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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 -
Opening Remarks by World Bank Group President Jim Yong Kim at Japanese and Korean Media Roundtable
Thank you for coming.I wanted to invite a few reporters from Japan and Korea as I'll be heading to both countries in about a week's time. I thought you might be interested in what we're looking to accomplish... Show More + on my visits.First, though, I'd like to report on a phone call that I had this morning with Philippine President Benigno Aquino. I expressed my sympathy to the government and people of the Philippines for the devastation caused by Typhoon Haiyan. I also offered to President Aquino an additional $480 million dollars in additional financial assistance to help communities lead the reconstruction effort. This follows a $500 million dollar emergency loan announced earlier this week, bringing our total package close to $1 billion dollars. We know that the relief, recovery, and reconstruction efforts will take time. The World Bank Group is committed to supporting the government's efforts to rebuild people's lives no matter how long it takes.I also told President Aquino that I very much appreciated his voice in speaking out for more global action against climate change. The science is clear: the numbers of extreme weather events around the world are increasing due to the change our climate caused by dangerous emissions. Now, let me talk about my upcoming trip to Korea and Japan. First, I'll be going to Korea to open a new World Bank Group office, after signing an agreement to establish the office with Deputy Prime Minister Hyun last month. This office will support a broad range of partnership opportunities, leveraging the entire World Bank Group's knowledge and convening power and Korea's expertise in areas such as development policy, information communications technology, infrastructure, and the financial sector.In addition to the World Bank's traditional lending arms, the new World Bank Group office will also host IFC and MIGA, our private sector affiliates. We're hoping to increase our partnership to help Korean firms invest in emerging markets around the world.The World Bank Group has had a long and extremely productive relationship with South Korea. As you all know, I was born in Korea, and in my youth, the country was referred to as hopeless – a "basket case." We know now, of course, that such a label was grossly wrong – and grossly unfair. Today, Korea is an exceptional example of an aid recipient turned donor, with GNI per capita growing from US$67 dollars in the early 1950s – lower than many countries in Africa – to over $20,000 dollars. As the world's 14th largest economy, Korea is a key development partner of the World Bank Group and an important contributor to the International Development Association, our fund for the poorest. When I first took up this position, I was very encouraged to find that many leaders in Africa and other developing countries wanted to know how Korea did it.At our Annual Meetings last month, the World Bank Group launched a new strategy to support the twin goals our shareholders endorsed in the spring: to end extreme poverty by 2030, and promote shared prosperity, which means making sure that incomes grow for the bottom 40 percent of the population in every country. To reach these goals, we're going to have to accelerate the pace of poverty reduction in Sub-Saharan Africa. More than one-third of countries in Sub-Saharan Africa had an extreme poverty rate of more than 50 percent in 2010. In 12 countries, it is above 60 percent; in 4 cases, it is above 80 percent.You can see why I'm placing a high priority on Africa –and I hope the new office will strengthen our collaboration, so we can leverage Korea's knowledge and its vibrant private sector. From Korea I'll be heading to Japan, where, among other things, I'll be participating in the Global Conference on Inclusive and Sustainable Growth through Universal Health Coverage. The conference is the culmination of a two-year partnership between the World Bank and Japan to respond to the growing demand from low- and middle-income countries for advice and support to advance universal health. As some of you probably know, Prime Minister Abe is supporting this initiative as a pillar of Japan's recently launched "Strategy on Global Health Diplomacy," which builds on Japan's own successful experience in achieving Universal Health Coverage. The Government of Japan and the World Bank undertook a joint study on disaster risk management to learn lessons from the Great East Japan Earthquake and Tsunami, which could be applied to developing countries vulnerable to adverse natural events. The recent devastating situation in the Philippines reconfirms how natural disasters could take heavy tolls socially as well as economically. Globally, almost $4 trillion dollars has been lost over the past 30 years because of natural disasters. We know these costs can be greatly reduced through effective planning and preparedness. We will be jointly launching the Tokyo Disaster Risk Management Hub to disseminate Japan's advanced knowledge on disaster risk management. This ranges from a culture of preparedness to effective legislation and regulation, including high-standard building codes, in order to build resilience in developing countries. The Tokyo hub will be a knowledge broker and spread Japan's know-how and technology to address specific needs of countries. Japan has been a member of the World Bank for over 60 years, and is our second largest shareholder. I look forward to discussing ways with Japanese leaders on how we can further deepen our partnership.I'll be happy to take your questions. Show Less -
Transcript: Panel Discussion at Wall Street Journal CEO Council
MR. WESSEL: --and countries like the U.S. and Europe better get used to this because we are going to be less and less relevant in the future with emerging markets.And I would say that,... Show More + in the last six months, maybe there's been some rethinking about that. So, my question to you is, is the golden age of emerging markets behind us and what are the chances--what are the factors that the next decade won't be so pleasant for emerging markets as the last 20 or 30 years will be. There's certainly--DR. KIM: Well, you know, if you look back over the last five or six years, even Africa has over 5 percent growth rates. And you know, there's been a slowdown. If you look at some of the biggest countries, it looks like India is going to have a good third quarter. China came in at an annualized rate of 9.3 percent in the third quarter. And you know, there are all kinds of downside risks, you know, the biggest one being what's going to happen here in this country when February rolls around. But we think that, over the next year, growth in the emerging markets is going to be over 5 percent, and we think that's going to continue. And so, you're not going to see, I don't think, the 10-plus percent growth rate that you saw prior to 2008, but you know, a lot of the fundamentals in these countries are in much, much better shape than we even knew.You know, in 2008, we thought that Africa was going to go off the deep end with the financial crisis, but then kept a 5-plus percent growth rate all the way through. And you know, I traveled all the way to--I just came back from a long trip to the Sahel, and you know, the leaders--the leaders there, I was very impressed with their understanding of, one, the importance of their own sort of management of macroeconomics, managing their debt watching their current account deficits. And also, every single one of them, what they tell me every time I talk to them is, "We've got to figure out a way to attract more capital." So, something's happened over the last 10 or 15 years, and I think that emerging markets understand that they've got to be competitive and they've got to create business environments that will attract all of you, and one message that I wanted to bring for this group is, you know, think creatively about opportunities for all of you in the developing world. You know, we now are doing the--focusing a lot of our effort on trying to make deals. There's so much infrastructure needed--so much investment needed in these countries, and they all know that they're going to have to attract private capital. And so, the opportunities may be much greater than you think sitting from the outside, looking at places like the Sahel.MR. WESSEL: Stan Fischer, what do you think?MR. FISCHER: Well, I think the emerging markets have done very well for a decade. It was a decade of very easy money, of very easy access to finance.But if you look at the BRICS, Brazil, Russia, India, China, South Africa, the BRIC is China and the others have not yet built a framework that is going to be very stable.The Chinese, the [unclear 0:03:20] has actually produced a plan which nobody understood at the beginning and now, as time has gone by, it looks better and better, including radical changes in changing the one child family gradually.China grew for 40 years at 10 percent. It just outstripped Korea which, up to that point, was the fastest for the longest. Rule of 70 says, if you are growing at 10 percent, you double ever 7 years. So, that period increased GDP by "two to the fifth" plus something, which is unprecedented in history. And it looks like, from the [unclear 0:04:07] they got most of what they should do, including structural changes, in place. So, that's good news. Now, whether they'll be able to do it and whether, in the end, they'll be driven back to bank financing under orders from the government, we don't know. That probably could happen.For the others, they absolutely have to improve their policies. This is a sad story of life that if you have all the prerequisites in place but you pursue policies which get worse and worse, you get into trouble. There is this phrase, "The Fragile Five," which consists of India, South Africa, Turkey, and Russia and Brazil. It's interesting that--MR. WESSEL: I was afraid you were going to put the United States on that one.MR. FISCHER: The United States, more or less no.The fact is that every one of them was either a BRIC or, shortly after inventing the BRICS generally, invented something called the MIST. The MIST consisted of ten countries of whom the leaders were Mexico, doing well, Indonesia doing reasonably, South Korea doing well, and Turkey, not clear.And you can't stay on top if you don't keep adjusting your policies, and they haven't, and they're beginning to pay the price. Will they learn their lesson? At some point they will, the sooner the better, we don't know about that, and I just second what Jim Kim said about Africa. Africa has continued to grow at 5 percent. It's largely based on exploitation of natural resources, but there's more than that going on in quite a few countries, and it's well worth looking at.And lastly, Latin America is divided in two: countries doing the right things, countries not doing the right things. The ones not doing the right things don't look especially good right now, that's Venezuela, in particular.So, even there, we see the same fact that you better get your policies straightened out, and I hope they do it.MR. WESSEL: Okay. Glenn Hubbard, so, we have an optimist and I would say cautiously pessimistic Sam Fischer. Where are you on this?MR. HUBBARD: Well, I would say caution, as well.Certainly, the easy credit has been largely responsible for the emerging market boom, as has China's own development.I think that Stan is essentially right, that the policies are paramount. You know, there's so much attention now being paid to tapering in Fed policy in the U.S. will spill over to the emerging world. That's a bit like the torture of Jerry Baker's early morning music analogy--it's like blaming it on the bossa nova. You know, the Fed is not responsible for structural problems in emerging economies. And if you take China, for example, and agree that some of the recent economic developments have been good, but it is still a financial sector whose policies don't work. Structural reforms, likewise, are needed in India, as well.And so, I think around the world, rather than looking at big monetary or macro factors, these are individual policy factors. And I would agree with both the other panelists that Africa remains really an exciting bright spot, particularly for the climate in entrepreneurship. I know in my own school we've been on the ground in Africa now for a decade, training people who train entrepreneurs, really exciting.MR. WESSEL: Interesting.Let's talk about a couple of developed countries, start with Europe.I am always fond of writing about Europe because it makes me feel better about Washington.Stan, why don't you start. Do they have any reasonable chance of finding their way to a set of institutional arrangements and policies that allows them to grow and a rate that raises living standards?MR. FISCHER: They have a reasonable possibility of doing that, but it's going to take longer than is politically convenient, and we'll see whether they can maintain that balance. They're trying to create something which took the United States 100 years to create, which is a more or less unified center based on the European Monetary Union.And this banking union, for instance, is moving much faster than anybody thought they could. But take note, the United States fixed its banks by 2009, basically, and you've seen the difference between American banking and European banking. Now, the European Central Bank is about to undertake an [unclear 0:09:04] of the banks which are going to be [unclear] by it, which means they're not going to be fixed until 2014 or 2015 at the very earliest. They have the money to do it. The European stability mechanism can recapitalize banks, but that can be done, but they've got to get the work done. So, that means [unclear 0:09:26] because persuading 15 countries that they want they want to be in a banking union and hand the supervision to some other group rather than their own regulators is not easy, it's happened. And then they've got to move on at some point to the fiscal side. Now, everybody thinks you have to move immediately to American centralized government, which is larger and more important than the national governments. They don't have to do that to begin with. They just need to have a reasonable sum of money at the disposition of the central authority so it can move funds around among countries, and that's a different proposition. They'll be able to do that if the political will remains, and that's going to be a very tough issue. I would say that, just think about this two years ago: Everyone was sure the Euro wouldn't survive the year. Well, here it is. People aren't even talking about its disappearance. They have a habit of overcoming these difficulties despite everything. And so, I'm moderately optimistic it will happen, a long time from now.MR. WESSEL: Glen, what about Japan? They're kind of rolling the dice on policy. Do you think they have a good chance of success or not?MR. HUBBARD: Well, I think that, you look at the various arrows, I think you'll see a range of chances. The change in monetary policy under [unclear 0:10:48] has been very welcome. Japan has had persistent deflation that can be arrested. It's a monetary phenomenon. It is simply not the case central banks are powerless here. The government, I'm a little more skeptical. Certainly, the talk from the incoming administration was very promising in the beginning and continues to be, but the real issue inside Japan are structural reforms that have bedeviled the Japanese economy for decades, and I really don't see a whole lot of progress being made there. So, good discussion. If the progress could be made, an excellent outcome, and monetary policy welcome.MR. WESSEL: And Dr. Kim, what do you hear from people when you travel around the world about what they think about the United States in 2013? Are we seen as a place that--envy and admire because we all have all this entrepreneurial fervor, or are we seen as a laughingstock because we can't even figure out how to keep our government open?DR. KIM: Well, I think if you just look back at what happened in August of 2011, the last time we had a near miss, I mean, we followed the numbers very carefully, and stock markets in developing countries took a 15 percent hit. Borrowing costs went up 75 basis points. And so, whatever happens here has a very direct impact on what happens in the developing world. But I think there's still tremendous admiration for the ability of the U.S. to innovate. And let me tell you, every single country in the world is thinking about what they need to do to build an innovative sort of new generation coming up. So, my experiences, by running a university, it has come up with almost every leader I talk to, because they're saying, "What do we need to do to become more competitive? What do we need to do at the primary, secondary, and especially at the tertiary level?" And so, the admiration for that part of the United States still remains very strong. I mean, there are a lot of countries--you know, China is one, Korea may be another, who have done so well at process improvement, but their real, real innovation is still, I think, a bit out of reach, and those countries want that and they know that we have that here in the United States.MR. WESSEL: Stan and Glen, you both mentioned periods of easy money and central banks' behavior. I wondered if you could--there's beginning to be some criticism that the central banks have done too much, that they have taken too much of the responsibility for getting growth going, particularly in the U.S., maybe in Japan, and that there are risks now of financial instability or whatever. In the circumstances, Stan, do you think that the central banks, the Fed in particular, are doing too much, or is this what the doctor ordered?MR. FISCHER: Well, the--without the Fed, we would have a much deeper recession, without the extraordinary things that it's done the economy would be in much worse shape today and we need to remember that. Precisely how to get out of it, of what speed to get out of it is a much harder thing to measure and to calculate, and there's this problem of not quite understanding what's happened to the participation rate of the labor force. There's far fewer percentage of Americans working today.So, there are dangers and as a central bank Governor, we have to reduce our interest rates in Israel, because United States' rates were so low that if we had kept them where they should have been, 4 percent, say, we would have had an inflow of funds that would have just created a lot of damage. So, we cut the rate. Housing prices have taken off. You're beginning to see housing prices take off in the United States. But these are things which you can watch closely. Everybody knows now about asset prices and presumably they will take that into account and moderate policy accordingly. So, yes, it's dangerous, but it's much--but it was necessary.There's another line, which is you shouldn't help the government [unclear 0:15:04] face the dilemma that they should be facing. Leave the job to them.Well, as a central bank Governor, I saw that one very nice, but it really wasn't our job to try and figure out how to teach the government to behave better. We had certain tools at our disposal, this is what was going to happen, we used it. And that, I think, is the only way you can behave. The moment you start thinking you're disciplining governments when you're an unelected [unclear 0:15:37].MR. WESSEL: Glenn.MR. HUBBARD: I think there's no question that we're asking too much of the Federal Reserve and that the Federal Reserve is in dangerous territory.It did start out with extraordinary positive responses and the response to the crisis, Stan, I mean, has it right, without the Federal Reserve's aggressive response, we could well have had a depression.But it's worth noting that the Fed's early actions in things like mortgage-backed securities markets were in the structural issues of the financial system. Unless persuaded that some of the other measures, long-duration treasury, riding the quantitative easing measures, that had much of an effect on the real economy and run the risk of misallocating capital in the economy.If you go back, what we needed, it was closer to negative interest rates that we could not engineer. The textbook answer for that would have been big fiscal policy changes, massive investment incentives, things like that, that would mimic exactly that kind of industry, but the government sat on its hands. So, the problem really is not the Federal Reserve. The problem has been the government.I agree with Stan that it's not the Fed Chairman's place to give lectures to government officials, but nor should we believe that the Fed can engineer an unemployment rate of 6 percent or 6.5 percent simply by its own power.MR. WESSEL: I have another question for you, but I don't want to deny you the opportunity to second-guess the Fed.DR. KIM: Thankfully, that's not part of my job description.MR. WESSEL: I want to just--before we turn to questions in the audience, I want to ask you about climate change.To what extent do you think the global governments are doing enough to prepare for the risk that we're really going to have a problem?DR. KIM: Well, I think, first, let's start with the science. You know, this is something that I dug into deeply when I came on board. And there are a couple of things. First of all, I think the science is pretty clear that there is a phenomenon of manmade climate change. And the second question is, so what do you do about it? And what we were looking for is, are there things that governments, corporations, that everyone can do right now that pretty much people agree. So, one of them, 70 percent of all greenhouse gases come from cities. So, is it possible to build more livable, cleaner cities? Well, New York City--and Mayor Bloomberg has shown this--that you can make tremendous progress, and his goal of 30 percent reduction of the carbon footprint by 2030, they're going to get there by 2017. That's something that we can do and we're actually working on that with China. China has completely changed its approach to global warming and climate change because they've had to close down their cities due to pollution, and they're losing a million people a year. So, there are things we can do, cleaner cities--MR. WESSEL: So, you mentioned some good examples but are, in general, they doing enough or they're not--DR. KIM: Not yet, not yet. But here are the things we can do more on: So, cleaner cities, renewable energy, climate-smart agriculture, forms of agriculture that not only have better yields but actually put carbon back in the ground. We can do that and rather than arguing about--you know, rather than arguing about only political solutions, we have to try to reach a political solution globally but in the meantime there are so many things we can do that's good for people, good for business, and good for the environment.MR. WESSEL: Okay.John Passo [phonetic], are you here somewhere?If you have a question, raise your hand and someone will bring you a microphone, and wave your hand. Otherwise, I will keep talking, even though I can do that.There's one in the back. Just speak loudly. Tell us who you are.QUESTION: [Off microphone.]--the first one is China has been a hugely important consumer of [unclear 0:19:25]--and second part is the real question--we've experienced two decades of over-investment booms around the world, housing in the United States, technology, emerging markets. I'd like each of you to put odds on the probability that China is experiencing an over-investment boom [unclear]--MR. WESSEL: Let's take the second question first.MR. HUBBARD: 100 percent.MR. WESSEL: 100 percent to having--MR. HUBBARD: Between the odds--I mean, China has been massively over-investing. It has invested in large numbers of negative net present value projects. That's not because their leaders don't understand economics. It is a bet about generating employment. I think it's a bad bet, it's one that leads to financial problems down the road, but absolutely there's massive over-investment.DR. KIM: I mean, if you look at the numbers, if you go back 10, 15, 20 years, China was investing at about 28 percent of GDP, and then it's gone up over time. Now, it's 45 percent of GDP. We've actually never seen that level of investment in the world before. So, the Chinese know they have to unwind. They have said they are very serious about moving from an investment focus to a growth model to one more focused on consumption, and I think the sounds that you heard coming out of the plenum are very much in that vein.You know, I've met with him, I've talked with all of the leaders there, and they understand what they're doing. And this group of leaders has much more savvy around economics than previous groups of leaders, but it's going to be tough because that unwinding has to happen gradually, but they know they have to do it.MR. WESSEL: All right.Martin Starr [phonetic].QUESTION: [Off microphone]--next year, it looks like nominal GDP will be a little bit better than this year, though the underlying current might be a little stronger generally, but can you just--[Overlapping speakers.]QUESTION: BRICS and next 11, which are going to be the stars and which are the duds?MR. WESSEL: So, of the 15 emerging markets, who's going to be a star and who's going to be a dud? Don't all answer at once.MR. FISCHER: My guess is that China will turn out more positive than is expected; there will be about 8 percent growth.Remember that when China grows at 8 percent after 10 years of growth at 10 percent, it is adding for more to global GDP at 8 percent growth this year than it added when it was growing 10 percent 10 years ago, because the economy is two-and-a-half times larger than it was previously.Well, duds, there are a lot of candidates and I'm not sure I'm one to sort them out, but I think there is a chance that policy in India is a great disappointment. I don't know if you want to go as far as call it a dud, but India had it right and then politics is taking over and doing things things that do not make a whole lot of sense economically, and there's an election coming up. And wherever there's an election coming up, it's worth considering what they're going to do up to the election, and then how long it will take them to undo it.One last thing: We used to have this saying in the IMF, it takes ten years to build up a country and to build up its framework and it takes one election to destroy it, and it happens time and time again, and it's very sad.MR. WESSEL: You're a ringing endorsement of democracy here, Stan.MR. FISCHER: Huh?MR. WESSEL: A ringing endorsement of Democracy. [Unclear 0:23:05] about Brazil? Brazil more likely--Glenn, Brazil: more likely to be a dud or a star?MR. HUBBARD: Well, I think probably somewhere in the middle, back again to the policy mix question that we talked about in the panel discussion. I would add an easy to the dud, too, of Argentina, which continues its century-long obsession with terrible public policy [unclear 0:23:27] pile of duds.DR. KIM: Although they cleared their arrears with us.MR. WESSEL: So, you want to nominate a star and a dud? You have to nominate a dud if you nominate a star.DR. KIM: Let me tell you a couple of places where I'm hopeful, right?And again, let's go back to Africa. So, one of our--almost half our business now is private sector. And so, our jobs is to help to find ways of de-risking investments, if you will. And you know, just in Burkina Faso--you know, who's ever been to Burkina Faso, but they've got great leadership, the private sector has been growing, the leadership is totally committed to building a better business environment, and they pay $0.75 a kilowatt-hour for electricity, which is seven times what we pay here in Washington, D.C.If we can find ways of getting long-term capital for them to be able to invest in energy at a much lower rate, those countries are going to grow. I mean, they're educating their people much more, it's a totally different scene now. And I would just say, once again, that if anyone is interested, please talk to us, because our role is to find ways of making the--we think the innate attractiveness of investing in Africa apparent to people like yourself. And I think you'll be surprised of how much we know about individual economies their governments and the policy environment, and you may think differently about the possibilities. And another place that I hope grows quickly that we're doing everything we can is Myanmar. Myanmar has a huge potential upside. They've made some very courageous decisions and we, as a global community, have to show that there's a democracy dividend. So, we're running like crazy to build energy infrastructure there and, if we do, I think they're going to--they could be very strong.MR. WESSEL: What about Russia? Does anybody think Russia is doing...MR. FISCHER: Russia is not going to do well. With the current cuts of policy they're implementing. Incidentally, Martin, on Brazil, there is an election coming up and there's going to be one party that believes in what I think of as good policies, and one policy has implemented what I think of as not good policies. And so, that's a very uncertain outcome.MR. WESSEL: Anybody else?[Pause.]MR. WESSEL: Oh, come on.All right. Let me ask you this: Do you think that we have a chance, Dr. Kim, in eradicating global poverty, extreme poverty, which is, as you define it, people who live on $1.25 or less, in our generation? Are we close enough to doing that?DR. KIM: We can. You know, China lifted more than 600 million people out of poverty in the last 20 years. We have a chance to do it, but our research shows that about two-thirds of the poverty alleviation comes from growth and about a third comes from various policies, methods to support the poor directly.And so, the thing that gives me--is encouraging to me is I think there's not a single country that I have visited--and that's--[unclear 0:26:38] visited country--that doesn't understand the importance of private sector growth as a part of their overall economic strategy.Even in India, they have a $1 trillion infrastructure deficit over the next five years, and the government has said to all of us that more than half of that has got to come from the private sector, "So, we want to learn how to help the private sector do better." Now, they've got a ways to go, as Stan and others have said, but I have to tell you, they're committed to it. At least they clearly understand that private sector growth is going to be critical if they want to reach their aim.MR. WESSEL: Here, tell us who you are?QUESTION: [Unclear 0:27:17]. So, one of the issue of--I guess 5 percent growth, 8 percent growth is all interesting in some larger emerging markets, in BRICS actually, [unclear], in Brazil and in India, 20 percent for currency exchange just [unclear], all the growth--and so, what becomes of our 5, 8 percent when I lose 20 percent in foreign exchange? I think the risk of foreign exchange for investment today will be much higher than the growth of GDP. Any comments on how do you see foreign exchange develop, especially as it comes to Euro and dollar because most of reporting [unclear]. So, [unclear] that's the way you have to be measured.MR. HUBBARD: The most honest thing an economist can say is currencies fluctuate. I'm not sure if you [unclear] but I think the question you raise is really two things, one at a micro level about whatever hedging strategy is optimal for your business and different businesses have different strategies. The other is there are predictable movements based on policy differences that you can certainly look at, but hedging comes from other things.MR. WESSEL: [Unclear 0:28:28]--QUESTION: Kasper Wison [phonetic] from [unclear] in Europe.A question--Europe--in your mind, is there any reason why Europe is not going growing in the next two to three years.MR. FISCHER: Start growing, yes, but--[Overlapping speakers.] MR. FISCHER: --5 percent--[Overlapping speakers.]MR. FISCHER: The rationale is that [unclear] everybody says [unclear] periphery countries there is--there are changes in relevant prices that has been happening. The countries that are in programs, the PIGS have, except for Italy, significantly reduced their costs relative to others. So, they can start coming out of it.We've also got the ECB coming back to life, which will give a partial [unclear 0:29:16] for some time. And then we have--there's a dynamic that will take place in the global economy. There's a chance it will work out.I mean, everybody was--you have to realize how quickly views change. Britain was the sixth man of Europe until six months ago. All of a sudden, it's the start. It's grown for three quarters. And that sort of thing changes moods and changes investment rates a lot. Whether it will be growing at 3 percent, I doubt it. Will it have grown consistently for several quarters? Quite possible.MR. WESSEL: I know we have a couple more questions, but I'm told that it's time to move to the next panel. Show Less -
Transcript: World Bank Group President Jim Yong Kim Media Roundtable
DR. KIM: Well, thanks, everyone, for coming by. I just finished a trip to the Sahel with the Secretary-General, which was our second trip. And I'll talk about that in a bit. Also,... Show More + just back from meeting with the Pope, which we can also talk about if you'd like. And my first visit to Turkey.But I want to start off by just, first of all, expressing our deepest condolences to the people of the Philippines. We've been, of course, watching this very carefully. We've got many projects going with them. We're not part of the group of first responders. And so, we're not on the ground now, doing immediate humanitarian relief. That's not what we do. But we've made it clear to the authorities in the Philippines that we'd be prepared to be involved in any way that they find appropriate. We already have, for example, conditional cash transfer programs, where we're providing direct resources to poor people. And we could increase the speed and the volume, remove the conditions; there's all kinds of things we can do. And we're in the middle of a discussion with them right now.You know, we've had a tremendous amount of experience responding to disasters. For example, we were responsible for a good deal of the removal of the debris in Haiti. And so, it's one possibility in the future, if that's what they need.So, while not being first responders, we're very involved. But I think it's important for the world to reflect on what we're seeing. Now, the critical issue is that you cannot connect any single event to climate change. That's not the point. But if you look across the world, the Philippines, quite literally, lives in the eye of the storm. So many storms are passing through the Philippines. The directions of the storms coming at the Philippines are changing now. And so, you can't think about building resilience on just one part of a particular island. So, they're in a particularly difficult situation.I was in a meeting with President Aquino, and we were talking about climate change. And he stood up, and he said, "Look, if anyone doubts the reality of climate change, please just come to the Philippines." If you think of the number of storms that have hit over the past year, the severity of those storms, and then if you look back, and you think about--so, we had Sandy last year, then we had Phailin in India, another category 5, that hit landfall, and then, now, Haiyan, or Yolanda as they refer to it in the Philippines, the second major storm in a year. The point is to think back and say, "What are the trends in the world?" So, I just got back from the Sahel. And droughts that used to happen every five to ten years now are happening regularly, reliably, every two to three years. In the Horn of Africa, severe droughts that happened, before, once in every 20 years are now happening every five years.So, it's not so much that a single event is the issue. The real event is that the frequency of these events are increasing. And that's exactly what the climate change scientists have predicted. Now, can you assign any of the current damage--well, you know, there were 20-foot waves and, you know, 10 to 15-foot rise in water levels. And we know that water levels, from historic records, have gone up about seven and a half inches, so a small portion. But again, that's not the point. The point is it's happening over, and over, and over again.But an even more important point is that the world agrees a lot on the things that we need to do right now. Everyone agrees that at some point, if we can find a stable price on carbon, that that would be good for everybody. China right now is engaging in a very extensive carbon-trading scheme inside China. The experience of a price on carbon has not been the most positive experience, but still, I think leaders across the world know that moving toward some sort of stable price in carbon would be important. That's the hardest one. That's going to be the hardest one to get to. But there's so many other things we can do right now that will have huge impact that pretty much everybody agrees on.Now, one that the IMF and Christine Lagarde has really championed is the removal of fossil-fuel subsidies. Critically important, into the trillions of dollars, the amount that governments spend in fossil-fuel subsidies, they don't really help the poor, they pollute the environment, and the removal of fossil-fuel subsidies could then make available government funds to support many other, much more important priorities. But it's politically difficult. So, again, it's something that people agree on but politically difficult to enact in any country.*But then you go to the issue of sustainable energy. Everyone agrees that we have to move toward more renewable sources of energy. And nowhere is this more clear, and the possibilities greater in my view, than places like the Sahel, like in Sub-Saharan Africa. So, more investment in renewable energy, cleaner sources of energy, everyone agrees we can do that now.Cleaner, more livable cities, everyone agrees that the way that cities are being built right now can be improved in terms of reducing the carbon footprint and making the cities livable. We're doing a major project right now with China to really work with them to rethink in a fundamental way how they're building their cities. Now, 60 to 70 percent of all carbon emissions come from cities. So, if we can build cleaner, more livable cities, with greater concentration, with mass transit, with using cleaner sources of energy to provide the base load electricity. There's so much we can do.And then, the final issue, and again, it's just a no-brainer, is climate-smart agriculture. And climate-smart agriculture, very specifically, means the simplest kinds of interventions that have been shown to have tremendous impact. For example, in Costa Rica, if you look, the whole country is moving toward climate-smart agriculture. So, instead of cutting down trees to make fences, they're actually planting trees, and then stringing barbed wire between living trees to define their property. And what happens is that those trees not only keep their livestock within the bounds, but they actually fix nitrogen and put it back in the soil, increasing the yield. So, there are, right now, things that we can do. We had a huge project in Kenya, a climate-smart agriculture project, that we know we can take to scale all over the world. And it will both take more carbon and put it in the ground, it will preserve the river beds, it will increase the yield and increase profits for farmers.These are all things that we can do right now. And so, what I hope the tragedy in the Philippines helps us to do is to move away from having, what I think, a silly argument about, not really the science, but about science as a whole. Ninety-five percent of climate scientists agree that anthropogenic climate change is real and that we've got to do something about it, or the impacts are going to be severe. So, basically, if you argue with those findings, you're not really arguing against climate change, because there's just no science to support you. You're arguing against science. And I guess you can do that. And I guess you can argue that you don't trust science. But I do. And I think it's really important that we should respond to the evidence as we see it. Moreover, I just want to make the point that there's just so many things we can do right now. Let's stop the argument. Let's move forward. Let's get the agreement. Let's make the investments that we need.In the Sahel, you know, I'm just returning, and I have to say that it was different than what I expected, in the sense that the conditions, the living conditions, were just as difficult as I expected. But the things that had been accomplished there are really quite stunning, given the difficulty of the circumstances. Let me just give you an example. Burkina Faso has grown their economy; their growth rate is going to be over 6 percent this year. They've continued to grow. They've built a lot of infrastructure, especially in Ouagadougou. But they've done it paying 74 cents a kilowatt hour for electricity. So, they import all their electricity from Côte d'Ivoire, and 74 cents a kilowatt hour is about seven times the global average. Here, in DC, we pay probably nine to 10 cents. A very high rate would be 25 to 30 cents a kilowatt hour. Burkina Faso pays 74 cents. So, the fact that they were able to see the growth that they have seen while still paying such high prices for energy is really quite remarkable.The other thing I saw was that there is tremendous support for French intervention--and Jeremy, especially, I want to make this clear--tremendous support for the French intervention in the Sahel, and for interesting reasons. You know, when I visited with President Compaoré of Burkina Faso, he told me about the history that they have of cavalries, that they were able to build a cavalry before anyone else in the region was able to. And he thinks that that was critical in their ability, over centuries, to repel the intrusion of Islamic extremism. And they see this latest set of events as just part of a centuries-long quest to live in harmony with a diverse group of people, Christians, Muslims, we had Arab populations, Tuareg, I met with them all when I was in Timbuktu. And they quite literally said, "What's happening, this Islamic extremism, is not part of the culture of the Sahel." And so, you know, I think some people in France have been saying, "Is this going to be France's Afghanistan?" And I can tell you that, from what I saw, overwhelmingly the answer is no, because the population as a whole so strongly supports the effort to keep out Islamic extremism from that area.Now, you know, what they're going to have to do is reduce the trade barriers between the Sahelian countries and really act like an economic bloc. And they're committed to doing that. But, you know, again, in countries like that, all along the borders, they have all kinds of ways of slowing down trade that we're going to try to help them to fix. But I came away from this visit unexpectedly, extremely optimistic about what could be done. If we can lower the prices of energy, if we can get them to work as an economic zone, with very fluid trade barriers, if we can attract the kind of foreign direct investment that I think right now that they could make very good use of, then the prospects for growth and development in that region, I think, are very high. And I think the intervention of the French, to ensure that Islamic extremism was kept at bay, at least for now, was an important intervention, and it's going to help us make progress.So, let me just start with those two, right off the top of my head, those two issues, which is Africa and climate change related to what we're seeing in the Philippines, and then just open it up for any questions that you might have.REUTERS: Just as a quick follow-up, what do you make of current climate talks and kind of where we are in the dialogue today?DR. KIM: There's a session happening right now in Warsaw and we're getting, of course, updates on a regular basis and my understanding is that yesterday, at the opening, a lot of the focus was on what was happening in the Philippines and, I'm sure you know, the representative for the climate talks to the Philippines is now on a hunger strike until something happens. Now, what I hope happens is that rather than just focusing on what is legally binding and what is not, that we make a major commitment to doing the things that we know we can do right now. I mentioned it. Price on carbon, removing fuel subsidies, sustainable energy, cities and climate-smart agriculture, they're five things that we can all move on right now and it doesn't require any kind of major legally-binding agreements. So, we are certainly injecting that kind of sensibility into the discussions. The Secretary-General has very much embraced those five points in his own approach to climate change. We really hope we can reach legally-binding agreements in 2015 in Paris. This is going to be a very important moment. But we can't be in a situation where everyone is waiting for those agreements to happen and then declare our efforts at fighting climate change a failure if they don't. We've got to move right now to tackle those issues we can take--In the Philippines a huge part of what they need to do is to build up resilience. And it's so hard to do, because in the U.S., you've got a coastline but islands, the coastline surrounds them and they've got multiple islands and because the storms are now coming from different directions, how do you build up resilience? So we've begun to do some studies on just what it's going to cost to build up resilience to storms of this magnitude, and they are very, very significant costs. Now, what we do know, though, is that right now the cost of these major storms on coastlines is about $6 billion a year. But by 2050, if all the predictions come true about the increasing frequency of these storms and the severity of these storms, then the costs will be around, in inflation-adjusted dollars, about a trillion dollars a year. REUTERS: By 2050?DR. KIM: By 2050. And, of course, they're going to increase every year between now and 2050. But our own estimate is that if we spend about $50 billion a year on building resilience, that we could actually avoid the vast majority of those costs. By building in resilience. And we know how to do it. In New York City they're doing it right now, they're building various levees and barriers in using both the natural systems and built-up systems, you know, artificially built-up systems, to protect the city from another Sandy. It's going to be very expensive, but compared to what it will cost if we don't do it? We think it's a good investment. DPA: But what about the finance, what about the $100 billion target by 2020? DR. KIM: You know, the Green Climate Fund is about to open. I'm going to be in Korea on December 5th. We have our climate investment funds here. And there have been many, many pledges. Donor governments have been extremely generous in terms of their pledges. I think what everyone is waiting for are really clear actionable plans where the money can be invested, there's going to be direct action and we're going to see things happening. So, let me just give you an example. One of the things that we're focusing on here at the World Bank Group is to develop bankable projects for sustainable energy. And by that we mean, look, in Burkina Faso the opportunity is huge. If we can get a public-private partnership where the government makes certain guarantees that we can also provide things like political risk insurance, we can provide some of our own investment, but then if we bring the private sector in, the private sector can make money. The returns are going to be sort of steady long-term returns. But we could potentially have the impact of dramatically increasing Burkina Faso's electrical supply, so increasing access for the people of Burkina Faso, while at the same time making money for the private sector that invests in these projects and at the same time reducing the cost per kilowatt hour. So, there are projects like this everywhere and we're focusing--if we all wait for the donations to come through, I think we'll be wasting time. So, the pledges are important, we want people to commit to the Green Climate Fund, we want them to move quickly on it. In the meantime, we at the World Bank feel that there are ways of bringing private sector money in which can move much more quickly and, in the long term, we think is more sustainable. So, public-private partnership that reduces the risk of these investments and even places like the Sahel, that will reduce the cost, increase the access and make money for companies, I think the key for us right now is to find as many of those projects as we can and move on pushing those forward. AFP: Actually I have a question that really doesn't relate to the World Bank activity but it was that we bought things that the Obama administration [unclear] stop eavesdropping on the World Bank and the IMF headquarters? I was just wondering if you have any comment on that?MR. DONNELLY: No, we're not commenting on that.DR. KIM: No, no comment. No comment on that.QUESTION: Okay. Too bad.FINANCIAL TIMES: I just have a question, back to climate change. Last month the U.S. said that it wouldn't back new coal projects. Isn't there a case to--not do coal projects at all by the Bank and how is the Bank shifting its own priorities in response? DR. KIM: Our policy's very similar on that. That we will not do any coal projects unless there are absolutely no other options in poor countries. So, we're looking around right now, and let me just give you an example: Liberia. Liberia has a total of about 21-22 megawatts of installed capacity. So, if you think about one kilowatt of installed capacity per person, it has enough energy for about 1 percent of its population. And 20 megawatts of installed capacity will give you as much energy as Texas Stadium, the stadium of the Dallas Cowboys, uses in a single day. So, it's almost nothing. And you're looking around and in Liberia, the question is what's going to be possible in that country? Now we're going to look like crazy to be able to find low-carbon renewable sources of energy supply. But in a place where they really don't have any other options, we would consider coal. But for the most part we're going to avoid coal altogether. And I have been very surprised by how much the quality has improved, in terms of providing solar energy, and the cost has gone down. So we now have some projects that are able to deliver solar power through solar-based micro-grids, not huge grids but the small grids, for local communities at around 10 cents per kilowatt hour. So, just compare that to what we're doing in Burkina Faso at 75 cents a kilowatt hour. The possibilities of solar and, in some places, wind, geothermal, hydroelectric power, are enormous and we're going to do everything we can to invest in those kinds of resources. But, for us, it's conceivable that there may be certain places where if there are no other options, we would consider coal. REUTERS: Just as a follow-up, besides Kosovo, is there any other coal plants in the pipeline or...DR. KIM: Not that I know of, not that I know of.BlOOMBERG: A separate question. If you could give us an update on the infrastructure fund. It was sort of announced and now we don't know whether [unclear] people willing to contribute. And just a quick second question: A few months--weeks ago when--your speech at George Washington, you told us that you'd be ready to abandon small projects to focus on big ones. Have you done any of that? Have you abandoned some projects? Concretely, how does that [unclear]?DR. KIM: Yeah, so--what was the first question?MR. DONNELLY: Infrastructure.DR. KIM: Infrastructure, okay.So, we wanted to do a little bit of a test. We wanted to find out what the interest would be in an infrastructure fund. And essentially, it's a new kind of product. And the idea would be that developing countries--really, any government that would want to could put money into a facility. And then, we would go out and we would bring bankable projects to the table. And we would then invite the private sector to come in and participate in projects like, for example, energy in Burkina Faso, right, energy in Nigeria, energy in any number of places. And we brought representatives of the private industry, private sector, and also representatives of governments. The demand among governments is really high. The fundamental insight is that, even at times of very low interest rates when quantitative easing was making access to capital seemingly very easy, there was still a problem getting access to capital for infrastructure in emerging markets in developing countries.So, the BRICS countries talk about a $4.5 trillion infrastructure deficit over the next five years. And if you look at total ODA, which is about 125 billion, there's no way that ODA can even touch those kinds of needs and India says that they have a trillion over the next five years themselves, and they can only imagine about half of that being covered by public sector and aid. So, and how is that other 50 percent going to be brought on board?So, what we heard, especially from the private sector, is that there's a lot of capital sitting on the sidelines earning very low interest rates. They would very much like to get involved in these kinds of infrastructure projects, but they need us to help de-risk them. That's not the perfect word but, in other words, they need us to be able to go in and, based on our 60-plus years of experience doing projects in these countries, knowing the governments, and also knowing the private sector, to come in and be able to say, "Here's a project. Here are the risks. Here's how we are going to mitigate those risks. Here's the insurance through MIGA, the Multilateral Investment Guarantee Agency, that we can provide. And here are some examples of projects that we have done where we have done just that." And we've got a bunch of projects we'd be happy to share with you--you know, power projects in Kenya--where IFC made a direct investment, MIGA provided guarantees. The Bank, through IDA and IBRD have given guarantees in support of the government, and all the institutions together have made projects happen that actually make money for people.So, there's a huge demand for us to do it. Now, as in all sort of global facilities, the governance is tricky. So, we're trying to figure out right now exactly how it's going to be governed, but the thing that was most surprising to us was just how eager private sector investors, sovereign wealth fund managers, pension fund managers were, to make these kinds of investments. Because they're not really seeing other kinds of investments where over 10, 15, 20 years, they can make, you know, 5, 6, 7, 8, 10 percent return in a reliable way.We think a lot of these energy projects and also, for example, ports and airports and transportation projects could actually not only be critical for the development of these poor countries, but could make money for people.And at the end of the day, if we want to achieve our goals of ending poverty and boosting shared prosperity, there's just no way we're going to do it based on ODA alone. ODA is only $125 billion a year. It's a drop in the bucket. It's really important and, in fact, it becomes even more important because the demands are so huge now, but using official development assistance to bring in private money, bring in sovereign wealth fund pension fund money is going to be a key to development in the future. And so, the global infrastructure, certainly, we think is a critical part of that. Now, over time, over the next six months to a year, we'll have talked about governance, and I hope that we'll be ready to go because, boy, all the BRICS countries are very much ready to go, and to our great--what's the right word?--we were very pleased to hear of just how much the private sector is ready to go.And what was the second question, John?MR. DONNELLY: The abandoning of small projects to focus on big ones.DR. KIM: Yeah. So, if you look at the Sahel, we came to the table and we put on the table $1.5 billion extra dollars in regional projects, focused on things like hydroelectric power, on irrigation, on improving farming for the pastoralists, you know, literally bringing veterinary science for the first time to some of these pastoral communities. And so, what we did was we reprioritized. We actually moved money for Africa from smaller projects and--you know, these projects never saw the light of day, so I can't tell you what they were. But we actually moved the money around and instead of doing smaller projects in individual countries, we brought it all together and put on the table an additional $1.5 billion for major regional projects that we think will have an impact on the economy. It's precisely what we meant, and Africa's really leading the way and showing us how we're going to do that.WALL STREET JOURNAL: Just wondering, following up on infrastructure, you know, the needs of the BRIC countries are so large. You mentioned the trillion in India. I used to be based in Moscow, certainly they need a lot of infrastructure. And part of the concern there was always that, among bankers, if you put too much money in any one country, there's the "Russia" risk or the "eighty-year" risk. How does that affect you guys or how does that affect the investors who would--would they be willing to put enough money into one country to make a difference, considering the risks?DR. KIM: This is precisely why the private sector folks came to us. So (inaudible) of BlackRock, you know, the largest institutional investor--they came to us because what they're saying is, "We want you guys to do this precisely because you can hedge risk across--literally, 140 countries."So, we have something called the Asset Management Corporation where different funds can put money directly into this corporation and then, based on what they want to invest in, or if they just want to invest across multiple projects, we're able to do that because we're actively in so many places at once. And so, one of the beauties of the global investment facilities is that you can make general investments and, again, hedge across multiple countries and, by doing that, you know, we--our own record in terms of--through IFC of our equity investments over the last 15 years has been very, very good. We've been at about 20 percent a year across the board, even through the difficult time starting in 2008. And the reason we think we've been doing well, there's a lot of--one, we have the best AAA rating around. You know, our borrowing costs are something like LIBOR minus 25-30 basis points at any given time. We have a very strong AAA. Every project in the developing countries wants us to be one of the first investors, because if we're on board, then it makes it very easy for them to get other investors on board. And also, we've done so well because we've been able to hedge our investments across many, many different countries. And the hope is that all of that experience put together and the ability to hedge across different countries will make the private sector more willing to invest along with us or a facility like this where literally bets are hedged, as opposed to going into one country and making a direct investment into a single country.I think most investors would like to have the World Bank as an intermediary to help them to stave off those risks, and we think we can do it. WALL STREET JOURNAL: So, you wouldn't charge too much into on--into one country or group of countries, [unclear]--DR. KIM: Yeah. I mean, the whole point of it would be to work across many, many different countries at the same time so that, you know, a--the default or the problems of a single country wouldn't blow up this whole facility. The whole point of it is just provide stability across the board. But I think what you'd also get from us is you'll get our own team working very hard to identify exactly what the political risks are, what the health of the banking sector, what the demand is going to look like. We are pretty good at doing that and partly because we've been at it for so long, so much longer than most folks. I mean, we've been in emerging markets from the beginning, as opposed to many who are coming into it relatively knew.AP: If it's on infrastructure, go ahead. BLOOMBERG: [Unclear]--just to know who the Bank--be they as an intermediary purely or will you putting your own money--DR. KIM: Oh, we put our own money, too. That's been one of the ways that we actually have been able to make projects go, is that we've put some of our own money on the line. Go ahead.AP: You mentioned low inflation and quantitative easing. I wonder if we could go into your view on the state of the world economy. It seems like we're sort of stuck in a rut and nobody seems to be able to get that boost to growth and [unclear] everyone is talking about.DR. KIM: So, I think the first insight is that if you look back nine months, a year, we now have the U.S., Europe, and Japan, all three are growing. Now, think back to the last time we could actually say that. It's been a very long time since you could say that all three of those have been growing at the same time.Now, you know, are there concerns? Absolutely. And we were just in France at a meeting, the economically focused international financial institutions met with President Hollande, with myself, Christine Lagarde, Guy Ryder of ILO, Angel Gurría of OECD, and Roberto Azevedo of the World Trade Organization, we just sat and had a discussion on these issues. So, you know, are there problems in Europe? Yes, there still are. I mean, there's this huge task of the Banking Union that has to be implemented. Some of the countries seem to be bouncing back, the UK seems to be growing, both Greece and Portugal look like they're about to be able to complete their programs and pay back the funds that they received during the worst of the crises. So, there are some positive signs, but there is still a lot of work to be done. Consolidation seems to be slowing down. The hope, of course, is that there will be no other Cyprus-like disasters.But you know, I think that, from my own personal view, is that in Europe, the combination of the European Central Bank, the European Union, IMF, have done a great job. I mean, they've done a great job and they've been willing to tackle really difficult problems, and everyone wishes that they would have tackled--solved these problems even more quickly than they have, but you know, I came into this job in July of 2012, and people said to me with great confidence that Greece will be out of the euro very soon, that the euro's future is in doubt, that all this is going to blow apart, and here we are, you know, now 18 months, 16 months later in a much better position than anyone had predicted that we'd be in when I started this job. So, there are some positives, but there is a lot of tough work ahead. Now, you know, we follow the U.S. economy very closely, of course, but mostly because of its impact in developing world economies. Growth is higher than has been expected, 2.8 percent instead of 2.0. Not quite sure where that growth has been coming from, but our sense is that we avoided some really bad things happening. I mean, we got very close to default, but it's very important that we didn't go there. Now, we're all very hopeful that they can resolve this crisis in--you know, come to some sort of agreement in January and February. We watched carefully, because the last time we had a near miss in August of 2011, borrowing costs for developing countries went up about 75 basis points, so, you know, three-quarters of a percent, and stock markets were depressed, on average, about 15 percent in developing countries. And those effects lasted for more than six months. So, any kind of uncertainty here in the United States has this very strong impact in the developing world. And what I was saying through the crisis, and it happened right at our Annual Meetings was that these kinds of impacts in developing countries are not good for the U.S. The U.S. Chamber of Commerce has said that more than 50 percent of all exports go to developing countries. And so, these kinds of impacts in developing countries slowing down their economies has a direct impact on exports in the United States.So, it's very connected. You know, our own overall projections for growth--you'll hear different ones form different sources, and our own, just to give you a sense of the comparison--so, our own sense is that the U.S. economy will grow about, overall, 2 percent this year, 2.8 percent in 2014, and 3 percent. We're a little higher than the IMF for 2014, a little lower than the IMF for 2015, but the good news is that we think the growth will continue. We had a very good jobs report just this past week. Other--the economy seems to be, here, in good shape.Now, in terms of developing country economies, there was a lot of concern that there was a slowdown, especially in the first half of the year in China, but those numbers seem to have rebounded and China did better in Q3, and they're just finishing up their Party Congress. And I--the language coming out of the Party Congress, I think is extremely positive. They're saying that they're going to get much more--rely much more heavily on the private sector and that the distribution of resources is going to be determined much more by market forces. I think what you're seeing in China is that what they're trying to do in Shanghai--the Shanghai Free Trade Zone--is a model for what I think they're going to continue to do. And they stated all along that, even with lower growth rates, they're going to commit to making the transition from being mostly investment and export-oriented to consumption and service-oriented. And I think, for us, it's very encouraging that, despite lower growth numbers, they're continuing down the path of reforms. Their commitment to reforms of the business environment and the role of the private sector, you know, focusing on consumption more, that commitment to reform seems very, very solid. And we expect them to perhaps grow at a slower rate, but the quality of growth we think will be better. The other countries that have been affected by the announcement of the potential tapering of QE, especially countries like Thailand, Malaysia, and Indonesia, what we saw there was perhaps a quicker out flow of capital based on real weaknesses in those economies: Current account deficits, fiscal deficits were relatively higher. And the announcement of the curtailing of the tapering of QE really had an impact on those economies. We think we've seen about a third of the overall increase in interest rates, responding to that first announcement. But what that means is when QE tapering actually happens, interest rates will continue to go up, and that could cause problems for the emerging market economies, which is why this Global Infrastructure Facility is so important, because as U.S. interest rates go up, what we're going to see is that it will be even more difficult to get access to the kinds of capital for infrastructure investments that developing economies need. And so, we think the pressure for us or some other group or some coalition of groups to put some kind of infrastructure facility together will be even higher. MR. DONNELLY: Just a few more minutes. REUTERS: As a quick follow-up, you visited Turkey recently, and Turkey--does it, I mean, borrow money from the World Bank, as well, to help support it? If you could give us some more details about that. DR. KIM: You know, Turkey is our second largest borrower over the years. So, Turkey has done some things just incredibly well. I mean, their ability to develop infrastructure in Turkey has been really quite stunning. Roads, electricity, they've done incredibly well over the past 11 years. And some of the data coming out of there were stunning to me. I couldn't even believe it when I first heard it, that not only has their economy grown over the last 11 years since they took over, but you have to remember that when they took over--when that government--when President [Prime Minister] Erdogan's government took over, their borrowing costs were 66 percent. I mean, they were in huge trouble, 12 percent budget deficits. And so, they were in a situation of almost having to default, and that discussion was on the table, and where they are now is really quite impressive. And as a physician, the most impressive thing was that they actually built a health care system that focused more on prevention and primary care than on hospital care which almost every other middle-income country is doing, right? I mean, every other middle-income country I see is succumbing to the temptation to build fancy, shiny hospitals, which of course are driving up their health care costs. The Turks said to me, "Our health care reform made patients very happy and doctors very mad." And as a medical doctor, I can tell you that's exactly what you want to hear when you hear talk about health system reform. So, they actually decreased their infant mortality rate by two-thirds. They decreased their maternal mortality rate. They increased their life expectancy. They did things that you never would expect to see in such a short period of time by quite literally taking the advice of us and many others and doing the right things in terms of their infrastructure investment. So, Turkey continues to work with us. They don't need our money so much anymore, but the reason they continue to work with us is because they really feel that they've benefitted from our knowledge, and the quality of our knowledge is what we're really focusing on, here. You know, it's my view that the future of the World Bank is going to depend on how well we capture, curate, organize knowledge and provide it to countries so they can actually implement it in their own situations. And so, we did that very well for Turkey, and all of the changes that we're going through right now inside the organization are focused on improving the quality of our knowledge so that we can do the right thing. And now that Turkey has actually done this and shown unbelievable changes in just these basic vital statistics, who's living and who's dying, the Turkish example is one that we're going to now take to many other countries in the world. All of the BRICS need to really look hard at the Turkish health care system example, because it's both saving them money and dramatically improving their outcomes. NEW YORK TIMES: [Unclear] obviously are quite broad-based. The benefits of your major infrastructure investments are quite narrow. Can they really offset the losses [unclear]?DR. KIM: Well, the--I'm not--say it again.NEW YORK TIMES: You had said one reason your infrastructure fund is important is it will offset some of the damage that is likely to be done as QE is pulled back and as interest rates rise. The benefits of low interest rates stretch out to small businesses and individual borrowers, they're very broad based. DR. KIM: Right.NEW YORK TIMES: The benefits of investment in a new power plant are quite narrowly focused, [unclear], and long term. DR. KIM: Right.NEW YORK TIMES: I don't entirely understand how it will offset those losses.DR. KIM: What we would say is, no matter what, the high interest rates are going to affect everybody. They're going to have an impact, whatever we do. The impact of the higher interest rates will be there. The question is, will you have higher interest rates and also very high energy prices, or will you have high interest rates and lower energy prices because we've been able to make the kinds of investments we need to make in much lower cost energy for places like Nigeria, Burkina Faso, places that are playing huge sums of money for electricity.Just to give you a very specific example, I was in Senegal and we were involved with the French Government--excuse me, the French company Eiffage, they're called, in building the very first toll road in Sub-Saharan Africa outside of South Africa.Now, when we started, the evidence was all very clear that this could have an impact, but there were all kinds of objections that they can't do it. "A toll road in Senegal? Are you crazy?" So, we built it. And it has decreased the commuting time by two-thirds, and it cost $3.00 to go from one end of the toll road to the other, which seems like a high amount, but they've got exactly the number of cars that they thought were going to be on-road are on that road. And the impact of having that toll road has decreased traffic on the traditional roads so that even on those roads the transit time has decreased by two-thirds. So, the company is making money, the government provided guarantees and made--and land, et cetera. We made an investment, the company made an investment, and the impact on the development of Senegal, I think, is going to be dramatic. Already, they're saying, if you can decrease your commuting time by two-thirds, then people can actually live further away from the city center and you don't have the kind of congestion that you normally would in that city. So, the interest rates are going to have an impact anyway. Going into a high interest rate environment with better infrastructure is a much better idea than going into it without access to good infrastructure.MR. DONNELLY: We have to wrap it up, I'm sorry. Thanks, everyone, for coming. Again, we hope to do this more frequently. Show Less -
Building Climate and Disaster Resilience for African Development: Remarks by World Bank Group President Jim Yong Kim
Dr. Kim: Thank you very much, your Excellency, Dlamini-Zuma. Excellencies, ladies and gentlemen, and especially Prime Minister Abe, last fall during the annual meetings of the World Bank I had the opportunity... Show More + to visit Sendai and I was deeply moved by the scale of the suffering that the people experienced. But I was even more moved by the fact that everyone there, and especially the Japanese authorities, kept stressing to me that the most important thing to them was that they wanted to help other countries, especially poor countries, knowing that so many countries would not be able to respond in the way that Japan had responded.So for me it was an indication of something very powerful, that I think you can tell the greatness of a country and a people when they're able to respond to disaster and untold suffering by thinking of others. I want to congratulate you and the Japanese people for working so hard to help others to deal with disaster. [Applause]Dr. Kim: As many of you know, we at the World Bank have two main goals. The first is to end poverty by 2030 and the second is to boost shared prosperity, meaning making sure that everyone can reap the benefits of economic growth, especially the bottom 40 percent of any society. These goals are very ambitious, but achievable and Africa holds the key. Africa will be one of the most important engines of growth of the future. But with its population growth, rapid urbanization and environmental pressures, it's also extremely vulnerable to the impacts of disasters and climate change. This applies to all regions of this diverse continent in different ways.Protecting African development by building resilience will determine how successful we are at ending poverty and boosting shared prosperity. This is because disasters have pervasive impacts, both direct and indirect. Over the last 30 years developing countries have suffered an estimated $1.2 trillion in damage and losses from disasters. We know that this figure is under-estimated in fact. It doesn't include the cumulative impact of smaller events affecting communities on a recurrent basis. We all know that it's the poor and the vulnerable - women, children, those recovering from the impact of conflicts - that bear the brunt of disaster impacts. They're not empowered to protect themselves and often live in fragile environments under fringes of settlements and they do not have the luxury of safety nets like savings and property. This inequity, coupled with increasing frequency of climate-related disasters, can push people in entire countries deeper and deeper into poverty. Again, if anyone doubts the reality of climate change and the fact that it will lead to increasing numbers of extreme weather events, just look at the state of Oklahoma in the United States today, which has suffered historic, unprecedented tornadoes in succession. Take droughts, for example. We usually don't think about the domino effect of drought. But as a medical doctor, I can tell you that the relationship between climate change and severe negative outcomes for children is very clear. Droughts reduce agricultural output, increase food scarcity, and the direct consequences on a child's nutrition and development are clear. She may suffer from stunting. She may be taken out of school due to more urgent concerns and put to work. Therefore, drought with its connection to agriculture and stunting can have a direct impact on the prospects of future development of under-cutting fundamentally the ability of countries to invest in the human capital that will drive the growth of the future. For far too long, the donor community has taken a reactive approach to disasters. We haven't done enough to support countries in their efforts to build resilience by investing in preparedness and prevention. And I want to give you one very concrete example. In 2002 faced with impending floods, Mozambique requested US$4 million from donor countries to help prepare. It received maybe about half that amount but after the floods struck the same donors gave Mozambique more than US$100 million and pledged more than US$450 million for recovery and reconstruction.Things are starting to change. The last time I was here of course we hosted the Sendai Dialogue and it's clear that governments are now focusing much more on shifting toward what we're calling a culture of resilience. At the World Bank we're not only changing the way that we think though, we're changing what we do. We've doubled our investments in disaster risk management, again with the strong support of the Japanese government, and we now invest on average $2.3 billion per year. We're putting disaster and climate resilience front and center and we've committed to integrating risk considerations in everything that we do.In our work on cities we need to make sure that fast growing cities are properly designed so they don't lock in high rates of carbon emission or put people at further risk of disaster. In our work in agriculture we have to foster food security and reduce vulnerability. In our social protection work we need to ensure that households have access to safety nets like insurance when disasters strike. To do all this we must work across sectors. We must work between the public and the private sector and we must build resilience in all countries in Africa across those sectors.At the end of the day, resilience is about development and development is about resilience. One cannot exist without the other. Now it's my great honor to introduce one of the greatest champions of the battle against climate change in the world today, the Secretary-General of the United Nations, Ban Ki-moon, who's been playing an absolutely critical role in bringing the entire multi-lateral system together to fight climate change. Secretary-General. Thank you. 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 following... Show More + 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 -
World Bank Group President Robert B. Zoellick Opening Remarks at the C40 Large Cities Climate Summit
Chairman Bloomberg, honorable Mayors; ladies, and gentlemen:It's a great pleasure to address you today at this important forum; in this great metropolis; on the critical role of cities in addressing climate... Show More + change.When the public imagines scenes of climate change, they probably call up visuals of shrinking glaciers, parched landscapes, rising seas, and dramatic shifts in weather patterns over wide expanses. Yet this may be ironic: Because cities will decide the future of climate change.City residents are responsible for more than 80 percent of the world's greenhouse gas emissions. Just the cities in the C40 alone account for 12 percent of global greenhouse gas emissions. At present, the vast majority of these emissions are in developed countries – but that is changing fast, as the cities of the emerging economies grow at a rapid pace.The World Bank Group was established 65 years ago to work with national governments – and later the private sector in developing countries. Yet climate change highlights our need – through groups such as the C40 – to deepen our partnerships directly with cities.These basic facts speak to the importance of the group, and why the World Bank Group and I have invested in the C40. Cities will pay a big price because of climate change, too: We believe 80 percent of the estimated $70 to 100 billion it will cost each year through 2050 to adapt to the changing climate are in sectors closely related to cities, including water supply, coastal zones, and infrastructure. More than 6,000 cities and local governments have announced greenhouse emissions reductions. When the world's largest cities pledge to work together on energy efficiency, clean energy programs, adaptation, and mitigation strategies – they can be a powerful force for change.I'd like to thank Mayor Gilberto Kassab for hosting this C40 Mayors Summit. I understand that the municipality of São Paulo has established the target of reducing greenhouse emissions by 30 percent by 2012. So we could not have a better host to spur action on climate change. I'd also like to thank Mayor Michael Bloomberg and President Bill Clinton for their leadership on cities and climate change. The partnership between the C40 and the Clinton Climate Initiative can be catalytic and dynamic.By joining forces, these two groups will be better able to make practical, measurable advances to address climate change, building on lessons the Clinton Climate Initiative has already learned through more than 100 pilot projects in several cities.Take just one example: The C40 cities generate about 440,000 tons of waste every day – about half of which is organic, generating methane, a powerful greenhouse gas. The Clinton Climate Initiative's composting projects in Lagos and New Delhi have been able to return waste material to agricultural lands, which have lost 30 to 70 percent of their carbon over past centuries. Building on these pilot projects, C40 cities may be able to improve food security while reducing greenhouse emissions.Mayor Bloomberg has also been a leader on Climate Change in New York City: His Plan NYC calls for a 30 percent reduction in green house gases emissions by 2030. Mayor Bloomberg's Greener, Greater Buildings legislation supports a City Energy Conservation Code, including energy audits and energy efficiency retrofits in city buildings. This legislation is expected to reduce New York City's greenhouse gas emissions by nearly 5 percent, save New Yorkers an estimated $700 million annually in energy costs, and create over 17,000 jobs in the coming years.The C40-WBG MOUI am also delighted that the World Bank Group is expanding our existing cooperation with the C40, drawing on your ideas.The Bank Group's investment in urban development was over $5.5 billion in 2010. We have 21 client cities that are members of the C40 – some of which, such as Jakarta, we have worked with for more than 50 years. We have more than $15 billion invested in the C40 cities. In Moscow, we are looking to advise on 'green city' programming and conversion from mono-cities; in Beijing and Shanghai, we are being asked to help finance infrastructure support; in Johannesburg, we are looking to bring investment to the South African Large Cities Support Program; and in Rio de Janeiro, we are developing support for a 'green city' assistance program that includes emissions trading and support on city metrics and capacity. So the C40 is a natural extension of our relationships with the C40 members. Later this morning, Mayor Bloomberg and I will sign a Memorandum of Understanding between the C40 and the World Bank Group. To simplify our ability to better serve you, the Bank Group plans to establish a "one-window access" for cities to the Bank's climate-related capacity building, technical assistance, and available funding programs.We hope the Memorandum of Understanding will help you draw on this more direct access in two particular areas:First, the development of city climate action plans and strategies. The Bank Group will help cities prepare standardized low carbon strategies; mitigation and adaptation strategies; and implementation plans, including through the provision of technical assistance.And second, we need to develop standardized reporting of city greenhouse gas emissions. Mayor Bloomberg once gave me a great insight into his successful management of New York City: He tells his city executives, "It says on the back of a dollar bill, 'In God We Trust', so we will. But all others must bring data!"He's exactly right: How can we really tackle this problem if we don't measure what we are doing? How will we know what works – and what doesn't? How will we be able to get payments to cities for reducing carbon if we don't know what they've accomplished?The Bank Group has promoted an international standard for reporting greenhouse gas emissions with the United Nations Environment Program and UN-Habitat.To take this project further, the Bank Group is now supporting a broader agreement on standardized reporting of greenhouse emissions with the C40, ICLEI and other partners. Common international metrics will enable us to better track progress against targets. Equally important, metrics will facilitate cities' access to private finance that pays for carbon mitigation or supports climate adaptation.Task Force's FindingsThe Bank Group has also been supporting the Mayors' Task Force on Climate Change, Disaster Risk, and the Urban Poor. The Task Force report includes case studies from Dar es Salaam, Jakarta, Mexico City, and São Paulo. The Group's recommendations provide important pointers:First, cities need to integrate policies to reduce climate change and disaster risk for the poor into urban planning and city management. These can't be separate, disconnected efforts. It appears that better policies for land use planning and service delivery have the biggest effect. Planners can also assist in making safe and affordable sites available for low-income residents, despite climate change and disastrous natural events, if they anticipate these risks. Jakarta's plan for 2010 to 2030 offers a good example of incorporating risk reduction activities into long-term spatial planning. Dar es Salaam has taken a similar approach to upgrading slums and providing for basic services. Second, the Task Force report points out that investments in building capacity for better urban planning and management can strengthen the resilience of cities. When cities mainstream climate change concerns within local government, they can improve delivery of basic services and reduce vulnerability to climate and disaster risk. Some cities have already taken important steps: Mexico City was the first city in Latin America to launch a local climate change strategy, and São Paulo has established one of the first inter-departmental municipal cabinets on climate change. Third, the report underscores that the best way to find local solutions is by involving the local community. For example, a participatory community-based approach was used to improve water and sanitation conditions in Quelimane, Mozambique, a city where a majority of the population lives in neighborhoods prone to flooding. Iloilo province in the Philippines launched an innovative community-based project in 2009 to address the problem of disaster risk management at the local level.Funding Climate Change – How the WBG Can AssistThese actions will require significant resources from a variety of sources, both public and private.The Bank Group has considerable experience – both in leveraging new investments in cities as well as in sharing knowledge and learning across countries and continents. Three years ago, we launched the idea of new, concessionary Climate Investment Funds to help developing countries leverage other financing to address climate change priorities. We were able to raise about $6.4 billion for the CIFs, and they have catalyzed about $50 billion in total climate finance.Our Clean Technology Fund promotes scaled-up financing for demonstration, deployment, and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings. The Fund is supporting transitions to more efficient mass transit systems in major cities around the world, including Bogota, Cairo, Mexico City, Manila, Cebu, Bangkok, Hanoi, and Ho Chi Minh City.In Bangkok and Mexico City – and in Morocco and Tunisia – the World Bank Group used these Climate Investment Funds for major energy efficiency, renewable energy, and urban transportation projects that provide services to the poor while reducing greenhouse gas emissions. We are helping finance urban mass transit in Mexico City and Cairo; and solid waste management and retrofitted buildings for energy efficiency in Bangkok. In addition to the CIFs, we are learning how best to design Public Private Partnerships that can attract private finance for cities. The Bank Group's private sector arm, the International Finance Corporation, or IFC, has been attracting private finance to cities while supporting renewable energy and other vanguard green technology. IFC has invested in more than 100 related projects, including wind power in Mexico and Azure power in New Delhi, where solar power is now being generated and added to the local grid. City-to-City emission trading and use of emission reductions offers another financing option. The World Bank is learning from Tokyo, which is rolling out a city-wide emission trading system. Our World Bank Institute has partnered with the C40 to build capacity to tap other sources of carbon finance for Dar es Salaam, Jakarta, Sao Paulo, and Quezon City. Each city is developing a Clean Development Mechanism – or CDM – pilot project. Dar es Salaam and Sao Paulo are working on waste management; Quezon City on energy efficient street lighting; and Jakarta on urban greening.. The Bank Group is supporting Amman, Jordan to pilot the newly developed city-wide approach to carbon finance. Tomorrow, we will present more examples of our practical experience.We hope our Memorandum of Understanding with the C40 will enable us to identify more opportunities for sources of concessional finance, carbon finance, innovative market and risk management instruments, and private sector investments. We have also cooperated with UNDP to develop a website on Climate Finance Options, which is now customized to provide specific information for cities.We know that cities learn best from each other. The Bank Group will seek to foster the exchange, including through the development of an Urban Risk Assessment framework and by sharing new tools.Our Urbanization Knowledge Platform is a new pilot, based on your feedback, to generate and share cutting-edge knowledge in critical areas such as urbanization, green growth, and ICT. We hope the Urbanization Knowledge Partnership will bring together cities, policymakers, researchers, and NGOs around transformative issues through knowledge exchange and peer-to-peer learning – with climate change and sustainable development as a core pillar of the partnership. The key concept is to Convene, Connect, Create, and Customize knowledge.These new platforms for information reflect a broader change in how the World Bank hopes to serve the public. Our new Open Data, Open Information, Open Solutions initiative opens to the world, free of charge, over 7,000 data sets, some dating back decades.With the guidance of the C40, we can better tailor your access to our experience and the knowledge gained by other cities around the globe.ConclusionThe threat of climate change has produced its own technical language. But behind all the jargon – what does climate change really mean?It can mean cities seizing the opportunity to become leaders in achieving a low carbon future. It can mean creativity and innovation to seek new ways to harness the power of markets.It can mean reaching out to others and forming partnerships, to share experiences, learn from others, and push out the frontiers of our knowledge.For centuries, cities have been the birthplace of some of mankind's greatest ideas. It is no stretch of the imagination to believe that cities will take the lead in overcoming climate change.So I want to thank all of you again for your leadership and your commitment. The World Bank Group will be a strong partner as we go forward together.Thank you. Show Less -
The End of the Third World?
Modernizing Multilateralism for a Multipolar WorldRobert B. Zoellick PresidentThe World Bank Group Woodrow Wilson Center for International Scholars April 14, 2010 Introduction: ... Show More + The End of the Third World? For decades, students of security and international politics have debated the emergence of a multipolar system. It's time we recognize the new economic parallel. If 1989 saw the end of the "Second World" with Communism's demise, then 2009 saw the end of what was known as the "Third World": We are now in a new, fast-evolving multipolar world economy – in which some developing countries are emerging as economic powers; others are moving towards becoming additional poles of growth; and some are struggling to attain their potential within this new system – where North and South, East and West, are now points on a compass, not economic destinies. Poverty remains and must be addressed. Failed states remain and must be addressed. Global challenges are intensifying and must be addressed. But the manner in which we must address these issues is shifting. The outdated categorizations of First and Third Worlds, donor and supplicant, leader and led, no longer fit. The implications are profound: For multilateralism, for global cooperative action, for power relationships, for development, and for international institutions. Multilateralism Matters The global economic crisis has shown that multilateralism matters. Staring into the abyss, countries pulled together to save the global economy. The modern G-20 was borne out of crisis. It showed its potential by quickly acting to shore up confidence. The question now is whether this was an aberration, a blip? Will historians look back on 2009 and see it as a singular case of international cooperation or the start of something new? Some now view Woodrow Wilson's attemptto create a new international system after World War One as an opportunity lost that left the world adrift amidst dangers. Will this be a similar moment? The danger now is that as the fear of the crisis recedes, the willingness to cooperate will too. Already we feel gravitational forces pulling a world of nation-states back to the pursuit of narrower interests. This would be a mistake. Economic and political tectonic plates are shifting. We can shift with them, or we can continue to see a new world through the prism of the old. We must recognize new realities. And act on them. What is Different? New Sources of Demand What is different? The developing world was not the cause of the crisis, but it could be an important part of the solution. Our world will look very different in 10 years, with demand coming not just from the United States but from around the globe. Already we see the shifts. Asia's share of the global economy in purchasing power parity terms has risen steadily from 7 percent in 1980 to 21 percent in 2008. Asia's stock markets now account for 32 percent of global market capitalization, ahead of the United States at 30 percent and Europe at 25 percent. Last year, China overtook Germany to become the world's biggest exporter. It also overtook the United States to become the world's largest market for cars. Import numbers tell a revealing story: the developing world is becoming a driver of the global economy. Much of the recovery in world trade has been due to strong demand for imports among developing countries. Developing country imports are already 2 percent higher than their pre-crisis peak in April 2008. In contrast, the imports of high-income countries are still 19 percent below that earlier high. Even though developing world imports are about half of the imports of high-income countries, they are growing at a much faster rate. As a result, they accounted for more than half of the increase in world import demand since 2000. New Poles of Growth The world economy is rebalancing. Some of this is new. Some represents a restoration. According to Angus Maddison, Asia accounted for over half of world output for 18 of the last 20 centuries. We are witnessing a move towards multiple poles of growth as middle classes grow in developing countries, billions of people join the world economy, and new patterns of integration combine regional intensification with global openness. This change is not just about China or India. The developing world's share of global GDP in purchasing power parity terms has increased from 33.7 percent in 1980 to 43.4 percent in 2010. Developing countries are likely to show robust growth rates over the next five years and beyond. Sub-Saharan Africa could grow by an average of over 6 percent to 2015 while South Asia, where half the world's poor live, could grow by as much as 7 percent a year over the same period. Southeast Asia has become a middle income region of almost 600 million people, with growing ties to India and China, deepening ties with Japan, Korea, and Australia, and continuing links through global sourcing to North America and Europe. The Middle East region is an important source of capital for the rest of the world, and increasingly a business-service hub between Asia – East and South – and Euro-Africa. Gross official reserves of the Gulf Cooperation Council countries were over $500 billion at the end of 2008, with estimates of sovereign wealth fund assets of as much as $1 trillion. If the Maghreb can move beyond historical fault lines, it can be part of a Euro-Med integration linked to both the Mideast and Africa. In the Latin American and Caribbean region, 60 million people were lifted from poverty between 2002-2008 and a growing middle class boosted import volumes at an annual rate of 15 percent. Africa as a Potential Pole of Growth Tectonic plates could shift further. Africa missed out on the manufacturing revolution that lifted East Asia's economies out of poverty and into prosperity. But Africa no longer needs to be left behind. Today, in many African countries even small, inexpensive items, such as soap or slippers, or basic tools or consumer goods, are imported. If Africans remove the barriers to producing these goods domestically and to local entrepreneurship, while creating conditions for outside investors to shift production to Africa, then African development could begin to look very different. Unlike past failed efforts to favor import-substitution interests behind protectionism, this approach can capture benefits from regional integration within global markets. What would it take? As a first step, the 80 percent of Africans earning $2 a day or less need to earn enough income so they will be able to buy basic consumer goods. Agriculture is the main source of jobs and an early opportunity to boost productivity and income. To do so, investment is needed all across the agricultural value chain: property rights; seeds; irrigation; fertilizer; finance; basic technologies; storage and getting product to market. Since about two-thirds of African farmers are women, we need to help them get legal and property rights, and access to services. With slightly higher incomes and living standards, local manufacturers can target or customize for the local market, and eventually for export. To grow further, Africans need the things that Europe and Japan needed after World War Two: infrastructure; energy; integrated markets linked to a global economy; and the conditions for a vibrant private sector. These public goods will foster much more than local manufacturing. Today's shifts open new opportunities. As the global crisis hit, some Chinese recognized that it was time to move beyond toys and footwear; China could move up the value chain, increase wages and consumption, and expand its "harmonious society." Chinese companies, in turn, could move lower value-added manufacturing elsewhere, including to Africa, following China's resource developers and construction enterprises. Chinese companies can be encouraged to relocate manufacturing for both domestic production and export. These manufacturers bring know-how, machinery, as well as access to marketing and distribution networks. The World Bank is working with Africans and Chinese to create industrial zones. Early investors are sensing the promise in Africa and are not dissuaded by the risks – after Lehman Brothers and Greece, investors know developed markets can be risky, too. Changes in government policies can create opportunities for private sector growth, which in turn offers services to other entrepreneurs. In the ten years to 2008, the private sector has invested more than $60 billion in information and communications technology in Africa; 65 percent of Africans are now within reach of wireless voice services, and there are 400 million mobile phones in use in Africa. IFC, the World Bank Group's private sector arm, is helping catalyze this business revolution. A new IFC equity fund has attracted $800 million from sovereign wealth and pension funds to invest in companies in Africa, Latin America and the Caribbean. Economic Shifts Mean Potential Power Shifts Increased income and growth in the developing world means increasing influence. The old world of fireside chats among G-7 leaders is gone. Today's discussion requires a big table to accommodate the key participants, and developing countries must have seats at it. Last year's G-20 Summit at Pittsburgh recognized that change. But it will take more than words on paper. Woodrow Wilson's words on paper did not realize their lofty ideals. Arranging a new sharing of responsibilities among mutual stakeholders in international systems will not be easy. But happen it must. The failure of 1919 led to countries that could not cooperate in 1929 and the start of a new war in Europe in 1939. Today, we already see the strains. The Doha World Trade Organization round and the climate change talks in Copenhagen revealed how hard it will be to share mutual benefits and responsibilities between developed and developing countries. Those debates also exposed the diversity of challenges faced by different developing countries. If it is no longer possible to solve big international issues without developing and transition country involvement, it is also no longer possible to presume that their biggest members, the so-called BRICs -- Brazil, Russia, India and China -- will represent all. And this will be the case for a host of other looming challenges: water; diseases; migration; demographics; and fragile and post-conflict states. In discovering a new forum in the G-20, we must be careful not to impose a new, inflexible hierarchy on the world. Instead, the G-20 should operate as a "Steering Group" across a network of countries and international institutions. It should recognize the interconnections among issues and foster points of mutual interest. This system cannot be hierarchical, and it should not be bureaucratic. It also must prove effective by getting things done. The Danger of Geo-Politics as Usual The danger of the political gravity dragging countries back to the pursuit of narrow interests is that we address this changing world through the prism of the old G-7; developed country interests, even if well-intentioned, cannot represent the perspective of the emerging economies. We cannot afford geo-politics as usual. Nor can we retreat into an "Old Multilateralism" –a 19th Century Metternichian Congress of Vienna solution–that seeks to resist change. A "New Geopolitics of Multipolar Economy" needs to share responsibility while recognizing different perspectives and circumstances, so as to build more mutual interests. Financial Reform Take financial reform: the world has paid a big price for the breakdowns of the global financial system in lost jobs and ruined lives. Of course we need better financial regulation, with stronger capital, liquidity, and supervisory standards. A new supervisory framework should consider systemic risks, reverse regulation that reinforces the ups and downs of cycles, consolidates supervision to avoid gaps, and considers inflation in asset prices as well as in goods and services. But beware unintended consequences. We should not compound costs by encouraging financial protectionism or unfairly constraining financial services to the poor. Regulations agreed in Brussels, London, Paris or Washington might work for big banksin the developed world. But what about the smaller ones, whether in developed or developing countries? These regulations could choke off the financial sector, innovation, and risk management in developing countries. They could make it harder to invest across national borders. "Lend local" requirements could have the same effects as "buy local." "Local physical presence" requirements could thwart services just as they can choke trade. "Local liquidity" requirements could fragment global liquidity management and add huge costs without strengthening safety. Derivatives now have a bad name. This is understandable when one remembers AIG. But derivatives are used by farmers in the American Midwest to protect against volatility in grain prices. Mexico used energy options to lock in a price for the oil that pays for much of the government's budget. The World Bank pioneered currency swaps, and uses swaps to protect against foreign exchange and interest rate risk. Our loans offer hedging opportunities to protect borrowers from foreign exchange or interest rate risk and even other risks such as droughts and catastrophes. By helping to develop local currency borrowing, linked to global markets, we helped shelter developing countries from the financial tidal waves of the recent crisis. Financial innovation, when used and supervised prudently, has brought efficiency gains and protected against risk: the World Bank has pioneered livestock insurance for Mongolian herders; a Malawi weather derivative against drought; and the Caribbean catastrophe insurance pool. The latter gave Haiti an immediate $8 million in January when its earthquake struck – faster money than from any other outside source. As former President Zedillo of Mexico has cautioned, the problem for poor people is not too many markets, but too few: We need markets for microfinance or small and medium-sized enterprises, especially if run by women; markets to move, store, and sell goods; markets to save, insure, and invest. Wall Street has exposed the dangers of financial innovation, and we need to take heed and serious actions. But development has shown its benefits. A G-7 populist prism can undercut opportunities for billions. Climate Change Take climate change: The danger is that we take a rule book from developed countries to impose a one-size-fits-all model on developing countries. And they will say no. Climate change policy can be linked to development and win support from developing countries for low carbon growth – but not if it is imposed as a straitjacket. This is not about lack of commitment to a greener future. People in developing countries want a clean environment, too. Developing countries need support and finance to invest in cleaner growth paths. 1.6 billion people lack access to electricity. The challenge is to support transitions to cleaner energy without sacrificing access, productivity, and growth that can pull hundreds of millions out of poverty. Avoiding geo-politics as usual means looking at issues differently. We need to move away from the binary choice of either power or environment. We need to pursue policies that reflect the price of carbon, increase energy efficiency, develop clean energy technologies with applications in poorer countries, promote off-grid solar, innovate with geothermal, and secure win-win benefits from forest and land use policies. In the process, we can create jobs and strengthen energy security. The developed world has prospered through hydro electricity from dams. Some do not think the developing world should have the same access to the power sources used by developed economies. For them, thinking this is as easy as flicking a switch and letting the lights burn in an empty room. While we must take care of the environment, we cannot consign African children to homework by candlelight or deny African workers manufacturing jobs. The old developed country prism is the surest way to lose developing country support for global environment goals. Managing for Crisis Response Take crisis response: in a world in transition, the danger is that developed countries focus on summits for financial systems, or concentrate on the mismanagement of developed countries such as Greece. Developing countries need summits for the poor. One lesson from this crisis is that effective safety nets prevented the loss of a generation – unlike the Asian crisis in the 1990s. Hearing the developing country perspective is no longer just a matter of charity or solidarity: It is self-interest. These developing countries are now sources of growth and importers of capital goods and developed countries' services. Developing countries do not just want to discuss high debt in developed countries; they want to focus on productive investments in infrastructure and early childhood development. They want to free markets to create jobs, higher productivity, and growth. Many are exploring how to use the innovation and efficiency of private markets to help provide and maintain public sector infrastructure and services. New Role for Rising Powers But modernizing multilateralism isn't all about developed countries learning to adapt to the needs of rising powers. With power comes responsibility. Developing countries need to recognize that they are now part of the global architecture. They have an interest in healthy, dynamic, flexible international systems for finance, trade, movement of ideas and people, the environment-- and strong multilateral institutions. We need to find points of mutual advantage, making reciprocal gain possible. At the same time, we must recognize domestic political constraints and local fears. We need accords that every leader can sell at home. What Does this Changing World Mean for Development? What does this changing world mean for development? Development is no longer just North-South. It is South-South, even South-North, with lessons for all with open minds. It is conditional cash transfer programs in Mexico being studied around the world. It's Indians in Africa explaining the so-called "white revolution" – that boosted milk production. It is a new world where developing countries are not only recipients but providers of aid and expertise. Nor is it about ideological panaceas, blue-prints, or one-size-fits all. In a multipolar economy, development is about pragmatism, learning from experience, recognizing how markets and business opportunities change, sharing ideas, and connecting knowledge, just as we connect markets, across innovative networks. Nor is the future of development only about old concepts of aid: The sovereign and pension funds wanting to invest with the World Bank Group in Africa represent a new form of financial intermediation. This is not charity. This is investment looking for good returns. IFC is helping to lower information barriers and cut transaction costs. It is our aim to do nothing less than revolutionize financial flows to developing countries Modernizing Multilateral Institutions How will we manage a "new geopolitics for a multipolar economy" where all are fairly represented in Associations for the Many, not Clubs for the Few? If the tectonic plates are shifting, multilateral institutions must shift too. The crisis has shown the possibilities of international cooperation, but it has also underscored the need to modernize and strengthen multilateral institutions to reflect a different world. The new world requires identifying mutual interests, negotiating common actions, and managing differences across a much wider spectrum of countries than ever before. It requires institutions that are fast, flexible, and accountable, that can give voice to the voiceless with resources at the ready. It requires institutions that reach out to partners, with humility and respect, ready to learn from others, that can act as global connectors pioneering a new world of South-South and South-North learning and exchange. It requires institutions that can demonstrate real results and can be held accountable when they falter. The World Bank Group must reform to help play this role. And it must do so continually at an ever quicker pace. Government and public institutions tend to be slower to change than private organizations facing competition. We recognize this risk. To address it, we have launched the most comprehensive reforms in the institution's history. We are Reforming to Become More Representative and Legitimate A modernized World Bank Group must represent the international economic realities of the 21st Century, recognizing the role and responsibility of growing stakeholders, but also their diversity and special needs, and provide a larger voice for Africa. Reflecting these needs, we are urging our shareholders to keep their promise to move to 47 percent or more ownership by developing countries this month. But we are not stopping there. In a model unique among International Financial Institutions, shareholdings will be reviewed every five years to allow for changes based on the continuing economic growth and evolution of our shareholders, with the goal of achieving equity over time. For the first time, shareholdings would be based on a formula specifically developed to reflect the needs and mandates of the World Bank Group: they will not only reflect economic power but also contributions to our fund for the world's poorest countries. Senior management now includes a record number of executives from developing countries as well as women. And we need to do even more. We need to work with developing countries as clients, not as objects of development models from textbooks. We need to help them solve problems, not test theories. Yet problems need resources to fix them. We are Reforming by Adding Resources Since the full force of the crisis hit in mid-2008, the World Bank Group has committed more than $100 billion to support developing countries. This broke all historical records. And I want to especially thank the World Bank Group staff who have risen to this challenge. We got money where it is needed –fast. Even though the World Bank Group has traditionally been a lender on long-term projects, our development disbursements have exceeded the IMF's crisis payments. When the World Bank Group stepped up to confront dangers, we depended on the effective and efficient use of resources on hand. We will need more resources to support renewed growth and to make a modernized multilateralism work in this new multipolar world economy. Should the recovery falter, we would have to stand on the sidelines. The World Bank is therefore seeking its first capital increase in more than 20 years. Shareholders face a decision to strengthen the Bank Group, or allow it to wane in influence, losing an effective multilateral institution and leaving it poorly resourced to cope with whatever comes next. In addition to providing critical financial resources, we have been demonstrating just how modernized multilateralism can work. We are building cooperation among 186 countries that are our members. Over half the resources raised to strengthen our capital will come from developing countries, through price increases and greater capital investments. Agreement on this package of measures, if successful, would represent a multilateral success story that contrasts with recent stumbles in climate change and trade. We are Reforming to Become More Effective, Innovative, and Accountable Representation and resources alone are not enough. We must also be more effective, responsive, innovative, flexible, and accountable. We are reforming to sharpen our strategic focus where we can add most value -- focusing on the poor and vulnerable, especially in Sub-Saharan Africa; on creating opportunities for growth; on promoting global collective action – such as in climate change, agriculture, water and health; strengthening governance; and preparing for crises. We are reforming to modernize our products and services, fostering opportunities for innovation, and considering a new decentralization model that will enable us to applycutting-edge skills closer to clients, while gathering, customizing and sharing knowledge and experience globally. We need global reach, but also local touch. We are reforming to focus on results, strengthening our governance and anti-corruption efforts, including strong prevention, and leading other international institutions in becoming more transparent and accountable. We have a New Access to Information policy, based on the Indian and U.S. freedom of information laws, which will be the first – but we hope not last – of its kind among international institutions. We are launching a new open access policy for World Bank data. Just last week, we concluded an agreement with other multilateral development banks on the cross-debarment of corrupt individuals and companies. And we are launching a corporate scorecard so we can be held more accountable. We know we make mistakes; if overcoming poverty were easy, it would have been eliminated long ago. By opening the shades for others to see what we are doing, how we are doing it, and with what results, we will catch errors more quickly and improve faster. Taken together, these reforms are transformational. This will no longer be your grandparents' World Bank. It won't even be your parents'. Conclusion Reform cannot be a one-time effort. It must be a constant --adaptation and re-adaptation, with continuous feedback loops to meet changing realities. We cannot predict the future with assurance. But we can anticipate directions –and one is that the age of a multipolar global economy is coming into view. This is no aberration, no blip. We still live in a world of nation-states. But there are now more states wielding influence on our common destiny. They are both developed and developing, spanning all regions of the globe. This can be all to the good. But the contours of this new multipolar economy are still forming. It needs to be shaped. The modern multilateral system needs to fit these changes. Modern multilateralism must be practical. It must recognize that most governmental authority still resides with nation-states. But many decisions and sources of influence flow around, through, and beyond governments. Modern multilateralism must bring in new players, build cooperation among actors old and new, and harness global and regional institutions to help address threats and seize opportunities that surpass the capacities of individual states. Modern multilateralism will not be a constricted club with more left outside the room than seated within. It will look more like the global sprawl of the Internet, interconnecting more and more countries, companies, individuals, and NGOs through a flexible network. Legitimate and effective multilateral institutions, backed by resources and capable of delivering results, can form an interconnecting tissue, reaching across the skeletal architecture of this dynamic, multipolar system. Woodrow Wilson wished for a League of Nations. We need a League of Networks. It is time we put old concepts of First and Third Worlds, leader and led, donor and supplicant, behind us. We must support the rise of multiple poles of growth that can benefit all. Show Less -
Statement of Robert B. Zoellick World Bank Group (WBG) President
ROSEAU, Dominica, March 11, 2010 - Today I had the opportunity to meet with the heads of government of CARICOM countries.As the world looks to 2010 for the grip of the global economic crisis to lessen... Show More + and recovery to take firmer hold, it is important to realize that there are still dangers to economic growth.CARICOM has been vulnerable to the global crisis. Small island states also face unique challenges, in terms of economic growth, trade, climate change, water and natural disasters. The WBG is committed to partnering with CARICOM to help countries build sustainable and inclusive growth.At today's meeting we discussed a number of the key issues facing the region: the impact of the economic crisis, climate change, debt, and financial jurisdiction issues. I very much appreciated our useful discussions and the practical problem solving approach of CARICOM leaders. I learned important insights from the leaders' exchange.We also had the opportunity to discuss the tragic earthquake in Haiti and the way forward. I met with President Rene Preval in Washington on Tuesday to discuss how the WBG can best support Haiti in the coming months. The World Bank has provided an additional $100 million in grants in response to the earthquake, while our private sector arm, the IFC has also made an additional $35 million investment to help boost jobs. The WBG also joined other donors in 2009 granting Haiti $1.2 billion in debt relief through the Heavily Indebted Poor Countries initiative and the Multilateral Debt Relief Initiative.In our exchange today on debt, we explored ways in which the World Bank can work to help countries identify options and customize a framework for debt sustainability and economic growth.CARICOM is particularly active on climate change, and the world is increasingly recognizing the needs of the small island states. The World Bank can help CARICOM with increasing its resilience to climate change, innovative financing, and low carbon growth strategies that include a focus on reducing the cost—and increasing the efficiency-- of energy in the region.The Bank's private sector arm, the International Finance Corporation, is exploring opportunities to support renewable options, such as geothermal, hydro, wind and solar, along with an energy efficiency program.With regards to financial jurisdictions, we addressed the range of issues the region faces in complying with international standards under the OECD and G-20. The WBG will continue to support countries with advice and assistance to put the necessary legal frameworks and treaties in place. While it is in the region's interest to complete these steps as quickly as possible, we recognize their special circumstances and are pleased to work with countries as needed on the implementation path.Finally, I would like to thank our host Prime Minister Roosevelt Skerritt and the people of Dominica for their gracious hospitality and Edwin W. Carrington, Secretary General, CARICOM, and extend my best wishes for success for the remainder of the meetings. Show Less -