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Keynote Address by Paula Caballero: Integrating Conservation and Development for Lasting Impact
Distinguished hosts and guests, ladies and gentlemen, I am delighted to be addressing such an eminent gathering of protected area professionals, conservation experts and decision makers. Thank you for... Show More + this opportunity to connect with old and new partners to strengthen and move forward the protected area agenda at a crucial juncture for parks, people and the planet.Some of you may remember me in previous incarnations, managing projects on biodiversity, land degradation and territorial approaches to climate change for UNDP, or pushing for the Sustainable Development Goals initiative from within the Colombian government. I moved to the World Bank in July with the same drive and passion because I now want to focus on implementation. As head of the new Environment and Natural Resources Global Practice at the World Bank, I see great opportunities to carry the conservation agenda forward by managing natural resources within the broader paradigm of poverty reduction and long-term sustainable, resilient development.Getting steps right to maximize present and future benefitsLet me start off with a story. A couple of months ago, on my first World Bank mission, I was in Tanzania. A country renowned for its national parks and protected areas. Indeed, national parks and the wildlife they host are the backbone of a tourism industry that accounts for a critical 13% of the country's GDP and 400,000 jobs. Tourism spurs investment and business in other sectors. It's also the largest export earner—which means it underpins the exchange rate, which makes much else in the economy possible.Nature-based tourism is thus a driver of growth in a country which still faces challenges in eliminating poverty. However, the natural assets that generate vital revenue face a range of threats.Some are more intractable such as the gruesome poaching crisis that has decimated elephant populations in the Selous Game Reserve, and demand concerted, collective international action. Other threats, however, could be readily addressed if the true worth of protected areas were understood. In the Ruaha national park, where 10% of the world's remaining lions live, the Great Ruaha River is running dry and wildlife is in decline. Why? Irrigated rice fields have increased 10-fold in the upper watershed above the park in the last few years. Because so much water is being diverted upstream, for several months every year the Great Ruaha River simply does not run, with concomitant impacts on wildlife. Streams and watering holes are drying up. In addition to impacts on the Park, this limits livelihood options for downstream communities.This illustrates a story that is played out constantly all over the globe. The true worth of ecosystem services, now and for tomorrow, is often not taken into account. Decisions are made without fully understanding the trade-offs, without identifying win-win options that would so readily deliver co-benefits. Instead, poor management of resources limits development opportunities, generating cascades of social, environmental and economic externalities. Perversely, the very assets that would lead to long-term collective well-being are eroded as a result of investments that focus on narrow short-term gains and fail to appreciate that environment is actually a core part of the development equation.Tanzania's government and business community are committed to ensuring that nature-based tourism remains a strategic driver of sustained growth. The Ruaha story is simply a reminder that resilient, sustainable development demands that we look at the big picture, one in which the health of both people and nature are deemed to be equally important as they are fundamentally interconnected. Ignoring nature inevitably erodes human wellbeing.When I started to position the SDGs I was told by many that they had to focus only on people. I always wondered exactly how that could serve humankind given that we happen to need the planet for life. Clearly we still need to make the case for the symbiotic relation between planet and people—and in this context then to make the case for protected areas. This is a vital task because unless we succeed, we will have a hard time steering decisions toward win-win solutions that help us simultaneously feed billions of people AND conserve habitats AND respond to climate change.Protected areas should be part of a broader poverty reduction strategyOur task, however, takes place against a sobering backdrop.It is what I call "receding reality"—the new normal. This is the slow onset degradation and depletion of our planet that lulls us into passivity. The fish are smaller, the forests emptier, the streams dry... Slow onset is not just sea level rise. Slow onset speaks to our progressive acceptance of a less rich and diverse world. This we must cognize and rebel against. Because a diminished planet also means that our collective global society will have failed to understand the inherent worth of protected areas.Current trends are encouraging—the global coverage of protected areas is increasing from around 9% at the first Rio meeting, to the current 15.4%. We're on track to reach 17% coverage of terrestrial and inland water areas by 2020, one of the Aichi targets. However, much more effort is required if we are to reach the targets for oceans and marine areas. We also need to ensure that these areas are vibrant and real, not paper parks.The World Bank is proud to be working with governments to advance this can-do agenda. Our work supporting the Brazilian government through the Amazon Region Protected Areas program (or ARPA), for example, has largely contributed to global progress on protected areas, by establishing, expanding and strengthening the protection of 60 million hectares of rainforest.We're also seeing more and more protected areas that are created with people and livelihoods in mind: ARPA's success is largely founded on empowering Indigenous Peoples and building assets for the poor: the program has helped secure Indigenous Peoples' rights over 45 million hectares of land, and enhanced their livelihoods by promoting the sustainable use and marketing of forest resources.My hope is that these best practices are carried forward into the new Parks of tomorrow. We know conservation must benefit nature-dependent people; we know how to do conservation without fencing out the people.But we can't rely on protected areas alone. How will we feed 9 billion people in 2050? Where will land, fodder, fuel and jobs come from? Put simply, the forest will burn if people are hungry. Agriculture and fisheries drive the majority of biodiversity loss. We must look beyond the traditional boundaries of conservation, fisheries and agriculture, understand that there can be no divide, and address poverty and food security full-on. We need to promote the sustainable climate-smart intensification of agriculture, through landscape approaches, sustainable fisheries, agro-forestry, and the restoration of degraded lands. Protected areas should be positioned as core components of broader landscape and seascape development strategies. Our challenge is to ensure that Ministers of Finance and Planning and Agriculture understand protected areas are part of a functional and productive economy. By protecting and enhancing natural capital not only in parks but along watersheds, on farm land, in pastures, in freshwater and coastal waters, we can transform the economic prospects and food security of millions of people. We've seen it, for example, in Indonesia, where a project worked with 358 village communities to protect coral reefs, while improving fishing practices. Coral reef grew on average by 17% in 6 out of 7 districts, and communities' income increased by 20% since 2008. Now in its third phase, the COREMAP project is working to mainstream an approach that makes coral reef protection planning an integral part of development planning and improves the welfare of coastal communities. Natural infrastructure delivers.Truly sustainable development requires policies and economic incentives, practical tools and safeguards to ensure that protected areas sustain critical ecosystem services and promote resilience and human well-being. In the coming year, we can set the pathway to that future if we can strengthen the role of protected areas in defining and delivering on the world's Sustainable Development Goals, and by embedding protected areas in the procedures that define society's development planning and underpin economic decision making. That's why I'm excited about the future despite the worrying trends: there are proven "win-win" solutions. We have the tools to ensure that both conservation and development are fully convergent.Steering development choices toward long-term gainsThis brings me to my second point: the rebellion against a receding reality only works if enough people in different walks of life join the good fight. And on this score there is also hope. Around the world we are witnessing a growing rejection of business as usual, with many taking risks and making hard choices to halt the planet's decline, to slow down the destruction.Yesterday, China and the U.S. exemplified historic leadership in the run up to Lima, putting forth commitments to reduce greenhouse gas emissions that should drive all Parties to greater ambition.Witness too the recent New York Declaration on Forests, with robust commitments to eliminating deforestation by national and sub-national governments, CSOs, Indigenous Peoples, companies. There is for example, a growing focus on the impact of commodities and consumer goods and the role that protected areas and natural ecosystems can play in sustaining commodity supply chains.The new Global Alliance for Climate-Smart Agriculture will be a decisive player in this effort.In addition to this, there is a growing chorus of governments and others seeking to look beyond GDP. More and more countries are asking for support from the Wealth Accounting and Valuation of Ecosystem Services Partnership—WAVES.Natural capital accounting has already helped Botswana factor water constraints in its policy choices. In the Philippines' biodiversity-rich Southern Palawan, where there are numerous competing demands on resources, ecosystem accounts are expected to provide decision makers with the tools they need to make no-regrets decisions on ecotourism, agriculture and mining. This work is challenging from a methodological point of view but politically vital. It is helping governments go beyond annual growth statistics and understand the importance of natural assets over a longer time horizon.Programs helping countries plan for reducing emissions from deforestation and forest degradation (REDD+) are also having an impact, by creating an incentive for decision makers from different land-use sectors to sit around a common table, take out maps and negotiate a shared vision for the future that leaves valuable forests intact. We are creating and applying solutions to address and correct market, institutional and policy failures, by transforming how we measure and account for development and by providing clear incentives across sectors for responsible private and public investment in natural capital. And let me share, as a final thought, why this concerted, collective action is so critical in a time of receding reality. There is no question that the moral imperative of our time is poverty eradication. While we know that extreme poverty has declined, the proportion of people at risk of falling back into extreme poverty remains stubbornly high. And everyone one of us in this room knows that gains on this front will be lost unless we change the current development paradigm.The World Bank Group adopted two goals last year: to help countries end extreme poverty by 2030 and boost shared prosperity for the bottom 40% of the population in a sustainable manner. The second goal speaks to the rising expectations of a global emerging middle-class. We must also be prepared to manage the changing consumption patterns of this growing global middle class as this will further exacerbate resource depletion and stretch the carrying capacity of many productive systems. This demands structural, systemic changes that go beyond minimalist, quick-fix approaches. It is our collective task to ensure that those changes have at their core an understanding of landscapes and seascapes as an integral, vibrant whole. That the true worth and value of protected areas is reflected.We have come a long way from the Stockholm Conference of 1972. We must seize the moment. Follow up on the NY Declaration on Forests. Support climate-smart agriculture and fisheries. Ensure that forests are meaningfully included in future climate change agreements. Support the active and integrated implementation of the Sustainable Development Goals. We must live up to the Promise of Sydney and implement solutions that cross boundaries and deliver lasting results for parks, people and planet.At Sydney this year, this must be our pledge. There is no plan B for people and the planet. Thank you. Show Less -
Remarks by World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati at Transparency International US Annual Integrity Award Ceremony Honoring James D. Wolfensohn
Thank you Alan. And thanks to Transparency International for hosting this wonderful event.First and foremost I want to congratulate Jim for this award that he deserves so much. What some in this... Show More + room may not know about Jim is that he broke one of the strongest taboos in the World Bank. And with this I don't mean becoming the President of the organization despite the fact that he was born in Australia.No, what I am talking about is the fact that he dared to utter the C-word.When Jim took the stage at the World Bank/IMF Annual Meetings in 1996 and declared that the "cancer of corruption" must be fought very much like we fight poverty, hunger, and disease he questioned conventional wisdom.Many, both inside and outside the institution, felt that corruption wasn't an economic but a political issue, better left to governments.But his argument was persuasive and beautifully simple:Because corruption diverts resources from the poor to the rich, because it increases the cost of running businesses, because it distorts public expenditures and deters foreign investors, we need to fight it.Jim also said that corruption is a major barrier to sound and equitable development.His words put transparency, accountability, and the fight against corruption once and for all on the Bank's development agenda.I know, almost 20 years later it may be difficult to appreciate what an important moment this was.But for me, Jim's words have a very personal meaning.World Bank teams used to meet the members of the Suharto regime without ever mentioning corruption. That changed after he delivered his famous speech.When I became a finance minister in Indonesia, the youngest and first female in my country's history, I felt very honored. But I also felt sad, knowing that corruption was deeply entrenched in my country and that the work ahead wasn't going to be easy.I know from experience that fighting corruption is tough. Progress is slow. And there are enough people out there who don't want you to succeed.It takes a personal toll, it even affects families.So it was good to know that there are people out there, in the World Bank and organizations like Transparency International, who were providing guidance and helping us to force change.Today, corruption remains a big problem in Indonesia. But we have the Corruption Eradication Commission, an independent institution that has the power to investigate and prosecute cases. We have a watchful media, and we have a strong civil society scrutinizing the powerful.Jim, you should take credit for this progress.Your leadership in making corruption an economic issue doesn't give anybody, any excuse, any longer to look the other way when corrupt officials enrich themselves at the expense of the poor.Since you declared corruption the enemy of development, the Bank has launched more than 600 anti-corruption programs in nearly 100 countries. Furthermore, we sanctioned over 560 firms and individuals for misconduct including corruption, collusion, fraud and coercive practices. Jim, you may not have ended corruption, but you made it a lot harder to be corrupt.Congratulations. Show Less -
Speech by World Bank Managing Director and COO Sri Mulyani Indrawati at the U.S.-ASEAN Business Council
Thank you Joe Marushack for that introduction, and a special thank you to Alex Feldman for inviting me to address such an amazing gathering.It is a great pleasure to be here today. I want to congratul... Show More + ate you and thank you for the work you have been doing over the last three decades.As you all know, I am a child of Southeast Asia. When I was born the region was extremely poor and at the center of major geopolitical tensions.Today, my home region is one of the most dynamic in the world. It is located in a neighborhood that will likely shape this century like no other.If measured in comparable prices, China will soon overtake the U.S. as the largest economy. And by 2050 it will constitute a quarter of the world economy. India will compete with the U.S. for second place, and Indonesia – my country - will be about to overtake Japan. This success inspires others.I just visited Tanzania and Ethiopia, both countries with high poverty and high growth rates in the last decade. Both are looking towards ASEAN member states like Vietnam or Malaysia to learn from its lessons and copy the region's successes.So when we celebrate the U.S.-ASEAN relationship today, I would like us to keep three points in mind that will be critical for our future:First, the need for more cooperation. Second, the role you, the private sector can play in helping the region achieve its development goals. And finally the importance of sound political leadership.We are now only 15 months away from the creation of the ASEAN economic community, a much anticipated step.A seamless economic space with 600 million people can be a powerful engine of growth for the region and the world.But too many obstacles remain.Trading with ASEAN is still expensive. For example, the cost of transporting a container from Bangkok or Jakarta to Los Angeles is twice that of shipping it from Shanghai or Seoul.And the barriers for foreign investments are still the highest in the world. They limit productivity gains and constrain competition.The new ASEAN economic community can only realize its vision when barriers are truly lowered, not only within the region, but also beyond.Too many exceptions in opening trade and too many limits on foreign direct investment will undermine the regions goal of being a key part of global supply chains. Pursuing closer integration therefore requires political leadership that can explain the benefits of cross-border cooperation while cushioning the impact on those that stand to lose in the short-term. Second, at the World Bank we are focusing on two goals: ending extreme poverty and promoting shared prosperity. Achieving these goals will take both multilateral aid and you, the private sector.Both people and businesses stand to win when growth is strong and shared broadly. And this is where our focus is at the World Bank.In Myanmar, a country that only recently emerged from years of military rule, we are working with the new leadership on bringing healthcare and electricity to all.In Vietnam, we are working with the government to upgrade 360 km of roads in the Delta, boosting the transport of commercial goods by 60%.Some of the most transformative projects we pursue involve the private sector directly. Like our rural electrification program in Laos which brings electricity to 70% of the population.The need for infrastructure is so high that no government or multilateral institution like the World Bank, will be able to address it alone. This is where you come in. The private sector.We need your investments and entrepreneurship to build and manage the roads, the power lines and the utilities so that people can leave poverty behind and businesses can thrive.Where we see a need for development and growth, you should see opportunity.Third, we need good governance, both in politics and corporations. We need transparency and a fair tax system. And we need sound leadership that will be critical to address rising inequality.Fast growing countries in Asia, like countries elsewhere in the past, are experiencing rapid urbanization, rising income inequality and a fundamental reorganization of societies away from traditional structures. Some rise in inequality may be good for growth, as it provides the incentives for people to strive to succeed. But World Bank research shows that if inequality starts to affect equity of opportunity, inequality could threaten growth. Further, high inequality could undermine the political consensus needed to implement policies and reforms that keep growth high. Leaders, whether in ASEAN or elsewhere, need to care about maintaining an open and competitive society.To achieve this, countries need competition laws, access to finance, and business regulations with low barriers to entry.The most difficult challenge for many countries ahead is avoiding state capture by the privileged.This is where ASEAN leaders can make a difference, even if the political costs are high and the benefits not immediate: by tackling the structure of state-owned companies and by leveling the playing field.Everybody will benefit, the people of ASEAN and you, the private sector. I have great hopes and I am optimistic that my region can achieve its goals.We need strong relationships, like the one we have with this council, to pursue them.On behalf of a region that has achieved a lot and has much to be proud of I want to thank you for your support, your cooperation, and your friendship.Thank you. Show Less -
Media Teleconference on Carbon Pricing with World Bank Group President Jim Yong Kim and Vice President and Special Envoy for Climate Change Rachel Kyte
DR. KIM: The UN Secretary General's Climate Summit will take place here in New York tomorrow. More than 120 Heads of State and Government are expected to attend this historic event.Today, ... Show More + ahead of the summit, I'm pleased to announce a powerful development that reveals the great commitment and impatience from governments and companies to move now to fight climate change – and not wait until it's too late.Today we are announcing that 73 national and 11 regional governments and over one thousand companies and investors support putting a price on carbon. Together, these government supporters represent 52 percent of global GDP, 54 percent of global greenhouse gas emissions, and almost half the world's population.The supporters include emitters like China, Russia and the European Union, and growing economies like Indonesia, Mexico, and South Africa.Many already have carbon pricing in place or are preparing to implement it. Others, including the Philippines and many small island developing states support carbon pricing because they know that without such action, climate change will have devastating impacts on their populations and on their economies.Companies such as LG Electronics, National Grid and Westpac have already integrated a "shadow" price on carbon into their business strategies to improve decision-making for the future. They know that this will help avoid risks and find opportunities that can increase energy and resource efficiency, reduce CO2 emissions, and give them a competitive edge.The World Bank Group is working with clients, both countries and companies, to put in place effective policies that will price carbon as a necessary step on the path to low carbon growth.I am proud to announce that to support the leadership of these countries and companies, the World Bank Group and the We Mean Business Coalition will be convening a "carbon pricing leadership coalition."This new leadership coalition will work to advance carbon pricing solutions after the summit ends tomorrow, and up to Paris in 2015. They will be sharing experience, research, and best practices and spurring action across their sectors, supply chains and with their neighbors and allies.Up to now many people have said, "Well, carbon pricing is important but it's difficult, it's complicated, it's not the only solution." All these things are true, in part or in full, but today these countries and companies are sharing a preparedness to do what's needed to speed the economic transition.The science is clear, the economics compelling and the politics sometimes difficult. But today we see that the politics aren't quite so difficult after all, and manageable, when there is leadership.Thank you very much. We are open to your questions.QUESTION: Hello Mr. Kim, thanks for doing this. I have two questions if I may, can you go a little bit more into detail on what the initiative you announced today means for the time going to Paris; what are you going to do, the specifics? The second question I have is if you put a price on carbon, definitely you get some kind of revenues, especially for governments, and I am just wondering, do you have any proposal for what to do with these revenues? Would you be in favor of doing tax cuts in other areas if you raise carbon taxes?DR. KIM: Let me introduce some perspectives on it, and then I'll ask our Vice President Rachel Kyte to get into some of the details. I think the most important thing is we have to really understand what a sea change this represents.We've never had a statement like this on carbon pricing. We've certainly never had a statement where representatives of nearly half the world's population, more than half the world's GDP, have come together and said we are determined to make a path to a real price on carbon.I think this is by far the most definitive and clear signal that we're moving in the right direction. So when we started talking to governments and companies about this, there was a lot of hesitation. Something happened over the last few months that got us to where we are today.The most important thing to remember, given where we were a year ago, even six months ago, having this kind of statement makes a huge difference in efforts to get something done at COP21.I just want people to understand how hesitant people were, and governments and businesses were, before this statement, and the importance and the sea change this represents. And for some of the details Rachel Kyte will now jump in.RACHEL KYTE: So two things, on your first point, so we've got a number of governments who are already pricing carbon, either through taxes or through emissions trading systems or through other fiscal policies that reveal an effective price on carbon. We've got countries who want to see this progression, who know that they want to move in this direction, and are asking for help.Secondly, inside this leadership coalition, we have a thousand companies from every corner of the earth, from all sectors of the economy, and what we want to do now with this group of self-selecting leaders; together with the We Mean Business coalition, is to start rolling up our sleeves and start working, government and business together, on how to bring carbon pricing forward in as many jurisdictions as possible, and to look at the many different ways in which that can be done.We are agnostic, as the World Bank Group, about how that can be done – it can be done in many different ways, but we're not agnostic on that it should be done, and the earlier that it is done the greater the possibility of spurring investment in cleaner growth and in resilience and moving away from an exposure to carbon in the economy.On your second point around taxes, I think that if you speak to a number of the businesses in the coalition then obviously tax rights are fundamental to their competitiveness. What they are seeking is fair treatment and predictable treatment in all the jurisdictions in which they work. And I think there is a conversation going on within the business community as well as within the economic community about whether or not we should be taxing what we burn rather than taxing what we earn, as the Europeans say.What is the tax regime for a world where we want to drive carbon out of the economy? That is the conversation that has started already and pricing carbon becomes one of the effective first steps as we try to drive carbon out of our economic growth going forward.QUESTION: And the World Bank does not have any position on that? What to do with the tax revenue?RACHEL KYTE: No, the World Bank Group works with our clients hand-in-hand, looking at the structure of their economy, looking at the choices that they need to make, and looking at the way in which they want to grow going forward, so we don't have a once size fits all answer to that question. We are working with countries that want to introduce taxes, we're working with countries that want to introduce trading systems, and we're working with countries that want to use other fiscal policy measures and reduce harmful subsidies and other instruments of choice.So the message from us is not that there's one way to do this, obviously we're in fiscal conversations with all of our clients. But the point today is that putting a price on carbon is an important first step, a necessary if insufficient step, towards driving carbon out of the economy.QUESTION: Is it a matter of concern for you that the U.S. is not on the list? How do you think you can move forward without the full cooperation of the world's largest economic power?DR. KIM: Thanks for the question Jeremy. So first of all, there are several states in the United States on the list, and many of course American companies on the list. And President Obama himself has made a very clear statement supporting carbon pricing. You know the complexities of getting a nation state like the United States to sign onto an agreement through the various legislative channels are frankly a little bit beyond me, but we know that despite the fact that as a country they haven't signed on, in so many other ways, American citizens, American states, and the president of the United States himself have been very positive about this statement.QUESTION: If I can follow up, how do you explain that they didn't sign? How do you explain this reluctance?DR. KIM: You know, I don't know Jeremy, but it's a good question that you should ask them directly Show Less -
Speech by World Bank MD and COO Sri Mulyani Indrawati on Policy Challenges for the Financial Sector: Global Financial Sector Reform, Five Years On
"Are we treating the symptoms or curing the disease?"Thank you very much. It's a great pleasure to be with you here today.I'd like to thank the IMF, the US Federal Reserve, and my colleagues... Show More + at the World Bank for organizing this important event.This conference is debating issues that remain vital, seven years after we suffered the first impact of the global financial crisis and five years after we slowly started to emerge from it.As you all well know, the G-20 responded to the financial crisis with a broad set of reform proposals. These include measures to strengthen capital and liquidity; policies to deal with the "Too-Big-To-Fail" problem; reforms for Over-the-Counter derivatives; and the expansion and redefinition of the regulatory perimeter.But the lingering question is: Is the drive for global financial reform addressing the disease? Or have we been dealing merely with the symptoms of systemic financial weakness?We must ask these questions while we shape the reform agenda - to be better equipped for future financial crises.So let's remember what the actual disease was:By now, we know the many fault lines that the last crisis exposed. Let me mention several of them:To start with, there was an inadequate quantity and quality of capital held by financial institutions. Leverage was high and the system quickly became illiquid. This made financial institutions vulnerable to losses as well as to shocks in interbank and other wholesale funding markets.On the other side, regulators and supervisors lacked the capacity and the resources to assess the complex internal models of the very same companies they were supposed to oversee.The "Too-Big-To-Fail" problem not only exposed our inability to unwind large and complex banks and insurance companies. It created a moral hazard that still haunts us today.And serious deficiencies in corporate governance standards and practices became evident when excessive risk-taking not only became the norm, but was rewarded and envied for its short-term successes. So if we know what's wrong, why is the cure so complicated?Instability is part of our dynamic globalized economy. We know that banking and capital market crises tend to recur periodically – and we know that they disregard borders, despite policymakers' best efforts to anticipate, prevent and contain them.So we'd better have safeguards in place to dampen the severity and contain the fallout. National and international regulations should address systemic weaknesses, to be better prepared for the next crisis.But as you know, this is easier said than done. While true, this line of thinking ignores the political and economic realities that create policy dilemmas and roadblocks when trying to do what is right.Let's not forget the realities of the policymaker, who has to juggle competing demands in the midst of a crisis – and after.As the finance minister of Indonesia, I experienced the perfect storm. 10,000 miles from the epicenter of the crisis in the US, my currency was devaluating and our banking system became vulnerable. Combine this with conflicting domestic political priorities, and you are left with limited options and tough trade-offs between taking short-term measures and fixing long-term problems.Keeping these realities in mind, I would like to highlight three critical points.First, we should review today's policy environment and how it imposes additional constraints on the implementation of global financial reforms.Second, we should consider the unintended consequences for emerging markets and developing economies.Third and finally, I'll like to highlight the role that the World Bank and others can play in helping developing countries to be better prepared.The post-crisis economic environment is looking good.After a bumpy start, the US, Europe and Japan are growing simultaneously for the first time in more than 5 years.But they are not growing at the same pace.While US growth looks reasonably strong, the global economic momentum is slow and overshadowed by uncertainties in parts of Europe. China's slowdown poses additional challenges to emerging markets, particularly commodity exporters.Several economies remain vulnerable to a sudden change in global financial conditions. Countries with large current account deficits, high levels of short-term debt, or significant foreign currency exposures could be at risk. Particularly if financial markets freeze up or if uncertainty builds up over the timing and magnitude of changes in high-income countries' monetary policy.Adding to this are the political, ideological, and philosophical differences amongst all of us about the scope, implementation, and impact of financial reforms.There are some lingering questions and uncertainties. And the answers really depend on who you ask:What activities and aspects of the financial sector should be regulated and how much regulation is desirable?This is a divisive question. As you know, some have argued that the proposed regulations are too light; others say they are excessive and could hamper innovation and fragile growth.My friend and colleague Christine Lagarde feels that bank reforms lack in depth and speed because of too many competing interests.Will all financial institutions be treated equally or will the large ones continue to enjoy political protection?This "Too-Big-To-Fail" policy dilemma remains a problem. As a policy maker you want to regulate these institutions, but your options are limited not only in terms of scope, but also in terms of political and economic realities. Will the implementation of regulatory reform put my economy at a comparative disadvantage?Win-win outcomes can only be achieved through coordinated implementation. But what if there are short-term gains for my economy for not playing ball. And why move first and farther than the others?These challenges and uncertainties diminish the appetite for deep change, regardless of how fresh the memory of the crisis still is. We all know that regulation is so much easier when growth is strong.It is good news that leaders are now confident that a framework for bank regulation is within reach. In fact, most expect the Financial Stability Board of the G-20 to conclude this framework at their meeting in November.There will surely be tradeoffs in the short term – for example, between financial sector development and financial stability. But I am confident that building a more resilient financial system today is critical for financial intermediation and economic growth tomorrow.International regulatory response to the global financial crisisNevertheless, we need to pay attention to the impact of international reform measures for emerging and developing countries, and we need to be alert about potential unintended consequences.Higher capital requirements for banks may lead to limited availability of cross-border funding, as large foreign banks are required to hold more capital. Additional capital charges on systemically important institutions may lead to changes in bank business models that could increase the cost of capital.The new liquidity requirements - for instance, the net stable funding ratio - could lead to limited availability of long-term financing by forcing banks to match the maturities of assets and liabilities. This is likely to have a significant impact on infrastructure financing. Should this happen, the World Bank and other providers of long-term finance could play a greater role.As we all know, implementation has just started. It will take some time to fully understand the actual impact of the reforms. Meanwhile, I welcome the ongoing efforts by the Financial Stability Board in collaboration with the IMF and the World Bank to monitor the impact of the reforms on our client countries.The way forwardImplementing the financial reform agenda is clearly the central challenge ahead of us, as we seek to ease the impact of any future financial crisis.The following priorities are among the most critical elements of implementation as we move forward:Consistent progress across countries and jurisdictions remains relevant, for instance by making risk weights – which are used to calculate capital - credible and comparable.We will also need to help developing economies align their supervisory and regulatory reforms to new standards.This is an area, where I feel confident the World Bank is playing and will continue to play an especially active and constructive role. Last February, for example, we began working with Turkish authorities to help them strengthen their resolution frameworks by aligning current practices with recently agreed international standards. We are also supporting Central Asian countries in their efforts to align their regulatory standards with Basel principles.Moreover, we will need to enhance policy coordination through such steps as data sharing and vigilant monitoring. This way we hope to mitigate any unintended consequences on emerging markets.So let me get back to my opening question.Are we treating symptoms or the root causes of the next possible crisis?As you may guess from the points I made: It depends.In my view, we have made clear progress. For example, banks with more capital and liquidity should now be more resilient to shocks. And more effective resolution frameworks for large financial, which apparently are on the table of the G-20 regulators, should help dampen and not amplify the effect of their failure on the financial system.But I also believe that more needs to be done. We need to ensure that once implemented, the reforms change the incentives and the underlying bank business models that were at the core of the crisis. We also need to ensure coordination between home and host jurisdictions for effective resolution of large financial institutions. By taking forthright action – and by promoting a spirit of caution and candor among all market participants – we can soften the impact and mitigate the effects of any future financial crisis that awaits us.Occasional shocks to the system may be inevitable in a globalized financial system. But by promoting robust and resilient markets – overseen by strong and steady regulation – we can responsibly ease the eventual impact of any future economic blow.Today's panel will discuss in detail some of the topics that I've touched upon in these remarks.With that, I will end here and open the floor for questions and comments.Thank you very much. Show Less -
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 -
Remarks by World Bank Managing Director Sri Mulyani Indrawati at APEC Finance Ministers' Meeting: The Global and Regional Outlook
Thank you Minister Basri.I would like to thank Indonesia for chairing the 20th APEC Finance Ministerial Meeting and to express my appreciation for your warm welcome, Minister Basri, and the stimulatin... Show More + g discussion we had at our retreat.What I take away from the retreat is a shared understanding that the global economy appears to be moving into a new phase, in which output in advanced economies is firming, albeit probably not as strongly as we would have liked. Developing country growth appears to be slowing, including in the Asia-Pacific region.Our retreat, of course, came in the wake of the decision by the US Federal Reserve to defer its tapering of quantitative easing. As we noted, it is a positive move in the short-term for both developing and high-income economies.We know governments have now been given some breathing space. Clearly the risks and uncertainty about eventual tapering remain. But this is the time for policy makers to seize the moment and address domestic vulnerabilities and reduce external financing exposures.So what is the economic outlook? For the most part, the views of the World Bank Group are similar to those of the IMF. Global GDP is projected to expand about 2.4% in 2013 and gradually strengthen to around 3.2% and 3.5% in 2014 and 2015. And APEC emerging markets and developing economies are expected to contribute almost 50% of future world growth.In advanced economies, growth is recovering on the back of accommodative policies. GDP growth has turned positive in Europe, strengthened in the US and remains robust in Japan. This momentum is expected to continue into the second half of the year, despite fiscal consolidation, buoyed by a recovery in the housing market and employment growth.Outside of India, the impact of the expected accommodating monetary policy on the Asia-Pacific region has been limited so far.After slowing down for several quarters in a row, growth in China is now showing signs of stabilizing at 7.5 percent, due to external conditions and domestic policy aimed at rebalancing growth away from investment and exports.Despite gradual adjustment to tighter financial conditions, growth in other developing countries is firming or holding steady. Excluding China and India, developing country import volume growth rose by more than 5% in the second quarter.However, for many APEC economies, the balance of risk is once again on the upside.The cost of international bond financing for developing countries has increased by 88 basis points since May.As QE policies are withdrawn, interest rates will likely rise further, which will increase debt-servicing costs and raise the cost of capital. On the positive side however, when tapering does happen it will signal further recovery in the US. Weaker exchange rates in developing countries will boost exports over time.China's moves to rebalance away from its dependence on investment and rein in credit growth could have significant implications for developing countries. Slower investment growth, and consequently slower GDP growth, could call into question the profitability of past investments and associated loans, with potential effects in the region.Excess capital inflows from loose monetary policies have fuelled asset price inflation in neighboring countries, increasing the risk of property bubbles. As liquidity is restrained and interest rates rise, the tapering of QE could have more serious consequences in the APEC region.So what can be done?In countries that have already recovered from the crisis, macroeconomic policy stances may need to be adjusted to contain or prevent inflation, asset-price bubbles, and deteriorating current accounts. This would also help restore depleted policy buffers, which may be needed in the future.The countries most vulnerable to swings in global capital flows could continue to strengthen their balance sheets, by reducing their reliance on short-term and foreign currency denominated debt. The significant effort throughout the region to develop local currency bond markets is clear evidence that policy makers have understood and responded to this need.One of the main risks for the Chinese economy appears to be domestic with regard to the ability of firms to continue to service loans issued during the investment boom. If the decline in investment rates in China is done in an orderly fashion, it will help other East Asian economies to adjust their spending cycle.It will surprise no one at this table to hear that I am convinced that countries in the Asia-Pacific region need to make structural reform a priority in order to extend their growth potential, which remains 1 to 2 percentage points below pre-crisis levels.To sustain faster growth, developing countries will need to redouble efforts to reduce bottlenecks by improving their investment climate, investing in infrastructure, improving labor utilization and boosting productivity.The APEC Finance Official Process, under Indonesia's Chairmanship, has rightly identified infrastructure financing as one of the priorities for our discussion this year. In times of uncertainty, it is particularly important to focus on long-term and stable investment.In developing countries alone, financing needs have been estimated in the range of US$1 to US$1.5 trillion per year.Addressing these long-term investment needs will require significant progress in project selection, quality and implementation, coupled with mobilizing private financing and capital markets. This is why we at the World Bank have started looking into the creation of a Global Infrastructure Facility as a very practical way to leverage public and private resources.Challenges also arise from a changing pattern of competitiveness and comparative advantage as emerging economies increasingly penetrate global production and trade. So future growth in advanced economies will require supporting a recovery of demand as well as a reallocation of resources to new sources of growth – new products, new services, and new jobs, which can sustain good lifestyles.Maintaining economic systems that allow people to benefit from growth has been a feature in the Asia Pacific region over the past decades. This is vital to ending extreme poverty and boosting shared prosperity. We hope it continues. 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 -
World Bank Group President Jim Yong Kim Remarks at the Opening Plenary of the International AIDS Conference 2012
"Ending AIDS and Poverty"Your Excellencies and honored guests, ladies and gentlemen, colleagues and friends,As we look back on the history of this epidemic, it is hard to say that there is any o... Show More + ne moment when the tide began to turn. Because the truth is that we have been turning back the tide of AIDS, step by painful step, for 30 years.And at nearly every turn, it is the activists, and their communities, that have led the way.It was activists and communities who devised safer sex, promoted condom use, needle exchange and virtually all the behavioral prevention we use today.It was activists who transformed drug development and regulatory processes, and involved patients in clinical research, cutting drug approval times in half in the global north.It was activists in Durban in 2000 who began to push for access to antiretrovirals in the developing world and who kept pushing and are pushing still for them to be affordable and available to everyone who needs them, everywhere.And it was activists whose deep understanding of the communities most affected by AIDS has spurred a movement to promote the health and dignity of gay men, sex workers and drug users that has now reached every corner of the world.It was TASO in Uganda, ACT UP in the US, TAC in South Africa, Grupo Pela Vida in Brazil, the Lawyers Collective in India, the Thai Drug Users Network, and countless organizations like them that have woven together one of the most extraordinary movements the world has ever seen. Remember what ACT UP stands for: the AIDS Coalition to Unleash Power.This has been a movement that came together in anger, that thirsts for justice, that is fundamentally about unleashing the power of human solidarity, and that for 30 years has forged alliances to expand that solidarity and be ever more inclusive.A movement that has grown to include pioneering governments from Brazil to Botswana, UN agencies, visionary donors and donor countries, and groundbreaking NGO treatment programs; a movement that has led to efforts such as 3 by 5 and the creation of the Global Fund and PEPFAR.Thanks to this collective effort, we have seen remarkable gains in the fight. Prevalence has fallen steeply in many countries, new prevention strategies show great promise, and more than 8 million people are on treatment today. As we gather here in Washington, we look towards the end of AIDS as something that is actually within our reach, a vision that to me and many others here seems less idealistic, less outrageous, than 3 by 5 did, just a decade ago.Today marks the first time that a President of the World Bank Group has addressed the International AIDS Conference. I'm here because I know what this movement is capable of achieving. I'm here to bring you both a pledge and a challenge.I pledge that the World Bank will work tirelessly with all of you here to drive the AIDS fight forward until we win.And I challenge you to join me in harnessing the moral power and practical lessons that the AIDS movement has produced to speed progress against that other global scourge, poverty.As the leading global development institution, the World Bank is concerned with all aspects of development, all the dimensions that are united in the eight Millennium Development Goals. We know that development challenges are interdependent. And yet our approaches to these problems often remain fragmented, limiting our vision and our results. That's why the idea of bringing lessons from AIDS to poverty reduction is crucial. By breaking down siloes between these two efforts, we begin a process that will go much farther. Ultimately we'll multiply the flows of knowledge and experience across all development sectors, accelerating progress on education for all, maternal and child health, environmental sustainability, and so many of our other goals.Let me describe how the World Bank is applying its distinctive strengths to AIDS.The World Bank's mission is to build prosperity and eradicate poverty in countries around the world. The Bank supports countries with financing, but also with knowledge and analytic capacities that are often just as important. In 2000, under President Jim Wolfensohn, the World Bank worked with many of you here to put the first billion dollars on the table for AIDS. Today, in health, the World Bank's comparative advantage is in systems building. Our health sector strategy is focused on supporting countries to create health systems that deliver results for the poor and that are sustainable. We also help countries build social protection systems that can mitigate the impact of events like economic shocks and catastrophic illness, including AIDS, on families and communities.As an example of our health systems work, the World Bank is helping governments implement performance-based financing, which gives local health facilities financial rewards when they increase delivery of essential services and improve quality. In Burundi, after a performance-based financing model was introduced nationally to strengthen the AIDS response, the number of HIV-positive pregnant women receiving antiretrovirals for the prevention of mother-to-child transmission increased by 65 percent in just one year.We know that HIV is more than a medical problem. AIDS has devastating economic and social impacts on individuals, families and communities. That's why social protection is also a critical piece of a comprehensive AIDS response. Every year, worldwide, 150 million people are forced into poverty by increased health expenditures and lost income due to illness, including AIDS. To date, the Bank has helped 40 countries scale up social safety-net programs, including health insurance schemes, old age pensions and cash transfer programs that supplement the incomes of poor families. Our goal is for all countries to be able to implement basic social protection programs tailored to their specific needs.Success in the AIDS response depends on partnerships. On a very personal level, I am committed to strengthening the World Bank's multilateral alliances with UNAIDS and the Global Fund; our partnerships with UN technical agencies, including WHO and UNICEF; and our collaboration with PEPFAR and other bilaterals. Moreover, strong partnership with civil society that delivers results for the poor will be a signature of my presidency. We'll build on the lessons of the Bank's MAP initiative, which recognized that civil society voice is critical to make programs work for poor and vulnerable people.In 2008, the overall proportion of people in the developing world living on less than $1.25 per day was 22 percent, less than half of the 1990 figure. The Millennium Development Goal of halving the incidence of extreme poverty has been reached. But today 1.3 billion of the world's people still live in absolute poverty. This is intolerable. We can and must end absolute poverty in our lifetime. To do so, we'll need to share know-how across the boundaries of institutions and development fields. And we'll need to use that know-how to build systems that can sustainably meet human needs.The AIDS fight has shown the world how to turn the tide of a massive assault on human life and dignity. We have a responsibility to ensure that lessons from AIDS inform and improve our efforts to tackle other social goals, above all poverty eradication. In some places, this is already happening. Governments and their partners are applying AIDS knowledge and resources strategically to beat the epidemic and simultaneously drive a broader anti-poverty agenda. Rwanda has used AIDS money and technical expertise from the World Bank, the Global Fund and others to build up its widely admired health insurance system, the mutuelles, and to expand secondary and vocational education. In Rwanda, AIDS resources are contributing to the strategic investment in human capital that has helped drive the country's remarkable economic progress. From being an exception, this approach can become the rule. This will be a leap forward in our capacity to build systems and deliver results. As Rwanda shows, successful countries have tackled AIDS as a systems problem. They've responded to the epidemic by strengthening delivery systems for key social goods, and they've integrated those systems to address people's needs comprehensively.Building systems is what the World Bank does best. We have decades of experience making systems work for all, but especially the poor. I want the Bank to lead the world in joining systems knowledge with clear moral values to help countries solve their toughest problems.Two features of the AIDS fight with clear lessons for poverty work are openness and innovation. The countries that have achieved the greatest successes against AIDS have been open about their epidemics. They have shared information widely, challenged stigma, and encouraged public debate. They have refused secrecy and dispelled irrational fear. There are many lessons here for the way we fight poverty. As we at the World Bank continue to tackle corruption, increase transparency and freely share our data, we're taking these lessons from the AIDS fight ever more fully on board.Looking back over the last 30 years, we see that the AIDS response has generated continuous innovation. From the acceleration of drug approval protocols to task shifting within medical teams. From fixed-dose drug combinations to the hiring of accompagnateurs to deliver community-based services.We'll need more innovation in the years ahead to finish the fight against AIDS. As President of the World Bank, I want to infuse that same appetite for innovation into the struggle for inclusive economic development. I'm convinced that if the practical know-how and the spirit of the AIDS movement can be brought to the poverty fight, there is no limit to what we can achieve.On the front lines of the 3 by 5 initiative, I saw daily how HIV implementers were generating innovative solutions to practical problems: from supply chain management to human resources to creating space for community voice in program evaluation. But have we done enough to organize, analyze and apply this knowledge? Have we brought it to bear in every setting where it could be transformative? All of us here know that a difficult fight against HIV lies ahead. We have come to Washington because we are determined to win that fight. We see our task through the lens of solidarity that has inspired the most ambitious AIDS activism and that we all feel today in this room. From the start, as they fought this epidemic, the activist pioneers knew they had to tackle the structural forces of prejudice, social exclusion and economic injustice. Their ambition to end unjust human suffering was as vast as the suffering itself. All of us here today must be just as ambitious.The AIDS movement has rekindled values that show the kind of global development we're striving for: development grounded in solidarity, courage, respect for the dignity of all people, and an unrelenting demand for justice.If we unleash the power of these values, we can overcome any obstacle in the fight for economic and social justice. If we unleash the power of these values, we can leave to our children a world free of poverty and AIDS.We can end AIDS. We must end AIDS. The challenge we face is great. But as I look out at all of you today, I can actually see the end of AIDS. Thank you, let's make it happen. Show Less -
World Bank Group President Dr. Jim Yong Kim at Brookings Institution
Global Development at a Pivotal Time: A Conversation with World Bank President Dr. Jim Yong KimMR. TALBOTT: My name is Strobe Talbott and it is my great pleasure to welcome you here to Brookings... Show More + this afternoon for a conversation with the new President of the World Bank Group.Whenever we have a distinguished visitor here to Brookings, in particular--and particularly if it's somebody who is coming here for the first time, we're always careful to check with his protocol people on exactly how the distinguished visitor wants to be addressed, whether we use "Doctor" or "Honorable," whatever, and the word came back "Jim."[Laughter.]MR. TALBOTT: So, welcome, Jim. It's really great to have you here. A couple of your successors, your most immediate successors, were frequent visitors here, particularly Bob Zoellick as recently as just a couple of weeks ago as he offered some reflections on his way out of the office that you now occupy.And Bob's predecessor, Jim Wolfensohn, was, for many, many years an outstanding trustee of this institution and made it possible for us to broaden and deepen our own work on development, and it's great to see on your team Navtej Dhillon who is an alumnus of this organization.Navtej, great to have you back here, as well.Jim is going to give us a sense as he takes on this extraordinarily important and challenging job of his priorities and his overview of the challenges ahead.I think everybody here knows quite a bit about his career, his dedication to improving health and development around the world, among other things as the cofounder of Partners in Health and also as a former Director of the World Health Organization's HIV/AIDS Department.And I think you also all know that, immediately before taking on this assignment, he was the very highly regarded President of Dartmouth, a post that he held for three years.Our order of the program is very, very simple. Jim is going to offer some remarks from the lectern here and then he is going to enter into a conversation with Kemal Dervis, who is our Vice President and Director of Global Economy and Development here at Brookings, a former head administrator of the United Nations Development Program and a former senior official of the World Bank.So, these two gentlemen have covered a lot of the same ground in their careers. They will do in an introductory conversation between the two of them and then open it up to all of you.So, Jim, the microphone is yours, and thank you again for being with us.[Applause.]DR. KIM: Thank you. It's such a pleasure to be here, Strobe, but when you said that my successors have been here, as the man who knows everything about Washington, I thought, "Oh, my God, what does he know that I don't know." I still have five years, Strobe.Thank you for the kind introduction and I just want to share with you a few words before we jump into the discussion.Kemal, I'm so pleased to be with you today. You're one of the heroes of the World Bank. And in many ways, the Brookings Institution, and the Global Economy and Development Program that you head is a showcase for evidence-based policy research, an approach that's critical for the World Bank today.As many of you know, I'm in my third week at the World Bank, and I'm still learning about this great institution. So, let me use this opportunity to share my early reflections in the role of the World Bank in global development today. I want to start by making two points. First, the last decade has been very good for many, though not all, developing countries. Progress has not come easily. It was borne out of hard work, learning from success and failures, bold reforms, and strong partnerships. This decade of achievement definitely inspires optimism for the next phase of our development work. My second point is that while we should be proud of the progress of the last decade, we must acknowledge that 1.3 billion people still live on less than $1.25 a day. This is a stain on our collective conscience. Aggressively attacking poverty is both a moral and an economic imperative. The next phase of global development will require us to address critical challenges, if we are to make progress. As a global institution with 188 member countries, the World Bank must play a pivotal role in brokering solutions to achieve a world free of poverty. But in order to succeed, the Bank must also evolve and become better. Let me elaborate.For the last decade or so, remarkable things have been happening in the developing world. Since 2000, nearly 30 developing countries have grown by 6 percent or more a year. We've never seen this kind of rapid and sustained development across so many countries. High-income economies also grew about 1.6 percent, and so we witnessed both growth and convergence. Developing countries are now the engine driving the global economy, accounting for around two-thirds of global growth. We can fairly say that the concept of a "Development Decade" that eluded us for 50 years was finally achieved.This story of transformational change is not just a story about emerging economies like India and China. It is broad-based, and extends to countries that are land-locked like Rwanda, a country that I visited many times, that are small like Laos and large like India; that don't have natural resources, like Ethiopia; and it extends even to countries that were once mired in conflict, like Mozambique.This story of transformational change is also about new gains in the fight against poverty. There are millions of people who are no longer poor; there are many more families who are sending their children to school; and there are many more communities that have electricity, water and access to health care. The rate of decline in child mortality in Africa is double what it was a decade ago. The overall percentage of the population in the developing world living on less than $1.25 a day was 22 percent in 2008--half the 1990 figure. The Millennium Development Goal of halving the 1990 incidence of extreme poverty has been achieved.The lesson of the last decade is that progress is possible for everyone. Nothing is pre-determined. Having come to the U.S. from a country that was once described as a "basket case," I know in my gut that we have to take great care never to again attach that label to any country again.Although a tremendous amount of work remains to be done as I take the helm of the World Bank, I carry with me an unshakable optimism that all countries can boost prosperity and eradicate poverty. There are many differences across countries but there are some common elements to countries that have grown continuously. They have stable governments that pursue prudent economic policies, provide essential infrastructure and services, and take a long-term perspective. They use the opportunities provided by global markets and they have a dynamic and competitive private sector.Through its lending, knowledge, and expertise, the World Bank has been an important partner in supporting these countries in their success.I have met with hundreds of staff over the last three weeks and I have discovered so many examples of where the Bank has been at its best. It partnered with China to undertake land-terracing to enable small farmers to grow more and earn more, which today is being piloted on the hillsides of Rwanda. It's been working with governments to improve the management and transparency of public finances so that taxpayer money is better spent. The Bank is helping countries share experiences across continents. With the Bank's facilitation of knowledge development and transfer, Turkey's economic transition is inspiring reformers in North Africa and the Middle East. India's IT services are emulated in many African countries. Brazil is offering its knowledge in agriculture to African countries.All across the developing world, the International Finance Corporation, our private sector arm, together with MIGA, the Multilateral Investment Guarantee Association [Agency], are leading the way in proposing innovative approaches to leveraging private sector investment in areas such as agriculture, manufacturing, and clean energy.But just as these countries have shown success or failure is not pre-determined, we also know that future progress is not pre-ordained. A great deal remains to be done in order to accelerate our fight against global poverty and I see four major challenges:The first is protecting development gains against global economic risks;Secondly, we need to broaden development to countries that are being left out especially the so-called fragile and conflict states;The third is that we have to ensure that growth is sustainable;And the fourth is demanding that growth is inclusive.In our interconnected world, we know that crises in one region or in one sector can affect all countries. For instance, even if the crisis in the euro area is contained, it could still reduce growth in most of the world's regions by as much as 1.5 percent. A major crisis in Europe could reduce GDP in developing countries by 4 percent or more, enough to trigger a deep recession everywhere. Such events threaten many of the recent achievements in the fight against poverty.To put it starkly, what's happening in Europe today affects the fisherman in Senegal and the software programmer in India. Therefore, it is urgent that European countries take all necessary measures to restore stability. I am encouraged by the recent steps taken towards fiscal and banking union as well as the additional resources made available by some G-20 countries to the IMF. The World Bank is ready to help developing countries protect growth, jobs, and the poor. Thanks to the generous IDA replenishment and capital increase, the Bank has adequate resources to increase lending and investments and to share unparalleled technical expertise. We can work with our clients to make rapid disbursements to maintain growth-enhancing investments. We can help countries improve the quality of their fiscal spending. IFC's financing is providing credit to small and medium enterprises and businesses as well for trade finance. IFC is also supporting subsidiaries of Western European and other banks in emerging markets to enhance liquidity and credit.We can help countries in building cost-effective safety nets that can protect people against shocks. What I learned by working in communities around the world is that the poorest are the most vulnerable to sinking even deeper into poverty. When illness afflicts a breadwinner, it compromises the future of the whole family. I have seen this happen so many times in my own work. Three out of five vulnerable people lack safety nets in developing countries, and four out of five in the poorest countries. Safety nets must be available on a continuous basis to increase resilience against shocks such as ill health or financial crisis, and building them requires political will. The good news is that effective safety nets need not be costly. Flagship Mexican and Brazilian programs cost only around 0.5 percent of GDP, much less than what other countries spend on untargeted and less effective programs or fuel subsidies. The World Bank has worked with governments to expand safety nets in 40 countries, and our goal is to ensure that every developing country has an effective and sustainable safety net. Second, beyond the current volatility, there are regions and countries with repeated cycles of conflict and instability that are being left behind. One-and-a-half billion people live in areas affected by fragility and conflict. No low-income fragile or conflict-affected country is on track to achieve even a single Millennium Development Goal. These countries need a World Bank that is far more responsive than it is today, and capable of delivering the right financial and technical support at the right time. Take Afghanistan, where the World Bank has partnered with the government to establish the National Solidarity Program. It is pioneering an approach where local councils are taking the lead in projects aimed at rural reconstruction and poverty reduction. To date, the program has benefited over 20 million people, and it is active in 28,000 villages across all provinces of Afghanistan. This is the kind of successful engagement that the Bank must spread to other fragile states.Third, even in successful countries, the next stage of development will call for further structural changes in order to sustain growth. Middle-income countries have to diversify their sources of energy. They have to modernize their economic structures and government programs. They have to create quality jobs to match the growing expectations of their citizens. These countries have an increasing number of options for development financing, but many continue to look to the World Bank for its lending, expertise, and knowledge. In particular, they need a more flexible partner to help them address deficits in infrastructure and institutions. Finally, growth and development have to be inclusive, ensuring that their benefits are broadly shared. Even as an unprecedented number of people in the developing world are ascending into the middle class, segments of the poorest populations are being left behind, and other segments of the middle class are at risk of falling back into poverty. As young people in Egypt and Tunisia have reminded us, even in middle-income countries, development gains have been uneven and incomplete. Demands for respect of individual rights, the rule of law, and the administration of justice go hand in hand with inclusive development, requiring institutions to be more open and accountable. That's why the World Bank is broadening its partnerships. Informed by the lessons of the Arab Spring, the Bank is creating a Global Partnership for Social Accountability. It is providing seed money from IBRD income and leveraging resources from foundations and bilateral donors. This would be the first time the World Bank is allocating specific resources from its income to support a partnership with civil society. We will try to do at the Bank what the most successful countries did during the last decade. We will work tirelessly, we will continue to learn what works and what does not, and we will carry out bold reforms when they are needed; and more than that, we will hold ourselves accountable to the people we serve so that we are judged by our results, not just our intentions. I started my remarks with the achievements of the last decade. I want to conclude with the promise of the next. Developed countries have made significant contributions through aid. They must continue this engagement, given their stake in a strong and dynamic global economy. Emerging economies must increase their contributions, commensurate with their growing economic weight. The world has unprecedented resources, knowledge, and experience to push forward the development agenda. I hope that the coming decade is defined by a great convergence. Where we reduce poverty to levels we might never have imagined; where more people join the global middle class, enjoying better living conditions and greater opportunities; and where the world commits to the critical task of leaving a healthier planet to the next generation. The time is now, the task is urgent. I look forward to the conversation.Thank you.DR. DERVIS: Thank you very much, Jim. When Strobe told me you were coming after your phone call--I think he was in Asia, in China, and you had a phone call and you said you would be willing to come as early as mid-July. So, thank you very, very much.DR. KIM: It's my pleasure.DR. DERVIS: It is a very important moment in the world economy. The changes have accelerated, the crisis was heavy in the advanced countries but, as you said, it also has affected the developing countries. It is a world economy and you're coming to lead one of the, I think, greatest institutions in the world, which I had the privilege to serve for quite a while.And yet, one always needs priorities. One can't do everything at once. When you look at the world today and at the World Bank, do you already see some priorities? Are you going to launch a process maybe to help you define them? What first?DR. KIM: Well, Strobe, I want to make it clear, I've been here for now two weeks and two days.DR. DERVIS: That's right.DR. KIM: Right? Three days. And what I've begun to do is to really try to take the temperature of the organization. So, I've been visiting a lot of the departments. Just this morning, I visited the Middle East and North Africa Department, and what I've been discovering about the institution is really encouraging. First, you walk in the door of the World Bank and it says on the wall "Our dream is a world free of poverty." Now, I was so moved by that slogan on the wall that I actually had some ties made with that slogan on the tie, and the reason is because I think we need to remind ourselves that this notion that the work of the World Bank is to boost prosperity and eradicate poverty. Those are our--the most compelling values and missions that you could ever imagine. So, we have a great mission statement. We know what we're doing in the largest sense and it's really critical.And so, as I've walked around the Bank, I've been asking some pretty specific questions, and the question I asked is "When do you remember the World Bank being at its very best?" And I've heard some fantastic stories. Of course, I want to hear more about the story of Bosnia as some of you may have read in Sebastian Mallaby's book that when you were in Bosnia you actually--the plane landed and it kept rolling and then you ran out of the plane into the country. Now, that's dedication, Kemal.And people tell us about those times when the Bank moved quickly, really effective. Kyrgyzstan is an example, right after the conflict. The Bank was in there very quickly, were the first to engage.So, throughout the institution, people have very strong memories of when the Bank was at its very best. And so, I think one of the most important questions for us is what do we need to do at the World Bank to ensure that we're at our best every day for every country in e very situation.So, there are some things that we need to do to look inside the Bank, but of course, we're living in a world where we have an ongoing crisis. And so, on an almost daily basis, we're having conversations about what we can do to understand the impact of the European crisis, especially on developing countries.So, we're having conversations about what are the specific transmission channels through which the European crisis is going to have an effect on the different countries, and we're looking at everything from trade to remittances to commodity exports and the impact on the different regions and different countries, and we're having really wonderful conversations and we're often at a large table talking about lessons from one Region that might be applied in another Region. Our experts in so many different fields are coming and talking about financial instruments that might be used to mitigate risk. And so, we're having this conversation every day.And so, we have to be ready to respond to the crisis in whatever form it takes.So, the mission is great. We can do so much more if we build a World Bank that can be at its best all the time, and of course we've got to be aware of the current economic situation.DR. DERVIS: With your permission, I'll come back to Europe in a little while, because I think it's quite important and interesting and I have a question that I really am burning to ask.But before that, when we say the World Bank, most people say it's one institution, but in fact it's a group of institutions: There is IDA with concessional money and grant money for the poorest countries; there is IBRD, which is actually a profitable bank doing long-term lending to middle-income and lower middle-income countries. "Profitable" in the sense that while it lends at a very small margin, it covers its costs, and I'm sure you're going to bring this message to Congress and other parliaments around the world.DR. KIM: Absolutely.DR. DERVIS: And there is, of course, the IFC, the private sector branch, which is highly successful. There are other parts, the MIGA and so on. And as you said in your speech, the old kind of distinction between the poor and the rich, the poor countries, the rich countries is kind of fading away, and yet poverty remains a huge challenge.How do you look at this diversity? Is it the strength of the World Bank but maybe can it also lead to loss of focus? There are all these different constituencies out there.DR. KIM: Right, right. Well, you know, we have 188 member countries, so the diversity starts right there. So, in Board meetings in discussion with our Executive Directors and representatives from those countries, there are very divergent views on the direction the Bank should go, but that's the whole point of multilateralism.The point of multilateralism is that we sit in a room together and then we try to find ways forward that make sense to 188 member countries. And there are always dissenters, but I think that that discussion is one of the most important pieces. I'm a believer in multilateralism and I've worked in the UN system before, and I think that the ability to do great work in a multilateral context is critical for the world, so let me start with that.I've spent a lot of time now talking to different people and different parts of the organization and, again, as I walk the halls, there is an intense desire to integrate across the institution.So, if you look at IDA, IBRD, IFC, MIGA, ICSID, these are the five entities that exist, but the way I look at it is that, in any given country, when we go to a country, we should be able to sit down and say to them, as a Group, "We can help you do--an understanding of your role in the current macroeconomic context. We can help you with fiscal policy. We can help you with health care education, social protection programs. We can help you with infrastructure. Oh, and by the way, we can also help you think about, for example, which cluster you should invest in in the private sector."The fact that we can do all of those things gives us, I think, an enormous relevance to countries all over the world, and the issue that now we're taking up day-in and day-out is, how can we integrate more?Just this morning, I was hearing, "We are at our best when we collaborate across sectors and divisions and even Regions. That's when we're at our best."And you know how that works, Kemal. When there's an emergency situation, you get on the phone and you call all your best people and they come and we have had transformational impact in certain countries.Now, is there a way for us to be able to do that all the time across all the five entities? Let me just say that I'm encouraged by the willingness and the desire of World Bank staff to move in that direction. Now, the implementation is going to be complicated, but that's precisely what we have to do. We have to be the institution that integrates across all our different areas and provides enormous value to our member countries.We talk a lot about knowledge, the Bank is a knowledge institution. There are many more Ph.Ds. at the World Bank than there were at the Ivy League institution I was president of before I came here, right?So, for me, it's just stunning the combination of direct, on-the-ground experience. I mean, in coming in, meeting all these people who have been trying to solve problems in developing countries for 30 years has been just the most exhilarating experience. It's what I've been doing. So, it's really felt like I've met just an incredible group of people with a rich set of experiences.At the same time, over 66 years, we have data. In fact, we have so much data that some of it is on onion skin paper sitting in salt mines in Pennsylvania, right?Bob Zoellick, among his many legacies is going to be the fact that he's opened up the institution to make that data available to everyone, and that's fantastic. It's really important.But then, we also have this analytic capacity. So, on-the-ground experience, lots of data, tremendous analytic capacity. I just don't think that that kind of combination is matched anywhere in the world. So, for me, that means we have an even greater responsibility to be our best selves every single day.DR. DERVIS: Yeah, the capacity is really, as you say, is enormous.DR. KIM: Is enormous, yeah.DR. DERVIS: And on internal data, we're trying to learn from you here at Brookings, but today is a breakthrough moment. I'm doing a little advertisement also for us, but we have the data visualization project with poverty data, demographics, income, and all that accessible now on the website for everybody to see, but we're learning a lot from how the World Bank has done that.Now, you mentioned this diversity and you've been a leader in social policy and social analysis and health. You led a very important part of the United Nations. What are the common features you see, because everything is different? I mean, macroeconomics, finance, health, transportation, energy, but there are common features in policy which I'm sure you've encountered in your career. What would you stress among these common features?DR. KIM: So, one of the things that has now affected every discipline, including economics, if I might say, is this notion that we can create an evidence base around--and measure things that we never thought we could measure before.We talk a lot about evidence-based medicine. Evidence-based medicine, of course, is everywhere, but it's only about 30 years old. I mean, I remember when I started medical school in 1982 that it was just the beginning of talking about, "We can generate evidence around the things that we do," and it's not any longer the experienced clinician who's saying to you, "Well, we do this because that's what we do."This is now a revolution that's happening everywhere. I mean, as you know, the randomized evaluations and data collection methods have expanded but, more generally, I think that there's a commitment to evidence everywhere.The other thing that I think is critical is that we have to now focus on actually delivering results on the ground. That's everywhere, right? So, the ability to collect more evidence has really focused on results on the ground.And one of the things that I was working on before I came to the World Bank was that I thought that there could be a science of how to actually deliver results in the social sector, and would say many times that the thing about working in the social sector is that so often we have been very tolerant of poor execution. Great idea, put some money to it, but we haven't really focused on the science of execution. And so, at the Bank, there are so many people who are really great implementers. We haven't don't enough, I don't think, in terms of capturing that experience and knowledge about how to actually make something work on the ground, systematizing, and then spreading it to everybody. So, there is a common sense, and let me just use health care as an example, the notion that if you have good research, good tools, put it in the hands of trustworthy individuals, and you're done, as opposed to thinking, what is that you really need to do to make sure that you deliver value at the end of the day. It's something that I hear a lot inside the Bank from our staff. We really want to turn the focus of the Bank more toward what are the specific outcomes and results that we're achieving on the ground and how can we set up a system so that that is what you're rewarded for, actually delivering the results on the ground.And I think there's a science to it. I think we have systems engineers at the Bank who are very good at thinking about how to make things happen like that. So, everyone is focused on results on the ground, delivery, what is the science of delivery, what is the science of execution. How can we look at the things around which we have our greatest, highest aspirations, health, education, social welfare, environmental sustainability? And how can we be much more focused on actually being effective at delivering on the ground. I think there is--I use the word "science" aspirationally, of course, but I think there is a science there, and I think economics is critical to it, I think systems engineering, I think some of the management disciplines can be helpful to us. And so, the very same problems we're seeing in global health, which is, how do we take the money that we now have and make sure that it has a longer lasting impact and that actually build systems, I think that's true throughout the work that we do at the Bank.DR. DERVIS: I think those are very important points and the systems approach in so many areas is so effective. The days when the just money output is what counted are gone—DR. KIM: I think they're gone. That's exactly right.DR. DERVIS: We've seen in economic history you can spend a lot of money and have very little impact, or you can spend less money and have more impact. Now, I'm going to go to the lessons learned and the cross-fertilization between developing countries and I think that that's very important. Korea is one of the big success stories and many countries want to learn from it. But now something else has come up which is very exciting but politically quite challenging. I've been working on Europe quite a bit lately and fiscal policy, spending less, getting more government revenue is one part of the picture, but if that's all that we can offer to get the crisis countries over their difficulties, it's not going to be possible. They need growth, they need supply-side response, they need new ways of doing things, and I mean, I'm of course a little bit biased, but the Bank has a lot of that knowledge and we've seen the IMF in many ways over the last five years becoming for the first time a truly global institution.DR. KIM: Sure, yeah.DR. DERVIS: Maybe in some ways, not the same way, perhaps, but in some ways the challenge is there also for the Bank. I can think of countries such as Spain or Greece that would greatly benefit from the knowledge of the Bank, from the experience of Korea, from the experience of other countries such as, you mentioned, Brazil and Mexico, but it's politically, of course, a challenging task in a sense. DR. KIM: Sure. One of the things we know--so, as we look around at the different Regions and the different countries, we know that Latin America weathered the financial crisis fairly well, and if you look at the reasons, I mean, this is not--may people may have their different opinions, but as we look at it, we think, "Well, what did they do?" They opened up their economies. They developed regionally in a very effective way. They developed social protection programs like Progresso and Oportunidades, Bolsa Familia in Brazil. They reduced income inequality. So, there's a lot of things that they did that seemed to have prepared them to weather the financial crisis. Let me give you another example that--and again, these are, how can we learn from the developing countries, middle-income countries, in thinking about responding to the current crisis? So, take a look at Korea--and I'll just give you one example that was very close to my heart--when the crisis of the late '90s hit, one of the most astounding things to me was that Koreans started going into their jewelry boxes and they took out gold. They gave away rings and there were places where Korean citizens could just put their gold, and that added up to a billion dollars. So, it might not have been the cash that turned the situation around, but the issue was solidarity. The issue was a very fundamental solidarity. The Korean people, everyday people, were saying "We want to contribute to the recovery," and they did that.Now, it strikes me that solidarity is a major question in the crisis today. So, I think the world has changed. I think there are many lessons from the developing countries that can be useful anywhere. I mean, I'd love to hear more about Turkey. Again, Turkey--our work in Turkey with you--is one of the times when our staff remember we were at our best.DR. DERVIS: Thank you very much. Well, I think there are lessons and there are big successes. Sometimes there are also mistakes and failures one can learn from, but as I look at the very severe situation in Southern Europe with unemployment in some countries above 20 percent, youth unemployment, 40 percent. You can't fix this just with macroeconomic tools. You need the sectoral knowledge and who has the best sectoral knowledge globally? It is really the World Bank. So, I hope the world community will find a way to access that and to help overcome this crisis which, as you said, is affecting the whole world.So, we're now going to open it up to the floor. I will propose, if it's okay with you take three questions at a time--DR. KIM: Sure, sure.DR. DERVIS: --so that we gain a little bit of time and then you can answer--sometimes questions overlap. You can answer in the most efficient way. Yes, we'll start with here. Please do identify yourself.DR. KIM: And use a microphone.DR. DERVIS: And use the microphone, yes.QUESTION: Thank you very much. I'm from JICA, Japan International Cooperation Agency, Keijiro Nakazawa.I thank you very much first of all for your comprehensive remarks and very interesting discussion with Kemal, and I'm also glad that you kindly met our new President, Dr. Tanaka, quite soon, and I'm looking forward to seeing you there, as well.My question is your view about the role of government in development. In this country, it is always discussed whether the government is a problem or the solution, or at least part of the solution, and in the developing world, there is a discussion between, like, the Washington consensus, there also is, like, a Beijing consensus, even though the definition of the Beijing consensus is different among various experts, I believe. I wonder--but given the experiences in Korea or other--for tigers in Asia or ASEAN countries or even including Japan, I think there might be a big role that government can play, although the market is a kind of driving force of the economic development.So, I just would like to know your view about the role of government and how you rely on the developing partner countries governments for pursuing the World Bank development assistance.DR. DERVIS: Thank you very much. We'll take two more questions. Yes.QUESTION: Hello, I'm Nilmini Rubin, I'm with the Information Technology Industry Council and I previously worked for Senator Lugar on the staff of the Senate Foreign Relations Committee and campaign for transparency and anticorruption reform as related to the development banks and I was intrigued by your comments about social accountability. I was wondering if you could tell us more about your goals for that and what you envision the structure to look like and how you expect the social accountability arm to interact with the private sector and civil society?DR. DERVIS: And one--Antwon [ph].QUESTION: Antwon Zanakman [ph] a former World Bank and IFC staff member and I've been investing in emerging markets. I have a question on the social safety net that you mentioned very prominently, I think, as a theme. What is the evidence that it has buffered crises and is there also evidence that it sometimes has delayed the response or the recovery?DR. DERVIS: All right. We'll take these three, each one of them a big subject in itself.DR. KIM: Yes, yes, yes.So, in terms of the role of government, I think one of the things, again, that I'm learning as I walk the halls of the World Bank is that I hear repeated again and again, there is no one-size-fits-all solution, and I think the Bank at one point has been criticized for taking that position.So, in terms of the role of government, I think every country is a little bit different, and I think there's no question that there is a role for government, even in setting up an environment where private sector investment can be enhanced. But I think the most important answer to your question is that the Bank now prides itself on taking every country on its own terms and not making any across-the-board guidance or recommendations about the role of governments or markets. I mean, this is very important that everyone understand. The Bank is different now and it's evolved--I would say it's evolved as much or more than any institution I've ever seen in terms of the way it works in individual countries.In terms of social accountability, this is very new and I don't know very many details about the particular social accountability program that I mention, but it's one that Sanjay Pradhan in the World Bank Institute is heading up, and it is really significant in the sense that, for a long time civil society organizations were outside the door at the World Bank meetings, and Jim Wolfensohn, one of his great legacies, is that he brought them inside the door.And now, I think this sets us up for a partnership with civil society organizations that is just much more advanced than I think every before.And of course, the intension is that our engagement with civil society will increase over time.In terms of the evidence of social safety nets, I actually don't know, and if you do, I'd love to hear--I don't know, either. I don't know, either. But I can tell you this: In walking through today the Middle East and North Africa Unit of the World Bank, there are pictures all over the unit that are from the Arab Spring, and they are very beautiful, poignant pictures about what happened. And so, the notion that that would happen in the states that it happened is something that we couldn't have imagined.Now, I worked in Peru, and I worked in Peru right after some of the shocks, and I was there witnessing just enormous social movements. There was one in particular called the Comedores Populares, the popular soup kitchens. And so, in Peru, it's sort of been a part of the fabric, the social fabric, for a long time, but no one would have guessed--no one would have guessed--that it would have happened in those countries, but it did. I think it sends a message to everybody, that if you don't focus on inclusion, if you don't have these safety nets that will protect people from, for example, a catastrophic illness that just sends an entire extended family into poverty--if you don't have these social safety nets, if you are at risk, that is the message that everyone has gotten, whether there has been some sort of specific study, I'm just not aware of it, but inside the Bank, I can tell you that the lessons of the Arab Spring have been very strongly taken, and it suggests to us that one of the things that we can do to add value in just about any country is to do an assessment of the public sector expenditures that one is engaged in and to say, "Well, you know, actually, you're not getting much value from, for example, fuel subsidies, but there are other"--like these conditional cash transfer programs, that can have an enormous value. And so, that's what the Bank has to do.We are not going to come in and dictate to any particular country what you should do, but what we can do is to say, "Boy, there's a lot of evidence that this form of social protection is going to give you much more value than this other form of what you might think is social protection.DR. DERVIS: Yes.QUESTION: Thank you for coming here. There are a good number of people from the Bank who are working now in Brookings. So, these are [unclear]. I spent 20 years in the Bank. We all love the Bank.Now, you just spoke about the social part of the Bank, the need to base Bank policy on evidence. The Bank has a longstanding problem, has an eminent DEC, which is economic research, has no department, no unit specialized in doing systematic social research and producing the evidence for social policies for basic policies and program on evidence.Second issue which concerns many of us is one of your predecessors, Jim Wolfensohn--also Jim--spent two terms to build many things at the Bank, one of which was a central Vice Presidency for Environmental and Social Sustainability Development, which was in charge with crafting Bank policies, safeguard policies to which you just referred. Well, it happens that the immediate successor to Jim abolished one Vice Presidency from the 25 the Bank had because there were too many and he found to abolish exactly the Vice Presidency focusing on social policies, elaborating the social policy of the Bank and the environmental policies.So, at this time that staff was moved for instance in information, there's a good job there, but there's operational work, and interpreter has no nerve center to develop further and update the Bank's social policies and the environmental policies which are the big demand. Do you have any intention to [unclear]?DR. DERVIS: Okay. Thank you. Yes.QUESTION: I'm Lawrence McDonald from the Center for Global Development. Thank you very much for your remarks and congratulations on becoming President of the Bank. My question concerns the scope for the World Bank to become more active and effective in addressing problems of global public goods. Many of the problems that confront poor people in developing countries are problems with the global commons. Climate is just the most obvious, but collapse of fisheries, emerging diseases, and yet the Bank's primary instrument of course continues to be country loans.Do you see an opportunity to seek a mandate to become more active addressing global public goods problems and would that require a new instrument or do you already have the instruments that you need? Thank you.DR. DERVIS: All right. There's one gentleman there. Yes.QUESTION: Thank you. My name is Desi Esaronai [ph] and I work with the Institute for Development Policy. It's a CSO based in Pristina, Kosovo and my question to Dr. Kim--it's a great pleasure, actually, to be here and listen to you. Congratulations on the post. My question has to do with the role at the World Bank you see should be taken in terms of developing energy projects worldwide.Now, I'm sure you're very well aware of the social environmental costs that relates to many energy projects around the world, and the reason why I'm putting these questions forth right now is because the World Bank is, at this stage, considering a project in my country, in Kosovo, to invest in lignite and build a new lignite-based power plant and we have, as a civil society organizations in Kosovo, we try to be as loud as we could that that probably is a bad idea because of all the social and environmental and also economic reasons, as well, and we have worked with many people who have also worked in the World Bank and just recently left the World Bank and one of them is Dr. Daniel Kammen of UC Berkeley, who was a chief renewable and energy efficiency technician there and who now publicly is also calling the World Bank to drop the idea of still investing in lignite in the third world country which Kosovo is and it's getting the IDA money for this project now. The project hasn't been yet done. I don't want to be very specific because I know it's just your 17th day in your office and you probably don't all the aspects related to it but I would really appreciate to know what path do you see the World Bank should take in terms of investing in the energy in the future and do you see that it should that it still be investing in lignite in a country such as Kosovo? Thank you.DR. DERVIS: All right.DR. KIM: Easy ones.So, I'm not really familiar with what you're talking about, which department was eliminated, but we have a very active--in fact, the largest group, VP, Vice Presidential Unit in the Bank is the Sustainable Development Network. It's headed by a wonderful professional named Rachel Kyte who came to first the IFC from environmentally focused NGOs. So, there is quite a bit of research going on. We have a huge investment in our Sustainable Development Network and that will certainly continue.In terms of the global public goods, again, on my 17th day, we're having these conversations. I'm not sure exactly whether we need new instruments or not but I can just tell you this: We just had a presentation to the Board on the Rio+20 meetings and Rachel and our Sustainable Development Group were very involved in that meeting. And interestingly, many of the most interesting discussions happened really outside of the main meeting with CSOs and NGOs, and I think really in--as part of a shift that's been occurring over time, the World Bank was right in the middle of those discussions. And so, our commitment to global public goods is very strong.Now, the social accountability arm, the instrument that we're just building, is increasing our ability to work directly with civil society organizations. Are we going to do more of that in order to be able to really have a broader impact on global public goods? I certainly hope so.My understanding of global public goods has been from my global health background. Tuberculosis crosses borders, the epidemics that cross borders, and you absolutely need global mechanisms to deal with those problems.I think our Governors, the Board and the Governors, expect the World Bank to play a very large role in climate change issues and other environmental issues and trying to make contributions around global public goods. We'll simply have to figure out over time the best mechanisms to do that. The commitment to it is there. The notion that we need to reach beyond the traditional mechanisms, work with civil society organizations, get outside of the standard ways that we've been doing business before, I think we're already there.In terms of Kosovo, well, you can imagine these are very difficult questions, and we--energy is a critical part of boosting prosperity and eradicating poverty. We talk about this all the time with relation to Africa. We know that we want more private sector investments in Africa to create the kind of jobs that are needed in Africa, but if you don't have access to power, it's impossible for that kind of development to happen.So, there are differing views within the World Bank Board. There are differing views about this tradeoff between our need to keep the environment clean and poor countries' need for energy.So, I would simply say, this is part of my new job in my new experience in trying to deal in a multilateral organization where people have very different views. One group will say, "We must protect the environment." The other group will say, "But wait a minute, you also use coal." And they say this to the wealthy countries: "You also use coal and you fuel your development on the basis of coal. We simply want to provide power to our hospitals. We want to provide lights for the schools. We want to provide energy so that the private sector can develop. We need to do that."Now, our standards on clean energy are very high. Our efforts to develop clean energy projects is also as high as it can be, but we're dealing in a complicated world where you have these competing demands for energy for development versus our desperate need to keep the environment clean.Look, I've been trained in science, and I think I'm actually the first one trained in science to be President of the World Bank, and so I have to tell you that the data that I'm seeing about changes that are happening today that we didn't think would happen for three or four years, the impact of a one-degree rise in the temperature of the oceans that we didn't think would happen until we got to two to three degrees' rise in the temperature of the oceans, this is extremely disturbing to me, and I think we have to put the science of climate change in front of all of our member countries. And I guarantee you that I will do that. But having said that, you should also know that there is a need for energy to lift people out of poverty and boost prosperity. And so, we're going to be constantly having to balance those needs and those interests, and that's part of my job.DR. DERVIS: Okay. We'll take quick--but please, because we're running out of time--quick three questions. First one here, yes.QUESTION: Thanks very much. I'm Garret Mitchell and I write The Mitchell Report and I want to ask a question that's slightly off subject, not about the work of the Bank itself but because I notice you're also an anthropologist, about its culture.About 10 years ago, I happened upon to a book called the Springboard Story, by Stephen Denning, which talked about the use of springboard stories to create knowledge management system at the World Bank. And so, my question is twofold:One, is the knowledge management system at the World Bank alive and well and an operating part of your mission delivery process?And second, does the concept of the springboard story play a role currently and into the future of the Bank communicating its mission and delivering on that mission?DR. DERVIS: Yes, gentleman all the way in the back there. Succinct please? Okay.QUESTION: Okay. Thank you, Dr. Kim. My name is Deng Wi with China Review News Agency. What role do you expect for China to play in the World Bank and the international financial system and do you support to further increase the voting share and more say for China and also other emerging countries? Thank you.DR. DERVIS: Thank you. All right, well, I'm going to try to create some balance. Yes, to you--sorry. Maybe very quickly we'll allow you to be the last, okay? But yes, the lady there. Right. The gentleman at the back was trying very hard for a long time. So, I can't pass him by.QUESTION: Hi, my name is Katie Malouf with Oxfam International, and I was interested in what you were saying about inclusive growth being one of the four challenges that we all face in global development. And I wanted to know to what extent do you see investments in public education and health systems as being central to realizing inclusive growth? And also what do you think is the most important contribution the World Bank can make to achieving universal access to basic health services in developing countries?DR. DERVIS: Thank you. And the last question now. Yes?QUESTION: Thank you very much. My name is Juan Irino [ph]. I come from Latin America, Division of the Voice of America. So you have talked about how open of the markets--opening the markets has been very useful in Latin America. I want to, you know--in the last months we have seen how some countries are now going in the opposite direction, closing the markets again. I want to know if you see that as a challenge and also how do you see the role of Latin America in the future years? How is the World Bank going to act, if you have any ideas so far? Thank you very much.DR. DERVIS: Thank you.DR. KIM: Okay. So I don't know the Springboard story but I will get that book and read it. So I would say knowledge management is among the most important things that the World Bank can do, and there have been many efforts to try to do that.I mean, first of all, one of the things we're trying to do is to measure the impact of our knowledge work. Now, again, 10 years ago you'd say that's impossible to do, but actually we're making progress in understanding how to measure the impact of our knowledge. But knowledge management is critical.And so now we're asking ourselves questions like: Well, so how should we get all of the best of the knowledge inside the Bank to every place that we need to be and do it quickly and effectively?I think technology gives us some opportunities, but I think there's also a lot of new insights in how matrix organizations and systems can work more effectively together. So I would just say this is at the very top of my priority list. You know, I'm also the first Bank president to ever have run a knowledge institution before. So I would come to this job with a lot of ideas about how to manage knowledge, about how to make it effective and be present where we need it. But the key to doing that is to have a lot of great people who actually have knowledge, and the good news is we have plenty of those. So now it's really a management task more than, you know, overhauling our staff. We have great staff.In terms of China, China has an extremely critical role to play in the World Bank going forward, as not only as a recipient of loans but as a contributor. China has also been making contributions to the World Bank.In terms of share, this is a very difficult and complicated issue and it's one that our Governors are going to take on again going forward. So, in this particular case of whether or not we're going to adjust shares, as you can imagine, this is a highly lively debate that happens within our Board and among the Governors, and I look forward to participating in that discussion going forward. But, you know, I'm not sure which direction it will go. There are many different ways that it can go. There are many different ways to have that conversation. There are many different way of understanding what share really means. And I think, you know, after two-and-a-half weeks, I don't have strongly formed views about it and I look forward to the conversation.In terms of health and education, you know, both of those areas are critical, and there are two areas of expertise that again are areas that I've worked on in the past. Let me talk specifically about universal access to health care.So next week, we have 45,000 people coming for the International AIDS Society meeting. There have been enormous investments in HIV. But if you go back and look at the stuff that I was saying in 2003 and 2002, when we first started seeing those investments, what I said over and over again is the investment in HIV is our opportunity to really invest in systems. The critical thing about investing in HIV treatment was that for the first time we invested in chronic treatment, lifelong treatment for a disease in the poorest countries in the world. That forces you to put systems together. So I think the debate--I mean the discussion--the discussion is moving in a great direction. What the HIV people are now saying is: Well, what about MDGs 4 and 5? What about, you know, childhood mortality and maternal mortality? What are we going to do to tackle those particular problems? And I think the most important thing is related to what I said earlier: We have to understand this as a systems and delivery problem and not as a disease problem. The aspects of this problem that need to be handled by highly trained physicians are actually quite narrow. The real problems are setting up the delivery systems that can not only protect people from the diseases of today but from the diseases of tomorrow, and there's enough money out there in the world that we can begin moving in that direction. That's how I would like to see the World Bank engage. We are really good at thinking about systems. We are really good at managing processes at a country level, and we're also really good at thinking about how to set up systems that deliver.So wouldn't it be great if we could take all this investment in global health and in every single country build systems? At Partners in Health, the organization I worked with before, every country we've gone into--and Rwanda is a good example--we've gone in and said we're going to take this money for HIV treatment and turn it into primary health care systems. And I think the evidence is overwhelming that it's both doable and cost effective.And the other thing that we've seen that we didn't expect was that once we built those systems, the economy sprouted up around those health care systems and actually contributed to the economic growth of those countries.So, one, health and education are critical to economic development in my view. I think the evidence is very good for that.But also I think the Bank has a very unique and wonderful contribution to make which is to say, "Hey, folks, these really aren't medical problems. They're partly medical problems but the big chunk of it that we can help you with is what's going to give you the long-lasting impact, protect you from future disease outbreaks, and also help to build your economy.And Latin America. So I'm not quite sure I understood the question. Again, let me just say that for the World Bank, again the mantra that's repeated over and over in the halls of the World Bank: There's no one-size-fits-all solution.And in terms of learning the lessons of Latin America, I think that the one of the really remarkable aspects of programs like Bolsa Familiar and Oportunidades is it's that the lessons are being learned everywhere.So, one of my favorite stories is the fact that Michael Bloomberg, the Mayor of New York City, actually flew down to Mexico and was with Julio Frank [ph] at that time, trying to understand how Oportunidades was working and built a program in New York City called Opportunities New York with the notion that these conditional cash transfer programs could have an impact even in places like New York City.So let me just say that the approach to Latin America, both as a place where we still lend money but also as a fountain of innovation that can be useful in all other parts of the world, this is something that we already recognize. You know, the model of social protection that has been pioneered in Latin America now, we're taking to many other parts of the world, and I think that's just the future. You know, I think we have to realize that it may be that it's in the most financially constrained areas where the greatest social innovations can occur, that it's under the pressure of those financial constraints that you really see the great innovations, and we have to be open to it.You know, there's a health care program in Camden, New Jersey run by Jeff Brenner [ph] that's using a community health worker model that we started in Haiti 25 years ago because they know it's--not only is it cost effective but you get better health outcomes in Camden, New Jersey when you use community health workers. I think that's the new world. Lessons are going to come from everywhere. It's not rich countries imparting their lessons on poor countries. The lessons are going in every direction.DR. DERVIS: Thank you so much. There's no way to summarize, and that's not my role anyway, but I have to say that you give us an amazing combination of confidence and optimism, which is so important in a leader, a wide array of knowledge--and the questions were not easy--and, you know, familiarity with so many areas where the Bank is active. I think many of us also felt the enthusiasm you have for the Bank staff and for the people--the women and the men--who are going to work with you, and I think that's key because that, after all, is the strongest resource of the World Bank.DR. KIM: Absolutely. Absolutely.DR. DERVIS: So, I'm very deeply grateful on behalf of this whole audience and on behalf of Brookings, President Talbott--really that you came here and talked to us. I think it's your first talk outside the Bank. We'll be restrained. We won't kind of invite you immediately again, but I really hope that maybe a year or 18 months from now or maybe in Aspen next summer, after one year of experience and, you know, we can have some follow up.We're very grateful. We wish you all the best, and really I think our hearts with you.Please, the audience, remain seated while Strobe will accompany Jim, but let's first thank you.[Applause.][End recorded session.] 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 -
Keynote Address on Connecting to Climate Event at the Newseum, by Caroline Anstey, Managing Director, World Bank
Working with others we've launched an Open Data for Resilience Initiative, a global effort working in 25 countries. An example is haitidata.org, which makes risk assessment data produced followi... Show More + ng the 2010 Haiti earthquake available for anyone to download and use.Similarly, Open Data for the Horn of Africa now facilitates open access to geospatial information, data and knowledge sources about the ongoing response to the drought in the Horn of Africa.My point is simple: Farmers, fisher folk, and others around the world are using data and technology everyday to deal with increasing uncertainty brought on by climate change. In Nepal they are using PDAs – computers that fit into the palm of your hand - to collect data regarding changes in food security situations. In Chile, farmers can use low-cost mobiles to receive SMS messages about weather forecasts, market prices and even the latest cultivation practices.In India, fisher folk can use mobile phones to receive messages about weather forecasts, optimal fishing zones, and market prices. And in Laos, Cambodia and Vietnam, mobile phones are used to collect data for flood forecasting and forwarded to a central early warning system, with the information then sent out via traditional media.The Search for Solutions – Engaging and Empowering YouthSo that's the technology part of the transformational combo. Where do youth come in?You are the ones who can think out of the box. You are the ones who can take convoluted conference communiques and begin to make them real, not in conference rooms where agreements stumble or disappoint, but on the ground, and in local and virtual communities around the world.And your numbers are growing. In Africa alone, 70 percent of the population is under 30. And there are already more than 400 million cell phone users. That transformative combo of technology and youth is not tomorrow's world. It's today.Connect4Climate initiativeThe Connect4Climate initiative – also one of the sponsors of tonight's event – is using the power of partnerships, participation and social media to include the voices of local youth in the global climate change conversation.With a coalition of more than 140 partners and a Facebook community of over a quarter million, Connect4Climate is reaching out to young people – to listen, acknowledge, and respond to their ideas, to help amplify their voice. Across multiple social media channels, Connect4Climate reaches up to 6 million users each week.In the run-up to the UN Conference on Climate Change in Durban last December, Connect4Climate used a combination of social media and a photo and video competition to getAfrican youth aged 13 to 35 to tell their personal climate change stories through photos and videos.340 rural young people in Somalia were trained on climate change and its effects on agriculture, energy, forests, gender, health and water. They were given cameras to document how climate change has affected their lives and these photo stories depicting deforestation, drought, and health issues were entered in the C4C Photo/Video Competition.Youth from all 54 countries on the African continent participated – they want their voices – and their stories – heard. And we need to listen.ConclusionLadies and gentlemen, As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that can sustain or destroy our future.We know that economic development during the next two decades cannot mirror the past two: poverty reduction remains urgent, but growth and equity can be pursued without relying on policies and practices that foul the air, the water, and the land. The powerful combination of technology and people power can help us avoid the pitfalls of the past.Over the course of this evening you will hear from others on what they are doing to "swing into action"! It's an impressive catalogue. Enjoy! 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 -
As Prepared for Delivery, IFC's 14th Annual Global Private Equity Conference
IntroductionIt's a great pleasure to join you today for IFC's 14th Annual Global Private Equity Conference in association with the Emerging Markets Private Equity Association, or EMPEA. The story... Show More + of this conference is emblematic of how the world economy has changed: Fourteen years ago, a small group met in the basement of IFC to discuss the prospect of private equity in developing countries. Today, there are more than 800 people here, from nearly 60 countries: institutional investors; public and pension funds; private investors; endowments and family offices; senior investment professionals; chief investment officers, and directors from leading fund managers around the world, as well as representatives from development institutions and government agencies. Plenary sessions and roundtable discussions cover a range of issues over three days – the global economic outlook and regulatory trends, of course – but also non-financial risks, infrastructure, SMEs, mezzanine…and intriguing markets beyond the BRICs to Turkey, Palestine, Africa, and frontier markets. The success of this conference is in large part because of the enormous potential of emerging markets: over the past five years, developing countries have provided two-thirds of global growth. This conference also reflects the terrific partnership between Lars Thunell and the Private Equity Funds group at IFC, and Sarah Alexander and her team at EMPEA. Together, they've made this conference one of the leading global forums for private equity. So I want to thank them for their hard work and their leadership. I also want to thank an impressive set of participants: sponsors; panelists; speakers –and all of you. Yet I want to add a special word of thanks for Lars. When I came to the Bank in July 2007, it was a time of trouble. Frankly, meeting Lars was like having a breath of fresh air: He was steady, sensible, constructive – clearly an excellent executive, committed to the private sector's role in development, and doing interesting things. Together, we came up with some innovative ventures both to help developing countries during tough times, and to move IFC even closer to the cutting edge of private sector development in these exciting markets. He always offered good counsel, fine judgment, common sense, and friendship – for which I'm grateful. Keeping the Focus on Growth and Structural ReformLast month, at the Spring Meetings of the World Bank Group and IMF shareholders, much of the focus was – understandably – on macroeconomic stability. This attention to the macroeconomic picture is necessary – but it's not sufficient. Extraordinary monetary policies buy time – but they don't solve the fundamental problems. As my friend, Deputy Prime Minister and Finance Minister Tharman of Singapore said at our Spring Meetings, investors will accept short-term costs if they perceive good returns over time. All countries – developed and developing – need to focus on the structural reforms – the microeconomic policies – that will drive future growth. Structural changes are essential to enhance productivity, competition, and innovation for developed and developing countries – whether it's so that Europe can restore its economic performance, or China can avoid the so-called "middle income trap" and meet its challenges in the coming decades. Structural reforms are important for the United States, too. In practical terms – and for investors like you – what does structural reform mean? It means strengthening the fundamentals of productive supply-side growth in all sectors – agriculture, manufacturing, services. It means investing in infrastructure – especially through public private partnerships. It means private sector development – the engine of innovation and job growth: markets; investment; small and medium-sized businesses; as well as focusing on jobs training and skills. It means expanding markets – through both the hardware and software of trade: regional integration; ports and infrastructure; lowering the costs of formal, informal, or logistics barriers. At the same time, structural reform means investing in green growth and energy efficiency – because "growing dirty, cleaning up later" is not a viable option. Environmental degradation cannot be the price for short-term growth. Structural reform also means investing in human capital: Efficient and affordable safety nets – because only 1 out of every 5 people in the poorest countries has any form of social protection;Basic financial services – because more than half the world's poor, almost 2.4 billion people, are "unbanked";Basic nutrition and health – because without these essentials, people cannot begin to achieve their potential; andQuality education, connected to training, which leads to better jobs, more innovation, and greater gains for all.Investing in people means tapping the energies and genius of all: young people, the elderly, and not least girls and women – an under-realized source of growth everywhere. Importance of PartnershipsYou can play an important role in making all this happen. Countries need private equity more than ever to push forward the structural agenda. But to be most effective, the right partnerships are critical – to seize opportunities, open up new markets, share market knowledge and learning. We've seen this at the World Bank Group with IFC's Asset Management Company, or AMC, which Lars and I created in 2010 to supplement IFC's traditional model of raising money in bond markets and then investing it. The idea was for the AMC to tap sovereign wealth funds, pension funds, and other institutional investors that are looking to increase their exposure to emerging markets, and that are interested in accessing IFC's transaction pipeline, investment approach, and track record of superior returns. Now ably led by Gavin Wilson and a fine team, the AMC considers investments in spaces where IFC-supported private equity fund managers are not active, either because of the size of the investment or the riskiness of the sector. As the AMC makes profitable returns for its institutional investors, these investors are likely to feel more comfortable investing in smaller private equity funds and frontier markets. The AMC now totals over $4 billion – almost $3 billion of which had little previous exposure to Africa and other less recognized emerging markets. Building on the success of its $1 billion African, Latin American, and Caribbean Fund, last year, the AMC established an African Capitalization Fund that invests in commercial banking institutions in northern and Sub-Saharan Africa. This Fund has already made investments in Ghana and Malawi. AMC offers a great model for a win-win partnership between capital, experience, and expertise. When I asked one pension fund manager what attracted him to AMC, he told me: We now know developed markets are risky, too; we see growth potential in developing markets – but we don't know where to invest. IFC does. And we can learn through this partnership. Opportunities: Doing Well and Doing GoodWe have seen the positive impact private equity can have. IFC has private equity investments of about $3 billion across 180 funds in emerging markets. We estimate that these investments alone have helped create about 300,000 new jobs over the last 10 years, many of them for women. We see much more potential for the future. Private equity also increases the wealth – the savings – of pension funds and other institutional investors who assist many millions of savers, small and big. Increasingly, institutional investors want their investment capital not only to do well, but to do good. Private equity can help companies grow, hire more workers, raise productivity. But at the same time, private equity can also be a powerful driver of change: raising standards; fostering growth; promoting new opportunities for businesses and individuals; helping to overcome poverty; bringing hope. Let me give you some examples. China Environment FundTsing Capital's China Environment Fund: Founded by Don Ye in 2000 to focus on clean tech investments, the Fund adopted a triple bottom line, balancing social, environmental, and financial returns. At first, portfolio companies were resistant to the Fund's focus and approach. After all, government regulations were weak. Investors would say, "We give you the money, and you give us a return. Why are you talking to us about welfare, child labor, the environment, and insurance?" Deal flow was slow for the first fund: it only raised $13 million from socially responsible investors. Now, Tsing Capital's investors are telling a different story. The company has become a market leader, generating three digit financial returns. The latest China Environmental Fund, in which IFC invested $20 million, had a target size of $350 million. What's the secret of Tsing Capital's success? Certainly persistence on the part of Don and his team. But they also chose the right partners. From the outset, Tsing Capital performed social and environmental risk screening on companies during due diligence before it invested. The company checked standards against national laws and regulations, but they also made thorough use of IFC's performance standards which provide guidance on how to identify – and avoid – risks and impacts. If Tsing Capital identified any excluded activity – potential deals were dropped. If they found risks, they were corrected. Tsing Capital worked hand-in-hand with companies to improve corporate governance and upgrade management capability and strategies. Their hard work has paid off. Today, Tsing Capital is raising environmental and social standards across the industry, and transmitting those standards into multiple start-up companies. It has twice been honored as a corporate citizen in China, and Don Ye has been recognized by Business Week as one of China's 40 most powerful people – alongside President Hu Jintao and Yao Ming of the Houston Rockets! It's a great success story. It shows how commercial concerns linked to environmental and social standards offer win-win opportunities. It demonstrates how private equity can be a powerful driver of growth and change. Pragati India FundOne of IFC's recent investments, the Pragati India Fund, offers another good example of doing well and doing good. The fund is a pioneering investment vehicle that will focus on economically under-developed states in India. These are areas where it has traditionally been a challenge to attract private investments – but where the changing political, social, and economic development dynamics offer new opportunities that are largely untapped. Sixty percent of Pragati's investments target the country's 8 poorest states. IFC is investing up to $20 million in the new fund. The idea is to help Pragati provide growth capital to start-ups outside of major urban centers – adapting successful business concepts to small- and medium-sized enterprises in low-income states and rural regions. In India, small- and medium-sized businesses typically receive only 5 percent of all private equity capital, forcing them to rely on high-cost informal borrowing. The Pragati Fund is designed to fill that funding gap and support the development of India's financial infrastructure. As a co-investor, IFC can help increase the impact of the project – bringing not only capital but management expertise, which can help strengthen operations as well as environmental and social governance. Just last month, Pragati India Fund made its first investment – in Jash Engineering Limited, a manufacturer of customized engineering goods for the water and waste water infrastructure sector. Jash is now expanding into manufacturing equipment for water treatment plants, and even generating clean power from residual water of the plants. The company is looking to move into municipalities across India. With India's government pushing for world class water treatment facilities, investing in a company like Jash offers real opportunities – to help these enterprises access finance, create jobs, promote inclusive growth, and contribute to cleaner, healthier water and energy for hundreds of thousands. Supporting the PoorestI hope more fund managers and investors will look for these types of opportunities – and look for them beyond BRICs and within frontier regions. IFC is increasingly shifting its focus in this direction. Since 2007, over half the funds supported by IFC have been in the poorest countries supported by the World Bank's International Development Association, or IDA. IFC's equity returns over the last 10 years in low-income countries, compared with IFC as a whole, provide a compelling case for investment. Africa has been IFC's top performing region over the last 10 years, with a real rate of return of 25 percent compared to 18 percent for IFC worldwide. Sub-Saharan Africa is also the region where IFC's investments in private equity funds have grown the most, and where we have more private equity partners – a total of 38 – than anywhere else. In FY11, IFC committed new investments in 5 funds in Africa, and so far in FY12 we've invested $70 million in 3 funds. We already have plans for 2 or 3 more funds this fiscal year – including 8 Miles Fund, a pan-African private equity fund backed by Bob Geldof. 8 Miles plans to make investments in growth areas across Africa such as agribusiness, consumer and retail health, telecommunications, banking and financial services. The target fund size is $450 million, with $15 to $40 million investments in 10 to 12 African companies with above-average potential for revenue growth and job creation. Investors partnering with IFC include the United Kingdom's CDC, the African Development Bank, and Vital Capital Fund. J.P. Morgan will provide fund administration services. Private equity is already changing the face of Africa – and funds such as 8 Miles recognize that there's huge potential to do more. The fund's name refers to the fact that, at their nearest points, Africa and Europe are only eight miles apart. For much of Africa, however, the distance is far greater. Countries dealing with fragility and a history of conflict are home to the world's poorest – the Bottom Billion, as Paul Collier pointed out in his 2007 book, though today, it's more on the order of 1.5 billion. In 2010, the World Bank focused on these countries in our World Development Report on Conflict, Development, and Security. One of the conclusions of that report was that private sector development is a key factor in infrastructure and logistics, local banking, service delivery, and job creation – to show early results as well as longer-term growth. Access to capital and finance is vital for putting these countries on the path to economic stability. But, of course, most fund managers aren't ready to provide the risk capital and strategic advice that private equity provides. That's why IFC conceived of SME Ventures, an initiative to support local private equity fund managers and raise equity and advisory services funds in low income – and particularly post-conflict – countries. Today, we're putting private equity to work is some of the most underdeveloped areas of the world. Take Central Africa – a region rich in minerals, but with a history of fragility and instability. Private equity groups have traditionally focused on larger investments in the extractive industries. Yet it's small- and medium-sized businesses that create the most jobs in any economy. So two years ago, IFC committed up to $12.5 million to the Central Africa SME Fund. Managed by XSML, a Dutch SME fund manager, and Cenainvest, its partner based in Cameroon, the fund aims to mobilize a total of$25 million from other development finance institutions and the private sector. With offices and a team on the ground in the Democratic Republic of the Congo and the Central African Republic, the fund's focus is on making investments and providing advisory services to the local business community, to help African entrepreneurs build sustainable businesses that create jobs and income. The funds' first investments in the DRC have been in a healthcare clinic, including new medical training for staff; a call center; and a food processing company for baby cereal, where the fund is also helping improve the company's financial management and developing audited financial statements. In the Central African Republic, the fund is preparing to invest in an internet service provider. The Central Africa SME Fund is also looking ahead. So, for example, it's conducting a market study on fresh fruits for a fruit producer in Kinshasa, and helping prepare a business plan and financial projections for a cassava mill run by smallholders. Through the SME Ventures initiative, IFC has also committed equity to funds for Liberia and Sierra Leone; Bangladesh; Nepal; and we are currently working on a fund for Bhutan. And just last month, IFC made its first private equity investment in Haiti. When Haiti was hit by a major earthquake in 2010, we knew that the Bank Group's support to help the country recover, rebuild, and break its dependence on aid must include bringing in the private sector. IFC has already committed five investments and significantly scaled up its advisory operations in Haiti. These projects are helping create 5,000 new jobs – as well as safeguard 5,000 existing jobs. Now, IFC is committing up to $10 million to the Leopard Capital Haiti Fund to support small and medium-sized businesses. With a team already on the ground in Port-au-Prince, the fund is raising $75 million in equity to invest in four main sectors: renewable energy; low- and medium-income housing; agribusiness; and hospitality. It's also raising $4 million in donor money to provide technical and managerial assistance to companies that were thriving before the earthquake, but now want to upgrade their operational capacity and grow. At the same time, this Haiti Fund will work with its portfolio companies to enhance corporate governance, and environmental and social standards and practices. It's an exciting new partnership for IFC. Our Private Equity Funds team has already catalyzed an additional $10 million from investors – and will continue to support the Leopard Capital team in raising more. We hope this will encourage more investors to invest in Haiti's potential. Importance of OpennessOver the past five years, I've seen this private equity conference grow in size, scale, and quality. I've also seen, from my discussion with our clients in developing countries around the world, just how important they consider the capital and expertise that private equity brings in helping their countries grow and raise standards. Yet the role of private equity has come under increasing scrutiny and political focus in the developed world – not least here in the United States. For some, the very term is synonymous with corporate raiders, asset strippers, and secretive back room deals. The private equity industry needs to respond to the demand for higher standards of openness, transparency, and integrity. Private Equity should be a major part of the new investment climate in emerging markets. It should increase overall investor confidence. I recognize that some investment professionals aren't used to being in the public eye. But you are now. And transparency is the best antidote to conspiracy theories. At the World Bank Group, we can see the transformative power of openness. Our new information and knowledge-sharing initiatives may turn out to be the most important legacy of my tenure at the Bank Group. Our Access to Information policy releases to the public vast numbers of documents about the Bank's projects, analytic and advisory activities, and proceedings of the Board. It's now viewed as the "gold standard" for financial institutions. Our Open Data initiative has unlocked our world-class knowledge and development data. We now provide free access to more than 7,000 indicators, including GDP data and development statistics, meaning that anyone – from a PhD student, to an NGO, to a farmer, or even a private equity investor – can download our data, analyze it, and come up with solutions. Our Mapping for Results website shares geo-spatial information on more than 2,500 Bank-funded projects. Now we are beginning to work with communities to map their own infrastructure – clinics, wells and schools. The next step is to allow people to use hand-held devices to let the Bank know, from wherever there are in the world, what is really going on with our projects and investments. These initiatives are making the World Bank Group more open, transparent, and accountable; helping us fight corruption and build better governance; and getting us ready for a new era of democratized development. The investment community can benefit from greater openness as well. ConclusionI have always enjoyed taking part in this conference. I have spoken at it every year during my time at the World Bank Group. I wanted to come here again, for the fifth time, because I am convinced that private equity investments can be one of the most powerful and important agents of change for developing countries: boosting local economies and creating jobs; improving governance and sustainability standards in private industry and capital markets; transforming thinking about growth; reducing poverty and creating hope. That Change agenda is the core of our mission at the World Bank Group. It's what we strive to do every day. It's why private equity – and this conference – is important to me. The success of this event demonstrates that I'm by no means alone in this conviction. So I want to thank you again for joining us today. I hope your time at this conference opens new insights and creates new partnerships for all of you – and for the World Bank Group. But most of all, I hope that it affirms your commitment to doing well and doing good – to using the power of private equity to support people in developing markets who want to create, build, and seize new opportunities. That can be a lasting legacy for all of us. Thank you. Show Less -