challenges. We know that the volume of their exports has gone down. We know that their internal consumption has suffered recently.But what really encourages me about China is that we recently went through a process with them and produced a document called "China 2030," and in that document, we were very encouraged to see just how deeply the Chinese Government was willing to engage in a process that looked at their growth strategy, not over the next five years but over the next 10, 20 and 30 years. And there were really important insights. One was that--a recognition that internal consumption probably was going to be a major driver of economic growth.So the lesson for me is that every, single economy in the world has to now be focused on the medium and long-term prospects for growth. Because of the crisis, I think there is a tendency to only look at the short-term—you know, how to respond to the crisis as it might hit us--but I think evidence is very good that the countries that start thinking right now about medium and long-term competitiveness are going to do much better in the long run. And this is part of the work that we do. I mean, we have experts inside the World Bank who have walked with many, many countries through their own process of economic growth, and we stand ready to work with any government in the world, all of our member countries, in thinking about medium and long-term approaches to growth.MR. MILLS: Very good. Thank you very much. Show Less -
Remarks by World Bank President Jim Yong Kim in Tokyo Japan Opening Press Conference
Thank you for coming. I know many of you have attended Annual Meetings before. This is my first, and I'm looking forward to meeting with Governors and our stakeholders.First, let me thank the governme... Show More + nt and people of Japan. The planning and work done and the hospitality extended to us has been just wonderful.I think it's especially meaningful because this year marks the 60th anniversary of the strong relationship the Bank and Japan has enjoyed over the years.Japan started out as our client in the 1950s and 1960s, borrowing a total of $863 million for 31 projects, including signature projects such as the bullet train, Kuroyon-Dam and the Tomei Expressway. Japan now is our second largest shareholder and the third largest donor to the International Development Association – the Bank's fund for the poorest. It is truly a success story and a remarkable show of generosity.But it doesn't end there. Japan has shared its knowledge and experience with the rest of the world as it evolved from a developing country to a developed country.I was just at one such platform, the Sendai Dialogue, yesterday. The Government of Japan has asked us to use the convening power of the World Bank to help them share the lessons learned on disaster risk management from the earthquake and tsunami in March 2011. Many nations take tragedy and improve. Great nations like Japan take tragedy and share lessons learned with others.We know the world is interconnected. Knowledge gained in one part of the world can apply to another. Things that are happening in one part of the world, such as in Europe, can have huge impacts in other parts of the world.We are in challenging times. Food prices remain high and volatile; growth in high-income countries is weak; and developing countries, which have been the engine of growth, will not be immune to the increased uncertainty in the global economy.The economic announcements emanating in recent weeks have been sobering. Everyone is vulnerable during times of uncertainty, but especially the poor who have few, if any, safety nets and resources and live from day to day. Our job at the World Bank Group now is to make sure the growth over the last five years that we've seen in developing countries in Africa and Latin America and Asia is not destroyed by further worsening in the situation.As part of starting a dialogue around barriers and solutions to ending poverty, the World Bank has launched a global online conversation: a "What Will it Take to End Poverty" campaign in the lead up to these meetings. We are crowd-sourcing ideas and comments through social media and video. It's a great way to drive a conversation around real, practical results.Because ultimately this is about results. I am asking our teams – "what can we do to fundamentally change the arc of history to end absolute poverty more quickly than it is currently predicted."It's our job to have a catalytic effect on poverty. The good news is that around the institution the World Bank Group, the answer has been a very strong yes, we can bend the arc of history. That's why we came to work at the World Bank – we want to fight poverty and we want to make a difference in history. It's been my life's work and I've worked in situations of great poverty and this organization is embracing this fundamental mission.I've been on the job for 104 days. While I'm excited by how much the Bank has changed around openness and results and accountability, I believe the Bank can go further. We need to be more nimble and focused on delivery. During these meetings I'll not only share my thoughts on areas of reform, I'll listen to the views of our stakeholders, and look for ways to enact effective reforms.Thank you. Show Less -
Transcript: Media Briefing on the World Development Report 2013: Jobs
MS. TUCK: Hello. This is the Washington Press Briefing on the World Development Report. I am on the line live at a press briefing. Can people hear me? &n... Show More + bsp; [Responses in affirmative.] MS. TUCK: I would ask media colleagues who are on the line to please "mute" your devices because we are about to begin this briefing. It is starting a little late. We have had some technological snafus, but we are going to get this briefing started. This is Merrell Tuck. I am the Senior Communications Officer, Development Economics. This is an embargoed briefing for the World Development Report 2013 on Jobs, and this Report is embargoed until 7 p.m. tonight Eastern Daylight Time, which is 11 p.m. GMT. I am very pleased today to introduce Mr. Kaushik Basu and Mr. Martin Rama. Mr. Basu is on his first day as Chief Economist of the World Bank and Senior Vice President for Development Economics. He has a distinguished background and came from being the Economic Advisor to the Government of India, and he is on leave from being a Professor of Economics and the C. Marx Professor of International Studies at Cornell. Mr. Rama, who is next to him, is Director of the WDR and has a long background in economics in Asia as well as an expertise in labor economics, social protection, and other topics. I am also pleased to note that there are several co-authors of the World Development Report, members of the World Development Report team, who have worked on various chapters, and I am sure that during the question and answer session, they may want to chime in with some specific answers if you have detailed questions. The full report is on our online Media Briefing Center, and some of our handouts are just outside the door. I know we have a number of reporters, hopefully, on the line at this point, and I'm sorry for the delay in getting everyone connected, but without further ado, given that our time is now a little squeezed, let me open it up first to Mr. Basu, who is going to give us a bit of the tour de raison and describe the origins of the Report and why we chose the subject, and then over to Mr. Rama, who can give you some of the main messages and some key findings from the Report, after which we'll have a question and answer session. Thank you very much. MR. BASU: Thank you very much, Merrell. Friends, welcome to the launch of the World Development Report 2013: Jobs. I feel very happy that the release is the first major World Bank event that I am engaged in. This is a topic which is very close to my heart.For those who do not know, I joined the Bank a couple of hours ago, so if you are looking for someone with short tenure, you can do much better than me for this. As Merrell mentioned, this is a pre--embargo launch. They sound like contradictory terms, but nevertheless, do remember that until the evening, there is an embargo on this. As you will hear from the Director of this World Development Report, Martin Rama, a friend from a long time ago and a topnotch economist, so the Report was in very good hands, the jobs challenging facing the world is urgent and multifaceted. It ranges from improving aspects of the work people do to supporting the relocation of people to better jobs and to creating more jobs. Youth bulges in some countries are bringing millions of new jobseekers into the marketplace--into the labor market. For example, South Asia's labor force grows by one million people every month. As we know from history, the demographic dividend can be a great opportunity, but it is also a challenge--and I should know this, because I was still two months ago the Chief Economic Advisor in India, so I was handling some of this problem which was coming, rushing, onto the marketplace every month, as was just mentioned. While we talk of the demographic dividend in some nations, in parts of Eastern Europe, shrinking populations and an aging work force present starkly contrasting challenges. The world is a varied place, and if making economic policy for a nation is hard, it is even more challenging from 1818 H Street--I know we are in the adjacent building right now--where the aim is to keep track of the whole world; the focus is really on the world, especially the entire developing and emerging world. This Report makes a compelling case for moving jobs center--stage. It delves into longstanding debates about whether growth alone is sufficient to raise living standards and put people out of poverty. It finds that growth generally leads to better jobs, but jobs themselves are a driver of development. As women access paid work, their place in the household and in society changes. New technical and managerial knowledge is acquired through jobs connected to world markets and global value chains. And jobs can give people a stake in society, fostering trust and civic engagement and reducing the risk of conflict. This Jobs WDR has a champion in the World Bank's President Jim Kim, who spoke eloquently last Sunday at the Clinton Global Initiative about the importance of joint public--private strategies to foster investment, job creation, and growth. My predecessor, Justin Lin, was instrumental in choosing jobs as this year's topic. He may have had a premonition that I would be taking on front him, given my interest, so I thank Justin for this choice. He rightly viewed jobs as inextricably linked to structural transformation. Justin was clear that it was time for the Bank to take a fresh look at jobs since the global landscape is changing so rapidly. For example, agriculture's share in global employment is falling steadily at the global level as the services sector grows and as more and more countries urbanize. Yet country contexts vary widely, and small farms and small firms matter for the poorest people in the world, and the private sector and micro enterprises are immensely important for expanding prosperity and reducing poverty; and governments play a very major role in facilitating this process. This Report illustrates how jobs serve as the linchpin connecting living standards, productivity, and social cohesion, all vital ingredients for achieving inclusive growth. Because countries differ in the job creation possibilities available to them at any particular point in time, jobs agendas have a certain element of country specificity. Martin can--and I hope Martin will--tell you about this just now as he speaks. The Report draws on over 800 surveys and censuses to delve into the role of jobs in driving development. And really, as a researcher, until recently--a research outside--the information that came from the data of these WDRs was always a major attraction to the WDR. I am hoping that this will spur research, spur greater data collection, and especially in labor and employment, we really need this. And I hope it will prompt Ministers at the next Annual Meetings in Tokyo to put the jobs challenge center--stage. Let me now hand over the microphone to Martin to tell you about the Report's main findings. Martin? MR. RAMA: Thank you, Kaushik, and thanks for the kind words. Let me try to summarize a few of the points that this Report tries to make, but let me start by saying that this is only the second time in the 34 years of the World Development Report series that it deals with jobs, and there is a good reason for it to be dealing with jobs. When Justin Lin, our previous Chief Economist, and former President Zoellick decided to go in the direction of a Report on Jobs, it was very clear that jobs were the main preoccupation of policymakers everywhere. There was the global crisis. There was the Arab Spring. So there were several developments that were giving a centrality of jobs. The first way to think of that centrality of jobs is in terms of numbers. The numbers are staggering--200 million people unemployed; 621 million, by our estimate, young people leaving school and not working. And if you look at the demographics and what is coming ahead, over 15 years, a total of 600 million additional jobs will have to be created. So the numbers are staggering; the number of jobs is the first thing that strikes. But numbers is only part of the story. In many developing countries, social safety nets are too modest for people to be out of work for too long, and in reality, most of the poor work. They work long hours. They work multiple jobs sometimes. It is just that do not manage to make ends meet. So it is not just number of jobs; it is also what people do. All this is in a context of enormous opportunity. Technology, globalization, outsourcing, and overall the migration of jobs are creating enormous opportunities, but those opportunities may or may not be exploited. As Kaushik pointed out, most people in developing countries work in very small units--in micro enterprises and on farms--and the success of these very small units matters not just for livelihood. It matters for productivity. When the dynamics of small firms are good, as they are in many industrial countries, you have many successes in terms of productivity and innovation coming out of these very small units--if you think of big success stories coming out of a garage [unclear 00:26:05]--I will not try to say names, so it doesn't sound like trying to advertise for anyone--that happens. And it has happened in developing countries. But one of the challenges of developing countries is that there is a lot of churning, and a lot of the large enterprises are born large, thanks to connections and thanks to state support. So the success of these small units is a challenge that goes beyond living standards and goes beyond productivity; it is part of what kind of society is being built. As we worked on this support with our team, as we held consultations in two dozen countries with businesspeople, policymakers, trade union leaders, it became increasingly clear that jobs are not just the outcome of growth, they were not a byproduct of growth, that development happened through jobs, and there are very important dimensions of jobs beyond the earnings or the monetary income they can provide.So that is how--as you look at the Overview that has been distributed, you will see that we organized the contributions of jobs along three lines--what jobs do for living standards, what jobs do for productivity, and what jobs do for social cohesion--so three dimensions of jobs. What we found was that many of the things we were caring about in development were in fact happening through jobs on closer inspection--poverty reduction, of course--most people who get out of poverty in developing countries get out of poverty through their work, the scope for great distribution is limited; gender equality--paying jobs can be transformational in terms of the role of women in society; urbanization--urbanization is about people working in cities in a way where knowledge spillovers happen, and people learn from each other, and people make each other more productive; global integration is learning from the rest of the world through working connected to markets; and even conflict--to a large extent, one can see associations between having a sense of opportunity, having ways for advancement, for peaceful advancement, as one of the big deterrents of conflict. But as Kaushik said, which of these jobs have the greatest payoff for development depends very much on the circumstances. And what the Report does is to consider a typology of jobs challenges--one that combines the level of development--that is the easiest thing--but also the resource endowments--countries that are resource--rich, countries that are isolated--the demographics--and we have the entire range, from countries with youth bulges to aging societies--and institutions--countries have different levels of strengthened institutions. Based on that, we built a typology of eight jobs challenges that draw from agrarian economies all the way to aging societies going through urbanizing countries, resource--rich countries, and so on and so forth, and tried to identify clearly what are the jobs that are more transformational in those countries. The leads us to a series of recommendations in terms of policies for jobs. And again, it is not just policies for the number of jobs; it is policies for the types of jobs that have these payoffs--jobs in cities, jobs for women, jobs for young people, depending on the context. This approach to policies is a three--layered approach. There is of course a level which is the fundamentals. There are things that are needed everywhere, regardless of the jobs challenge. They are necessary conditions. They may not be sufficient conditions--macroeconomic stability; an enabling business environment; human capita; and the rule of law. And by the rule of law, we want to be clear--it is not just the property rights; it is also the rights that go with work. So this is the fundamental layer. Then there is a layer that is labor policies. And of course, labor policies matter, but one of the conclusions of the Report is that they probably matter less than what the heated debates around labor policies around the world may suggest.What we found is that there are two extremes to be avoided. One extreme is of course the absolutely lack of interventions that leaves people without voice and without basic access to social protection. At the other end are the interventions that clog, that prevent the growth of employment in cities and in jobs connected to world markets. And in between there is a range where policy has to be. But that range varies a lot depending on the country, so one of the conclusions of the report is that there is not a single recipe or a single mode of labor interventions that matters--and when I say "labor interventions," that is the regulation, that is also the way that bargaining or representation is organized, it is insurance, and it is active labor policies like public works and training. Finally, perhaps the most interesting part in terms of policy is at the tip of this pyramid that has the fundamentals and then the middle layer of the labor policies, and that is to be able to set priorities so that there is job creation but there is also creation of those jobs with very high development payoff depending on the circumstances. And those may be very different in an agrarian economy or in an economy with high youth unemployment or in a formalizing country. Then, throughout the Report--and I will finish with this--throughout the Report, chapter after chapter, we end up by what we call a difficult question. So we use this framework to challenge somewhat the conventional wisdom on jobs. Just to give you a flavor of the questions, they are of the sort: Growth strategies or job strategies? Or "Skills or jobs; which comes first?" Or "Competing for jobs?" Or "Protecting workers or protecting jobs?" On each of them, there is conventional wisdom, and we find that there are very good reasons for the conventional wisdom, but there are also [unclear 00:32:18.] There are also circumstances in which we find that a nonconventional response may be warranted. So we hope these questions will be a teaser for readers, and when the embargo is lifted at 7 p.m., they are very easily accessible as self-standing pieces, four-page pieces. Let me stop there as an introduction to the Report. Thank you. MS. TUCK: Thank you very much, Martin. Now what I'd like to do is collect questions in batches. We might start here in the room and see if there are two or three questions here, and then we'll make a round in the next series of questions to see if people down the line want to ask something. I would also ask that when you ask your question, please signal to whom you would like to pose the question and your news outlet. Thanks, and we'll get started. Yes? Anyone else? QUESTION: Should I take the mike? MS. TUCK: Yes. I'm sorry. Yes, indeed, take the mike from its stand in the middle of the room, or you can just go to the middle of the room. So, one, two, and I guess Diana Gregg after that. QUESTION: I'll start. Sudeep Reddy with The Wall Street Journal. A question for Martin. You mentioned the skills issue. Do you have any sense of how much of the global jobs gap can be filled simply by higher aggregate demand and how much, on a relative basis, needs to be other changes such as improving skills and education and underlying infrastructure? MS. TUCK: Okay.Yes, sir, over here. QUESTION: Robert Schroeder, International Investor. I'd like to sneak two in here. One is-- MS. TUCK: I'm sorry. One question. We have at least 20 journalists on the line. QUESTION: Okay. As you project forward 15 years or more, are you taking into account, and can you give us any guidance in terms of how you see technology, robotics, also displacing workers? We see some great growth in some countries. Thank you. MS. TUCK: Thank you. Diana? QUESTION: Hi. I am Diana Gregg with BNA. For Mr. Rama. When you were talking about jobs that are transformational, and some are more than others in different settings, since I haven't had much time to look at the Report, I was wondering if you could just give a couple of examples of what you are talking about there. MS. TUCK: Okay, thanks.Why don't we start with these three questions, and then I'll open up the lines to see if folks who are remotely participating have questions. Martin, I think these were mostly for you.MR. RAMA: Thank you. Thank you very much. First, on the question of the role of skills and education, you also mentioned aggregate demand and infrastructure as examples. Let me start with the part on aggregate demand. We discussed some of it under macro policy, but keep in mind that this is a report about development, so it is more mid-term and long-term, and we don't go into much detail on the level of, say, budget deficits or monetary accommodation that is needed. But we do find on this difficult question on skills or jobs that, in general, we tend to have a reaction that what is needed when there is a problem of unemployment or mismatches is skills. And it is true that skills matter, and they matter especially in two circumstances. The basic level of skills without even getting started on jobs is very difficult. We see that, for instance, in the case of agrarian economies, where there has been a lot of progress in terms of the coverage of education but not in the educational attainment, and that gets in the way of really getting started. Skills are also very important further down the line when countries need to really move up the ladder. We see that in urbanizing countries that have been good at integrating themselves in the world economy but remain very dependent on one type of export--say, Bangladesh and garments, and how you move from 80 percent of exports in garments to doing something else. There, skills matter. But in the range in between, we find that jobs can be a driver of skills. They pull skills in the sense that the availability of employment opportunities encourages people to acquire more skills. They provide skills. There is quite a lot that is learned on the job. Experience counts on average for one--third year of education per year of experience. There are basic behaviors and norms, quality and reliability, that are learned through the job. So we tend to be a bit skeptical about the responses to major problems such as unemployment being just in training. Countries can sometimes have massive training programs. And the other issues you mentioned, like infrastructure and creating the conditions for employment generation, may be more important. On robotics and productivity, that is clearly something we address, and we look at what has happened with manufacturing in particular, where the demand for manufactured goods has been growing steadily, but the productivity in manufacturing has been growing so fast that, overall, over more than a decade, the number of jobs in manufacturing worldwide is stable, is basically stable. Of course, this is not to say that because of high productivity, there will be no jobs. People will be doing other things. But it raises the question of where those jobs will be. Especially when you have jobs that have high payoff beyond their own jobs because they have the kinds of spillovers in terms of productivity that matter, there is a potential in those cases to have situations of global competition for jobs--where will the jobs in manufacturing go? And that matters not only in thinking about industrial countries and developing countries. What we have seen in manufacturing is jobs migrating to East Asia. It will also happen now, in the next stage; as China's costs go up, by some estimates, some 85 million jobs in manufacturing may migrate out of China. And where will they go? Will they go to Sub-Saharan Africa? Will they go to South Asia? This combination of very rapid productivity gains, even with high demand and even with a growing global economy, may create these situations where people may be competing for some of these jobs. Examples of jobs that are transformational--let me just give three, one along each dimension: living standards, productivity, and social coherence. On living standards, there is quite a lot of microeconomic evidence, micro data--so, rich studies using individual data that we review--on which we base these assertions. But there is quite a lot of evidence of how, when women bring a higher share of household income, decisions at the household level change; investments in education and health in children change. So jobs are transformational in that respect. It is not just how much money comes to the household; it is how it enters the household. On the productivity dimension, there is quite a lot of evidence on how firms operating in the vicinity of foreign companies, which tend to have better technology and management skills, become more productive. So there are spillovers that come from jobs that have different levels of productivity to the local partners who learn from this, or sometimes learn just because workers learn on the job and then move to other companies. On the social cohesion side, there are interesting studies, for instance, one in Indonesia looking at people who had jobs or did not have jobs in 2000 and then again in 2007. And you see that people who were out of a job and gained a job become more engaged in their societies and more often members of associations, tend to trust more other people, while the opposite is true for people who lose their jobs. So, in each of these cases--and these are examples, and the Report covers nine ways in which jobs can be transformational and for which we have some good evidence--jobs can go beyond what they do for the person who holds the job and have a broader impact on society. MS. TUCK: Thank you, Martin. Now I'd like to invite some questions for people on the call. Does anybody have any questions, and if so, please identify yourself by your name and your news organization and to whom you want to ask a question. So let me open it up. QUESTION: Good morning, and good afternoon here in Paris. My name is Jean-Pierre Buris [ph.], and I am a journalist with Radio France International. My question is for Martin. I have not heard you talk about Sub-Saharan Africa, where the problem of growth without creation of jobs is a crucial one. What would you say, for instance, a government such as the Government of Mozambique, where the growth is around 8 or 9 percent a year but without creation of jobs? What do they have to do? MS. TUCK: Okay; good question. Let's see if there is another one from someone down the line. [Pause.] MS. TUCK: Anyone with a question on the line? [Pause.] MS. TUCK: Okay. If not, let's see if anybody in the room has another question. Yes, sir; if you could come to the mike. QUESTION: Hi. Howard Schneider with The Washington Post. My question is whether, in looking at this, you see any lessons or any conclusions to draw about some of the programs that have been pursued in the developed economies that use the sort of classic, government--funded stimulus programs. Are they really good for job creation in the long run? And secondly, vis-à-vis Europe, where you have already urbanized, already fairly productive developed economies seeming to be heading toward a situation of sustained high unemployment, what do they need to do to transform the job outlook? MS. TUCK: And Howard, who is your question for? QUESTION: Martin, I suppose, unless Basu-- MS. TUCK: Okay. Maybe they can both try to tackle this. And Dani, yes. QUESTION: Dani with Xinhua News Agency.Thanks for doing this. My question is for both of the experts. What causes are behind the high unemployment rate situation in many countries? To what extent can government fiscal and monetary policies help to reduce them? Are some employment structural ones difficult to tackle? Thank you. MS. TUCK: Okay, thanks. Maybe we can start with you, Kaushik, if that's okay, and then Martin will elaborate. Thanks. MR. BASU: Sure. Let me take on the question from Howard at The Washington Post. Government stimulus is, I think, extremely important right now, and it really relates to the question that Dani also asked. So, fiscal policy, monetary policy, to create greater demand is something unavoidable. At the same time--and I am actually just pulling in the two sets of questions--I believe that part of this problem that you are seeing is structural, but part of this is episodic to do with a crisis currently, a sovereign debt crisis in Europe, which is feeding to this. For the episodic part of it, yes, you cannot with monetary and fiscal policies, but as far as the structural part goes, I think we have to think in terms of longer-run movement of labor from one sector to another. Part of this happens on its own; there are mechanisms through which incentives get created, and workers move from one sector to another, but it may also need at the level of government incentives and skill development so that people can move on. And just to clarify what I am referring to, as this is a tricky and difficult point politically, as the world is coming together, the global labor market is really tending to be a common pool, which means that workers are coming under competition from segments of the labor force that earlier, they did not have to think about because it was just too difficult for what was located far away to work in the same pool, whereas now it is not difficult. And this may require industrialized country workers to develop kinds of skills which are at the higher end, where they move on to the space where there is greater challenge from the world, and they take that on better. So, yes, it has to be--I am just treating both of these questions together--you have to take on both fiscal and monetary policy on the one hand and structural changes to tackle this problem. MR. RAMA: Thanks, and let me add--start with the question from Fi [ph] on Sub-Saharan Africa and Mozambique. In fact, Mozambique is one of our case studies. For Egypt--cases in the typology of--just challenges, we chose one country in which we had local experts, we went into much more depth as to what was going on, and we used Mozambique as the example of an agrarian economy. I would want to start by clarifying the job creation issue, and these are countries where people work. So, it's not open unemployment, it's generally not the main issue. And when people talk about jobless growth, what they mean is that there is not enough creation of jobs that look like modern jobs, the kind of urban jobs, wage employment jobs. So, in that respect, there is a tension between--very clear in the case of Mozambique, between market growth, in general people working, most people are farmers and they are working, but not enough of the [unclear 0:45:03] will absorb--will create this dynamic that goes from people moving from rural areas to urban areas and the whole economy becoming more dynamic. In this kind of decision, what we see is a double challenge: One, because most people still live and work in agriculture is to increase agricultural productivity. There are issues related to land in agrarian and, in fact, it can be agreed that there are no examples of sustained poverty reduction that did not start with an increase in agricultural productivity. And of course, because the kind of modern agriculture is highly productive, but it takes some time to get there. So, in the short-term, one of the challenges is how to make smallholder farming more productive, which some countries have struggled with. If you take a success in terms of agrarian economy, it was Vietnam in the 1990s. Vietnam managed to accomplish phenomenal increase in agricultural productivity on smallholder farming. So, that's one part of the equation, but it's only one part of the equation. The other part is that you need to get dynamic cities going. You need to have cities connected to the world so that they can be places where people go because there is hope and not just because they despair and they don't know what to do. So, we see that as the policy responds in cases like many in Sub-Saharan Africa. The questions on lessons for developed economies, the report has in several places a framework which we believe is relevant for all countries even if the report itself focuses mainly on developing countries. And I want to give just two examples of--give you questions that are, we believe, valid. One is the question on the growth strategy or job strategy. There, what we use as an example to illustrate this is what Korea did in 2010. Korea had a situation that was arguably similar in many ways to what Spain was confronting, the sense of having a labor market that was extremely dual, with some people having jobs for life and some people being in short--term context. And with the global crisis coming, it became clear that the impact could be devastating.And so, Korea, which had abandoned jobs-related planning during the initial period after the East Asia crisis, adopted as its main strategic document towards 2020 a jobs strategy, and a jobs strategy involving policies across all ministries and across all sectors. So, this tension of when you go for growth and when you go for jobs and how you organize policies is something that is relevant everywhere. The other--give you a question which we see relevant is the one on protecting workers or protecting jobs. And there, the conventional wisdom and our normal response is that protecting workers is better, meaning, by "protecting workers" having safety nets, but allowing the reallocation of people because that's better for creative destruction and for growth. But there are times or circumstances when that conventional wisdom does not necessarily apply to those kinds of massive decoupling between job creation and job destruction, as has happened in this recession. Or there are times when viable jobs, due to a shock, are at stake and these are jobs that have an impact on other jobs, so the situations where you can have depressed regions or ghost towns because of the disappearance of jobs that are otherwise available. In both cases, we found good examples, and let me just use the first one, what Germany did in terms of--[unclear 0:48:40] policy in terms of providing support for firms to retain their workers on lower pay and lower hours was one way to address the tensions there. While the report is not on industrial countries, we think that it has some types of--can be useful. As for the question form Xinhua news, high unemployment rate may have many different sources, and who the unemployed are can also be very different. You have countries with the same unemployment rate but, for instance, with a composition of long-term unemployment that is very different. In developing countries, we have some countries with very unemployment rate, and in one way, what--the situation we have seen in many of their countries have been helping in countries with growth was remarkably successful and still unemployment rates we will have. The kind of policy response is very different depending on the type of unemployment one is having and the causes of unemployment. In countries with high youth unemployment, in our topology, we used Tunisia as our case study. But in general what we find is that it is not so much a problem of skills, it's not so much a problem of education, it's not so much a problem of mismatch. It's a problem of lack dynamism in the sectors that could absorb these young people, young people where there have been limited competition in areas related to the Internet and new technologies. And so, the response in those cases is very much related to having competition in public markets so the sectors that have the dynamism can absorb young people. One successful example of that was Slovenia. Slovenia had a very high youth unemployment rate, and through integration in the European Union and competition in public markets they accomplished that, but the answer will be very different if your problem is long--term unemployed who are at the older end of the workforce and cannot easily be re-equipped or retrained. So, there is no, I think--no easy fix for this type of unemployment. MS. TUCK: Thank you, Martin. And for those of you who access that report online, that Germany example is on Page 280. There is a box on Kurzarbeit. I'm not sure I pronounced it right. MR. RAMA: I'm not sure how to pronounce it, yet. MS. TUCK: Okay. Let's see if there are any other questions on the line, and then we'll invite maybe one or two more questions here in the room.Any other questions on the line? [Pause.] MS. TUCK: Doesn't seem to be. Okay, in the room here. Yes, sir, here in the... QUESTION: Hello. My name is Patrick Byrd [ph] with German newspaper Frankfurt Algemeine Zeitung. I have two short questions, if I may. One, if you're talking about international collaboration which might be deployed for bringing for the jobs worldwide, and I'm really wondering what should that because, until now, I would have thought that labor market policies and job creation is much more a national task instead of an international task. And the second question I have is, if you look at this tension between labor market standards in developing countries and these claims coming out of [unclear 0:52:00] in industrial countries that people are--yeah, if you look at the cheap product that people--that they have produced that will need lower wages and the bad labor market standards, do you see any need for industrialized or developed countries to put pressure on these developing countries to raise these standards, or is that detrimental to the economic development and to the labor market prospects in these developing countries. MS. TUCK: And who is your question for? Okay. Let's see. Any other questions? Okay. Sure. QUESTION: [Unclear], again, International Investor. When I add up the numbers that you first gave us, I come up with almost 1.5 billion people that are either unemployed, not looking, or are just without jobs and prospects for them. By our estimate, that means that robotics and technology could displace a couple hundred million more in addition. My point is, we're going to see an awful lot of people in a slow-growth global environment, still in this state 15 years from now. Are we going to see--there is one other difference: We see a world where travel--it's much easier for people to migrate to the jobs. You've already discussed this. So, the question is, are we going to see more anti-immigration legislation or cases spring up in an effort to protect labor within these nations? Are we going to see any more efforts to talk about population controls of some sort? MS. TUCK: Okay, thanks. Both very good questions. So, why don't I turn to you two and try and handle those. Thanks. MR. BASU: Thank you very much. You know, the scope for a global collaboration today is there in virtually every economic field. The need is there. The world is a very, very open place. In the context of labor, labor standards, one has to be careful that there are two aspects to labor standards. One is, by virtue of a country being poor, labor is going to be cheaper over there, because everyone is getting a lower income. About that, there is nothing much to be done. You don't want to place a minimum wage level which is so high for these countries that no one gets employed. On the other hand, there are practices which are acceptable practices by any global standards, those you do need global pressures and collective work to keep a certain level of standards. You know, one of the things that has been talked about and there is small literature--instead of thinking of a single standard for anything in pertaining to labor, a single standard will be meaningless because to a rich country like Germany, what will apply to Zimbabwe will be totally different. So, people have talked in terms of ratcheted labor standards. So, you have labor standards but it is ratcheted to the per capita income level of the country. So, there are innovative ways of thinking of that and, indeed, collaboration is something we should think about. And just touching on that, this is not just collaboration in terms of labor market policies, but even macroeconomic policies which were being talked about earlier. In today's world, one country creates money,that country, yes, stimulates that country somewhat, but it also stimulates other countries, because the borders are porous and money flows around. So, we need to collaborate on a range of policies, more widespread than I think most people realize, and that tends to globalization, I'll use that expression. MR. RAMA: And, in fact, I wanted to pick up exactly where Kaushik left off. We see three areas in the report for collaboration especially important, and the first one is exactly what Kaushik was referring to is, on rights--there has been a range of different attempts to improve compliance with rights. And by that, meaning not the level of income but the egregious violations of human rights. But some have been less effective than was hoped for. There is only so much that one can achieve through pressure on countries and their compliance related to work, like, for instance, linking trade with labor agreements work in some circumstances, but they also have run the risk of threatening the creation of jobs in these countries, and jobs are precisely what is transformational. So, there is a limit to what can be accomplished through job pressure. On the other hand, there are very good experiences of how partnerships that also increase productivity can succeed in improving compliance. There is one program and, in general, we have refrained from referring to any Bank Group programs in the report or to any specific initiative internationally, but let me refer to this one because it is not just World Bank, it is the IFC/ILO Better Work Program, which is a program where it's not just setting standards and putting monitoring mechanisms, it is also helping firms learn how to reach the managerial level that make it work for them. So, that's one area where there can be collaboration. Second area for collaboration is cross--border investments, and I'm not referring to portfolio investments but to productive investments. There has been quite a lot of liberalization on investments in manufacturing, but services is an area where there is a lot of potential to see progress in terms allocation--global reallocation that is, if well-managed, could be beneficial to everyone. But there is much more that could be attempted in the liberalization of the investment of services than has been tried in terms of investments in manufacturing. And there are good reasons for that, since services are complex sectors that also require regulations, opening up in finance brings the issues of supervision, opening up in services trade opens up issues, including those related to social impacts, as well as in terms of the effect on small shops. So, we see there an area where there is a prospect for working and having better regulations so that liberalization is indeed beneficial for all the parties and not just liberalization alone. And then, the third area is migration, and that also relates to your question. Migration has the impacts on both sending and receiving countries, and has the impact, again, if we think of living standards, productivity, social cohesion, has impacts across all three fronts. And there, one should not take for granted that they are all positive, they can be positive, but they can also be negative. But these impacts happened on both sending and recipient countries, and having migration policies just being decided on one side tends to be inefficient because the enforcement of the provisions for migration is more limited. So, there is scope--an area where we see scope for collaboration is in bilateral migration agreements where both parties have an interest in enforcing the terms of return migration, movement of one level of migration to the next, and so stakeholders on both sides can help with the enforcement. Will there be a backlash against migration? Well, to remember that, for now, migrants are 3 percent of the world population. So, we are not talking about large numbers. There are 200 million migrants, of which 90 million are migrant workers. It can be very large in some countries but overall is not such a big number when you compare it to the 620 million young people who are neither working nor selling, indeed, that work is--it's a relatively small number. But again, this is an area where global agreements are more difficult and a few conventions on migration and very few ratifications of those conventions, but perhaps bilateral agreements, Canada and Mexico have one, New Zealand has a Recognized Seasonal Employer agreement with the Pacific Islands, which are working in the sense that migration works for both sides. People go overseas, then send remittances, then in turn they go back to the countries with new business ideas and the flow of migration is enforced by both sides when one is in the interest of both sides. Thanks. MS. TUCK: Okay. Thank you. I don't know if there is maybe one final question. We're right at 11:30. Any other final question? We have organized a transcript for the briefing. We're supposed to get that by this afternoon and I would remind folks about the embargo, 7:00 p.m. tonight. And again, the full report is available on our website and we should have more copies of it by the end of this month, and also it's a treasure trove, I would say, of data. There's some interesting new labor statistics at the back of the report, and please let me know if you have any questions. The team working on the press materials would be happy to help you. So, without further ado, I'll close this embargoed meeting. Show Less -
Transcript of Media Roundtable
MR. MILLS: Good afternoon, everyone. Thanks for joining us for this roundtable. My name is Richard Mills. I know many of you; welcome. ... Show More + I want to set up a couple ground rules to begin with. First of all, we're going to have this session embargoed until the end of the session, so that should keep all the--maybe some of the hurried typing down to a minimum. The other thing I would just ask is that you--when we call on you, just repeat, for the record of the transcript, your name and organization, and then we can go into questions. I handed out a statement and I will turn it over to President Kim. President Kim?MR. KIM: Well, thank you very much for coming and I want to welcome you here. I'm taking over at the World Bank at a pivotal moment, as we said, and we're very encouraged by some of the things that we saw over the last two weeks, what happened at the G20 meeting, the commitment of middle-income countries to continue lending to the IMF at levels that were very encouraging. Also, what happened this past Friday in moving toward a stronger financial and banking union in Europe was all very encouraging. Our mission here at the World Bank is to boost prosperity, especially in low- and middle-income countries, and to eradicate poverty. We have just an outstanding staff. I've been working in developing countries all my life and have known from the ground just how outstanding World Bank staff are. We are prepared to continue the dual mission of boosting prosperity in the world and eradicating poverty and to do so with great energy, especially in this very difficult time. And let me just stop there and ask for questions.MR. MILLS: Okay. Anyone who has any questions? Danny? DANNY XUFENG: Thank you. Danny Xufeng from China Xinhua News Agency. Thank you for all [unclear]. President Kim, today you are in a World Bank tie – a green tie – and you are the first non-Wall Street banker and non-Washington politician to run this agency. How would your background help you to continue modernizing this global agency in this multi-polar world, and [inaudible] your predecessor, will your Chief Economist will also be from a developing country? Secondly, to some observers, you are a good golf player. In your golf bag, you have a "putter" of global and medical experience. But how would you improve your [inaudible] in managing such a big agency as well as [inaudible] of tackling economic and trade issues? Thank you. DR. KIM: Wow. Just a few things. Let me just say that I bring two relevant experiences to the World Bank. First, I've been working in development all my life. I've actually had extensive experience with World Bank employees in the field tackling difficult problems. And so, I feel I share the passion for development and poverty alleviation with the World Bank staff. I come into the organization feeling very close to them in terms of why they came here. I've heard over and over again from World Bank staff that I've met over the past few months, we came into this institution because we have passion for development. I share that with them and I think that's important that the World Bank President has worked on the ground on the issues, many of the issues, that the World Bank tackles.Secondly, many people have noted that the World Bank's greatest contribution may be as a knowledge institution. We have a combination of experience on the ground, and that experience on the ground isn't just being in developing countries, it's actually investing, not only with governments, but in the private sector. So, the World Bank has people who have actually experienced doing projects, bringing resources to the ground. Secondly, the World Bank has enormous amounts of data and information. Let me just take a moment to thank my predecessor, Bob Zoellick. I mean, his openness initiative was revolutionary. It's leading the way for all multilateral organizations to be more open, and I welcome that. It's critically important. It's time to do that. So, we have more data than any other institution about development. Moreover, this is like a huge academic institution. There is a tremendous amount of research and analytical firepower in this organization. So, this combination, on-the-ground experience, data, and analytic capacity is unique to the World Bank. And so, having come to this job from a knowledge institution now helping to run a knowledge institution that has the capacity and has a history of providing critical information where it's needed, I feel that those things have prepared me. Now, as for your golf metaphor, I don't think that there's anybody except maybe Tiger Woods and a few others who do everything well, and the history of this institution is that people have brought to the institution certain experiences and expertise. Let me say that, in my--in the last few months, I have been just extremely impressed with economists, development experts, sociologists, others who are in this institution who bring a huge variety of expertise that will be very helpful as we go forward. So, I certainly don't bring absolutely everything--one of the tools that you might want. On the other hand, no one does, and I feel very confident in our staff, in our leadership, to be able to deal with all of the critical problems that we'll face. Thank you.MR. MILLS: Howard. MR. SCHNEIDER: Howard Schneider, Washington Post. Thank you for doing this. A couple things: First off, on this sort of nuts and bolts of transition, I wonder if you can sort of give us a sense of what you've been doing the last two weeks and specifically who you've been relying at U.S. Treasury, whether you're bringing folks from Treasury over with you to Bank staff. And secondly, you know, one of the things that when you look at President Zoellick's comments over the last year, it's clear he's been very, very concerned with conditions in Europe, and I'm wondering whether you have come to share his concern about that as it might affect the developing world, or whether you feel the Bank's mission really is more on sort of longer-term, systemic, development-type problems rather than the euro crisis.MR. KIM: So, a couple of things. The transition has been run by the President's office here, but also I've been working very closely with people in U.S. Treasury who were working with me during the campaign. So, this is an enormous amount of--this is a huge organization and so there's an enormous amount of information to digest. So, what I've been doing is meeting with almost every single one of the Vice Presidents. I've had multiple meetings with the Managing Directors, with the CFOs. So, over the past two months, what I've been doing mostly is meeting our leadership. So, I can tell you that I'm just extremely impressed with the leadership of the World Bank. Many of them have been in the organization for years and years and years. And again, what's been most exciting is that every single one of them have come here because of the mission. So, I've been reading lots and lots of documents in preparation for the G20. Of course, there were a tremendous number of documents, many of them prepared by World Bank staff, and I've been going through them. Now, in terms of our specific position, President Zoellick brought a series of extraordinary experiences and an expertise to the Bank and I bring, frankly, a different set. So, am I concerned about the euro zone crisis? Of course. I talked about it a little bit in the beginning. I am encouraged by what happened over the past two weeks, but we are monitoring the situation very carefully. The primary mission, I think, of the World Bank in this crisis is to make sure that low- and middle-income countries are protected. Since 2008, we have invested over $300 billion to support lower- and middle-income countries to weather the crisis. So, what are the things that we do? We make sure that children can stay in school, we make sure that health clinics stay open. We've done a lot of work on food security and not just in terms of providing food in times of crisis, but moving toward more sustainable approaches to agricultural development. So, the primary mission, of course, is to just ensure that global growth continues and that, in the process, we support countries to provide basic services that everyone needs. Often, what happens in crises is children get pulled out of school, health clinics close. We've done a lot to make sure those things do not happen. MR. SCHNEIDER: And anybody from Treasury coming over to your staff?MR. KIM: Yeah, well, we—Navjet Dhillon who was a former Bank employee and had worked with Jim Wolfensohn among others had been at Treasury for a while and, with his experience at the World Bank, he'll be joining me in my office.MR. MILLS: Okay, any other questions? Lesley? MS. WROUGHTON: Hello, Lesley Wroughton, from Reuters. I want to get back into the issue of we see today manufacturing in Europe going down, China going down. We've already seen effects on developing countries through trade finance and a tightening of Bank flows. When Mr. Zoellick came in, he immediately increased funding to countries and said that's the way to stop it. I was wondering how the Bank would be positioned currently under the finances to move quickly and to move with such big amounts to help countries if there is this extreme worsening of global conditions. We know that the World Bank's finances may be declining over the next few years. So, the question is, how do you raise resources like that? One of the issues has been raising finances through the World Bank actually offering its services to developed countries, i.e., Greece. I was wondering how your feeling is about that.MR. KIM: Let me say, we've been having lots of conversations about the financial strength of the World Bank, and what I've found is that the Bank is in a very strong position. We've had, over the last few years, a successful IDA replenishment, we've had a capital increase. Bob has done a great job in putting the Bank on very solid ground. Now, we feel prepared to tackle crises as they come forward. Now, of course, it all depends on the scale and the severity of the crisis, but the World Bank is in very sound financial footing. Now, in terms of our work in high-income countries, as a person who has been focused on how to tackle social problems in developing countries my entire life, I am very impressed with the quality of our staff and the range of insights we have on everything from fiscal policy, getting--understanding macroeconomic trends and getting fiscal policy right from country to country to health care to education, all the way down to our International Finance Corporation has been very effective in investing in the private sector in developing countries. So, all the way from fiscal policy down to investments in the private sector, I am very impressed with the expertise that we have of, could that be applicable and useful to high-income countries as well? I think so. Now, you have to understand that we only go into countries when we're asked, but I feel the kind of expertise we have could be relevant in many, many countries in the world, including high-income countries. MS. WROUGHTON: So, you're not ruling out if Greece or the EC asked you to, that you would move--you would go--you would happily help Greece.MR. KIM: Well, I've talked to our staff--and again, my job as a leader is to really understand our staff, our capabilities and what we can do. And my staff feel that they have relevant experience that could add value. And if that's the case, and if we were asked, I would be open to the possibility. IKKI YAMAKAWA: Ikki Yamakawa with Asahi Shimbun. So, [unclear 14:25] little country and the [unclear], emerging countries that are hoping to increase their involvement and contribution, both in power [unclear]. How are you going to [unclear]? And also, secondly, I want to ask you about, you know, [unclear] should come from [unclear] and also how--do you have any will to increase the transparency of the election process within five years of your term?MR. KIM: In terms of middle-income countries and the lower-income countries, you know we are very much involved in both, middle-income and lower-income countries. Our commitment to supporting the lower-income countries through IDA grants and loans and also with expertise. And, in fact and increasingly, the IFC has been making more and more private sector investments in the poorest countries. So our commitment to lower-income countries is unshakeable. Of course, it's a primary part of why we exist. But in middle-income countries, I think it's important to know that more than two-thirds of the people living on less than $2 a day live in middle-income countries. Our mission is about eradicating poverty, so we must remain engaged with middle-income countries. Moreover, in working with middle-income countries, we are learning again so much about how to tackle the most difficult problems, and so we will remain engaged in both, and I think there are very good examples of how we've had successful work in both. Let me just say something about the election. So I was very proud to be part of the first contested election in the history of the World Bank. Issues of share and voice in/and election, these are issues that I look forward to discussing with the Board and with the Governors. These are very important issues and ones that affect all member countries, and it's not for me to decide as President how this will happen. These are issues that will require full discussion, and I look forward to those. JEREMY TORDJMAN: Hi. I'm Jeremy Tordjman. Before leaving office, your predecessor, Mr. Zoellick cancelled a loan made to Bangladesh and I was wondering if you would think that is it an appropriate way to address some of the critics made to the WB especially about corruption.MR. KIM: I've been following the situation closely, and Mr. Zoellick and the senior staff have informed me fully about the decision. The Bank has a sterling record in fighting corruption. The Bank was the first to raise the issue of corruption in the 1990s and has a no-tolerance policy for corruption. The discussions with the government of Bangladesh started in September. Even toward the very end, there were extensions given so that there would be what we would think of as an appropriate response; and not seeing one, we cancelled the bridge project. Now, we're very concerned about the well-being of the poorest people in Bangladesh, but what I must stress is the Bank's position is that we do not tolerate corruption. JEREMY TORDJMAN: Do you think it was appropriate?MR. KIM: Yes. I do think it was appropriate.MR. MILLS: Any other questions? Yes, sir. KAZUHIRO HARUKI: Hi. My name is Kazuhiro Haruki, Kyodo News [unclear]. And Tokyo will host Annual Meetings in October [unclear 18:45]. How [unclear] Annual Meeting and what is your expectation for Japan [unclear]?MR. KIM: So, I'm very much looking forward to my visit to Japan. As you may know, I visited Japan during the campaign and had a wonderful meeting with the finance minister and other leaders there. I have--we're preparing for the meeting. I think it's going to be an important meeting at an important time. I know that Japan has been a very strong supporter of the World Bank from its inception, and we value Japan as a member country very, very much. I think it's important that my first meeting, in fact the first annual meeting, will be held outside the country. It's part of a tradition here at the World Bank, and I think it's an important one.MR. MILLS: Sandrine. SANDRINE RASTELLO: Sandrine Rastello with Bloomberg. So, besides Japan and that trip for the Annual Meetings [unclear], do you plan to get personally involved in certain projects like the IDA replenishment or do you have a planned visit to your [unclear]? And my second question there's been a lot of talk about the World Bank doing too many things and not finding, you know, what it is as an institution. Do you plan to refocus the Bank or do you plan to continue being involved in everything from the environment to education and [unclear 20:28]?MR. KIM: Let me say, I am very--I'm a practitioner, a development practitioner, and I have been for most of my adult life. So, I'm going to take great interest in a wide variety of projects that we work on, and I hope that I can help in the success of some of these projects. In terms of focus, one thing to remember is that we are very much a client-driven organization. In other words, we have to respond to the priorities and the aspirations of our member countries, and that [is] a critical piece of our work going forward. Now, having said that, I think it's also very important to have strategic discussions with not only inside the Bank among our staff but with the Board of Directors and the Governors. These are important questions about where the Bank should focus its energy, where the Bank brings the most value, and how we can organize our activities going forward. So, I think it's critical to have strategic discussions but also critical for us to be responsive to the aspirations of member countries.MR. MILLS: Yes, sir. MR. FERNANDEZ: [Unclear] Fernandez from the Spanish newswire EFE. I wanted to know your views about Latin America, the [unclear]. How can the World Bank help the region?MR. KIM: As you may know, I have worked for many years in Latin America. I've worked in Peru and Chiapas in Mexico. Also visited many, many countries and worked technically on health-related issues. So, I think it's remarkable that the resilience, as you said, during the economic crisis was remarkable and also very encouraging. I think that the support for the poorest countries, of course, will continue through IDA and other mechanisms. But I think it goes back to the issue of high-income countries and what our role might be in some of the high-income countries. There are many situations in which what our member countries want most of all is our technical expertise, and, you know, there are so many sources of capital these days in the world that we know that often that's not going to be our role but that our role will be to provide technical assistance.We have learned an enormous amount from countries like Mexico, for example. Mexico's experience with conditional cash transfers, the expansion of that program in Brazil. These are important lessons for many countries in the world. And so we will continue to engage deeply, of course, in Latin America, the poorest countries through IDA. And the middle-income and emerging countries, we both will provide technical assistance but also look forward to learning from them as they have weathered the last few years.MR. MILLS: Yes, sir. I think we'll take our last question. Okay. I'm Gwang-ik Jang of Maeil of South Korea. There was--you mentioned Korea's success story as a model of success with [unclear]. How does the experience of Korea's economy's success affect your ability to carry on the World Bank [unclear]?MR. KIM: Well, I think, on a very personal level, when I came to this country, many people thought that Korea was--and the word that was used was "a basket case"--impossible for Korea to develop. And the reasoning was--seemed fairly clear: no natural resources. Even--there was even talk of Korea having cultural deficits so that they couldn't develop. And so now, look what happened. What it gives me in tackling this new job is an unshakeable optimism that any country can go down the path of development, and so I bring that optimism with me every day to work. I spoke about it today at a meeting with staff. I think for those of us who are fortunate enough to work in an institution like the World Bank, every day we walk through the door and we read on the wall "Our dream is a world free of poverty," I think that it's critical for every single World Bank employee to bring with them every day the sense of optimism, that no country is a basket case, that we have to work with every single country to try to help them down the path of development, just as--that's been my experience, and I feel that deeply in my bones.MR. MILLS: Okay. We'll take one last question from Jeff.JEFF: Jeff from Financial Times. If I could pull up on a previous question [unclear 25:49] for a bit more. You said that the Bank now has a very strong financial capital position. Is the Bank in position to accelerate lending if, in fact, the global economy does go into a much deeper, prolonged downturn as some of the recent indicators are indicating. And if it is in that position, is that something that you will consider doing or are considering doing [unclear 26:09]?MR. KIM: So the financial position of the Bank, as I said, was very strong. It--you know, this is my first day and it's one of the things that we're going to be talking about. We feel that, especially in lower-income and middle-income countries, we are ready to respond to support those countries.And let me clarify an earlier comment when asked about Greece.We're not talking about the World Bank investing massive amounts of finances in higher-income countries. I think where we feel like we can add value is in the technical support around some of the structural issues that some countries are facing. And so for lower-income and middle-income countries, we're prepared; we're ready to support countries as needed, and of course, as I said, we are monitoring the situation very carefully, and we'll respond as countries come to us to ask for assistance.MR. MILLS: Very good. Thank you all very much. Show Less -
Transcript of World Bank Group President Jim Yong Kim's Remarks upon Arrival at the Bank
DR. KIM: Good morning, everyone.I'm honored today to assume the presidency of the World Bank Group. I do so at a pivotal moment for the global economy.I want to start by thanking my predecessor, Rober... Show More + t Zoellick. Bob has done a fantastic job over the last five years, and he has left me with a very strong institution.I spent most of my adult life working in some of the poorest communities in the world. And in my work, what I've learned is that the World Bank is the most important development institution in the world. I'm both humbled and inspired to take over today as President.You know, over the last few months, I've had the privilege of talking with many, many World Bank employees, and what I've found is that not only is it the most important global development institution in the world, but it's a movement. People here in Washington, and in more than a hundred country offices all over the world, are passionate about the twin aims of boosting prosperity and eradicating poverty. I'm very excited to get going, and I want to say to everyone here today that we will continue to do our work at the World Bank with innovation, with analytic rigor, and with great passion, working in partnership with governments, with civil society organizations, with the private sector and, most importantly, with the people living in poverty we aspire to serve.Thank you very much. I can't wait to get started. Show Less -
Globalization: Made in the Americas
Introduction Thank you for the honor of your invitation to commemorate the 30th Anniversary of the Inter-American Dialogue. The origins of this Dialogue stretch back to a discussion between ... Show More + Peter Bell and Abe Lowenthal on a park bench. Peter and Abe were disturbed by the breakdown in inter-American exchanges during the Falklands/Malvinas war, and by the lack of ties with the rising democrats of Latin America. So they discussed bringing together leaders from across the hemisphere to set a new inter-American agenda. The Dialogue held its first ad hoc conference in late 1982. Today, 30 years later, Latin America's very success offers the opportunity to remake that Hemispheric partnership around new pillars:A revived free trade policy that will aid structural reforms for growth in all our countries;An energy transformation, ending the Hemisphere's energy dependency; A new diplomacy infused with private sector pragmatism to solve public problems;Shared security; andThe first Democratic Hemisphere. For the United States, this new agenda could enable us to rely on a great, home-grown asset – Hispanic-Americans – as the vanguard of U.S. connectivity in a new Western Hemispheric economy. This Dialogue can – and I believe will – help drive this change: to create a "Globalization: Made in the Americas." Under Peter Hakim's and now Michael Shifter's energetic leadership, the Inter-American Dialogue has become the leading U.S. center for policy analysis, exchange, and communication in the Western Hemisphere. The idea at the heart of the Dialogue remains very much the same as that which emerged from the conversation on the park bench: that through dialogue and shared vision, interested citizens across the hemisphere together can plant the seeds of new policy ideas and practical proposals for progress in the Americas. So tonight, let's put that idea to work. A Different Vantage Point Just two months ago, the leaders of the Western Hemisphere met in Cartagena for the Summit of the Americas. Colombia was an excellent host, and the Summit showcased the country's many hard-won achievements. But the news reports were, frankly, disappointing. Aside from the behavior of some Secret Service agents, the coverage focused on disagreements about Cuba and drugs. Some even suggested this would be the last Summit of the Americas. The agenda seemed stuck in a time warp. So when Carla Hills asked if I could join you this evening, I thought the best way to celebrate the Dialogue's Anniversary was to offer new possibilities for the Americas in a fast-changing global economy. My vantage point on our hemisphere is different from many U.S. contributors to the Dialogue. I am not a specialist in Latin America. Like many of my U.S. foreign and security policy colleagues, much of my energy has been concentrated on the issues of Europe and the Asia-Pacific, the Middle East and Southwest Asia. Yet because of my economic background, Latin America and Canada have loomed larger on my global map. In the 1980s and early 90s, working with Secretary of Treasury and State James Baker, we were immersed in issues of Latin American debt and reforms for growth, the Canadian and North American FTAs, and Central American security and democracy. In 2001, as U.S. Trade Representative, we were fortunate to build on that experience, negotiating FTAs with Chile, Colombia, Peru, Panama, the five countries of Central America and the Dominican Republic. Together with NAFTA, these FTAs cover 54 percent of the economy of our hemisphere, not including the United States, offering an underutilized web of free traders that could support deeper integration in the Americas – even hemispheric free trade and democracy. Five years as President of the World Bank Group has added to this perspective. Why am I stressing this global outlook on Latin America? Because, while working on the issues of our region, I have urged my Latin counterparts to look globally, too. Instead, for too many years, the dialogue within our hemisphere seemed constrained by a North-South framework. The United States loomed large – whether as a hegemon, source of support, market, model, danger, or even frustrating land of inattention. On development, debt, investment, competition, and trade, Latin Americans need to see the wider horizon – especially to benchmark with East Asia. And beyond East Asia, Latin America has a new role to play in building multiple engines of growth with other emerging markets. It is time to break out of that North-South construct. Consider Canada's experience in combining regional integration with global reach: of course, Canada's FTA with the United States in 1988 deepened the two countries' economic integration – but in addition, the competitive adjustment driven by that accord made Canadian business more competitive globally. A new hemispheric partnership requires leaving old habits, old mindsets, and old models of dependency behind. That partnership will necessitate a new mix of partners, public and private. That partnership should be the next challenge for the Summit of the Americas and this Dialogue. Latin America's Record of Gains Latin America's recent record of gains now puts it in a position to remake the Hemispheric partnership. The numbers tell the story. Between 2003 and 2010, the income of the average Latin American increased by more than 30 percent. A silent revolution in macro-financial policy has strengthened the economic immune system of many countries. We saw the payoff after the fall of Lehman Brothers: Sound policies in Latin America enabled expansions to offset the downturn without the aftershocks that now threaten Europe. About 73 million Latin Americans have been lifted out of poverty since 2003. Today, almost a third of the region's population is considered middle class. Latin America is breaking a pattern of persistent inequality, including through an increase in women's involvement in the economy, particularly from poor families. Colombia and Peru have buttressed this trend by boosting opportunities for people of African and indigenous origin, seeking to overcome divisions that populists have exploited. Mexico and Brazil have led in developing well-targeted conditional cash transfer programs that have revolutionized public assistance. These programs couple income grants for poor families with incentives for health check-ups and keeping children in school. Mexico's Oportunidades program has probably done more for women's health than anything in the country's history. These are safety net programs that appeal to a fiscal conservative: They cost only about half a percent of GDP. The World Bank has helped export this model to 40 other countries, ranging from Pakistan to the Philippines. Latin America is "going global." As the global trade negotiations have stalled, leading Latin American free traders have tried to keep up the momentum. Mexico has FTAs with 59 countries; Chile with 43. Colombia offers a leading example of how a democracy can combine security, development, and good governance to overcome narco-traffickers, kidnappers, and terrorists. Peru demonstrates how sound economic policy and political commitment across administrations can reverse years of stagnation. Brazil's influence is expanding – through its companies, agricultural and mining experience, development work, peacekeeping in Haiti, and interest in Africa. Brazil's leaders of the left have also turned a page in history by sticking with democracy. Rising leaders of the left in other Latin American countries have seen the benefits for the poor of Brazil's example, compared to authoritarians who tear down institutions to consolidate personal or party power. Looking Ahead So what's ahead for Latin America? Latin America's per capita income is still only at 30 percent of the U.S. level. To climb higher, Latin American economies will need to leap beyond the so-called middle income trap. Many developing economies make early rapid gains. But then productivity and growth tend to slow. This is a global challenge. In 1960, the World Bank ranked 101 economies as middle income; by 2008, almost half a century later, only 13 had made it to high income levels – and one was Greece. Many Latin American countries will need to translate the commodity boom into broader, more diversified economies. This region has lived through roller-coaster booms and busts before. Higher productivity is the antidote to the middle income trap. Since the 1980s, Latin America has underinvested in infrastructure – electricity, roads, bridges, ports, transport – and maintaining and operating these services. Currently, Latin America spends 2 to 3 percent of GDP on infrastructure, less than half the rate of investment in East Asia. Public-private infrastructure partnerships not only offer a source of financing, but also better design, maintenance, and operations to deliver high-quality services on time. Colombia has experimented with PPPs in urban water supply and sanitation. Mexico's new Highway Concession Program has mobilized PPP projects of around $11 billion, expanding the country's major toll roads network by some 25 percent. Latin America has to anticipate its human capital needs. The region is aging rapidly: today, about 11 percent of Brazil's working age-population are seniors; by 2050, it will be nearly half. Latin America also needs to improve the results of its investments in education. By age 15, the learning achievement of the average Latin American student lags two years behind his or her developed country counterparts. Latin America is recognizing that gender equality is smart economics. Today, women in Latin America outnumber men in schools and universities. Working age women represent roughly 40 percent of the entire labor force in the region. To continue to grow, the region will need more competition and innovation in the service sector. Competitive services increase productivity. They supply the 'software' of integration: transport, where delays and losses can impose significant costs; information technology, because accurate data and effective communication is vital; financial services, to create a supportive business environment; and logistics systems, which are a driver of business competitiveness. A New Agenda What do these challenges mean for a new hemispheric partnership? What should have been the news coming out of Cartagena? Let me offer five ideas. First, the Western Hemisphere needs to revive an activist free trade and economic reform policy, globally and regionally. We need fresh approaches. The United States will be cutting agricultural subsidies, especially given high prices, and eliminating protection for ethanol. Why not deploy these to prod others? Service sector liberalization can boost productivity, open new businesses, create new jobs, and cut the "Latin cost" that many countries impose on their own businesses. Why not deploy this economic need to revive a mutual interest in negotiation? A strong self-interest can drive this renewed call for liberalization. Latin American economies still need much investment and more robust capital markets – especially in local currencies – that can help Latin American entrepreneurs and family-owned businesses to expand. Infrastructure investments require capital goods and services, as Panama's 21st Century Canal project is demonstrating. Why not dismantle barriers to lower the cost of infrastructure expansion? Better logistics make economies more competitive. The World Bank's 2012 Logistics Performance Index estimated that Latin American logistics costs are between 16 and 26 percent of GDP – that's two to four times the average in Europe or East Asia. The World Bank has helped Colombia and Peru to implement a "single window" approach to customs clearance and border management. In Brazil and Peru, the Bank has worked with international freight forwarders to connect rural, remote villages and small businesses to export through national postal services; in the first six months, more than 300 small firms in Peru became exporters, most for the first time. Even as the WTO works toward a Trade Facilitation agreement, the Americas could develop an accord that points the way. Brazilian officials are focused on exchange rates. Yet to really boost growth the target should be productivity. Better infrastructure can help, and so can more efficient and effective public services. The World Bank Group has launched a deeper partnership with the Governors of the Northeastern states of Brazil to overcome these impediments. Over time, however, the United States and its free trade partners should be working with Brazil to rebuild the case for a hemispheric initiative to realize the benefits of trade liberalization and economic reforms. It takes two to tango, and this agenda requires changes on the part of the United States, too. The United States is no longer leading the open trade agenda, as it relies increasingly on defensive measures. The United States has its own high costs of trade – antiquated ports and laws to protect special interests. The United States should work with its current free trade partners in the Americas to deepen ties of development, reform, and investment. The current architecture of US FTAs in the hemisphere offers a solid legal framework, but it needs to evolve into a home for an ongoing dialogue – across countries and with business, academic, civil society, and environmental communities – to see what else can be done to lower costs and barriers and create opportunities. The United States and its partners could explore progressive integration across the FTAs, for example by expanding provisions to cumulate inputs among partners while qualifying for free trade. The United States needs to make its hemispheric FTA network dynamic, linked to business and investment policies, and improved governance. A new concept of an FTA network in the Americas could also support inclusive and sustainable development as the foundation for open societies and borders. Second, innovation in the energy sector, led by the United States, could transform energy security for North America, the Hemisphere, and the world. In 2008, imports supplied 70 percent of US oil demand. By 2020, PFC Energy estimates that imports could be down to 40 percent of US oil demand – or even 20 percent if Canadian oil is counted as part of the home market. If natural gas for Canada and the United States is added, U.S. net energy imports from the rest of the world could drop to five percent of U.S. demand. That's an amazing game-changer in energy. If Mexico opens PEMEX to real outside investment, the outlook is even brighter. With the discovery of the giant deep offshore PRESAL oil and gas fields, Brazil can play a major role in supplying oil and gas in the region. Yet there is a need to connect these energy supplies – through infrastructure – with countries in Central America and the Caribbean that have suffered from high prices and limited access. Increased efficiency and alternative sources could help the energy poor, too. It's long past time for a hemispheric energy policy – blending consideration of inclusive growth, the environment, and indigenous communities' interests. Third, this new Hemispheric partnership needs to break old patterns of diplomacy. There are now vibrant private sectors all across the hemisphere. The challenges of overcoming the middle income trap and structural reforms to boost productivity need private sector advice and solutions. All across the developing world, the World Bank is encountering a new pragmatism about involving the private sector in areas that used to be public monopolies: infrastructure; education; healthcare; skills training; delivery of public social services. Advanced economies such as the United States should be taking note, too. Yet government-business dialogues can be stilted showcases. The Summit of the Americas – and perhaps the Dialogue – should review which approaches work better and why. With some guidance, businesses can better connect possibilities with policies. Governments can commit to responses, commitments, openness, and results. Fourth, the new Hemispheric agenda should help all 35 countries overcome security threats to growth and opportunity. The fragile governments of Central America are at risk of being overwhelmed by crime and violence linked to drug trafficking, organized crime, gangs, and firepower. Spain, which has roughly the same population as Central America, has about 400 murders per year; in 2010, Central America had over 18,000. The region pays a heavy economic price for this insecurity – as much as 8 percent of GDP. The basic legitimacy of governments and institutions is fraying: About half of Central Americans say a military coup could be justified when crime levels are high. Experiences from Medellin and Rio de Janeiro have shown that the best way to attack criminal insecurity is through an integrated approach: combining stepped-up policing, prevention, and community investments. Quick turnarounds are possible. Strong regional cooperation is indispensable. The United States has an unfortunate pattern of ignoring dangers in Central America until they explode. This time U.S. diplomacy should work with Mexico, Colombia, and Panama to develop a coherent strategy – not band-aids. As in Colombia, the Central American private sector must also be part of the solution. And the United States should also take responsibility for the drug habits of its public that fuel demand for narcotics from the south. Fragility in the Caribbean is another soft spot. But small economies can be competitive in many sectors. Accelerating integration in the Caribbean can share services, add to resilience, and boost economic prospects. Latin America should also be looking toward a greater role in global security – through practical steps, not the old G-77 policies of the past. My friend and former colleague, Bernie Aronson has proposed, for example, that Brazil could lead by voluntarily ending its uranium enrichment program and then calling on other nations – including Iran – to follow its example. If Brazil wants to help shape the 21st Century, leadership in preventing the spread of nuclear weapons – with an idea and action – would send a powerful signal. Fifth, the debate over Cuba at Cartagena sounded like hollow echoes from another era. Look ahead, not back. Chavez's days are numbered. If his subsidies to Cuba and Nicaragua are cut, those regimes will be in trouble. The democrats of Latin America – left, center, and right – should be preparing. The calls for democracy – for an end to intimidating thugs, human rights, fair elections, and rule of law – should come from all its capitals. There will soon be an opportunity to make the Western Hemisphere the first Democratic Hemisphere. Not a place of coups, caudillos, and cocaine -- but of democracy, development, and dignity. This transformation will not be achieved by the Calvo doctrine. By divisive populists. By corruption. By acquiescence. By silence. You know well that if Latins leave the work to Washington and Ottawa, the opponents of liberty and human rights will play the cards of gringoism and neo-imperialism. Trump them. Conclusion For the United States, a new partnership in the Western Hemisphere offers opportunities for renewal at home, too. All the debates about macroeconomic issues – fiscal and monetary policies – as important as they are, risk inattention to microeconomic incentives, structural reforms in the United States. Energy. Infrastructure. Education. Human capital. Competition. Environment. Innovation. The United States also needs to clear away old rigidities on these new fundamentals. The United States also needs to draw on the energies, intelligence, and drive of all its citizens. As my friend Luis Alberto Moreno of the Inter-American Development Bank has pointed out, the 50 million strong Hispanic community in the United States is a growing market, source of entrepreneurship, and resource for a Hemispheric economic strategy. At over $1 trillion, the purchasing power of Latinos in the United States is larger than the economies of every Latin American country except Brazil. According to the U.S. Census Bureau, there are between two and three million Hispanic-owned businesses in the United States. Many are small. But they create jobs, earn revenues, and pay taxes. As Latin America grows, the Hispanic businesses in the United States offer an incredible asset. Hispanics in the United States could be in the vanguard of a new Western Hemispheric economy. Small and medium-sized Hispanic-American businesses will need help to expand their entrepreneurialism – information about markets, financing, and risk management services. To be most effective, this assistance should be decentralized – perhaps drawing on local chambers of commerce in cities and states where most Hispanic businesses can be found. The Small Business Administration, OPIC, Ex-Im Bank, the Inter-American Development Bank, and the World Bank could then deploy their resources to help. The world economy is still struggling to recover from the worst blows since the 1930s. Europe is a danger zone. U.S. leadership remains vital to get through the storm, to reach a new world economy of multiple poles of growth. This is why the news coming out of the Cartagena Summit was disappointing. This is not a time for drift, for old North-South debates, for retreat behind borders, old mindsets, or out-dated dependencies. This is a time for the New World to again inspire novel thinking – about development, growth, structural reforms, rule of law and human rights, democracy, and security. This Dialogue should aim high: To have the Western Hemisphere shape this next era of globalization – so that future historians will title the next chapter, not "The Passing of the New World," but "Globalization: Made in the Americas." Show Less -
Transcript of Opening Press Conference with World Bank Group President Robert Zoellick
MR. MILLS: Good morning, everyone. Thank you for joining us for our World Bank Group press conference for the 2012 Spring Meetings. Joining me this morning is the President of the World Bank... Show More + Group, Robert Zoellick, who will have an opening statement and then take some of your questions. If I could please ask everyone when they ask a question to identify themselves and your organization; and once again, I am sure you have been asked, but if we could have our mobile devices switched off or to "vibrate." So, President Zoellick. MR. ZOELLICK: Thank you, Rich. Welcome, and thanks to all of you for coming. This marks my last Spring Meetings as the President of the World Bank Group, so I would like to begin with a few words of thanks to the Ministers who have supported us and worked with us; to our Executive Board, who have labored hard to help our Management team to modernize the important multilateral institution; to the excellent Senior Management team that I have been proud to help build and to lead; and to the World Bank Group staff in Washington and around the world. They are motivated, they are committed, they want to make a difference, they are a tremendous asset, and we have been able to draw the best now from 170 countries. This has been a pretty busy five years, so I suppose my tenure at the World Bank Group has had three phases--a turnaround from a time of some trouble; quickly moving into faster and more flexible, large-scale support for our client countries across the food, fuel and financial crises--in financial terms alone, about a quarter-of-a-trillion dollars; and the start of the modernization of the World Bank Group for the future. That ongoing modernization effort will be a large part of my presentation to the Development Committee later this week and my discussions with our Governors. With the first large recapitalization of the IBRD in over 20 years and two record-breaking IDA replenishments totaling more than $90 billion, I am pleased to turn over a well-resourced Bank with a AAA rating. Yet we always need to think ahead about how to mobilize resources--for the growing interest in IFC and private sector development, for the poorest, and for the changing needs of our middle-income clients, which are still home to three-quarters of those living on under $2 a day. Our Modernization Agenda is driven by our focus on clients, listening to their priorities, as opposed to an old top-down approach, and modernization involves a rigorous focus on results, openness, and accountability. So our initiatives for open information, open data, and open access to knowledge may turn out to be the most important legacy of the past five years. These steps are key to democratizing development, and these steps lay the foundation for expanding social accountability, fighting corruption, and building better governance. Last year, I proposed that the World Bank and others should recognize that investments in civil society and good governance are as vital as investments in roads, factories, and clinics. So I will be pleased to announce later today the formation of a new Global Partnership for Social Accountability that will provide support to civil society organizations in their work on social accountability. Now, much of what you will hear over the next few days will deal with the ongoing shock waves of the financial crisis--issues of macroeconomic stability, fiscal and monetary policies. That is certainly important, but it is not enough. Countries, both developing and developed, need to focus on the structural reforms that will be the drivers of future growth; otherwise, the world will keep stumbling along. The World Bank Group will be emphasizing the structural growth agenda. Structural reforms and changing growth models fit with our recent major reports such as the China 2030 Report and the Golden Growth Report that looked at Europe. You will also encounter structural growth in our priorities for infrastructure, especially public-private partnerships; social safety nets, to protect human capital in a volatile and uncertain world; gender, so that countries can gain growth opportunities from empowering all of their people; and financial inclusion, including at these Meetings, a first-of-its-kind report on measurement to access financial services that will show that three-quarters of the 2.5 billion people living on less than $2 a day are shut out of access to banking. Developing countries have provided two-thirds of global growth over the past five years. These are no longer charity cases; they are vital to the world economy. But of course, they face huge challenges, too. So it is the World Bank Group's aim to keep focusing the world's economic leaders on growth--not just stability; on human safety nets--not just financial safety nets; and on modernizing multilateralism so that all 188 of our shareholders can work together for their common interest. Finally, I had an opportunity to talk to Jim Kim after his selection as my successor. We will have a chance to meet shortly after the Spring Meetings on the transition process. I think he will do a great job, and I wish him and all others associated with the World Bank Group every success. I am pleased to take your questions. MR. MILLS: Yes, Sudeep? QUESTION: Sudeep Reddy with the Wall Street Journal. I was hoping you could address the European crisis from two angles. One, you previously noted that European countries had bought a lot of time with liquidity measures. I am curious what you think about how they have used that time and what they need to do next; and more broadly with emerging market countries, how are they faring with the shock waves from Europe, and is there anything in particular they should be doing now given the potential for another round with Spain? MR. ZOELLICK: Well, on the first one, I think the euro zone in particular and the European Union is going to be walking a very fine line. First, as you noted, with the anxieties late last year, I think the ECB's extraordinary actions were appropriate, but I think some misled themselves because they only bought time, and the time has to be used. I think that, as the IMF has pointed out, on the one hand, the future of the euro zone depends on actions of individual countries, particularly the steps they take for fiscal consolidation and, as I have emphasized, the steps they need to take for structural reforms and future growth. It is very difficult to take those steps in a no-growth environment, so it has to be balanced with steps that might be able to support demand and longer-term changes of growth. So this week, I tried to make some suggestions on the supply side and ways in which the single market could also further deepen integration to support growth. Now, again, as the Fund has pointed out, the banking system also remains under significant stress, and at the one hand, you need the banks to build their capital; on the other hand, what we have seen is that if the banks build their equity ratios by shrinking, as they by and large have been doing, that is going to put a stress on credit contraction and undermine the basis of growth. So I think the debate understandably reflects the fact of trying to balance these issues, but I think we are now in a phase where, after the ECB provided very attractive financial resources to a number of the banks to be able to buy government debt, as we have seen in various newspapers--I think your own today, as I saw one story--they are about at the end of that point and limit. So I think further actions are going to be called for, and the point I keep emphasizing, wherever it is around the world, is not just to focus on the austerity and macroeconomic stability measures, but you need to do this in a context of growth, in part because we have to face the political economy issues. So, as I have emphasized, the real countries that are critical because of size at this point are Italy and Spain. You have governments that are taking strong actions. It would certainly help if they got some support from some of the types of things that I and others have talked about so as to help with growth and the politics of reform. As for your second question, the deleveraging process in European financial institutions has certainly begun. I tend to agree with I think the IMF report and others that said that there is more to go. We have seen the effects, differential effects, around the world. I just came from East and South Asia. You have definitely had a pull-back in some of the project lending and sale of some of the assets in East Asia. A number of the Asian banks have stepped in, so it has not really had a significant contractionary effect. Starting late last year, I again worked by my friends at the EBRD and EIB and EC to try to reactivate the Vienna Agenda because I have been most concerned about the Southeastern European and the Balkan countries. And there, working with the banks, we are seeing the contraction. So far it has been orderly, but it is a good example of trying to get ahead of the curb, Sudeep. I was talking about this late last year, and people did not yet see the numbers, and as you saw the first quarter with the BIS numbers, you started to see this contraction. And I was actually pleased--through the IBRD, we were able to expand our commitment over the next couple years by about $4 billion, IFC another $2 billion, so our total, I think, is about $27 billion. I think that is an example of the types of things you need to do, frankly, even in the months ahead to get ahead of some of these problems. North Africa has clearly been affected by this, and this is again the political implications, because for a number of the North African countries, Europe is a very important export market, so it is important. I was with the Tunisian Finance Minister yesterday, and I am going to meet them again--as they undertake these difficult reforms, they need to get support from us and others along the way. And an area that Pascal Lamy of the WTO and I have been watching particularly closely is trade finance. A lot of the European banks were big players in trade finance, particularly the French banks, so you are seeing some shrinkage of that. In the areas, what I am most concerned about--and by the way, this is where the new capital rules from Basel III are going to have to be watched very closely; the Basel Committee took some steps to alleviate some of the changes that they had put in, overly stringent, in my view, but now we are trying to gather some data with the WTO and others to make a stronger case for easing some of the strictures they have--because what I am most worried about is a place like Sub-Saharan Africa, where I suspect that the exporters of major commodities to the U.S. and Europe will still get trade finance, but if you are a small country, if you are a small bank, if you are a small client, if it is intra-African trade--which should be the future of growth--those are likely to get squeezed. So, again, what I try to do in these meetings, Sudeep, with my G20 colleagues, because we see all these marketplaces, is to try to anticipate some of those issues, and those are some of the ones that I am focusing on. And then, the last one, of course, which is implicit in your question, is that we are not out of this mess yet, so if you have a more seismic event because of failures of management, that is going to hit everybody hard. It is still a fragile economy, as we and the IMF have pointed out. MR. MILLS: Yes, the woman in the second row, please. QUESTION: Yes, Antonella Ciancio from Reuters. We would like to know how concerned are you with Argentina's move to nationalize the country's leading oil company, and if this somehow threatens to further isolate the country. Thank you. MR. ZOELLICK: Well, I think it is a mistake, and I think it is a symptom that we have to watch out for of, under economic pressure, whether countries will move to more national, autarchic policies, respond more to populism, respond more to protectionism. So I think it was the wrong thing to do. MR. MILLS: Thank you. Yes, Howard? QUESTION: Hi, Bob, and thank you. Howard Schneider with The Washington Post. On the Arab Spring, I was just curious--Madame Lagarde laid out what is basically now a stalemate between the IMF and Egypt over support there, and I was wondering from your perspective, to what degree you think political uncertainty in those countries is holding up the type of support you feel needs to come from the outside to get their economies back on track. And then, secondly, briefly, what is your advice to Kim on transition? What are the mechanics of that going to look like, and what are you going to be able to do to help him in the door? MR. ZOELLICK: Well, on the first one, Howard, it varies a lot by country. So let's take Tunisia, which I referenced with Sudeep. You know, Tunisia has gone through an election process. They have an Islamic-based government. The government seems to be stressing the continuation of the policies that the prior interim government focused on, and those are policies we are trying to do everything we can to support--not just basic financing, but policies of inclusion, because you have had sort of a growth model that didn't pay enough attention to people in the west and central part of the country--trying to focus on some of the youth unemployment issue, and--very nicely with the agenda we are setting on openness and social accountability--when we did a Development Policy Loan, they accompanied it with a series of changes to try to open up their process. And I think it is not only good politics, it is good economics, obviously, to have the society feel that they are engaged in the process. But the Tunisian economy is still under significant stress; it has lost tourism; it has lost some of the effects of exports to Europe. So IFC, our private sector team, has also been doing investments in there. So, in the case of Tunisia, this is not going to be done overnight. They are going to face a tough year. But I think it is in everybody's interest to try to support them if the government stays on the current path, because again, looking at this from a bit of an economic history point of view, I think the North African transformation is going to take a while, but what I saw happen in East Asia and elsewhere is that countries that undertook the reforms become models for others. Morocco has had a fast-paced evolution as opposed to revolution. They are making a series of reforms, so we are trying to support them, again, on the openness side, the investment side, the private sector side. We are trying to support Jordan. Jordan is going through a combination of political and economic reform. In a country like Libya, they have the resources. There, we have been trying to work with some partners in a difficult security environment to help create the capacity for basic financial management and other activities. So, the big one obviously is Egypt, which you referred to, and here, as I suspect from what you have said that Christine mentioned, they not only face an economic and financial challenge, but they are in the process of a political transition. And I understand that there will be a need to be able to base the legitimacy of whatever economic relationships they have on the Fund and the Bank with the people who will be exercising power under the new Constitutional arrangement. So I think that that does slow up the process. Life is full of twists and turns. That is kind of the facts of life and the reality. There are things that I think the interim government can do to create a better environment for this. We have kept doing investment lending, and we have tried to focus some of the investment lending in Egypt on some of the sectors in need, but the bigger policy loans that we would do would depend on the macroeconomic issues that the IMF is addressing; and frankly--at least it has been my guidance--they will also be based on some of the openness and social accountability issues that we have seen in Tunisia and other countries. And that, I think--that is also important because I think you are going to be going through a political transition process, and the more open it is, then, whoever is elected in this year or next year or others I think will have a better sense of engagement with the economic changes in Egypt and the relationships with the World Bank. So this is one of the things, I think--we have also had to learn lessons from the Arab Spring. Economic growth alone is not enough. It has to be inclusive. And frankly, the more we can emphasize the things I have been talking about, about openness and social accountability, I think that is the future direction of the Bank as well as these countries. You asked a second one--oh, on Dr. Kim. Well, I have been through a lot of transitions in my life, so I have some experience with them. We tried to centralize a team to avoid the standard problem of the 500-page briefing book by focusing on some of the issues that will come up first. I think these Spring Meetings are timely because we will get a sense from the Governors and the Board about some of the issues that would be of nature to be a continuation--some of the things that I have talked about in this Modernization Agenda which has both internal and external aspects. And beyond that, I always think that as you are turning something over, you have to actually have some degrees of restraint. You know, he will be the person in charge. I happen to believe that change is good for institutions as well as me, and it is good to have a fresh person come in. So we will try to explain where we think some of the issues are. He certainly has a lot of perspectives, I am certain, from the tour that he took around the world and the discussion with the Board. So I am certain that by the time he takes office, he will have a pretty good feel for the challenges ahead. MR. MILLS: Yes, right over there, to the gentleman with his hand up--no, to the gentleman. Thank you. QUESTION: Larry Elliott, of The Guardian. In your five years at the Bank, what do you consider to be your biggest success, and what do you consider to be your biggest failure? MR. ZOELLICK: Can I hold on the second one? [Laughter.] MR. ZOELLICK: Well, I tried, Larry, briefly, in the opening, sort of anticipating this question, to say that in my own mind, I have seen these three phases. So, first, when I came into the Bank, as for those of you who have covered it, it was a tumultuous period. And so I had the challenge of a leader trying to turn around an institution. And to the credit of the institution, the best way to get out of some of the internal strife was to focus people on the mission--that is why people came to the Bank--and we were able to do that relatively quickly. We had some complicated issues to deal with in governance and anti-corruption and others where Paul Volcker and others helped. Second, before too long, we had the food and fuel crisis start to hit us in late 2007, so I am particularly pleased that sort of a combination of my international experience and kind of reading what was happening in the market, we moved quite quickly, and I think if you talked to people in the food security community, they felt that the Bank was more agile than it might have been in the past, but--and in addition, we start to see this as an opportunity to invest in agriculture going into the future. And then, as I have mentioned, in the financial crisis, doing about a quarter-trillion dollars of support is not only important financially, but it was important to how we designed a lot of it. So the fact that in trade finance, Lars and the IFC team leveraged our financing to keep a lot of banks in the market. I mentioned the Vienna Initiative. In Indonesia, we organized with the Asian Development Bank, the Australians and Japanese, a backstop proposal. So part of my point here is that it is not just financing; we need to be able to leverage it and kind of innovate it in innovative ways, and I think we were able to do that, including some things that I hope will become seeds of very important future growth, like this Asset Management Company which is a subsidiary of IFC, where we are now tapping the sovereign funds and pension funds, and we already have $4 billion of money that the Bank would have never seen going into African equity markets. So it is not only the response in financial terms, but it is also the innovation. And then, as part of that, it goes to this modernization phase which I think has just been begun, and there, as I mentioned briefly in my remarks--and here, I credit some of my team, Caroline Anstey, Sanjay Pradhan--together, we decided this focus on really opening up the Bank as an institution was key to not only development, but frankly, having a healthier Bank. And so an Open Information policy, it is the first among multilaterals, based on an Indian and U.S. Freedom of Information Act--this Open Data Initiative is just going to--I have already seen it--it is going to drive a whole new way of doing policy, because we are making this accessible with mobile phone technology in any country around the world, so we are going to have a much more interactive process. And just to connect this to a little bit of the transition debate, Larry, it was interesting that--and I am not saying this was any of the three candidates--but some others were saying: Oh, the Bank is doing too many things. It must focus on these three things. In my view, that was a mistake that elitist economists made 20 years ago, where they said "We know what developing countries need." And maybe it is because of my private and policy background--my approach has been fundamentally different. It says let's focus on the client; let's hear what the client needs, and then let's take the innovation from the world and apply it so, and then, in the process, we can learn with the client through an open process about how to do it better. So I think--I am sure you have encountered this with The Guardian, but I have encountered it at university campuses – is that you know, the Bank is still a big, multilateral, Washington-based institution, but the more you open up an institution, it is the best antidote to conspiracy theories and better policy. Pardon? QUESTION: [Inaudible; no microphone.] MR. ZOELLICK: Well, I'll let you be the judge of the failures; how about that? [Laughter.] MR. MILLS: Yes--thank you--to the gentleman right here. QUESTION: Thank you. IMF Managing Director Christine Lagarde just said that low-income countries have to deal with lower aid resources. I would like you to elaborate a little bit more specifically on Latin America, if you have figures. And I would also like to know if the World Bank is concerned about the rise of protest movements and more social demands in different countries, even the Occupy Wall Street movement here in the United States, in Europe, and all this situation. MR. ZOELLICK: Well, on the first one, I guess the way I would approach the concerns for low-income is not just in certain countries but across countries, because one thing a lot of people have lost sight of is that two-thirds of the people living on under $2 a day are in so-called middle-income countries. I was just in India, where I met with women with a Self-Employed Women's Association. These are extremely poor women. So one of the challenges for the Bank is getting people to recognize that you are going to need to deal with poor people in a variety of different countries. Now, foreign assistance is clearly a piece of that, and it's under stress. By and large, if you look at the OECD numbers, the countries have sort of generally kept up what they were doing. But I guess my suggestion on that goes to some of the things we have said in modernization. Take a country like the United Kingdom, which has maintained its effort to reach the 0.7 percent of GDP under difficult budget circumstances. It is a heroic effort. They, the Australians, Canadians, and others have done good work on this. But they need to show value for money, so this goes right back to the Results Agenda. And this is where some of the things we are trying to do to have evidence-based learning about what works and doesn't work--I think it is something Dr. Kim is interested in--this will be very important for the future. But another point of it is, one reason that it is important to draw the middle-income countries into the multilateral institutions is about a conservative estimate of the foreign assistance from the emerging borrowers, or the emerging countries, was about $15 billion last year. That's about 15 percent of the total, and it is probably a conservative estimate. And recognize, part of my view is you've got different sources of funds. You are also going to have investment funds. So the rise of China and the increase in commodity prices has probably been one of the best things for Latin America. The challenge, however, will be for Latin America to use that--and that is one of the things I will be talking about with the Governors--as a broader basis for more inclusive growth. So I tend to--I gave a speech last year where I talked about "Moving Beyond Aid," and the idea was not that we can overcome that today, but we need to move beyond kind of a charity model to the notion of investing in human capital, in infrastructure, with developed and developed countries, and in some ways, the best test is Sudeep's opening question--what are people most worried about today--Europe. And if two-thirds of the global growth comes from developing countries, we have to change people's mindsets. These are potential poles of growth. I just met yesterday with the African Governors. What are they interested in? Energy. Infrastructure. Regional integration. So those are the elements that we need to focus on. And I guess the last point on the poorest--the world is an unpredictable place. We are not going to change that. So people who believe they can control this price or that price, I wish them--well, I don't wish them good luck--but anyway, it is not going to work. What we should be doing, however, is making sure that every country has an effective social safety net, and we had a function on this yesterday, because we have learned a lot from developing countries about how to do this in a cost-effective way. The Bolsa Familia Program in Brazil, the Oportunidades in Mexicos--these are done for half of one percent of GDP. Trust me, if the U.S. Congress could get their entitlement programs down to any remote degree of that, they would be pretty happy; and yet they cover 15 to 20 percent of the people, and they provide a ladder up. So, and Ethiopia has a different model. So we at the Bank have helped extend conditional cash transfer programs to about 40 other countries. So we had the Philippines Secretary here yesterday, and they have expanded to 3 million families. So to me, the message for aid is not just the aid number but its effectiveness, and for the poorest, let's focus on basic safety nets for every country to deal with the volatility and uncertainty, because the other lesson we learned is if you wait until the crisis, it is too late. MR. MILLS: Okay. I think we have time for one more question. Yes, we'll go to the gentleman in the back, please. QUESTION: Hi. I am Bernard Busuulwa from Uganda. Now, Robert, I would like to know--you talked about the pending problems with trade finance among African exporters. I would like to know what is your first advice to central bankers in Africa who are terribly challenged in getting their banks to increase access for the exporter, and pro-poor growth in cross-border trade, especially at a time when their economies are also feeling the heat of the euro zone stress and weakness in the American economy. MR. ZOELLICK: Well, my first advice is not necessarily to the African central bankers; it is to some of, the Basel and developed world central bankers that, as they develop these rules, build back in feedback loops, because as sure as we are sitting here, they are going to find ways that over-constrict--it is the way the pendulum works--and I am most concerned about the effect of over-constriction on poor countries and developing countries. And in the area of trade finance--something that Lamy and I have talked about--part of the problem is they put in capital requirements and they don't have very good evidence, but frankly, the evidence we have is that it is a pretty short-term loan, and, it's a pretty - it tends to get repaid. So my first start is with the developed world. But secondly--again, I would not focus so much on the central bankers--there is a huge opportunity in Sub-Saharan Africa to remove border barriers, to create more integrated markets. So--you are from East Africa--I visited a one-stop border place that we helped open up--I think it was actually Kenya and Uganda--and it had gone from two days for goods transporting to two hours. And this does not require huge sums of money. We now have the systems. We have worked with some private sector firms to develop the software on this. And it means sort of systematizing the process. Then, if we can combine that with infrastructure development so, whether it is roads or railroads or ports or electricity, to be able to strengthen it. So you are right--at least, I think you are right--by saying that subregional integration--and I would focus on sub-regions--East Africa, West Africa, Southern Africa, Central Africa--is the way to really start to drive a potential for growth. And I just keep coming back to this, because when I read most of the press accounts of these meetings, everything is focusing on the macroeconomic/fiscal/monetary. Fine. I am not denying that. But you are not going to ever deal with this problems unless you create sources of growth, and there are sources of growth in Africa, and I see it with private sector firms being interested in it, but Africans have to create the right enabling environment. MR. MILLS: Very good. Thank you very much. Show Less -
Transcript of World Bank Group President Robert B. Zoellick's Press Conference in Beijing
Moderator: ... joining us for this news conference this morning with World Bank Group President Robert Zoellick. Also joining us today, as many of you already know, Klaus Rohland, our Country Director... Show More + for China. Mr Zoellick will begin with some brief opening remarks and then he'll be pleased to take your questions. If you haven't had a chance to silence your mobile devices, this would be a good time to do so. Let's get started. We'll turn it over to Mr Zoellick, please.Mr. Zoellick: Well, first I'd like to thank all of you for coming, and I apologise, I seem to be losing my voice a bit. I'd like to start by thanking the Government of China and the Chinese people for the hospitality extended to my colleagues and me during this visit. [Unclear]Moderator: Ladies and gentleman, we will resume our discussion here, please. Everyone has a chance to get settled, please.Mr. Zoellick: We'll wait for people to sit down [unclear].Well as you see this report has provoked some interesting debate about China and that's the point of any good research report. I also, before I go on, would like to thank Executive Vice Premier, Li Keqiang, and Vice Premier, Wang Qishan, for their meetings with me to discuss the Bank's co-operation with China and also this joint DRC World Bank report. I'd also like to thank Minister Xie Xuren and Minister Li Wei for yesterday's conference on this important work and the extensive co-operation of their staffs.I also want to thank Party Secretary, Wang Yang, who I met Sunday in Guangdong. I first visited Guangdong in 1980 when I lived in Hong Kong, so I enjoy visiting it because it gives me an opportunity to see the tremendous progress that China has made over the past 30 years. I last had the opportunity to meet Wang Yang in 2007 shortly after we both undertook our new posts, so the meeting enabled me to learn more about one of China's coastal provinces.Right after this session I'm heading to Inner Mongolia, a visit that will include conversations with Party Secretary Hu Chunhua, so I can learn more about the process of reform in interior parts.In Guangdong I was struck by the fact that many of the issues now facing Party Secretary Wang Yang [unclear] … very well with the very issues that were discussed in this China 2030 report.The joint work by China and the World Bank highlights that China's leaders are willing to ask some tough questions about the challenges ahead. I've been very impressed that China after 30 years of 10 per cent growth is willing to consider the structural changes discussed in this report.We hope this work will also be of use to other middle-income countries facing the so-called middle-income trap, so I was pleased yesterday that Trevor Manuel of South Africa and B K Chaturvedi, the Deputy Planning Minister of India, were able to join us.Much of the world economy is now focused on economic stabilisation measures, but [unclear] it would be useful for developing countries to also consider structural growth changes to advance productivity, innovation, technical change and to create jobs.Now realising Chinese vision for 2030 will demand difficult changes, reforms, to meet the challenges that lie ahead. These are decisions that only China can make. But we hope the report will help.I believe there is a momentum building behind reform in China. And I offer the World Bank Group's assistance on pilots and other projects to test ideas in the years ahead.The World Bank was China's first and largest international partner in helping to overcome poverty. Since my predecessor Robert McNamara first launched relations with China with Deng Xiaoping in 1980, the Bank has had a special partnership with China on economic analysis. I think that experience was one of the factors that led to this report.In 1985 there was a floating seminar for days down the Yangtze River that later produced a report in 1986 about the reform prospects. In 1992 there was an important conference in Dalian that led to the idea of China embracing the socialist market economy. So it's fitting to be here today with this report, now a joint production, that examines the past, the current and the future role for China to the year 2030.Since this is likely to be my last visit to Beijing as World Bank President, I also thank the Chinese leadership and officials for their very strong support of the Bank, and of me personally, during my tenure. We're very appreciative and we broke new ground in many areas.I also want to take this opportunity in public to thank our extraordinary World Bank Group staff here. And in particular, our excellent Country Director, Klaus Rohland; the head of our IFC team, [unclear] and the incomparable Elaine Sun who keeps all this running. They're superb professionals and I'm proud to have worked with them.I'm pleased to take your questions.Moderator: Okay. We'll open up for questions. Kindly, if you could, state your name and your organisation - and we'll take a question from the gentleman here, please. There's a microphone that's coming to you too.Question: I'm from China Economic Elite magazine. I would like to ask a few questions related to this China 2030 report that you have mentioned. The first one is, would you please comment on the importance of this report? Secondly, we have all seen the protester just now, so I'd like to ask, are there any sharp or controversial issues that was raised in this report and in what aspect would you please mention to us that you think has stimulated this kind of protest?Thirdly, I have also read some coverage on this report and I understand some of the suggestions made in the report relate to scaling back the size of state-owned enterprises and enterprises under the direct management of the Central Government. Otherwise it's going to pose some difficulties in - for future development of the Chinese economy. Why do you think so, in your view?Mr. Zoellick: Well, firstly the importance of the report will depend on what China does with it. It's important to remember that these are the decisions for China to take. But I'm encouraged that the ideas will be taken seriously. First, because as I've said, there has been a long history, over some 30 years, of Bank - Chinese cooperation on the analytics of reform. And it's been productive for China and we've learned things that are applicable elsewhere in the world. Second, we could see that the leadership embraced this report from the very first time I suggested it about 18 months ago. Third, while we've done a lot of cooperative work with China, this has really moved to a new level in the engagement we had with the DRC and the Ministry of Finance.What happens here in September when we presented a draft, and I think one of the reasons we took additional time for this report, was that the interim consultations that were taking place within China, I hope, will create the basis for building on the final recommendations. Deng Xiaoping said seek truth from facts and that's exactly what this report tries to do.You asked about controversies. Frankly, this isn't new to me, as I've been in public service for 30 years. I was a trade representative so I've dealt with demonstrations and worse. So I will ask for the translation of this gentleman's paper and will look at it, as well as other comments. At the Bank we're pretty comfortable with an open debate, we think that debate is a way to refine one's ideas.My only request is that people express their views in a way that allows discussion. They can probably do that on the web as well, since we have an open information policy. Indeed, one of the key ideas in this report is to be successful with changes of this nature, one has to involved public participation. I expect there are a number of controversial elements in this report. I don't need to list them all. I suspect that will come up in the course of debate over the coming years.Let's focus on the core question. China has been very successful over the past 30 years with one structural model for development. That model has focused on export-led and heavily investment-led growth. The 12th Five Year Plan recognises that needs to change to focus more on domestic demand and consumption. This report goes into detail, looking to the year 2030, of how one could make those changes.Now you talked about state-owned enterprises. I think many experts have the view that state-owned enterprises have benefited from very inexpensive financing, preferred positions in the market, and there have been very large retained earnings that have led to China savings, but haven't necessarily benefited all the Chinese people.So to reduce China's global savings rate and also benefit the Chinese people, if a lot of those dividends are sent back to provide social benefits for China's people, we'll have structural change and help support some of the social security systems. China has seen, in its own experience and the rest of the world has seen this, that competition creates more efficiency, as productivity; high productivity can sponsor higher wages. So the export sector, which has been highly competitive, already has some of these benefits but some of the service sector, which needs to adapt to benefit from reforms, needs the types of adjustments that would break up monopolistic - oligopolistic positions.I know it's a long report but I urge you to look at some of these sections because I think the descriptions of the benefits are well stated in the report. The last word. Will some of the vested interests that benefit from the current structure resist? I suspect they will. They do in the US and Europe and Japan. But the Chinese leadership's interest are that of all the Chinese people, not just specific groups.Moderator: Okay, we'll take another question, then. The lady in the front row in the grey, please. Here's a microphone.Question: Thank you, reporting from CCTV News. I have two questions. The first one would be you will leave this position as chief of the World Bank in June and what are you going to do [unclear]? Have you had any idea who would be your successor as the World Bank President? Second question is in 2001 you have negotiated China's entry into WTO as a Trade Representative. What do you think is China's legacy of this membership in this organisation? Thank you.Mr. Zoellick: On your first question, I don't have any plans yet for what I do when I leave. I want to focus 100% on my job until I finish on June 30, as is demonstrated by somewhat my broken physical state. And also I feel, as a responsibility to the organisation, that's the right way to handle it. And I announce my plans to leave so as to allow time for the process to take place to select a successor. Our Executive Board of Directors has set up a process by which nominations are to be done over the course of the next four weeks or so, and then the shareholders will make a decision on who the successor is. All I can say is I'm pleased to leave it an institution that is well capitalized, I think it's performed well and we've got some - an excellent team.Your question on China's WTO accession is a very good one and it fits this report. And I touched on this briefly in my remarks yesterday. What I saw is that Zhu Rongji and Jiang Zemin used the WTO accession process to push internal reforms in China in the course of the late 90s. The WTO membership then connected China into the rules-based trading system. That provided the foundation for the export-led and investment-led growth that has been so successful for the past 10 years. But if you look at the conditions in the international economy, I think we'd be unrealistic to expect that China would be able to rely on exports to the same degree going forward. So that's why this report talks about another generation of structural changes just like those that Zhu Rongji pushed through.But it also suggests that China as a growing player in the international economy could connect these internal changes with the cooperation in the international economic environment. I touched on some of these, for example, the investment policies, intellectual property rights protection, service competition, financial service sector reform. These offer win-win opportunities for internal reform and international accords. So there is a nice parallelism here.Moderator: Okay, let's take another question. The lady on the side, please. I'm afraid we're running out of time so the lady with your hand up right there, yes. [Unclear].Question: Thank you very much, from Bloomberg News. I just wanted to follow up, actually, on the questions of the previous journalist. Obviously while you've been here you've talked with Chinese policy makers. What's their feedback they've been giving to you about how they would like to see the next President of the World Bank, how they would like the process to go ahead, and who they would see as a good candidate?You talked about the WTO being a trigger for internal reform. What's going to be the trigger this time, there doesn't seem to be one? A lot of people who are China watchers are saying that reform has actually stalled over the last few years. [Unclear] being the head of SASAC in 2003 to manage the state owned enterprises, he said then they want state owned enterprises to pay dividends. That doesn't seem to really have made much progress, as is exemplified in your report. The other issue is interest rate reform again, they've been going about this for years and nothing has really happened. What's been holding it up? What do you think could be the catalyst – would it be another crisis or what do you see as being the catalyst? Thanks.Mr. Zoellick: Well, first on your first question. The Chinese, at various levels, have been very complimentary about their work with the Bank and our partnership, and I'm appreciative of that. It's been a key part of, not only our work with China but expanding China's role as a responsible stakeholder in the international economic system.Just to give you an example, when I was in Guangdong, we discussed the possibility of some of the Chinese lower value-added manufacturing, perhaps relocating to Africa, and what we could do to support that.My former colleague Ngozi Okonjo-Iweala - now the Minister of Finance heading the economic team in Nigeria - was in Guangdong right before me; trying to talk with the companies about this move. So, there are enormous possibilities to build on in the global development area.And as for China's preferences for successor rights, we'll let the Chinese comment on that.You make an excellent point about the different context for driving reform than in the period where one could use the WTO accession as a structural driver. But I think in these circumstances, the economic crisis and the drop-off of exports that you've seen to the US and Europe and elsewhere, has sharpened attention to the changes.As I mentioned, in addition to going to Beijing, I often try to go to the provinces. And when I talk to the Party Secretaries, I try to get their sense of the need for reform. That's one of the factors that leads me to believe that this process will have momentum.Like you, we look for other signs. For example, the People's Daily Editorial that reports from the People's Bank of China.And certainly in my conversations with the Chinese leaders, I think they not only say they want to move to reform, but they describe the challenges in a way that suggest they know it's needed.But having said that, I don't expect any big bang reforms. The history of China's development process –starting with Deng Xiaoping – is often to start in local areas with pilots and to test and then to widen the process.Keep in mind, this report is looking out to 2030 – that's a lot of years here. But I think it tries to outline the set of steps, and some sense of sequencing. We would be pleased to work with the Chinese as they explore how they want to proceed.They are very aware of the facts, the environmental costs, the urbanization process, the aging of the population, some of the issues of social disparity; and I think, they believe they need a new approach to be able to address those issues.The one other point I guess I would add is that, from some informal conversations with some of our Chinese colleagues, in the process of their discussing the grasp of the report with other ministries, I've gotten the sense that there's a hope that with the next generation that these will move forward.But nothing's foreordained, the devil's in the details and these are decisions for China to make.Moderator: Okay, we'll take one more question. Let's take the lady right at the front here please.Question: Good morning. I'm from China Radio International. I have a few questions about the report.Moderator: We'll take one, if we could please. Mr. Zoellick has a plane to catch...[Over speaking]Question: Okay…Mr. Zoellick: Give it your best shot.Question: I'll just ask one question – would you [inaudible] … How should the pension fund be expanded to cover the vastly growing elderly population, both urban and rural, without adding significant fiscal burden to the government. And [unclear] discussion about investing the pension funds into the Chinese stock markets?Mr. Zoellick: You'll see that in discussion in the social welfare issues and social production issues, there's a focus on flex security.That means to try – one thing it means – is to try to have some of the benefits delinked from enterprises or local associations, and connected to individuals.A number of developing countries have used savings systems and map saving systems so people can build up their pensions over time.This also relates back to the question about state owned enterprises.Part of China's high savings rates are the redeemed earnings of those state owned enterprises. So you need a revenue system that also provides the resources so people can build those pension plans. And some of those could come from dividends from the state owned enterprises.But I think the one other point that I want to emphasise, is that we talk throughout the report about having a fiscal system that supports the changes in China. This relates to your question but it relates to a number of other issues. For example, we all know there's been a lot of disputes in China over land. This is often because local governments have expenditure responsibilities but they don't have revenue sources, so they don't get revenue from the centre.So if you move towards a revenue system that matches resources with expenditure responsibilities, you avoid some of the tensions that have been built into the system and you can benefit for the average person in China.And this relates to a point that I want to share with you because it comes up with my discussions in the provinces but also in Beijing.The Chinese model of growth so far has relied on a mixture of state and market. And sometimes the borderlines between those are a little fuzzy. And that sometimes means the average Chinese citizen is dependent on the actions of local authorities about where that borderline is.This report emphasises something that I think is getting increasing recognition in China, is the rule of law, so there's clarity on those issues. And transparency and accountability.Now then you asked about where the pension fund should be invested and I won't get into that one. I have a hard enough time investing in my own pension fund.Moderator: Okay. We really do have to wrap it up at this point. I'd like to thank all of you for joining us and look forward to seeing you again. Thank you. Show Less -
World Bank President Zoellick's Opening Remarks at the High-Level Conference on: "Development for a Modern, Harmonious, and Creative Society: International Experiences and China's Strategic Choices"
IntroductionHonorable Ministers; ladies and gentlemen.It's a great pleasure to be here today to present the "China 2030 Report."The idea for this study was conceived eighteen months ago, when I met wi... Show More + th Executive Vice Premier Li Keqiang at the time of the 30th anniversary of the partnership between China and the World Bank.We discussed how we could deepen that partnership – how we could build on the knowledge and learning, the mutual respect and friendship developed over three decades between China and the Bank.Vice Premier Li endorsed a proposal that we work together on identifying and analyzing China's medium-term development challenges, looking forward to 2030. President Hu Jintao and Vice President Xi Jinping welcomed the proposal.So I'd like to thank Vice Premier Li for his unwavering commitment to this project.I'd also like to thank Minister Xie Xuren and Minister Li Wei for hosting today's conference, and bringing together this distinguished audience to discuss the work.In addition, I'd like to recognize Minister Zhang Yutai for his role in starting and guiding this study. And I'm grateful to Vice Minister Liu Shijin, who led the team at the Development Research Center of the State Council on our joint work. His leadership throughout this project has been exemplary.ContextThere could not be a better time to discuss China's remarkable development story as well as the challenges China faces going forward.Today's international economy reflects multiple poles of growth. Emerging markets – many in Asia – have been compensating for the stumbling performance of advanced economies. Over the past five years, developing economies have provided two-thirds of global growth.China is a vital part of this story.China's economic performance over the past thirty-two years has been exceptional: an average growth rate of 9.9 percent; over 600 million people lifted out of poverty. China has already achieved upper middle income status. If the country reaches $16,000 of income per person by 2030, up from today's approximately $5,000, then China will have an economy equivalent to adding 15 of today's South Koreas.These developments will have profound and lasting effects on the world – economically, socially, and politically.We should, however, be wary of straight-line trends. As China's leaders know, the country's current growth model is unsustainable.China has recognized the challenges of moving away from export- led growth and over-reliance on investment toward greater domestic demand and consumption.China also faces challenges that are special to its circumstances:A population that will grow old before it grows wealthy;Pressure on global supplies of energy, food, raw materials, and water;Environmental dangers;A labor force that in five years will have more retirees than entrants, and a concomitant need to boost productivity; andSocial risks of rising inequality.China will chart its own unique development path toward a modern and creative high-income society – one that can overcome these challenges.A successful China will not only continue to provide opportunities and improve lives for hundreds of millions of its citizens. It could offer an example to other countries – developing and developed – for how economic advancement need not be at the expense of social and environmental performance, or global responsibility.China can also seek to connect its reforms to building a stronger, more inter-connected and cooperative international economy.I respect the Chinese leadership for asking these questions, based on their recognition of a need for structural reform.Developed countries that are now absorbed with stabilization efforts would be wise to consider their own structural challenges to growth and innovation.This is not the time just for muddling through. It's time to get ahead of events and to adapt to major changes in the world and national economies.China's policymakers have identified what needs to be done. The 11th and 12th Five-Year Plans reflect the goals of change, with their focus on quality of growth, structural reforms to harness innovation and economic efficiency, and social inclusion to overcome the rural-urban divide and the income equality gap.Now China needs to translate these plans into action – to take "what" needs to be done and turn it into "how."The ReportSix months ago, we met at this very same venue to discuss an early draft of the "China 2030 Report." At that time, Chinese and international experts provided insightful and valuable suggestions on how to improve the draft. Minister Li Wei provided especially important guidance on how to make the report more useful to the Chinese leadership.The joint DRC-World Bank team has worked hard to address these comments and concerns, and to improve the structure, argumentation, and application of their research and analysis.I believe they have done an excellent job.The result is a report that does not offer simply a textbook solution, but is based on a recognition of the political economy challenges.The report is practical. In accordance with Minister Li Wei's advice, the report stops short of being overly prescriptive. It offers directions, recognizing that these ideas need further debate within China before the details of precise policies, laws, regulations, and guidelines can be drafted and then implemented.The report is realistic. Reforms are not easy – they often generate pushback. We have tried to identify obstacles to reforms, suggest sequencing and quick wins – steps that can make reforms easier to implement. We have tried to address short-term risks, but at the same time ideas on how to make reforms participatory, building in support throughout the society as well as feedback loops based on experience.This is also a report that can appeal to an international audience, especially other middle income countries that are in a position similar to that of China and face many of the same challenges. For that reason, I'm especially pleased that today's audience includes development experts from a wide range of countries, with diverse backgrounds.Finally, this is a report that raises difficult questions. It focuses on the central policy challenges that China, and other upper middle income countries, will need to confront:What should be the role of government in the economy of the future? What should be the roles of individuals, households, businesses, and civil society organizations? How can countries reconcile economic growth while protecting the environment and natural resources, and transition into green development?What do countries need to do to ensure that everyone has equality of opportunity, basic social protection, and long-term care for the aged, and that these services are affordable – for the government, businesses, and households?How can countries adjust to rapid urbanization?What does it take to develop a creative, open, and innovative economy that can compete globally with advanced countries?How can we learn from the recent global financial crisis and build fiscal and financial systems that are not just resilient but also just, transparent, and accessible to all?To address these questions, the report proposes a new development strategy for China over the next two decades.This strategy builds on China's considerable strengths – high savings, plentiful and increasingly skilled labor, large markets, a record of solving problems to keep growth on track, and the potential for further urbanization – while capitalizing on external opportunities, including globalization, the rapid growth of other emerging economies, and promising new technologies.The proposed reform program is based on six strategic pillars.First, redefine the roles of the state and the private sector, so that China can complete its transition to a market economy. Currently, China relies on a mix of market and nonmarket measures to shape incentives for producers and consumers, and there is a lack of clarity in distinguishing the roles of government, state enterprise, and the private sector. China needs to resolve these issues. Among specific reforms is the residency permit system – the hukou. Priority should be given to protect farmers' rights over agricultural land, expanding land registration, and rental rights. The Chinese economy of the future needs to rely more on markets and the private sector.Second, enhancing innovation and adopting an open society system with links to global R&D networks. These improvements will need to be linked to capital and entrepreneurial markets, and supported by strong rule of law and intellectual property rights enforcement.Third, promoting green development. China has a significant opportunity to transform its environmental challenges into green growth as a driver of development.Fourth, ensuring equality of opportunity and basic social protection for all. This means facilitating equal access to jobs, finance, quality social services, and portable social security – all with stronger capacity, transparency, and accountability.Fifth, strengthening the fiscal system and improving fiscal sustainability. This involves three key dimensions: ensuring that different levels of government have adequate financing to meet spending needs; mobilizing additional revenues; and reallocating spending toward social and environmental objectives.Sixth, ensuring that China, as an international stakeholder, continues its integration with global markets. China is already a key stakeholder in the world economy – though perhaps a one that is still assessing how to combine its development needs with its international responsibilities. Moving forward, China should be a key partner for global solutions in areas such as international development, open trade, global financial stability, open investment, energy and commodities, and the environment.The structural changes outlined in the "China 2030 Report" also offer opportunities for stronger and more constructive international ties.As the U.S. Trade Representative who completed China's accession to the WTO in 2001, just over ten years ago, I was impressed by the way Jiang Zemin and Zhu Rongji used that process of internationalization to drive internal reform. Then I observed how the next generation of leaders, businesspeople, and workers worked to benefit from both the reforms and the WTO system.Therefore, we should also aim to connect this generation of China's structural reforms to the changing international economic agenda – rebalancing growth, savings, and consumption; a more open and competitive service sector market, with greater international competition; technology development to boost productivity, with protection of intellectual investments and property; encouragement of global agricultural development, with attention to food security; wise and more efficient use of energy; open investment opportunities, in developing and developed economies alike; internationalization of major currencies, moving to open capital accounts and flexible exchange rates; and advancing global trade through new openings and expansion of opportunities in global supply chains.Today, much of the world is focused on policies for macroeconomic stabilization. They are necessary, but not sufficient.The world also needs reforms to drive growth, and growth will require structural changes to enhance productivity, competition, and innovation.Structural reforms in developed and developing economies can open new avenues for deeper cooperation and mutual benefit. Instead of being bogged down in traditional disputes – with their zero-sum outcomes – perhaps mutual structural reforms offer opportunities to develop joint strategies to overcome vested interests that pose obstacles to mutual growth.ConclusionI hope that the "China 2030 Report" will provide a useful reference for policymakers, and an invaluable opportunity for countries to share knowledge and experience – an opportunity, to borrow a phrase from China's father of modern development, Deng Xiaoping, to "learn truth from facts."But I also hope that this report is only the starting point. Our aim is to build on the research, analysis, cooperation, and partnership that we have gained over the past 18 months, so that this study can be the foundation for the development of institutions and policies, especially for fiscal expenditure, social protection, rule of law, and competition.One of the highlights of China's successful development experience has been its ability to start at the local level, test, and then scale up. Pilot projects can be incredibly useful learning tools. Small steps can often produce big things. The World Bank Group is ready to support China's efforts to take these next steps. One of the great benefits of this joint project has been the bonds that have developed over the course of preparing the report. Vikram Nehru, the leader of the World Bank team, has informed me that at the end of the day, both the Chinese and World Bank teams had truly become one joint team with common objectives and deep friendships.So I'd like to thank again the Chinese authorities and our Chinese counterparts again for being such outstanding partners. I hope we can continue to work together.Thank you, and I look forward to hearing your views. Show Less -
Robert Zoellick on China 2030 report: Transcript of Media Questions and Answers
Moderator: Morning ladies and gentlemen. Thanks for joining us. President Zoellick will be pleased to take your questions about the discussion you just heard in China 2030 report. I'd ask you to kindl... Show More + y silence your machines of various sorts, and we'll proceed with the questions. Over to you - let's take the first question please.Mr. Zoellick: As Carl said, since I presented an opening statement, and our time isn't too long, we'll just go straight to questions.Moderator: Okay, we'll take your questions please. Let's go to the gentleman from AP.Joe McDonald: I'm Joe McDonald from the Associated Press. Many elements of this report are sort of in line with the party's Five Year Plan, but the emphasis on the private sector element does seem to clash with some of the things the government is doing - [unclear] government-owned national [unclear] industry. I wonder if you can tell us, what is your assessment of the pace and direction of reform now, and how realistic do you think it is to say that the Chinese government will be able to adopt the things that you recommend and get government out of the economy?Mr. Zoellick: Well, implementation will be the test, but you've heard that was also a point made by some of the ministers from the DRC.I think what's impressive is that the leadership is even asking these questions about structural reform.This is a country that's grown about 10 percent a year over 30 years.The easiest thing to do would be to keep doing what one is doing.But what I am picking up from discussions, not only in Beijing but with provincial party secretaries, is the recognition that it's better to undertake structural reforms while the economy is growing well.I was discussing with one of our colleagues about Europe and the challenges that Spain and Italy have in making structural reforms as well as fiscal consolidation.We both observed that it is much harder to do that when there's zero growth.So I think the timing of this report is also important because you'll have a leadership transition in China.It's very important this is a joint report, so this just isn't an outsider coming in and giving a view, but it's been something that's been worked over extensively by Chinese and World Bank counterparts over a year and a half.And recognizing the way the Chinese system works, this report in draft stage has been consulted for extensively with lots of other ministers, and I think that's a good process, because it builds in buy-in.So you talk about the increasing role of the private sector. You've heard the Chinese officials explain why that was an important process to proceed with.But I've also seen at the provincial level that people recognize that local governments, for example, might have too much control, and therefore they stymie the types of initiative we're going to need in the future.But one last point. I understand that you haven't had a chance to see the full report yet. It will come out later in the day, but what you'll see is, this is a very rich agenda, and you've got some sense of the description. So, while private sector is part of it, there are a series of other elements that are important to see how they fit together.Moderator: Let's take the next question, if we could please. Let's have the gentleman there, please, yes.Yin Hang: I'm [unclear] some questions to ask the president [unclear]Moderator: We're taking one question if you could please.Yin Hang: China - you comment about Chinese influence of the economy growth in the past 30 years, and what are the most concern - most problem that we should most consider this year, because we think that we suffer from the world financial crisis and growth problems this year - this is very important. Most of the Chinese foreign exchange reserves have been [used] for the American national debt. Do you have any suggestions of how to - is there any better way to use the Chinese foreign exchange reserves, and about the trade problems between US and America.Mr. Zoellick: Rather than being a problem, China's growth over the past 30 years has been an incredible success story.It's removed some 600 million people out of poverty. And now China's an important pole of growth for developed and developing countries.So as I mentioned in my remarks during this terrible economic downturn, two thirds of the global growth has come from developing countries, and China had a very successful response to the crisis.But I think part of the wisdom of the Chinese officials we work with was to recognize you have to be careful of straight-line trends.As we started this report, I discussed with my Chinese colleagues the dangers of the so-called middle-income trap. Countries reach a certain level of income, their growth starts to slow down, productivity slows down.I'm always a little skeptical of long-term projections, but you'll see in the report, there's projections about what the growth would slow to absent changes over the course of the next 10 or 15 years.But one also has to take into account China's special circumstances.You have serious environmental issues. Urbanization is projected to go from about 50 percent to 70 percent. Within the next five years you'll have more people leaving the workforce than entering it. There's concerns about inequality and an urban-rural divide.Then, how China as a growing economy - as it grows larger, fits effectively in the global system.So those are some of the issues that the report seeks to address, but the devil will be in the details of implementation. But this is a good start.And as for the use of China's reserves, they can always buy World Bank of bonds. Because we're a AAA credit unlike some of those others.(laughter)Moderator: Let's go to the FT please.Jamil Anderlini: For the last couple of years you have been talking, since, I guess, this process began, talking a lot about turning point. You also noted from earlier today. But we didn't really hear the Chinese side today that we are at a turning point. In their discussions with you, do you think they use that language? And -do you think there is a recognition that this is the moment China really has to change? Rather than a Five Year Plan that sounds quite similar to the last Five Year Plan about the economic structural change over the long term. Is there are crisis assessment going on in China about that this is really necessary?Mr. Zoellick: I think the concept of turning point is used in the context of some of the challenges I've discussed and made in my opening remarks, because they're going to have to be addressed over time. I see it as more of an issue of stress points that will expand over time, rather than a crisis. I think this is true for economies other than China. Frankly, I think a lot of the developed economies would be well served by undertaking structural reform examination like China's undertaking. You know, much of the daily economic discussion and your reporting, understandably, focuses on stabilization of macroeconomic, fiscal and monetary policy. I think that is sometimes unfortunate because you have to look at the fundamental drivers of growth not just the macroeconomic issues. That's what this report seeks to address.Also, in the near term I personally believe that China's likely to have a soft landing. But for a country of this size, of this importance, with the challenges still ahead - a population that will grow old before it grows wealthy - I think it would be important if the next leadership team is able to proceed with the types of reforms discussed in this report. I think that is one reason why they were interested in having it done as a joint report.Will there be obstacles? Sure, there's obstacles in the US, in Europe and elsewhere. And I'll share this personal insight. What I've been actually struck by as we've gone into the final stages of this report, and from again, some of my discussions with provincial party secretaries, is there's a momentum behind reform in China. So I think you're going to see this in some form or another move ahead.Moderator: The gentleman from the Press Trust of India please?K.J.M. Varma: This is quite an exhaustive report. There are a lot of commonalities between the economies of the BRICs countries especially India, China and Brazil. Does it have any implications; can others too learn any lessons from this report?Mr. Zoellick: We definitely hope that there will be lessons here that will be applicable to other middle income countries.And the report process itself was designed that this report might be of use to others. So you've seen even in this meeting you had Trevor Manuel from South Africa, you had a deputy from the Indian Planning Commission.At the Bank, one of the people who helped supervise this report was Sri Mulyani Indrawati, the former Finance Minister of Indonesia. She and I talked extensively about how we might be able to use this with other emerging market countries. Having said that each circumstance is different - you have to customize for a country's special circumstances.But as I also mentioned in the answer to another question, I think it would be good for developed countries to be thinking about the structural reforms they need for growth too.Moderator: We have time for a final question. The lady from AFP I believe. Yes?Allison Jackson: I just have a question of people who were involved in preparing this report because you say that China is facing an economic crisis because of [unclear] State reforms involvement in various sectors. So I'm just wondering what you comment is on it? Is it that serious and what sort of time frame you're looking at? Just on you alluded in your speech to some assistance from some areas of government to the reforms in this report, both in this report, where [unclear]?Mr. Zoellick: Well the time frame is up to 2030, so I think you should put into context any of the sense of challenges in that they're challenges for medium and long term growth.I believe China will have a soft landing so I don't see an economic crisis today. If anything as I assess the world economy, as I'm often asked to do, I think China will likely be an ongoing source of growth. The potential crises I see are elsewhere.But I think a more accurate phrase is the one we discussed that was with Simon, about turning point.Over the next few years I think it will be important for China to start to address these issues. If you look at the report it isn't just a theoretical report. We talk about sequencing reform. We talk about building support - to get public support in the ongoing process. We talk about feedback loops.And as for your question about obstacles, I think any time you have an economy that has started to develop as China has, you'll get vested interests in the old models. As a former trade representative if I can say this existed in the United States too. So the traditional model that's based on export-led growth and heavily investment. This talks about moving towards greater domestic demand and consumption. Part of the idea is as you build new opportunities in some of these new areas, you'll build other groups that will be supportive of reform.One last point, which I touched on in my remarks, and maybe other participants will be less prone to raise this, but I'll share it with you. Sometimes in trade or international economic relations, this is the case with the US and China, Europe and China, the disputes have become somewhat of a zero sum traditional trade off. For creative officials in China as well as in other countries, this report actually offers some additional opportunities for win/win mutual gains.For example, look at the ideas here about opening up the service sector to build productivity and jobs. That could help international firms to be able to compete but also gain business in China. There'll be inward investment with China but increasingly there'll be Chinese investment outside in both developed and developing countries. So it might lead to better rules on international investment.As China's labor force starts to get smaller and yet there is an interesting increase in wage growth, you're going to need to have innovation and productivity increases. So you've heard some of the Chinese officials talk about stronger intellectual property rights protection and ways of supporting innovation and technology development. That's another potential win/win. I think you'll find the same in areas like energy and water efficiency.So what would be most exciting to me is that in addition to this report the US and others also start to undertake structural changes – that they use therefore such as strategic economic dialogue to engage on the mutual win wins here.Moderator: Okay, thank you very much, that's all the time we have this morning. You'll have another opportunity to ask Mr Zoellick questions tomorrow morning at 9.00am at the World Bank Office [inaudible]. The full report will be available at 4 o'clock today. So if you've read it all by tomorrow morning you can ask detailed questions by line. Thank you, okay. Show Less -
The Economist World Oceans Summit: "A New S-O-S: Save Our Seas"
"A New S-O-S: Save Our Seas"IntroductionLadies and gentlemen,Oceans are the lifeblood of our world.They flow over more than 70 percent of our planet, and hold about 97 percent of its water. They... Show More + absorb heat and carbon dioxide, generate oxygen, and shape the world's weather patterns. They provide about 15 percent of the animal protein for the world's population.The air that we breathe, the water we drink, the food we eat. Whether we live inland or on coastlines, each one of us relies on healthy oceans. So I'm particularly pleased to have this opportunity today to discuss the need for coordinated global action to restore the oceans to health.I'd like to thank The Economist for convening this Summit, and John Micklethwait for chairing today's session. And I'd especially like to thank all of you for your commitment to this issue.Addressing Oceans: Challenges and OpportunitiesOver centuries, we thought that oceans were so vast, so deep, that we could take from them whatever we chose, and could dump whatever we chose into them. Today, we know that isn't true. The world's oceans are in danger.Fish stocks are crashing from overexploitation. Rising pollution is flowing into the oceans from land, air, and rivers, choking plant and animal life. Ocean habitats are disappearing – some with alarming rapidity – as coastal cities boom. A changing climate has brought warmer oceans, higher sea levels, and ocean acidification.Oceans are the natural capital of all countries, developed and developing; all countries suffer from degradation of these ecosystems. There are close connections between land and water, human and ocean health, sustainable management and renewable benefits.Yet when we devalue our natural capital, it is often the poor who feel the greatest harm. Oceans provide a wealth of goods and services that make a tremendous contribution to overcoming poverty, creating opportunity, and spurring economic growth.Let's look at just one dimension of the oceans: fish and seafood.One billion people in developing countries depend upon fish and seafood for their primary source of protein. Over half a billion people in developing countries depend on fishing as a livelihood. Half are women.For developing countries, including many island and coastal nations, fish represent the single most traded food product, valued at $25 billion a year. For many Pacific Island countries, fish make up 80 percent of total exports.For some countries, the fishing trade is absolutely critical for their growth. In Sierra Leone, fisheries account for as much as 10 percent of GDP; for the Pacific Island nation of Kiribati, it's 53 percent. In Senegal, fishing creates about 600,000 jobs and employs 17 percent of the labor force.Fishing licenses can be a critical income source. In Guinea Bissau, the annual fishing license sold to the EU at one point represented close to 50 percent of government revenues. When catches shrink, or a country is unable to keep other countries from fishing its seas, license prices fall too.The living ocean is also home to millions of animal and plant species, important to maintaining ecosystem health – and to a large global industry in recreation and ecotourism. In the Seychelles, for example, a country consisting of 115 islands, tourism accounts for 25 percent of GDP. Coral reef tourism alone has an estimated economic value of more than $20 billion a year. More livelihoods stem from ocean research.Around the world, we estimate that about 350 million jobs are linked to the oceans through fishing, aquaculture, coastal and marine tourism, and research.Ocean ecosystems – mangroves, bogs, reefs, wetlands, and barrier islands – are becoming more important for protecting increasingly populous coastal areas against natural hazards. Some 275 million people live in coastal economies dependent on coral reefs, for example – and they are among the most vulnerable to climate change and extreme events.For hundreds of millions of people around the world, oceans are essential for providing food, jobs, livelihoods, and protection.Oceans are the home of an under-recognized and under-appreciated "blue economy." At a time when the world is looking for sources of growth, there is huge potential for "blue growth" – wisely preserving and investing in the value of ocean ecosystems to fight poverty and improve lives.But oceans aren't living up to their potential.Rebuilding Oceans: What Will It Take?Why not?There is already a wealth of valuable knowledge and experience about how to restore our oceans – as well as considerable resources devoted to the challenge.NGOs invest about $100 million a year in oceans. Organizations such as Conservation International, The Nature Conservancy, and the World Wildlife Fund have done a tremendous job in bringing the problems facing oceans to public attention, while also showing the way to innovative solutions with marine protected areas and projects within countries to deal with pollution or rebuilding fish stocks.The Global Environment Facility has invested as much as $600 million in healthy oceans, funding coastal and marine projects that are addressing issues ranging from pollution reduction to innovative approaches to conservation management.The UN group has worked for many years on oceans management – with agencies such as the FAO playing a crucial role in measuring the health of fish stocks, for example. The World Bank Group is investing $1.6 billion in coastal zone management, fisheries, and marine protected areas.NOAA and other national scientific bodies have advanced marine science and ocean planning.Many private companies are increasingly committed to establishing sustainable supplies of seafood.But the scale of the challenge is such that these singular efforts are simply not enough.We need a new S-O-S: Save Our Seas.To make our oceans healthy and productive again, we need greater cooperative and integrated action around the globe, so that our efforts add up to more than the sum of their parts.So today, I want to propose a new approach – an unprecedented Global Partnership for Oceans.This Partnership will bring together countries, scientific centers, NGOs, international organizations, foundations, and the private sector to pool knowledge, experience, expertise, and investment around a set of agreed upon goals.These goals can sharpen our focus, encourage common and reinforcing efforts, and compel us to measure performance. Together, we will build on the excellent work already being done to address the threats to oceans, identify workable solutions, and scale them. We can also mobilize financing where there are gaps.I've seen in other areas that the World Bank Group is fortunately positioned to catalyze and help organize such a global partnership effort. Our relationships with both client governments and all shareholder supporters – based on common interests in development, growth, and sharing experiences in solving problems – offers us a valuable entry point.We can coordinate financing and help with the global advocacy effort, using our own access to policymakers and ministers of finance, in particular, to highlight the oceans agenda, raise interest in investment, and communicate results.We will also provide new funding, as well as leverage our existing portfolios in fisheries, coastal zone management, marine protected areas, ports, urban development, agriculture, and community development, backed by our knowledge platform.We are asking as many organizations as possible to join this initiative. And I am delighted to announce that the response has been extremely positive.The World Bank already has a firm track record working on this topic with the Small Island Developing States, which face unique development issues, as well as large coastal countries such as Indonesia and India. Some of these countries have deep experience in protecting oceans. President Tong of Kiribati, for example, has been a leader in sustainable management of coral reefs and associated ecosystems. Brazil is doing innovative work with the private sector and civil society in scaling up marine protected areas. I expect these leaders and others to play key roles in the Partnership.We are also in discussions with Australia, Monaco, New Zealand, and Norway about working with us on the Partnership.Conservation International, the National Geographic Society, The Nature Conservancy, the International Union for Conservation of Nature, the World Wildlife Fund, and Rare Conservation are prepared to add their expertise, great capacity for innovation, and advocacy. Together, we're making strides on biodiversity, so we are excited to work with them to Save Our Seas.The Global Environment Facility, the Intergovernmental Oceanographic Commission of UNESCO, the UN Development Program, UN Environment Program, and Food and Agriculture Organization are committed to working with the Partnership.The Prince of Wales Charities and GRID-Arendal of Norway are interested in joining forces.Finally, but critical to our success, private sector actors – Darden Restaurants, the International Sustainable Seafood Foundation, the World Ocean Council, and the National Fisheries Institute – are engaged.We hope that this is only the beginning of the list of organizations and companies that will join this partnership – and will join in showing effectiveness to achieve results.First StepsAs a starting point, the Global Partnership for Oceans is committed to mobilizing at least $300 million in catalytic finance. These are funds that would be used for technical assistance to support key governance reforms that can create the necessary incentives for long-term investment in oceans, as well as to help operate marine protected areas, and monitor and communicate lessons learned. Working with governments, the scientific community, civil society organizations, and the private sector, we aim to leverage as much as $1.2 billion to support healthy and sustainable oceans. This would total $1.5 billion in new commitments over five years.Goodwill and even good partners are not enough.We need a common approach and a set of common goals.Last September, the World Bank convened a roundtable to share ideas and come up with solutions for how to bring oceans back to health. We brought together representatives from key countries, NGOs, and private sector players, and asked them "what will it take to restore the oceans?" The answers focused on three key areas:First, countries need help making better decisions about oceans. This change starts with understanding the full value of the ocean's wealth and ecosystem services – because, whatever the resource, it is impossible to evolve a plan to manage and grow the resource without knowing its value. Simply put, we cannot manage what we cannot measure. The Wealth Accounting and Valuation of Ecosystem Services initiative, or WAVES, is already helping developing countries to integrate the economic benefits that ecosystems such as forests, wetlands, and coral reefs provide into national accounting systems. We need to extend these tools to all ocean ecosystems.To make better decisions, countries also need to reform policies. Better policies and governance can create incentives – for both the public and private sectors – to reduce threats to ocean ecosystems, and to invest in long-term protection and management of critical coastal and ocean habitats. Taxes and subsidies, for example, need to be directed with an eye toward incentives and disincentives; certification processes can be simplified; regulatory institutions and national systems for enforcing rights-based fishing can be strengthened.Second, there are numerous areas where greater investment can make a real difference. When a coastline is managed, better decisions are made about development. When marine areas are protected, critical ecosystem services can recover and thrive, enhancing the ocean in neighboring spaces as well.The National Geographic has found that in the Solomon Islands and Kenya, when marine protected reserves were established, the income of local fishermen doubled in five to seven years. Public investments in infrastructure, research, and technology can reduce land-based pollution. We need to show the possible returns from these investments, make them, and continue to assess performance.Third, we need broader cooperation between the public and private sectors. One of the striking elements in all our consultations was that we heard almost exactly the same messages from private and public organizations. We've seen in other areas of development and conservation that building partnerships – sharing experience and ideas – with private and public parties to address problems in practical ways helps build a broader response from the ground – and water – up. With these areas of focus in mind, I'd like to propose targets for what we should achieve in the next ten years:We should rebuild at least half the world's fish stocks identified as depleted: About 85 percent of ocean fisheries are fully exploited, over-exploited, or depleted. This includes most of the stocks of the top ten fish species, or about 30 percent of the world's marine capture fisheries production. There's no room for further expansion – we need to start rebuilding.We should increase the annual net benefits of fisheries to between $20 and $30 billion. We estimate that global fisheries currently run a net economic loss of about $5 billion per year. We need to turn this around, by allocating and enforcing the rights of fisheries and reforming subsidies.We should more than double the area covered by marine protected areas. Currently, less than 2 percent of the ocean's surface is protected – compared to around 12 percent of land. Let's increase this to 5 percent We will need to work with governments and stakeholders to identify and establish sound marine protected areas where they can contribute direct economic benefits. The scale will depend on the context: for example, in some areas, we might work with communities to introduce small-scale protected areas on local coral reef systems, while in others we may work with national governments to identify and protect large areas as part of a wider strategy for the country's ocean ecosystems. We would build on the idea of supporting networks of marine protected areas, such as island chains in the Pacific. A number of these networks already exist, but have yet to be fully implemented. And we should increase sustainable aquaculture to provide two thirds of the world's fish. Today, that figure is about 50 percent, but there are serious concerns over disease management, feed use, and introduction of non-native species. We need to do much better, not only to help secure a reliable source of food, but also to take the pressure off of ocean fish stocks. This is an ambitious list. But these targets are achievable. They are founded on sound scientific assessment, extrapolated from World Bank project experience.There is much more to do. But meeting these goals will take significant steps toward reversing the dangerous, centuries-old deterioration of ocean and coastal ecosystems.This is a critical start.ConclusionEconomists now commonly reference our interdependent world, in which developed and developing countries, rich and poor, are linked – by economics, trade, migration, climate change. Mariners know we are also linked by oceans. But we've taken those oceans for granted. Our predecessors appreciated Neptune's bounty, respected Neptune's power, and were wary of Neptune's wrath.We should recall their wisdom, but add to it our insights from science, economics, and governance.Restoring our oceans to good health is an investment in all our future.We hope that today's event – and our new and expanded partnership – will help us to enlist supporters and donors who are ready to take on this challenge on a global scale. The World Bank will be convening a first meeting of the Global Partnership for Oceans in Washington, DC this April. I invite all of you to attend.Send out the S-O-S: We need to Save Our Seas.Thank you. Show Less -
World Bank Group President Robert B. Zoellick's Q&A Session at The Economist World Oceans Summit
MICKLETHWAIT: Thank you Bob. A somewhat churlish question, you might say, particularly from a man who's just said that he'll raise 1.5 billion for the oceans. What some people are bound to ask is, why... Show More + do we need a new partnership for the oceans? You've got the UN, you've got a variety of different groups already involved. Why this extra level?ZOELLICK: I think the good news is - I commented in my remarks early on - is that there have been tremendous contributions from a wide variety of players, but the facts don't lie. The statistics are we're not doing enough, we're not accomplishing enough and the oceans continue to get sick and die.So as we started this dialogue with partners - and I'll first acknowledge many of them had much more experience than I would've had in this area - but I've seen this in other fields of biodiversity. We started to find that there was a commonality - a recognition that in some case the knowledge and experience, for example, of setting up governance or rights-based fishing hadn't expanded to other areas. In some cases - and I've worked with governments all my life on this - people aren't aware that what they're developing in a coastal zone is one development project could have huge effects on the oceans. They may not know about the nitrogen that's going to supposedly help their agriculture fertilizer system but ends up polluting the oceans.So part of the role here is to be catalytic in trying to get a greater focus on financial resources, knowledge resources, and as is often the case when you bring in developing countries in this - and here particularly you've got a lot of small island states - and see that the net gain from some particular investments could be much larger, then what we've seen in areas as diverse as tigers to other areas of economic development, you have to measure it.You have to be - goodwill is not enough. So again, in the time that I've tried to add some focus to this, I've had a chance to meet - I know many of the people in the room - and there's some fascinating ideas out there. We just have to get them out and we have to drive them forward.MICKLETHWAIT: Do you think the data's sufficient? You just mentioned the numbers. We've had a number of people here make the comment that we know more about the far side of the moon than we do about the oceans. Is that a problem from your point of view?ZOELLICK: Well you've got people here who are more expert. From what I've been able to see, there is a lack of information but I remember talking - I think this was a conversation with Peter Seligmann of Conservation International – what is being developed quite quickly, and we've seen this in other areas, in terms of mapping oceans, mapping particular areas, but then seeing their interconnection could be hugely beneficial. This again is something I've seen in other areas of development. If we can work together to develop a knowledge platform and make it easier for all participants; private companies, island governments, large states; to be able to tap into that, again, I think we can maximize the individual investments.MICHKELWAIT: One thing which has run right the way through this conference is I suppose the idea of whether you can make more money out of the seas, with quite a lot of people worried about the devastation, the economic spoliation, I suppose, of the seas. Yet you very plainly are coming at it from the point of view that this is a route to economic growth. Can you just say a little bit more about that?ZOELLICK: Well, there's some analogies actually - energy efficiency. The first step is to stop doing dumb things. So you've got subsidies that are used for fisheries that are net negatives to the system, so when I was referring to the negative $5 billion loss, the fisheries [that we want] are trying to move to $20 billion to $30 billion a year gain. That's probably because money is misused.So then I was reading an account coming from some of the Prince of Wales charities where some fisheries, people have been able to see, once they crash, once they start to rebuild them, and as they start to develop either a rights-based system or others that are sometimes based on local populations, you can start to see the economic gain. So when you and I first studied economics or many people did, there was an issue called the global commons, and it's the issue about how things can be misused. Well this is the classic case of the global commons, and since it covers 71 percent of the Earth's surface, it's a pretty big one.MICKLETHWAIT: Would you think there's a particular thing to do with people from deep inland actually using the oceans but not actually knowing that they're causing problems there? It's very obvious, fisheries, they're involved. It's very obvious hotels, right on the outside on the coast. But people from deep inland who are actually causing problems within the oceans but they never actually carry the full cost of it.ZOELLICK: Well this is another one of those British-American tensions since you're from an island maritime nation and I'm from Illinois, which you'd probably consider to be a landlocked, Midwestern…MICKLETHWAIT: Very, very landlocked, yeah.ZOELLICK: But we do have the Great Lakes. But I think as you probably know, given your study of military history, a lot of the greatest admirals come from the Midwest.MICKLETHWAIT: There's a very, very [ill] joke…ZOELLICK: I think the reality is that there's a - part of this of course is that people are unaware of this. People are unaware of the dangers that I talked about. When you think about 85 percent of the fish stocks are either being severely depleted or close to that stage, this is a huge effect. The good news is, in a world where you see the interconnections with films and internet, I think people are much more alert to this. So part of the challenge with this - and this is again where I hope we can coalesce - people are barraged with information.There's challenges, as you and I were just talking about, of all types. But I think here if you bring together a series of communities, whether it be the governments, the scientific, the conservation communities, the development community, and focus on some core points and core things to achieve, I think you have a better chance of bringing others along. What I found in this area, but also other areas of development, that's been quite encouraging is I'm increasingly finding private companies that find that the governments themselves seem to be stuck.The private companies want to push the agenda but sometimes they're less familiar with how to build the governance structures. And so if we can get those interconnected, I think we can make progress. There's an idea I just alluded to in my remarks, and probably it'll come out in the course of the discussion, which I know that Kiribati has been a key leader in - but when you start to take the island chains and then you take their 200 mile economic zones, and then you can imagine creating a network of these, you could start to have a rather significant effect in creating a form of governance because it could start to affect how fisheries industries interact with those islands.But as was noted in one of the cases, I think is the case of Kiribati, while they start to have the governance system, they don't really have much of a coast guard. So you have the US Coast Guard sending some ships out as part of a training exercise. Those are problems with rather modest investment you can take a concept of governance, an economic issue connected to the law enforcers, some minimal resources, and then you start to leverage it over different players.At the same time, it'll be very important that the communities working on this work with those that are concerned about the freedom of the seas. So I think there's a potential here to be able to leverage a series of individual islands much more effectively than we're doing today.MICKLETHWAIT: Let me throw it open to the audience questions. There's a lady there.ZOELLICK: Could you give your name or who you…MICKLETHWAIT: Yes, that would be good.ALEXANDRA VAN: Hello, I'm Alexandra [Van]. I work with the World Future Council. That's a global forum that's working to protect the rights of future generations. We will be celebrating this year the world's best ocean and coastal policies with the future policy of water partnership at the global [unclear] facility, the Food and Agriculture Organization, the CBT. So Mr Zoellick, thank you very much for your presentation and congratulations for the new partnership. I want to build up on what you have said that there needs to be much more that needs to be done, we need to agree on common recommendations and having an action plan.So I would like to get back to your comments on marine protected areas because we had this morning very good discussions about the potential economic benefits also of marine protected areas. Now, in Nagoya, governments have agreed actually to have the target of 10 percent of marine protected areas, so I would just like to follow up with you if under this partnership you will be supporting the 10 percent goal that was [already] agreed by 193 countries. Thank you very much.ZOELLICK: Well, the goal that came up from the various groups here was 5 percent. They're more than doubling. Now, would I be delighted with 10 percent? Sure. But I was at Nagoya and I've been attending some of those conferences since Rio in '92, and I guess one of the distinctions I'll draw is the difference between what I've seen between when people put words on paper and even sort of put the gavel to say a nice concluding statement - and then what they actually achieve.What we've tried to do, whether it be climate change or biodiversity or in this area with oceans, is try to organize the different parties together - conservation, scientific, international organizations and others - and set realistic goals. My own sense from what I know, that I'm happy to defer to others, that doubling the 5 percent will be a significant effort to achieve.So if you can go to five to 10 percent - as we all noted, the land is 12 percent - I'm all for it. But let's take realistic milestones and try to get them done, and once we get that one done then you can go to the next one.MICKLETHWAIT: Another question. Two hands back there.PARTICIPANT: Thank you. My name's [unclear]. I am former Minister of Marine Affairs and Fisheries, Republic of Indonesia. Right now I'm working as Professor for [unclear]. I think you agree that despite the global effort of restoring ocean deterioration. But the fact is that the state of our ocean tends to be unsustainable, be it in terms of fishing, water pollution and habitat degradation. My conclusion is that why despite global efforts, ocean still unsustainable because up until now, we're only tackling the symptoms of the problems.We've never caught the real causes of the problems, and I think that the cause of the problem in our world is that the human demand on the carrying capacity exceeds the carrying capacity of the ocean in providing resources and [unclear] and we know the human demand is determined by two things: number one is the number of population, and number two is consumption rate of the people on our resources and [unclear] of humanity in terms of pollution.So I'm just wondering if I could suggest that to tackle the global problems, I think number one, we have to increase the carrying capacity of oceans on Earth, and number two is to align our human demand [unclear] carrying capacity. My question to you then…MICKLETHWAIT: I think you've gone on a very long time. Can you just give your question very rapidly?PARTICIPANT: Yeah, my question is, how to reduce or control human demand?MICKLETHWAIT: Thank you, that's a very good question. Essentially it's [Malthuse] of the seas.ZOELLICK: Well, this is an interesting issue that arises at the interstices of a lot of conservation and environmental issues and economic growth issues. The economist's answer would be price because that's what allocates scarce goods. I think what we've all identified here is we have a problem because of the commons and so the normal market economic mechanisms don't work because you really don't have in many areas the property rights or the ownership and so you've had people who will get short-term gains and not invest in the long term.So part of what we've been discussing is how through governance reforms, lessons about how you can create rights-based systems, but also sort of a recognition that various communities have to have their sensitivities taken into account, so in some areas, it's a question of who's going to get the fishing rights, whether it'll be local population. Then in any market-based system, you also have to have enforcement, and part of the big problem in this area is whatever rights and aspects haven't been enforced. So there's huge steps that can be taken in these areas.The reason I'm taking this approach is that what I've seen in other areas of development and environment, if you pose the two against each other, if you put growth against environment, I think you're going to spend a lot of time debating and there's going to be a lot of poor people who want to grow and develop and want their sources of protein. So maybe it's just my bias but I found whether it be carbon and climate change or others that you can find a lot of win-win, mutual solutions and you're likely to build a broader coalition and build more support.I think it's time that that be tried in the oceans area because we're starting to see the coalescence of different communities; science, island-based nations, coastal nations, people recognizing this. But the question is how do we interconnect these? And I think the start is set some basic goals and then share the information about what works and then try to finance it.MICKLETHWAIT: There's another question just beyond the white hand - white-shirted…JERRY KNICK: Mr Zoellick, my name's Jerry [Knick] and I actually owe you a debt of gratitude because three years ago, [unclear] programs, you provided some funding for us to develop a concept for developing sustainable fisheries as an industry-led activity [in Indonesia]. Three years later we've gone through the process of developing all the parts and pieces and we're about to start [unclear] and building the infrastructure that's part of the plan. Interestingly enough, the most difficult part of this process has been financing it. My experience has been that the financing institutions of the world [unclear] in this space [unclear] fisheries [unclear] they'll perceive the risk of being too high to get involved. So my question to you is how accessible is financing going to be for fisheries in transition part [unclear] overall [plan as] proposed?ZOELLICK: Two points. The first one is, I think what we have to recognize, that some of these areas we're talking about public goods. So the question is - and this is why we're starting out with this $300 million catalytic fund and we're looking to governments, some private sector participants and others, there'll be some investments that wouldn't be made on a basic market term.Second, however, as I've suggested, you could switch what are in some cases a lot of misapplied subsidy policies or also policies that might create incentives or disincentives with fees and licensing or taxes or other arrangements to try to create the right economic structure. What I've been encouraged by is you're finding more and more private sector players that look at the facts that we've seen and realize this can't go on and so they're interested in trying to invest in a rebuilding effort.The World Bank has a private sector arm, IFC, that is also going to be part of this, so as we work with partners to be able to try to get the governance in the market and the protected areas right to try to see how we might be able to catalyze further private sector investment in addition to the public sector side. On the public sector side again, we as an institution, as I mentioned already, have about $1.6 billion in this area. That is not money that we decide by ourselves. We have to do that with governments.So part of this goes back to getting the word out to the governments about how these are in their interest and then they can use the various financing mechanisms that we have, whether it be coastal zone or fisheries or marine protected areas, which we're involved with all of it. But then let me make the second point, 'cause it's something I want to emphasize about the World Bank's involvement - something I've tried to emphasize over the past four and a half years of my tenure. We're trying to work as a network player here.With a lot of the questions and the reason why this conference I think is particularly valuable, as others that have led to it, is we see ourselves in a catalytic role but certainly not one that knows all the answers. I know I've been with John at a couple of different functions where I've just been stunned by some of the insights that you have, not surprisingly, of people in marine biology, others that have devoted themselves.So what I do want to communicate with people, I'm glad our modest investment with you has started to pay off, but where we see ourselves as trying to be a support in a process is to use the networks that we have across different communities but frankly draw on the ideas of people in this room and others that are committed to it.MICKLETHWAIT: I'm very sorry. Unfortunately we have to come to an end there because Bob has to catch a plane. But I would like to thank him…ZOELLICK: Actually, to see the Finance Minister.MICKLETHWAIT: To see the Finance Minister to try and raise money for this great purpose. I would like to thank him very, very much for coming in and for making the time. It's been a heroic scheduling appointment to come here. It's a delight as usual to have you, and I will take you off and we will hand over to [Dominic Ziegler] up here. Thank you. Show Less -
Remarks by President Zoellick at the South Sudan Engagement Conference
President Kiir, Ministers, ladies and gentlemen.It's my great personal pleasure to be with you here today to congratulate the people of Africa's newest nation and the world's youngest country, South S... Show More + udan.For far too many years, the Southern Sudanese have known war and suffering. Achieving independence under the Comprehensive Peace Agreement, and overcoming many roadblocks and challenges along the way, testifies to the determined diplomatic skills of President Kiir and his fellow peace-builders.I first worked closely on the trials of Sudan with the late John Garang. I am sorry he cannot be with us. But I suspect he's watching – and smiling – as we meet today. He would be proud of what you have accomplished – but he also would be demanding about the work still ahead.I'm also pleased we could meet here in Washington. Americans – from all walks of life, across Administrations, Congresses, and Executives – are proud to have strived with you.AcknowledgementsSo I'd like to thank the U.S. Government for organizing this timely Conference. I want especially to recognize the Members of Congress who were stalwart in their support for South Sudan over so many years. I know from my labors with them that these Congresspersons have been deeply committed to your people and your cause.The World Bank Group is pleased today to be working closely with other co-sponsors, including the governments of Norway, Turkey, and the United Kingdom; the African Union; the European Union; the United Nations; the Corporate Council on Africa; as well as the leading civil society organization, Interaction.I recall working with many fine and courageous people from your countries and organizations in years past – trying to help South Sudan to arrive at this point.I also want to thank the AU High level Implementation Panel of Presidents Mbeki, Buyoya, and Abubacar, for their efforts in the talks between Sudan and South Sudan.Although they are now two independent countries, Sudan and South Sudan remain interdependent. They need to find a path of peace and security, growth and opportunity, together and connected. I'm particularly pleased to welcome our guests today from private business. The private sector plays a critical role in stimulating economic growth, jobs, sustainable markets, and economic vitality – and South Sudan offers significant opportunities for your energy, innovation, and investment.I'd like to say a few words about some of those opportunities – as well as the formidable challenges that lie ahead for South Sudan.Challenges and OpportunitiesSouth Sudan is roughly the size of France – but with a population of 8 to 9 million, it has only about an eighth of France's people. Most of South Sudan's population is very young: almost three quarters are under the age of thirty. 83 percent reside in rural areas.South Sudan is one of the poorest countries in the world; despite some recent improvements, its human development indicators remain among the lowest in the world.More than half the population lives in grinding poverty.Only 3 percent of women receive prenatal services. One in 4 maternal deaths occurs during pregnancy or within two months after delivery. Less than a third of those 15 and above are literate.Adding to these challenges, South Sudan has been absorbing large numbers of returning migrants who need help to resume their lives in new communities.I recall visiting Juba and Rumbek in 2005, walking around burned-out military equipment, rutted roads, and a damaged, simple school building. And that was in town.So I recognize that since the signing of the 2005 Comprehensive Peace Agreement, important progress has been made in infrastructure and in basic services. Adventurous entrepreneurs have created a small business boom. But there is a huge demand – and so far, this is only a start from a very low base. Today, there are only about 100 km of paved roads in South Sudan – that's 60 miles of paved roads in a country around the same size as France.Only one percent of people in South Sudan have access to electricity, and its cost is among the highest in sub-Saharan Africa. Without electricity, children can't study after sunset; many businesses can't thrive. 75 percent of businesses report that having no power is the single, biggest hurdle to investment in South Sudan. Yet South Sudan offers real possibilities, too.The country has rich agricultural and forestry potential, with good land, good weather, and lots of water.It has significant oil reserves – about three quarters of Sudan's overall crude output.The country has a history of resilient social structures, including effective customary law and dispute resolution mechanisms, being embedded in the apparatus of a new state.There is a significant trained diaspora, some of whom have returned to their country.And there is international goodwill that can still generate considerable resources for development.Coalition BuildingThe greatest threat to South Sudan's development and ability to overcome poverty is a new eruption of conflict. Fires still simmer. Violence in the South has claimed more than 2,000 lives this year – and perhaps as many as 3,000.The Bank's 2011 World Development Report on conflict, security and development offers lessons about how to secure development in a post-conflict state such as South Sudan.Building institutional legitimacy is the key to stability. But institutions and legitimacy can only be built over time; they also depend on producing results.Citizens in fragile states have told us that the results they want most are citizen security, justice, and jobs.If the results are achieved by bringing people together in "inclusive enough" coalitions – not necessarily everyone, but a critical mass – the coalitions, new capacity, and results come together to start to build institutions.Early wins are important. As Rwanda has shown, engaging citizens in cleaning the country, building it, making it better – this builds pride and citizenship.We've seen some quick wins in South Sudan. Prior to independence there were at least seven armed groups operating in nine of the country's ten states, with tens of thousands of people uprooted and scattered from their homes and communities. President Kiir has reached out to these groups, helping to bring stability to most parts of South Sudan.Now peace needs to spread. Even when facing dangerous groups, force needs to be used with care so as not to lose the support of the local people.Supporters of states emerging from conflict need to adopt a layered approach: Some problems can be addressed at the country level, but others need to be addressed at regional or global levels.South Sudan will need a broad national coalition to tackle these formidable development challenges, to be as resilient in building your new country as you were in fighting, surviving, and negotiating for it. President Kiir has wisely called first and foremost for unity, inclusion, and development, with peaceful neighborly relations. Additional Building BlocksThe Government has produced a charter for its future called the South Sudan Development Plan.To support this Development Plan, I'd suggest a focus on three priorities.First, ensure macroeconomic stability and fiscal sustainability: Managing oil dependence will be central to maintaining economic stability, which is critical for the country's social and economic goals. High inflation will also erode the public's confidence in their currency, their savings, and the country.You need to manage the jump in both oil revenues and aid in a sustainable way. You need to own your country's development. So as you build, build your own capacity. If you build something, be prepared to operate and maintain it. Make sure the government's budget is comprehensive and covers all expenses. Make it transparent, too.Second, provide basic health, education, and other key services: Your people are your country. Take care of them. Invest in them. They are your future.Currently, the government provides very limited services, relying on CSOs, community groups, and charities to supplement these services. Future government spending is uncertain.The government, with help from local communities, and the World Bank Group and other partners, needs to increase the reach and quality of key services, making these work through decentralization – and reaching far beyond Juba. It's fine to rely on others now. But start to integrate these services within your design. Over time, you'll need to fund and operate the services. You are independent, so look beyond dependence.Third, kick-start non-oil growth: South Sudan needs a more diverse base of growth – for jobs, skills, safety, and to fulfill the land's and people's potential.Private companies and investors can create new businesses and jobs. Yet the costs of doing business in South Sudan are too high. This year, the World Bank's "Doing Business" report ranked Juba 159th out of 183 economies on ease of doing business, explaining that important laws and institutions are still absent.To increase private sector engagement, South Sudan will need to improve its transportation infrastructure and strengthen its regulatory framework, as well as other economic measures to lower costs of doing business.The Scourge of CorruptionI also want to note one particular problem facing South Sudan: corruption.You are the founding fathers and mothers of your country.This is a great honor. And opportunity. And responsibility.Whether it takes the form of bribes at checkpoints, or officials taking cuts from deals, corruption gnaws away at political systems, weakens institutions, impedes the flow of commerce – and it is the people of South Sudan, your brothers and sisters, who pay the price.I am delighted that President Kiir has spoken out strongly against corruption. The plans to strengthen the Anti-Corruption Commission and require asset declarations by public officials are important steps. I hope the Legislative Assembly will have the capacity to carry out its accountability function. State and county governments should be helped to manage resources transparently and be accountable to citizens for delivery of services. It would be a wonderful foundation for the future if the first government of South Sudan establishes the checks and accountability so that police and security forces – state organs with coercive power – respect the rule of law.All of us have seen too many good starts trip up if security forces dominate – instead of serve – the public.Empowered citizens can hold their own governments accountable.We will help. We'll show how transparency assists. How it can be connected to social accountability. How new tools can help. How good governance has been built elsewhere.World Bank Group SupportThe World Bank Group has been a staunch partner of South Sudan from the very beginning. We will continue to be.Since 2005, the Bank played an important role in Sudan's development. The multi-donor trust fund for South Sudan has disbursed more than $476 million, that's about 88 percent of the total amount contributed to the fund. It supports 20 projects in more than 10 sectors, including infrastructure, health, education and the private sector.We also created a $75 million South Sudan Transition Trust Fund in June this year to improve health care, build roads, and create new jobs for the people of South Sudan.As South Sudan becomes the newest member of the World Bank Group, it will be able to access concessional financing from our fund for the poorest countries, the International Development Association. The International Finance Corporation, or IFC – our private sector arm – has already helped Sudan put in place the basic legal framework for business. IFC will next turn to financial sector development; investment promotion in key sectors such as agriculture; and funding options for those investments.And we plan on working with South Sudan and other development partners to hold a Donor Conference in 2012, with the theme of "the effective use of resources for results." ConclusionSouth Sudan has now emerged as a new nation, optimistic and hopeful. Yet it is a nation that still bears the scars of decades of conflict that killed millions, made refugees of most of its people, and crippled the country's development.As President Kiir said in July this year, at the birth of South Sudan's independence, "the night may be long; but the day will come for sure."The people of South Sudan are working hard to build their future.We congratulate their commitment and their courage.We stand with you and walk with you.I know President Kiir and the government face many demands and are deluged with suggestions. Perhaps the most important point now is to act. Sometimes too much advice from donors can overwhelm, even paralyze. Exercise your judgment as best you can, and then we and others will work with you to learn and improve.You've already seen the amazing come to pass. You know that dreams can become reality. Let's work together to make that happen for the generations that will walk in your footsteps. That would be a tremendous legacy of peace.Thank you. Show Less -
Transcript of the Audio Teleconference with World Bank Group President Robert B. Zoellick
MR. FERGUSON: Hi, good morning. Alex Ferguson from the World Bank. Thanks for joining us today. World Bank President Robert Zoellick is going to brief you on this week's G20 meetings. Just for b... Show More + ackground, you should all have been sent his Washington Post piece that was published on Sunday. After his statement, Mr. Zoellick will take a few questions. When we do get to the questions, please identify yourself and your organization before asking a question. All of Mr. Zoellick's remarks will be on the record. Mr. Zoellick, please, go ahead. MR. ZOELLICK: Okay. Thank you, Alex. Well, thanks, all, for joining us. We're looking towards the G20 Summit this weekend, and the package developed by the Eurozone leaders last week was a positive step, but there's much still to do. What's most important now is not to waste the moment. Markets are responding now to readings of confidence as much as pure finance, and the confidence challenge is now focused on governments and institutions, not only in the European Union. Market confidence remains very fragile, and we saw it evaporate in August after the EU agreement in July. The global economy is still very much at risk from faltering economies in developing countries, and the Eurozone deal has bought some time, and the challenge is how to use the time. I believe it would be very useful if the G20 leaders can send a strong signal on follow-through after the Eurozone announcement so as to sustain and build confidence, and I urge G20 leaders not to permit these primary messages to fray into tactical political positioning on secondary issues. The world economy is still wobbling on the edge right now, and it could tip very quickly if momentum isn't maintained and built upon. The one ray of economic light in this downturn has been emerging markets. Developing countries have accounted for two-thirds of global growth over the past five years. But as we saw in August and September, they also can be hit when developed countries trip up. We saw equity markets drop over 20 percent, bond spreads increase, currencies were tumbling, started to affect trade, and the real risk was if the slowdown in confidence in the European Union and United States spread to developing countries, consumer and business confidence and then would affect domestic demand. Now, this has been stemmed somewhat with the Eurozone deal, but people will be looking to this G20 meeting. The World Bank will be seeking to highlight three points: Some fallout from the Eurozone that we need to address; second, a broader growth and jobs agenda; and third, how we can try to stretch resources to assist. So, first, we have to anticipate and help counter some of the second-order effects of the Eurozone arrangement. In particular, European banks are already selling assets and they'll be shrinking lending. Trade finance is a short-term type of loan and it can be run down quickly, but trade finance operations are also labor and operationally intensive. They're not easy to develop substitutes for, and we're already seeing some signs of a shrinking trade finance in West Africa and elsewhere. Now, in 2008 and 2009, the World Bank Group's private sector arm, IFC, launched special trade finance facilities, and we're already activating those to provide support; though, in the area of liquidity, we leveraged it through private sector partnerships, and some of those institutions may be less able to provide liquidity themselves this time. In addition, southeastern Europe, the Balkans, Eastern Europe are at particular risk of credit crunch in the European Union banks, and I've been working already with Thomas Mirow of the EBRD on trying to replicate the Vienna Initiative that we offered last time to make sure that there was credit support for those countries. The Middle East and North African countries rely heavily on exports to the European Union. So, the slowdown in the EU comes at a very sensitive time given political developments. We can help here, too, but we'll need good cooperation with the European Union. And there will be a greater temptation for protectionism in various guises from all countries. The best defense is a market-opening offense, but unfortunately trade liberalization has been stalled. Second, developed and developing countries alike need to keep their eye on the fundamentals of future growth in jobs. Macroeconomic space for all countries is limited and so, what I'm referring to are structural reforms of tax policy, entitlements, labor, competition, investment, innovation, infrastructure. In developing countries, the growth agenda shows the interconnection with food security, infrastructure, inclusive policies. These are not peripheral issues and especially in a fragile and crisis-prone world where--needs of human safety nets as well as financial safety nets. In the area of food security, this involves both increasing production and productivity as well as dealing with price volatility. Now, we've released a Food Price Watch today which shows that the index is up 19 percent over a year ago, even though it dropped somewhat in September, and it had revealed that we're in a period of continued serious volatility, which is especially high in low-income countries. Now, you may recall that in June IFC, our private sector arm, launched a new agricultural price risk facility to help producers and consumers in developing countries cope with volatility. We had the first facility with JP Morgan to assist countries in Latin America, and today we're bringing to our Board a $100 million facility with SocGen of France to help producers and buyers in the Middle East and Sub-Saharan Africa. And with that amount offinancing, we should be able to leverage hedges many times that amount. So, pending Board action, there should be a separate release later today. We also, at the G20, have been discussing the push for infrastructure development, cutting costs of remittances and linking them to savings in credit vehicles, developing local currency bond markets, and we're going to keep pushing for the spread of effective focused social safety nets for all countries. The poorest and most vulnerable are in particular need of a cushion in times like these. Last week, I was in the Philippines where I saw one of the more recent of the over 40 Conditional Cash Transfer programs that the World Bank has helped support around the world, building on the initial programs in Mexico and Brazil, and these are impressive because they often deal with 10 to 15 percent of the population at the bottom for about a half of one percent of GDP. And third, we'll be talking about how we can try to stretch resources. The World Bank has worked with the regional evaluation banks to assess what we could provide over fiscal years '12 and '13. We're almost halfway through Fiscal Year '12 because that starts on July 1. So, this is over a two-year period. We've estimated with the regional development banks we could provide somewhat over $200 billion in financing, drawing on a full set of tools. This includes the ultra-concessionary financing such as IDA, our regular borrowing, private sector, the World Bank Group amount of that is about 115 billion of the over 200 billion. And we also discussed with the G20 that, if we could get some more flexibility with maturity and pricing of loans, I believe we can even provide more support if needed. So, at Cannes, the countries need to follow through on the Eurozone plan, they need to have attention to growth and job strategies, and they need to recognize that developing countries are now a key source of solutions to the world and then opportunity with the right investments and policies. We need to make the world safer for people, not just systems. Pleased to take your questions. MR. FERGUSON: Thanks. And we'll take your questions. As I said earlier, can you please identify yourself and your organization before asking your question. Can we now have the first question. OPERATOR: If you'd like to ask a question from the phone, press star one, please unmute your phone and record your name. To withdraw your question, press star two. Once again, it's star one to ask a question, and you do need to record your name. Please standby for the first question. MR. FERGUSON: Can we have the first question, please. OPERATOR: The first question is from Sudeep Reddy from The Wall Street Journal. QUESTION: Hi, Mr. Zoellick. How would you assess the latest European debt plan from a growth perspective, in particular what should some of the European countries that are under severe fiscal constraints such as Greece and Italy be doing to boost growth? And secondly, what do you think about how Europe is going about raising money for the Fund, particularly how they continue to pursue emerging market governments to provide money? MR. ZOELLICK: Well, on the first part, I think the Eurozone plan is really primarily focused on short-term liquidity stabilization. So, I actually distinguish it from a structural growth plan. What that plan is designed to try to do is strengthen the banking system, give Greece a chance to recovery by cutting the debt, and multiply the resources of the EFSF so as to help make sure that Spain and Italy can roll over debt while also dealing with Ireland and Portugal and Greece. And so, that, to me, is sort of a classic example of buying time while one still has to work on the overall fundamentals. And that's one reason why--so, my core point is I know how difficult this was to reach. I think they made some very important steps, but my read of the situation is that we're now dealing principally with assessments of market confidence, and market confidence is going to be based on assessments of whether the governments and the institutions follow through. So, to me, the key point is how they're using the time and being able to respond with the overall follow-through of activities. So, I understood this morning that, in the case of Italy, there's going to be a budget process over the course of November to try to package the overall proposal in an up-or-down vote, and that will obviously be watched very closely in terms of trying to see whether Italy can take the appropriate follow-up actions. The types of things that I've been referring to on the growth side have been discussed in national parliaments, but they haven't been so much at the heart of the Eurozone's rescue package, and those go to some of the issues that I mentioned about tax and investment policy and creating a competitive environment, a lot of the things that Germany had done quite successfully over the past years. As for your second question about outreach to others, at least as I've been able to ascertain it, the picture is pretty clear: Europeans are going to have to be the principal agents in solving Europe's problems. Others will be willing to try to be of support. They are going to be principally doing it through the international institutional mechanisms such as the IMF. I think as for the particular use of the EFSF that there are two vehicles that they have discussed: One is a form of an insurance model which is trying to multiply with a, for example, first-loss provision. The second element which would allow others to invest, I think, needs further clarification to have a sense of what risk people would be taking in terms of investing in it. And frankly, Sudeep, from what I've seen is I think some--at least, I'm not referring particularly to your paper, but I think some of the earlier reporting got a little bit ahead of itself in assuming that some of the developing countries would rush in, because I didn't think they would and so far I don't think they have. MR. FERGUSON: Thank you. Can we have the next question, please? OPERATOR: The next question is from Alan Beattie from the Financial Times. QUESTION: Hi, good morning, Mr. Zoellick. You were mentioning the possible impact of the Eurozone crisis on the rest of the world and specifically the developing world. How much independent growth momentum do you think the emerging markets have, I mean, particularly given that, for lots of talk about rebalancing, there still seems to be a lot of dependence in the emerging market world on exports to the U.S. and to Europe? MR. ZOELLICK: Well, I think the interconnections are strong. I think prior to August we did see a multispeed recovery where the emerging markets had recovered quite well, had come back beyond the initial point of the crisis and, if anything, the risk was of overheating. I think the events in August in the Eurozone and, to a degree, the U.S., showed that the effects on financial markets flowed quite quickly to the developing world. So, as I mentioned, equity markets came down to over 20 percent. There has been some recovery with the deal. Bond spreads had gone up about 100 to 180 basis points. They've come back down, again, with the deal. You've seen what's happened in some currency markets. And as I suggested, we already started to see the effect of the slowdown in the trade area. So, and the next category that we were most watchful of was the one that I referred to of, if the confidence that has affected consumers and businesses in the developed world also infected the developing world--and there, it was a little hard to tell. You could see through some of the PMIs that they were starting to show some deterioration, I think, with the Eurozone deal, you've seen some pop-back but, frankly, high degrees of uncertainty. And so, it's the core message that I think coming out of this G20 meeting, people are going to look through to see the follow-through on the principle areas that the Eurozone has outlined, but they're also going to look to see whether there's a tension to the ongoing growth agenda that I mentioned. MR. FERGUSON: Thanks. Can we have the next question, please. OPERATOR: The next question is from Howard Schneider from The Washington Post. QUESTION: Hi, Bob, and thanks for doing this. My question is a little--I want to just sort of step back on the last couple of days, here, you know, the whole ethic of the G20, the whole idea was, you know, coordinated policy across the major economies, and yet you see this intervention by the Bank of Japan now just a couple days before the Summit, you know, without really discussing or coordinating it. And now, you see this call for a referendum in Greece really catching all of the European leaders off guard, a clear example, it seems to me, that they in a sense really don't have control of their own agenda. So, [technical difficulties] two years ago in London, is this group really living up to [technical difficulties]. MR. FERGUSON: Sorry, we lost you the last bit. Can you repeat the last-- QUESTION: I'm saying, just, I mean, isn't it pretty clear that this Group is not living up to its potential--that this forum is not living up to its potential as a place to coordinate these important policy decisions? MR. ZOELLICK: I think we have to see what comes out of this weekend's meeting. I think that the Eurozone arrangement--I know, because I was with the Finance Ministers a week before--was not easily achieved. And I think, as I mentioned, it's an important step, but it's only a step. In the case of Japan, obviously, part of the G20 but not part of the Eurozone discussions, Japan has been intervening modestly over this time period. My own view is that, particularly for the G7, that interventions in a flexible exchange rate system would be better off being coordinated. So, I think that if they haven't been--and I just don't know for sure with all the Finance Ministers, but from the reporting I haven't seen evidence of it--that would be disappointing. In terms of the Greece referendum, that's less of a G20 issue and more of a EU issue and to me it looks like a roll of a dice, and you know, I just--I don't know how the question will be phrased. We don't have the exact timing of the referendum. For certain, it's going to add uncertainty to markets at a time when, I think, people had hoped that the Eurozone deal and the actions to be taken would help to alleviate some of that uncertainty. So, this is an evidence of some of the fundamental problems that have been plaguing Greece throughout the whole process. And so, in that sense, it certainly makes the hill steeper for the G20. MR. FERGUSON: Thank you. Can we have the next question, please. OPERATOR: The next question is from Alessandro Merli from Il Sole. QUESTION: Yes, good morning. I wonder if you can tell us what do you think is missing from the European plan. You talked about rebuilding confidence and stabilizing the situation. This seems to have lasted a little more than 24 hours. Do you think anything in particular was missing there as a tool of reestablish [unclear]-- MR. ZOELLICK: I think it's more a question of the follow-through, and most of the commentators focus on three elements. I focus on five, in part, from some of my discussions with some of the Europeans who have been part of it. First, you have the bank recapitalization. That is, I think, an important step. I think you had an initial positive reaction in terms of some of the bank equities, but it has to be accomplished, as I recall, by about the middle of 2012. So, the devil will be in the details of the execution. Second, you have the multiplication of the EFSF's facilities, and that one was somewhat vaguer about how it was going to be accomplished and, as I mentioned, the idea of using some of the EFSF funds for first loss insurance provision is a viable alternative. The other method, frankly, I think, required clarification, and my sense of it was that the leaders, understandably, wanted to try to take those models and further define them with markets, including potential investors, to see how they could get the greatest effect. Third is the actions that Italy and Spain take themselves. You know, these countries should be able to make it if they continue to take the right actions at home. And so, in that sense, it's linked to the EFSF's ability to help them roll over their debt, but in a world where markets are--depending on confidence--it's going to depend a lot on the governmental actions. And Spain actually has taken a series of significant actions. I think that distinguished itself somewhat from Italy. We'll have to see whether this most recent proposal that I mentioned about a package of reforms during the month of November can be pursued and, if so, whether that can help boost confidence. Fourth, you have the Greek debt, and there will be debates about whether the reduction is deep enough, but it certainly gave Greece a much better chance, and now we have the uncertainty related to the decision the Greeks will have to make in their own referendum. And the fifth element is one that I think is important to connect the immediate to the medium and long term, and that is what some in Germany have discussed as political and fiscal union or, sometimes, in France, is talked about as economic governance, and that is recognizing that these steps fundamentally buy time. What will be the future structure of the European system of fiscal support that complements the monetary union. So, the monetary union as constructed without the fiscal discipline clearly ran into trouble, and markets are well aware of that. So, the question will be what type of political and fiscal union will be built on the Eurozone on top of it. That's not going to be done overnight, but I think people will be looking to see what are the directions and steps that are taken. So, again, I'm not critical of the package. What I'm saying is that the devil will now be in the details of the follow-up, and this is why the G20 leaders shouldn't waste the moment. MR. FERGUSON: Thank you. Can we have the next question, please. OPERATOR: The next question is from Phil Thornton from Emerging Markets. QUESTION: Thank you very much, Mr. Zoellick. Can I just pick up the theme about the role that emerging markets and developing countries can play. You've highlighted their strong level of growth, but a lot of the recommendations you're talking about seem to be quite long-term. Isn't the G20 an excellent opportunity for the emerging markets to really step up to the plate and take the sort of immediate action that was taken by the G20 in London? MR. ZOELLICK: Well, I don't know what actions in particular you have in mind, and remember, what--at least, the way I see things is markets are now looking for a sustained boost of confidence, and I've outlined how the Eurozone could take first steps, but I think there need to be follow-up steps and others need to be taking steps in support of that. So, as I said, I think that if the G20 leaders have the primary message of supporting these steps that the Eurozone has taken plus the pro-growth steps that I referred to in avoiding sort of fraying at the edges with sort of domestic political positioning, that would send a positive signal to markets, and developing countries will be part of that. At the same time, I think the best thing the developing countries can do is to continue to have the pro-growth strategies that they have. They've been the bright light in the picture, and so, they do have a common interest in Europe and the United States and Japan enjoying full recovery. But I don't want to--I don't think one should raise expectations about what one could expect them to be able to do to help Europe and the United States solve their own problems. And in fact, I think that one of the misleading paths is to assume for any of these countries that somebody else is going to bail you out and solve your own problems. Europe's got to solve its problems, United States has got to solve its problems, Japan's got to solve its problems, and what one wants to avoid is people doing dumb things that will make it harder, such as slipping into protectionism or trade conflicts. But by and large, for the emerging markets, if they can participate in financial support through the IMF arrangements as they have before or through special agreements to borrow, that can be constructive, but I don't think that, for example, in the Eurozone, that people should be looking for a silver bullet from the Chinese when the per capita income in China is about $4,000 a person and it's about $38,000 in Europe. MR. FERGUSON: Thank you. We have time for one more question. OPERATOR: The next question is from Ruben Barrera from Notimex. QUESTION: Yes, thank you for doing this. Mr. Zoellick, I would like to go back to the issue of Greece, and my question is, if--do you think that this position by the Greek authorities to seek a referendum on the bailout could set a bad precedent for a future rescue plan for other countries, either in Europe and other parts of the world? MR. ZOELLICK: Well, ultimately, countries have to make their own decisions here. I mean, my--I guess the theme is whether it's a group of countries or individual countries, they need the political support and they have to take the tough actions. So, I'm not in a place to second-guess the Greek political authorities feeling about what sort of vote of confidence or referendum they need. I did say it's a roll of the dice. If it passes, that could be a positive signal for people. If it fails, it's going to be a mess. And one of my concerns is that, in the meantime, it adds to degrees of uncertainty. Europe can cope with that if it has the additional support and facilities that we've been discussing because Greece is only about 2 percent of the EU's GDP. But at this moment, it adds one other element of uncertainty in what's already a difficult time. MR. FERGUSON: Thank you very much. I'm afraid that's all we've got time for today. So, thank you for calling in and goodbye. MR. ZOELLICK: Thank you. MR. FERGUSON: Thanks, good-bye. Show Less -
Development Committee Press Conference
MR. MILLS: Thank you all for coming to the closing press conference for the World Bank Group/International Monetary Fund Annual Meetings. Each of the participants today will give an opening state... Show More + ment, and then we'll go to questions. We will begin first with DC Chairman Al Khalifa, World Bank Group President Robert Zoellick, and IMF Managing Director Christine Lagarde. MR. AL KHALIFA: Welcome, ladies and gentlemen, to this press conference on today's Development Committee Meeting. I am pleased to be joined by Bob Zoellick and Christine Lagarde. Today's meeting gave us a chance to exchange views in three important areas. We discussed the prospects for growth and how the developing countries are doing in the rapidly changing circumstance of the world economy. We discussed the policy and operational implications of the new World Development Report on Gender Equality and Development. And we updated ourselves on the progress being made to modernize the institutions of the World Bank Group. More details on these issues are in the Communiqué and background papers, which are all publicly available, but I will briefly touch upon them now. Let me begin by focusing on the policy and operational implications of this year's World Development Report on Gender Equality and Development. This is an important report and an important subject. It was the centerpiece of our discussions today. As you arrived, you can hardly have missed the huge banners hanging from the World Bank building which highlight very effectively some of the key insights of this year's World Development Report. The main message is a simple and powerful one: Gender equality in economic and social life is, and I quote, "smart economics and an essential ingredient in poverty reduction." As a Committee, we welcomed the Report's analysis, with its important lessons globally, including that gender equality requires specific action from governments, the private sector, and development partners. We endorsed the directions for the World Bank Group set out in the accompanying Implications Note, and we look forward to reviewing its implementation in a year. We urged the World Bank Group to further integrate gender equality into its operations and reporting, working within its mandate and respecting national values and norms. I commend the Report and its lessons to you as important reading. Also central to our discussions were developing countries' prospects in the face of risks to the global economy. The IMF has summarized the key issues with great clarity in the latest World Economic Outlook report. We noted with concern the turbulence in global financial markets and widespread fiscal strains, which put at risk the robustness and sustainability of global economic recovery. Volatile commodity prices and pressures on food security are critical challenges, particularly for developing countries, and we are alert to the possible global impacts of all these issues, particularly on the poor. We committed to do everything within our means to support strong, sustainable, balanced and inclusive growth in all our member countries, and we affirmed the need to work cooperatively to meet our development commitments to achieve the Millennium Goals by 2015 and to support the poor in developing and emerging countries. We attached particular importance to the question of jobs. Current high levels of unemployment make the challenge of job creation a priority for countries at all levels of development. Jobs, of course, are vital in translating growth into lasting poverty reduction and broad-based economic opportunities. We at the Development Committee reiterated our commitment to job creation, especially by supporting the expansion of a vibrant private sector. In this connection, I should point out that next year's World Development Report will be precisely on the issue of jobs. We also discussed two parts of the world that face special challenges. We are all saddened by the scale of human tragedy caused by the drought and famine in the Horn of Africa, and we commended the response of the World Bank and the IMF both to the immediate crisis and to the area's long-term challenges. We also welcomed the Bank Group's enhanced focus on innovative approaches to help countries in the Middle East and North Africa to address the social and economic consequences of their current transition. Finally, we discussed the ongoing process of modernization at the World Bank Group. Here, I want especially to emphasize the contribution that the Bank Group is making to greater transparency and better diffusion of information about development issues through its Open Data, Open Knowledge, Open Solutions Initiative, which opens up a huge repository of data on development to anyone with access to the internet. I also want to commend the new World Bank Scorecard that will improve accountability and better reflect the World Bank Group's accomplishments. Thank you very much. MR. MILLS: Thank you. President Zoellick? MR. ZOELLICK: Thank you, Rich, and thank you, Chairman. The Development Committee meeting is important for the World Bank because it enables us to hear directly from our shareholders beyond the normal country dialogues and in concert with other countries. This invaluable interaction helps us to make improvements to our work in order to better serve our clients-developing countries. Since the middle of 2008, when the global crisis really began to take hold, the World Bank Group has committed $196 billion to developing countries from IBRD, from IDA, from IFC, our private sector arm, and from MIGA, our guarantee agency. Total disbursements were $126 billion, faster during the most heated period of the downtown. In the discussions we had today on the state of the global economy, it was clear that shareholders want us to persist in providing this vital source of support for developing countries. And this may become more important if the early signs of a possible slowdown in their economies turns to reality. In low-income countries, this risk adds urgency to our work to build safety net programs to shield the most vulnerable from a downturn. We have helped expand the conditional cash transfer model that was pioneered by Mexico and Brazil to over 40 countries. And we have helped 40 more countries implement other types of safety nets. But we have more to go, and the nets can be stronger. Shareholders want us to assist in real-time to crises as they emerge in the global economy. A good example is the decision we announced today to boost World Bank assistance to the countries in the Horn of Africa to $1.88 billion over five years from the previously announced sum of $500 million. This will include $250 million from the Crisis Response Window in the International Development Association, our fund for the poorest. This Crisis Window is a good example. It is a new tool. We called for it, designed it, and persuaded the IDA donors to endorse it just last year. The World Bank is supporting the common call for action in the Horn of Africa that is being led by the UN humanitarian agencies, with stalwart support by the UK, Australia, the European Commission, the United States, and others. In addition to addressing today's disaster, our efforts will be to help build recovery for tomorrow and resilience for the future. A humanitarian crisis should not and need not be a perpetual crisis. While keeping up what we are doing, our shareholders also want us to find new ways to do better--and we'll do that. We'll press on with the Modernization Agenda to make the Bank Group more flexible, focused on clients, open, accountable, and always driven with attention to results. These are tough times, and taxpayers deserve the best value for money that their tax dollars and our revenues can buy. Aside from crisis response, I was also pleased to hear the endorsement of shareholders for two long-term priorities of the World Bank Group. Shareholders agreed with the findings of our World Development Report on Gender that equality between men and women is not only a right in and of itself, but it is also smart economics and essential to overcoming poverty. This is common sense that is not always commonly believed. Yet how can a society reach its full potential if half its population is too often treated as second-class citizens? So we will now work to ensure that the implications for gender are embedded in everything we do, from land titling to designing social security systems to infrastructure projects. There was also shareholder endorsement for the Bank's next World Development Report on jobs. With unemployment soaring in developed countries and a youth bulge and lack of jobs--and the lack of dignity associated with work--among the many causes of the Arab Spring, this project could not come at a better time. We also had a chance during these meetings to discuss the global situation and particularly the looming danger that failure to take decisive action in Europe and the United States may shake the entire global economy, throwing developing countries off track--and they are today's engine of global growth. The numbers emerging out of developing countries over the past month, even the past week, are shaking and shaky. As Ben Franklin said during another era of crisis, we must hang together--as men and women, as developed and developing economies, as G20 and G187, our entire World Bank membership--or we'll hang separately. And that, I think, is the fundamental message from this meeting. Thank you. MR. MILLS: Thank you. MS. LAGARDE: Thank you very much. A few words about the current situation, the recommended macroeconomic policies, and the role that the international community and the International Monetary Fund can play in that regard. Concerning the economic situation, the low-income countries are doing relatively well in the current circumstances. Emerging and developing economy growth has been in the range of 5 to 6 percent and is predicted, forecasted to be, in the same range of numbers in 2012. So, compared with other forecasts for advanced economies, for instance, it is a very good level of growth that is forecasted. But we shouldn't be under any illusion, and as President Zoellick indicated, we are in this together. The low-income countries, particularly the developing countries in general are clearly at risk if there is economic dislocation in the advanced economies. So, resolving the crisis in the advanced economies is a major priority because it affects everybody, not just the advanced economies, but it's also the rest of the economies. In terms of policy recommendations, what certainly the Fund has recommended in its various publications and review is to make sure that the low-income countries rebuild their strength, and to the extent that they rebuild their buffers, they had developed policy buffers that had protected them during the crisis that have been eroded as a result of the crisis. That needs to be rebuilt. Second, they need to protect spending on infrastructure for growth and continue to drive to diversify their sources of value creation. Finally, they need to continuously protect their social safety nets, because clearly in times of crisis they will be needed to protect the poor, particularly from the high food prices and the high price of commodities. Now, as far as the international communities and the IMF is concerned, certainly what we hope and what we call for is that donors must be kept to their promises, and aids budgets in particular should be maintained. Trade should be encouraged, market access should be encouraged so that those that actually produce and export in the low-income countries can have better access to countries that import, and private sector investment should be encouraged. So, those are the clearly the expectations that we have from the donor community and as far as we're concerned we will continue to support the low-income countries strongly, be it by policy advice, by specific surveillance, by specific lending instrument. In that vein I would simply call your attention to the fact that we will be shortly discussing what we call a Vulnerability Exercise Paper which will focus specifically on the low-income countries that will be discussed in the Board in the coming weeks. And second, we will mechanically extend the very concessional terms at which our PRGT facility is extended to the low-income countries; that's the Poverty Reduction and Growth Facility that is extended at virtually zero interest that will be continued in 2012. Thank you very much. MR. MILLS: Thank you. So, we'll now go to questions. If I could please ask that you identify yourself and the organization you're with. Yes, right over there, sir. QUESTION: Yeah, Larry Elliot of The Guardian in London. Can I ask a double-barreled question. How big a risk is it to the developing world that the European crisis and the need to solve it--and secondly, the dog that hasn't barked during this crisis so far has been protectionism. How big a risk is there do you think of a second leg of this crisis leading to protectionist pressures, which would seriously affect developing countries. MR. ZOELLICK: Who is it for, Larry? QUESTION: The Guardian. MR. ZOELLICK: No, now-- QUESTION: Either you or Madam Lagarde. MR. ZOELLICK: Do you want me to go first? Well it's up--well, on the developing countries, up until the summer, we had a multispeed recovery, and this is reflected in some of the forecasts in the World Economic Outlook the IMF has put together, and most of the emerging markets' primary challenge was dealing with the risk of overheating and inflation. That hasn't entirely gone away, particularly because of the challenge of food prices. But what we started to see in August, and this is very early, given the way the data comes in, but is there--the bond yield started to go up on average about 70 basis points. The equity markets took a big hit. So, as of mid September you had about, globally, 10 percent of global GDP drop in equity markets. As you've seen this week, you've started to see some withdrawal of funds from countries that actually had a lot of money flowing in, so their exchange rates have come down. And the environment was already one where their trade to developed countries had not recovered all the way back from the start of the crisis. So, the issue that we're watching quite closely now is the question of whether the drop of confidence that you've seen in developed countries would extend to developing countries. And so, whether the business investment, their consumers, and that would, of course, affect their domestic demand. And the challenge of course is that, in that sort of context, the data we have would be starting to show up in some things like purchasing manager indices. But it's very early but it's showing deterioration. So, at least the key message that I believe, or at least speaking for myself coming out of these meetings is we are even moving closer to the edge, because if developing countries start to lose domestic demand then the source of what's been half of global growth evaporates. And then, obviously, for example, the World Economic Outlook Forecast sort of had a drop in developed countries. It had developing countries come down a little but still be steady. Well, that would obviously be in question. And so, then, for the second aspect about protectionism, so far, Larry, the protectionist actions that we and the WTO and others monitor actually came down a little bit as the crisis went on, but--and here's the big "but"--is that since many of them were facing inflation, it wouldn't be too surprising that they would try to keep trade barriers down, and particularly in the food and agriculture area. But even over the past week or so, you've seen some countries start to take some actions that deal with their manufacturing sector, and then, that could set off a whole series of other actions. So, the message that Pascal Lamy and I gave to the Development Committee was not only the need to monitor these, to try to draw attention to them, but at least speaking for myself, I think the best defense is a good offense. So, I would be trying to look for ways that you could advance openness in the international economy. MR. MILLS: Okay. We'll go around. Yes. QUESTION: Thank you very much. Rodrigo Vilgo from Indian Globe and Asia Today [ph]. My question is that poverty and corruption, they go together, and that is the most essential for the poor and underdeveloped or Third World countries, and there are many banks but especially in Swiss banks, still they are holding black market money from the corrupt politicians. You have seen recently in many underdeveloped countries, including in India, the campaign going on against corruption, those who are holding black market money in those banks. What I'm asking you is what are you doing about those to--are you forcing those banks--especially there is no accountability for the black market money, so, then, because of that, only few pockets and the countries' treasury is empty and poverty is going down and down, and at the same time poor people. So, what I'm asking you is if you are doing anything about that. Thank you. MR. ZOELLICK: Want me to start? Well, Christine actually played a leadership role on this in her prior post, because the Bank had created something called the Stolen Asset Recovery Initiative, and when we presented this to Christine as Chair of the G20 Finance Ministers, she became a very strong and prompt advocate of it, and there are different dimensions of it. But one is there's an international treaty, there's an accord that we've tried to press as many countries as possible to ratify, and we're including some developed countries that haven't yet got it through their parliament to make it easier to get access at those funds. But then, secondly, we are working with a series of emerging markets to help them file the cases, develop the capacity to track the money. In some cases, they feel it would help them in the recovery they could make the case about the monitoring or the disposition of those assets. So, there's a series of countries that we're working with. We had some modest early success, I believe, with Haiti, I can get you some others, but there's a host of countries that we're working with on this, and indeed, in the course of the past couple days, I had some discussions about trying to support India on this issue, as well as some of the North African countries in this process. MS. LAGARDE: I'll just follow-up on that for a second. I think the two dimensions, in addition to what President Zoellick has mentioned, and the Stolen Asset Recovery is a very good initiative and one that is to be encouraged. Two other things: One is the Transparency Initiative, which has been certainly undertaken by various jurisdictions around the world and which is critical in that it requires disclosure of payments that are made, and whatever goes in support of transparency in that particular section is very, very important. And the second one is the Non-Cooperative Jurisdiction initiative that has been undertaken by the G20 which has helped some jurisdictions make progress in terms of disclosure. Whatever happens in the field of disclosure, bank secrecy, and commitment to disclose information is good news. There are progresses being made. It's not entirely satisfactory and I certainly hope that there can be further progress in that respect. MR. MILLS: Yes, Bob. QUESTION: [Off microphone.] MR. MILLS: Is there another microphone we could use, please? QUESTION: Better? Okay. For Mr. Zoellick and Ms. Lagarde, you both have talked very passionately about the possibility of this crisis getting worse and worse. At its heart it's a European crisis, is there anything that either of you could point to, in the many meetings that you have had in the past few days that would lead you to say that the European crisis is closer to resolution? And if so, what would you point to? MS. LAGARDE: I wish you had attended the conference that took place earlier today, because what we tried to do was to express precisely what you are looking for, which was a clear sense around the membership.And I'm not just talking about the members of the eurozone, but the membership, the 187 members that are represented at the IMF when we had the meeting of the IMFC this morning, but a clear sense of, number one, a common diagnosis of the issue; number two, a sense of common purpose and decisiveness about addressing the issues; number three, a clear focus on the steps to be undertaken in the coming weeks to address the issues. Now, there is clearly work underway in that regard, but I certainly myself was very strongly encouraged by the purpose, the determination, the sense of absolute urgency that was shared amongst the membership. MR. MILLS: Yes, ma'am. Right here. QUESTION: I'm from China Business News. My question is both to MD Lagarde and also President Zoellick. What kind of suggestions do you have for China for China to work with the international community to restore the confidence and also to inject the new energy to the new economic recovery at this critical point? I'm not saying that China is going to rescue the rest of the world. China is facing its problems at home. China's economic growth has slowed down a little bit and it is difficult and it is impossible for China to have another four trillion stimulus at this moment. So, what kind of suggestion for China to do at this moment? Thank you very much. MS. LAGARDE: Well, in this collective drive that I was referring to when I responded to the previous journalist who asked the question, there's a role for everyone, and that was also clearly the understanding in the room, which means that for large emerging markets, there is a role to be played. Countries with an external surplus account can certainly play their part in rebalancing the economy, because that's really in the background and also in the root of what is happening at the moment. So, the message is pretty clear: To rebalance countries with external surplus accounts need to actually develop their domestic market which will be good internally, good externally as well. And by the same token a little bit of currency appreciation might help, including to drive down inflation. MR. ZOELLICK: I'll just supplement by saying that I think for most emerging markets the key test now is to focus on their own growth fundamentals so we can keep them as an engine of growth. In the case of China, it has faced the danger of overheating, there have been actions that they've started to take, including some on the regulatory side but also some appreciation of the currency, since the overheating has been somewhat related to food prices, and that's a very sensitive issue for China's poor. Obviously, again, appreciated currency allows China to buy more food at lower prices. But I think the other point is that the main reason why I was in China was to work on--to get close to the finalization of a report we've been working on for the past year that has been driven by China's concern, even though it has grown successfully for 30 years, of moving to a growth model that avoids the middle-income trap, and that growth model will be a model that relies less on export-led growth than investment-led growth. And I think these are the goals that China has outlined in the 12th 5-Year Plan, but they were in the 11th 5-Year Plan, too. They were thrown off in part by the crisis. So, the purpose of this work is to go into considerable detail to go to how to achieve what China has said it wants to accomplish. And I think this could be significant over time, because with the next leadership generation coming in in 2012, I think there's a recognition about the need for these structural changes. And my own experience has been that China will move more on some of the price issues if the structural models will change. And so, this is not obviously as immediate as some of the fiscal and monetary issues that Christine has mentioned, but I think it's going to be important for the long-run stability and rebalancing of the international system. And to give credit where credit is due, there's a lot of economies that should be considering structural growth issues in the midst of pretty weak performance. China has had 10 percent annual growth for 30 years and yet it's willing to consider structural change, and I think that's a good sign, but of course the devil will be in the details of implementation. MR. MILLS: Okay. We have time for one more quick question. Yes, ma'am. QUESTION: My name is Adam Ouologuem, the Washington Bureau Chief of the African Sun Times. My question is for President Zoellick and Madam Lagarde. Do you think is there any hope that we will meet the Millennium Challenge Goals in 2015 if the donor countries are struggling? Economically, there is crisis everywhere. In the U.S., where I'm based, there are more poor than in my country of origin, which is Mali. So, how can you come out with the Millennium Challenge account--how can you meet that goal? Do I need to repeat myself? MS. LAGARDE: No, I'm just thoughtful about your question, and it's the beauty and the problem of categorizing and putting countries in the advanced economies categories, in the low-income categories, in the emerging markets categories. There are clearly within those categories less privileged poor people in all of them and where action needs to be taken. I think one of the discussions that we've had, and I'm really pretty much outside the subject of the development agenda that was developed with great talent by President Zoellick, but one of the topics we had for discussion at the IMFC was the definition of the kind of growth that we're looking for. Is it growth in and of itself? Is it growth that is creating jobs? Is it growth that is creating jobs for those that have been excluded from the job market such as the young generation, such as women? It is growth that creates jobs and that is also inclusive because it has a social dimension and should consist of aggregating rather than dividing, as we have observed lately. So, I'm not sure that I have a ready-made answer for you, but it is clearly part of the agenda that we have and that we pursue and to have that quality growth that helps guaranteeing the social chemistry of our societies. MR. ZOELLICK: Let me just add to this. Within the Millennium Development Goals, there will be some that are met globally. So, for example, cutting poverty in half will happen, and that is a very significant achievement during that period. Now, one reason it's going to happen is because China has reduced poverty by about 300 million or 400 million people. So, if you look through all the goals, there's some good progress in education and some of the other ones. Now, as you go country by country, in Sub-Saharan Africa as well there's been some significant progress. So, talk about girls in school, one of the issues in the gender is we now have in many countries, maybe most countries, about half the girls in primary education. We now have to work on the quality of the education, in the secondary education. In some of the health and water and sanitation, we're not as far as we need to be. I remember because I visited Mali in December, there were a couple--we track these individually, obviously, but we can get back to you. In Mali, my recollection was there were a couple that Mali had a good chance to be able to make. Now, the purpose of goals, however, is not just to clear easy hurdles. The purpose is also to understand kind of what else we have to do to keep working for them. Now, here's the group that's most vulnerable: In post-conflict countries, not one of them has been able to reach one Millennium Development Goals. So, that's the focus we have particularly on the Liberias, the Haitis, the Côte d'Ivoires, and others, but let me give you an example of what comes out of some of these--the details of this. Take some of the health and education and nutrition ones, is that people have tended to look at these as separate goals. True enough, they're on the chart separately, but the intervention is probably much better if you can get them in an interconnected fashion. So, I talked about the safety nets and I mentioned this conditional cash transfer program started in Mexico and Brazil, now in 50 countries. That model was, you get money to the poorest, you deal with the poverty goal, if people send their children to school and they get basic health checkups; so, one platform, three goals. And you can do the same thing in school feeding and connect it with basic vaccinations and nutrition. So, please don't give up hope, because there have been some countries that are making it, and some of the goals you're going to make it in a macro fashion, and even within Sub-Saharan African countries there is a lot of variation, and that means with some, we've made progress, and others we're going to learn how to achieve those goals. So, the other point I think that also Christine referenced is this occurs a lot more easily if this occurs in a country in which you get growth. So, what really drove a lot of the anti-poverty changes in China was an overall growth agenda. Now, you talked about aid numbers. We're going to try to do what we can. We had a report at the Development Committee, I think about $130 billion of aid this year, you know, and here's--we ought to draw attention where countries are doing the right thing. Britain has taken a very tough fiscal program, it is still increasing its development aid. It is still going towards the 0.7 goal, Australia is trying to do the same thing. So, there are countries out there that are trying to be supportive. And then, if we help countries mobilize their own domestic resources, go back to this corruption question, the more we can try to do where local revenues are not misspent or given to some rich minister or something like that, then you drive that home, and it comes back right to this question on transparency. I answered it narrowly with the Stolen Asset Recovery Initiative, the best thing we can do is help the transparency to fight the corruption in countries. So, don't give up hope, and particularly in Mali, Mali, as you know, is a democracy, has made--for a poor country has made some notable progress. It can make it. MR. MILLS: Thank you very much. Show Less -
As Prepared for Delivery, President Robert B. Zoellick Opening Remarks, Development Committee Media Conference
Thank you Rich and thank you Mr. Chairman. The Development Committee meeting is important for the World Bank because it enables us to hear directly from our shareholders beyond the normal country... Show More + dialogues and in concert with other countries. This invaluable interaction helps us to make improvements to our work in order to better serve our clients - developing countries. Since the middle of 2008, when the global crisis really began to take hold, the World Bank Group has committed $196 billion to developing countries from IBRD, from IDA, from IFC, our private sector arm, and from MIGA our guarantee agency. Total disbursements were $126 billion, faster during the most heated period of the downturn. In the discussions we had today on the state of the global economy, it was clear that shareholders want us to persist in providing this vital source of support for developing countries. And this may become more important if the early signs of a possible slowdown in their economies turn to reality. In low-income countries, this risk adds urgency to our work to build safety net programs to shield the most vulnerable from a downturn. We've helped expand the Conditional Cash Transfer model, that was pioneered by Mexico and Brazil, to over 40 countries. And we have helped 40 more countries implement other types of safety nets. But we have more to go, and the nets can be stronger. Shareholders want us to continue to assist in real-time to crises as they emerge in the global economy. A good example is the decision we announced today to boost World Bank assistance to the countries in the Horn of Africa to $1.88 billion over five years from the previously announced sum of $500 million. This will include $250 million from the Crisis Response Window in the International Development Association, our fund for the poorest. This crisis window is a good example; we called for it, designed it, and persuaded the IDA donors to endorse it just last year. The World Bank is supporting the common call for action in the Horn of Africa that is being led by the U.N. humanitarian agencies, with stalwart support by the U.K., Australia, the European Commission, the United States, and others. In addition, to addressing today's disaster, our efforts will help build recovery for tomorrow and resilience for the future. A humanitarian crisis should not and need not be a perpetual crisis. While keeping up what we are doing, our shareholders also want us to find new ways to do better – and we'll do that. We'll press on with the modernization agenda to make the Bank Group more flexible, focused on clients, open, accountable, and always driven with attention to results. These are tough times and taxpayers deserve the best value for money that their tax-payer, their tax dollars and our revenues can buy. Aside from crisis response, I was also pleased to hear the endorsement of shareholders for two long-term priorities of the World Bank Group. Shareholders agreed with the findings of our World Development Report on Gender that equality between men and women is not only a right, in and of itself, but it's also smart economics and is essential to overcoming poverty. This is common sense that is not always commonly believed. Yet how can a society reach its full potential if half its population is too often treated as second class citizens? So we'll now work to ensure that the implications for gender are embedded in everything we do, from land-titling, to designing social security systems, to infrastructure projects. There was also shareholder endorsement for the Bank's new next World Development Report on jobs. With unemployment soaring in developed economies and a youth bulge and lack of jobs -- and the lack of dignity associated with work -- among many causes of the Arab Spring, this project could not come at a better time. We also have had a chance during these meeting to discuss the global situation, and particularly the looming danger that failure to take decisive action in Europe and the United States, may shake the entire global economy, throwing developing countries off track, and they are today's engine of global growth. The numbers emerging out of developing countries over the past month, even the past week, are shaking and shaky. As Ben Franklin said during another era of crisis, we must hang together -- as men and women, as developed and developing economies, as G-20 and G-187 our entire World Bank membership -- or we'll hang separately. That I think is the fundamental message from these meetings. Thank you. END Show Less -