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Doing business 2011 in Juba : comparing business regulation in Juba and 183 economies
Doing Business in Juba 2011 is part of the International Finance Corporation (IFC) Sudan Investment Climate Program. The program aims to reduce administrative and r... Show More + egulatory barriers to business, attract new investments in sectors such as agribusiness and hydro power, provide small and medium enterprises with management training, and develop access to credit and leasing. Doing Business in Juba 2011 functions as a kind of cholesterol test for the regulatory environment for domestic businesses. A cholesterol test does not tell us everything about the state of our health. But it does measure something important for our health. And it puts us on watch to change behaviors in ways that will improve not only our cholesterol rating but also our overall health. Doing Business uses a simple averaging approach for weighting sub-indicators and calculating rankings. Other approaches were explored, including using principal components and unobserved components. The principal components and unobserved components approaches turn out to yield results nearly identical to those of simple averaging. The tests show that each set of indicators provide sufficiently broad coverage across topics. Therefore, the simple averaging approach is used. Show Less -
New Multi-Million Dollar Fund For Developing Country Carbon Trading Initiatives
Cancun, Mexico, December 8, 2010 - Developing countries wanting to use market instruments to scale up their mitigation efforts will soon have access to financial and technical support arising from a n... Show More + ew global partnership launched today. World Bank Group President Robert B. Zoellick announced the establishment of the Partnership for Market Readiness at an event on the sidelines of the UN Framework Convention on Climate Change conference in Cancun. The Partnership received pledges of more than $20 million by Australia (A$10m), the European Commission (€5m) and the United States ($5m) in Cancun today, which builds on an early pledge of $5 million from Norway. In addition, Germany, Japan and the UK announced their intention to support the initiative financially. The Partnership is aiming for a total capitalization of $100 million. It is expected to become operational in early 2011 and will support a range of carbon market readiness initiatives ranging from technical to policy to institutional interventions. "This new Partnership – which brings together developed and developing nations – will help countries get ready to put in place domestic trading schemes and other market-based instruments to meet national mitigation objectives," Zoellick said. "The fact that developing countries are looking for market-readiness support is testament to the drive for climate action at the national level – these countries are not waiting, they're getting on with it as part of their development goals." A number of countries, such as China, Chile, Indonesia, and Mexico are exploring the use of carbon market instruments and emissions trading mechanisms as a way of encouraging investment in alternatives to carbon-emitting technologies. They are looking to build on lessons from the 10 years of experience of the Clean Development Mechanism under the Kyoto Protocol, and adapt them to their local contexts. For example, Chile's government is exploring the establishment of a domestic emissions trading scheme; India, similarly, is putting in place a trading scheme for renewable energy and energy efficiency certificates. Furthermore, China is joining the Partnership. "China has launched low carbon economy pilots in five cities and eight provinces. China intends to explore feasibility of domestic emissions trading schemes to achieve mitigation," said Mr. Xie, Vice Chair of the National Development and Reform Commission. "The Partnership for Market Readiness will provide timely support for the initiative." In announcing Australia's A$10m contribution, Minister for Climate Change and Energy Efficiency, Greg Combet, said "a broad and well-functioning carbon market will help countries reduce carbon pollution in the fairest, most efficient and cost effective way. Australia looks forward to working with other partners in building capacity to establish and expand carbon markets."Zoellick was joined at the launch event by Raineri Bernain, Chilean Minister of Energy who presented his country's national emissions trading initiative. Other participants included ministers and senior representatives from the European Commission, Australia, China, Colombia, Germany, Indonesia, Japan, Mexico, Norway, South Africa, Spain, Sweden, the UK and the US. Show Less -
United States Senator Patrick Leahy Remarks at the World Bank International Corruption Hunters Alliance
It is an honor to be with you. Bob Zoellick is an old friend, and as he mentioned, I chair the Judiciary Committee as well as the Appropriations subcommittee that provides the United States' annual co... Show More + ntribution to this institution. What he didn't say is that having Bob as President of the World Bank gives me and others in Congress a great deal of confidence. I have supported the World Bank's mission throughout the 36 years I have been a United States Senator. There have been times when I disagreed with some of the Bank's decisions, or felt its policies fell short. But I have always worked to try to obtain the funds to fulfill the United States commitment to this institution, because it can play such a unique and important role in setting the example for how we collectively confront new global development challenges. One of the issues which I believe governments – including the United States – and the international financial institutions, as well as the United Nations, were too slow to grasp is the corrosive effects of corruption on development – whether economic and social development and the reduction of poverty, or the development of democratic institutions. But in the past few years, public corruption has become a key concern of donor and developing countries alike, and I applaud the World Bank – and this Alliance – for confronting this difficult but critically important issue. It is an endemic problem that touches every country in the world, which we must face head on, together. Today we face an unprecedented, global economic crisis that has exposed serious weaknesses in the world's leading economies and devastated the struggling economies of many developing countries. As we seek to strengthen our economies and to help the poorest countries, widespread, systemic corruption is among the biggest obstacles. As each of you knows, public corruption is a blight wherever it occurs. It chips away at the trust that citizens have in public institutions, it undermines democracy and the rule of law, and it deters individuals from engaging in civic life and companies from doing business. As a former prosecutor, I saw the effects first hand. Prosecuting corrupt public officials and police officers was one of my highest priorities, because of the intolerable message that would be sent if it were ignored. But these effects are felt particularly deeply in developing countries. There, the result can be civil unrest, even the overthrow of democratically elected governments that have lost the public's respect and support, making effective international aid difficult if not impossible, and discouraging badly needed foreign investment. Building the capacity to address corruption worldwide is both a daunting challenge and an absolute imperative, and we must be united and unequivocal in our response. For influential countries like the United States, that means first and foremost leading by example, which we have not always done in recent years. We have seen the stain of corruption at all levels of our government and across both political parties, including the impeachment of judges and convictions of members of Congress and state and local officials. (In fact, in les than an hour the Senate begins impeachments proceedings on a Federal judge.) This misconduct, and the abuse of public funds, has at times shaken the confidence Americans have in their government. The United States has taken some key steps to shore up its ability to fight corruption at home, which can help serve as a model for other countries. In 2007, Congress passed important ethics and lobbying reforms, tightening restrictions on those who hold public office and those who seek to influence public officials on behalf of private companies. Last year, President Obama instituted similar controls to prevent conflicts of interest and restrict the influence of lobbyists at the White House. We have also seen several successful, high-level prosecutions of senior government officials for serious corruption offenses. Effectively rooting out public corruption requires giving investigators and prosecutors the tools and resources they need. There are many laws on the books for prosecuting public corruption in the United States, and the FBI and Department of Justice have stepped up their efforts in recent years. But gaps remain, and I and others have been working to try to fill them. I have twice introduced and worked to pass legislation called the "Public Corruption Prosecution Improvements Act", which would strengthen key aspects of federal criminal law and enhance the capacity of investigators and prosecutors to attack public corruption nation-wide. The bill would provide an additional $100 million to support these efforts, because resources were shifted away from fraud and corruption enforcement to counter-terrorism after the September 11th attacks. The bill would also extend the statute of limitations for the most serious public corruption offenses, and increase sentences for some key offenses. It would preclude public officials from receiving anything of value because of their official position, other than what is explicitly permitted. This would help prevent corruption and the appearance of corruption, which can be just as insidious. The Judiciary Committee has twice reported this bill, and I will keep pushing to get it passed. The United States unfortunately took a step backward this year in its efforts to fight fraud and corruption. Earlier this year, the Supreme Court sided with a former executive from Enron, the energy-trading corporation that collapsed with devastating impact on the economy a few years ago. The Court severely narrowed a law that plays an important role in combating public corruption, corporate fraud, and self-dealing. I have been working to close this gap, and I introduced legislation last month that would restore the government's ability to prosecute key categories of corruption cases. Even with these gaps, anti-corruption laws and their enforcement in the United States remain strong. Recent prosecutions of high level officials, while regrettable, are also in some ways a sign that the system is working. But we must strive to make our corruption laws as comprehensive as possible and ensure that they are enforced. Similarly, those of us who hold public office must meet the highest ethical and legal standards every day. I have also worked to strengthen our anti-fraud laws and to make sure that we fight fraud aggressively, including working to detect and deter fraud related to government spending. The brazen theft of public funds by private contractors in Iraq and the fraud in our health care system are but two examples. Congress last year passed the "Fraud Enforcement and Recovery Act," a bill I introduced which was the most significant anti-fraud legislation passed in more than a decade. We also included key anti-fraud provisions in the health care reform and financial regulatory reform bills that passed into law this year. As governments engage in stimulus spending, provide increased international aid, and step in to preserve struggling financial institutions, protecting these public investments from fraud will be more and more important. Leading by example and cracking down on corruption and fraud at home is essential, but it is not the full extent of our obligation. It is vital that American companies not participate in corruption abroad. I have been a supporter since it passed in 1977 of the "Foreign Corrupt Practices Act", which makes it a crime for American individuals and businesses, and those with close ties to the United States, to engage in bribery abroad. This law is critical to the integrity of international business and development. Individuals involved in bribery schemes must face jail time for their offenses. Similarly, corporations must face criminal penalties, or a culture of corruption will persist, perpetuating violations over time, as we have seen in many countries. For a time, the "Foreign Corrupt Practices Act" made a strong statement but was of limited use. The United States stood virtually alone, as few other countries similarly punished their companies for engaging in bribery overseas, and many international corporations ignored the problem. In part for that reason, the law was not used as often as it could have been. All of that has begun to change. The United States is cracking down aggressively on violations of the "Foreign Corrupt Practices Act". In the past two years, the Justice Department charged more than 50 individuals and collected nearly $2 billion in criminal fines in cases related to this law. Other leading economic powers have begun enacting and enforcing similar laws, and international businesses have begun to change their ways. As more countries crack down when their companies engage in corrupt practices abroad, we may start to finally change the culture in countries that have tolerated corruption. When clean government becomes a necessity for international investment, those countries desperately seeking business investment will begin to prioritize curtailing corruption. We must also work to help countries strengthen the institutions of democracy, particularly independent judiciaries, and to learn how to stop corruption. Supporting those efforts has become a key priority of the World Bank, as it has for the United States. Several years ago I wrote a law which has the unambiguous title "Anti-Kleptocracy". It prohibits the issuance of visas for admission to the United States of officials of foreign governments and their immediate family members who have been involved in corruption related to the extraction of natural resources. There is no shortage of countries whose children are hungry and dying of curable diseases, while corrupt public officials siphon off the profits from oil, gas, timber and mining, drive expensive cars and own extravagant homes in Malibu or the French Riviera. These officials treat their country's natural resources as their own bank account. We have also seen how corrupt officials in such countries have successfully intimidated and manipulated judges, prosecutors, the police and the military, to arrest and silence whistleblowers and political opponents and remain in power indefinitely. No democracy, I believe, can survive or thrive without a justice system that the public has confidence in. Yet reforming corrupt justice systems and strengthening the rule of law, when the officials in power are determined to preserve the status quo, is exceedingly difficult. We in Congress are trying to prevent our foreign aid from falling into the wrong hands, or from being misused to prop up corrupt governments. I am encouraged that we are finally enacting laws that require the public disclosure of payments by American companies involved in extractive industries overseas, and of the revenues of foreign governments that receive United States aid. The people of those countries can finally begin to hold their governments accountable for the misuse of public funds. But it is not easy, and we are not always successful. One need only look at Afghanistan today, where corruption is rampant, there are frequent reports of pilfering of international aid by public officials and their friends and families, and where the United States has compelling national security interests. We saw unprecedented abuses in Iraq, where corrupt American contractors, the absence of a functioning justice system, and Iraqi officials who had nothing to lose, created a culture of corruption on a massive scale. I sponsored two pieces of legislation – the "War Profiteering Prevention Act," which would make intentional over-billing under war contracts a federal crime and strengthen contracting fraud statutes, and the "Wartime Enforcement of Fraud Act", which was passed a couple of years ago. These measures seek to bring greater accountability to contractors working overseas and to give the government new, more potent tools to prosecute fraud and abuse by private companies filling government contracts during war time. I for one do not view protecting national security, fighting terrorism, and combating corruption as competing interests. I see them as complementary. We should have learned by now that we do no service to ourselves, and neither to the people of other countries, if we turn a blind eye to public corruption. If we tolerate this type of abuse—we fail our own citizens;we fail the people of the countries we want to help;we undermine the rule of law domestically and internationally;we sully the reputation of the United States; andwe damage our long term national interests.The same can be said for every country represented here today. I hope that all of us can commit to work to clean our own houses, so we can be examples to the rest of the world. I hope we can commit to work together on corruption enforcement, and to continue to use this Alliance to share information and best practices, because international cooperation can be absolutely essential to successful investigations and prosecutions. I hope we can further commit to do all we can to ensure that our governments, businesses, and citizens do not engage in corrupt practices abroad. Only if we unite in our commitment to shunning, and punishing, corruption at the highest levels, will we create real incentives for other countries to change cultures where corruption flourishes. I applaud the World Bank for turning its attention and its influence to addressing this problem. I applaud all of you for joining this effort. I cannot think of a more timely and important issue. By working together we can make real progress toward fairness, economic prosperity, and global justice. Show Less -
New Study Reviews the World Bank Group's Response to The Global Financial Crisis
Washington D.C., November 18, 2010. Today the Independent Evaluation Group (IEG) released "The World Bank Group's Response to the Global Economic Crisis"—an appraisal of the significan... Show More + t role the World Bank Group (WBG) has played in addressing the global economic downturn. IEG's evaluation shows that the organization has sought to achieve three objectives: support the most vulnerable, maintain long-term infrastructure investment, and sustain the potential for private sector-led growth. In doing so, the WBG committed $128.7 billion and disbursed a record $80.6 billion during fiscal years 2009 and 2010—more than any other international financial institution (IFI).Vinod Thomas, Director-General, Evaluation, noted: "The World Bank Group's response has fitted the nature of the crisis -- which called for a fiscal expansion to compensate for sharply declining trade and private capital flows. The financing from the WBG and other IFIs has helped in the worldwide effort to avert what might have been a harsher global downturn. The ensuing challenges are with emerging fiscal imbalances, higher debt levels and financial sector vulnerabilities—and with ensuring that the increase in spending produces sustainable results."This IEG study is a real- time assessment of ongoing activities. As such, it evaluates the immediate results and serves as an input to the WBG's continuing efforts to address the effects of the crisis. The evaluation of the development impact of WBG's response will be taken up at a later stage. There have been notable variations in the nature of the response across the WBG entities. Substantially increased lending by the International Bank for Reconstruction and Development (IBRD) was accompanied by moderately higher financing through the International Development Association (IDA). The volume of new operations of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the private sector arms of the Group, followed the business cycle and focused on a set of targeted interventions. These included IFC's efforts in trade finance, especially in low-income countries and the introduction of a set of innovative initiatives. MIGA guarantees supported European banks' cross-border investments in Eastern Europe and the Former Soviet Union. The World Bank (consisting of IBRD and IDA), while responding to the crisis with some delay, has demonstrated preparedness based on its knowledge of poverty impacts, long-term dialogue with country authorities, and ability to expand lending—aspects that need continued and careful attention. Areas that need strengthening include the ability to act quickly in the event of such crises and preparedness to carry out financial sector interventions. IFC's crisis initiatives responded creatively to capital constraints and had a positive effect especially in low- income countries; yet implementation challenges were underestimated and the Corporation gave priority to protecting its portfolio. MIGA played a supportive, crisis response role with existing clients in Eastern Europe, but there was not a significant uptake elsewhere. Going forward, greater synergies must be realized across the WBG. For the World Bank, this review underscores the value of maintaining an active policy dialogue with countries, emphasizing further its analytical and knowledge work, and having greater versatility in its use of financial instruments for crisis responses. For IFC, there is the need to secure financial headroom and look beyond portfolio protection, with a focus on development effectiveness. Lessons for MIGA concern greater product flexibility and enhanced business development.Increased poverty resulting from the financial crisis will be a major challenge in the foreseeable future. The World Bank estimates that the crisis left an estimated 50 million more people in extreme poverty (below the $1.25 a day poverty line) in 2009, and some 64 million more will fall into that category by the end of 2010. Even with rapid economic recovery, some 71 million people will remain in extreme poverty by 2020 who would have escaped it had the crisis not occurred, coupled with unemployment rates that remain high in several countries.Even in a financial crisis, the WBG needs to support the crucial requisites for long-term results — fiscal and debt sustainability, structural reforms, environmental and social sustainability, and actions to reduce risks related to climate change. Finally, improved coordination among WBG institutions and other development partners during response initiatives will continue to be of paramount importance. ABOUT IEG:The Independent Evaluation Group reports directly to the World Bank Group Boards of Executive Directors. The results of its evaluative findings are discussed by the Boards and its studies are carried out independent of the Management. Show Less -
World Bank Group President, Robert B. Zoellick Addresses the Annual Meetings Plenary Session
CHAIRMAN: Thank you, Mr. Strauss-Kahn. I now call on the President of the World Bank Group, Mr. Zoellick, to address the Governors. Mr. Zoellick? MR. ZOELLICK: I'd like to welcome all o... Show More + f you to our Annual Meetings and to thank our Chair, thank my friend and colleague Dominique Strauss-Kahn for very close cooperation over the course of the past year, and I would like to thank all of you for joining us this morning. In the spirit of the governance changes that we have been making, and especially with the important steps that you took at our Spring Meetings for the World Bank, Dominique and I thought that it would be useful to try to streamline these meetings, so I very much appreciate your support as we seek to do so. And in the same spirit, I thought it might be useful for me to open with more of a corporate-style report. So, after describing the context as we see it and reporting on results and reforms, I'll close by trying to identify some of the challenges ahead and some questions, and I hope these can guide our discussions over the course of the next two days. So, to start, the good news is that global growth has returned but not strong enough to cut into unemployment in many countries. Now, as the next slide shows very importantly, output has not recovered to pre-crisis levels in high-income countries and particularly in the developing area of Europe and Central Asia. If you look at that top orange line, that is China, and you can see that it has continued quite strong. The dark line below it is the general group of developing countries that have returned back to the starting point, but you can also see that high-income countries in Europe and Central Asia are still behind the recovery process. The next chart shows that the good news is that foreign direct investment and bonds in emerging markets have rebounded, but bank lending remains weak, and that is particularly hard on low-income countries and those that rely most on bank lending, such as small companies. Also, take a look at that orange line. That measures capital flows as a percentage of GDP versus the bars, which show the absolute amounts. And what that underscores is that the 2005-2007 period is unlikely to be our reference point for the future. This wasn't the "old normal"; instead, it was the abnormal. Now, you can see on the next map that we are moving into an era of multiple poles of growth. The darker the color, the red, that shows the growth using a five-year average. This is important because the emerging markets are helping global demand. So the message is that the developing world is part of the solution both today and for the future. The next slide underscores this point, and that is that developing countries are increasingly the engine of global growth. You see the bars on the left side; that shows contributions to GDP growth between 2000 and 2010, so over the course of the decade. And you can see that developing countries are now about half the source of global growth. On the right, you see the role of developing countries contributing over half of the recovery to global imports--this is imports, not all trade; if we use trade numbers, it would actually be higher because of the export statistics, but if you added services as opposed to merchandise imports, it would be a little bit lower. Now, of course, these are aggregate numbers, so the next map shows you what happens when we move beyond the general, and that is countries continue to face serious uncertainty about volatility and disasters. The basic blue and red and orange relate to mortality risk, so you can see the legend at the bottom left. But then, if we add various stresses, you can see the effect of hunger on countries with purple; crop declines with green; water stress with blue; demographic challenges with burgundy; and then the coastal effect through red lines; and then, on top of that, you see the recent history of conflict. So these are the risk points that we have to manage around the general aggregates. The next chart also shows what has happened with food prices, and you see they have stayed relatively high for some crops--the top line there is rice--but importantly, we also seem to be facing added volatility. And for the poorest, the food bill is the biggest share of family consumption, so for many poor families, there is no cushion if the price rises. This adds to vulnerability and risk, and I think it is a topic we'll need to return to. So, in sum, we have a recovery, as Dominique stressed, but it is a fragile one, and unlike in the past, developing countries are part of the solution, but there are vulnerabilities--short-, medium-, and long-term. The poorest, as always, are most at risk. And as he emphasized in his close, there is a greater need for economic cooperation including a role for the multilateral institutions such as the IMF, the World Bank, and WTO. Let me turn next to the World Bank Group's response. This chart shows the World Bank Group's record commitments and disbursements. Now, if you look at the bar chart on the left, the very biggest shows our combined commitments for IBRD, IDA for the poorest, IFC, and MIGA since the full force of the crisis in mid-2008. And in fact, it shows 137.4--we are already up to 140. The key bar I want to show or emphasize there is the blue one. That is IBRD lending. Because our IDA increases, as all of you know, have been limited by the three-year envelope of IDA15, IFC faced a capital constraint, so the good news is we had the capital to boost the IBRD lending, but this is why the decision you made in the spring on capital is absolutely critical if we are to continue to play that role. The chart on the right is also very striking, because this shows disbursements. We have had, as the Chair mentioned, $88 billion of disbursements. That is more than any other, including--and this is an unusual circumstance--the IMF, which is normally the quick funder. What this shows are some of the benefits of the new lending tools that we have been able to develop because normally, the Bank, as you know, is a long-term lender, it is an investment lender--but we are getting the money out, which is important, but also, this will pose operational challenges for us as an institution. We have sought to have a fast response, a flexible response and client focus. In the area of rapidity, as many of you know, we created an IDA Fast-Track system to move through our processes and, with the help of our Board, to move this through quickly. It has benefited some 50 countries. We have had a pilot Crisis Response Window for faster action. We have had a Global Food Crisis Response Window. IFC, ably led by Lars Thunell, has done a fantastic job of generating an extra $6 billion for crisis facilities focusing on trade liquidity, microfinance, infrastructure, bank capital, renewable energy, and a number of the countries in this room helped contribute to these, for which we are most appreciative. MIGA, which has been very ably led by Izumi Kobayashi, is now seeking if we have some changes to have greater flexibilities, improve effectiveness, and make MIGA a stronger tool in our portfolio. But just as important as money, we are trying to share know-how and spread innovation. The first is an example of a conditional cash transfer system. As many of you probably know, what these are about is they combine payments to the very poor in a community with a condition, such as health care checkups, sending children to school. Mexico was the innovator in this. Brazil had a wonderful program. We have now been able to spread it to some 36 countries. In the area of social safety nets, learning the lessons from the nineties crisis, we have been able to support some 60 countries in this crisis with about $6 billion of support. Infrastructure is particularly important, and some lessons we learned from China's experience in the nineties, which is that strong investments in infrastructure in a crisis can create jobs today, productivity tomorrow. We are doing a lot of experimentation, and I have discussed with some of the Ministers in the room about public-private partnerships, and I think there are some lessons here for developed countries as well. Public finance, procurement, transparency and accountability--I just want to underscore this, because what has struck me--this is not something we are trying to push on clients. This is something where we get more and more requests from developing countries because they want to make sure the money is well-spent, they want value for money. In many cases, we are working with state or provincial governments to try to improve revenue management and better results. And then, disaster risk management--as that map emphasized, countries can do a good job, but all of a sudden, they can have tremendous setbacks from disaster risks. We have done some 20 Needs Assessments after natural disasters since 2008. As many of you know, we are working hard on one with the Asian Development Bank now for Pakistan. But we also need to add new tools to manage these, in a sense, forms of risk insurance policies. Now let me just touch on some of the global priorities that fit within this. Agriculture and food security has been a key area for ramping up. We hope to do about $6 to $8 billion a year over coming years. This is combined with the crisis facilities I have mentioned. IFC has put a very strong initiative about the value chain, everything from property rights to seeds to fertilizers to irrigation. Too often, about 50 percent of the product is lost on the way to market. We have also had a very important overhaul of the Consultative Group on International Agricultural Research, which is the foundation of this work. In climate change, we now work in some 133 countries. We have the $6.4 billion investment in these Climate Investment Funds that have leveraged investments in 44 countries. I particularly want to draw this to your attention because they are a relatively recent innovation, and the real power is we have been able to leverage that some $6 billion almost ten-to-one. We are drawing, actually, about $50 to $60 million for Climate Investment through these funds, 30 percent from the private sector. What you see at the bottom are some of the building blocks for the future. I just read a report this morning about some of the challenges going into the Cancun Meeting. We believe that there is strong possible progress that can be made in any event in some of the areas that you see listed below there—in REDD, in forestation; technology; soil carbon; the Fast Start finance--and these are some of the items we will be discussing with some of you over the course of the next couple days. We are also, as the next chart shows, keeping strong attention to governance and anti-corruption. We completed over 300 individual cases last year. We moved them through more quickly. We have a record number of sanctions. We are also, importantly, focusing on the preventive side, some of the initiatives to deal with stolen assets, which my colleague Ngozi Okonjo-Iweala helped to initiate. We are doing not just sanctions but referrals for prosecutions, and now we have a cross-debarment system with our partners at the regional development banks--so if you steal from one of us, you are shut out from all of us. We are going to have a meeting in December to try to build an Anti-Corruption Network, which is critically important because this is a cross-border issue. Gender is an increasing heart of our work; we want to mainstream it. It will be the topic of our World Development Report in 2012. It will be a key theme for IDA16. We just had a wonderful event in the past couple days with something called the Adolescent Girls Initiative, which has begun with eight fragile countries and is something that will be important to scale up. Fragile states, the challenge of the so-called "bottom billion"--we found that important use of multi-donor trust funds is a way to try to collect support in a way that doesn't overwhelm the government. We have done this in Aceh, Afghanistan, Haiti, South Sudan. This will also be a theme for IDA16 and the topic of our very next World Development Report. I want to do a quick follow-up on reforms. We agreed in the spring to increase voting power for developing and transition countries. So IBRD is now up to 47.2 percent. That is up 4.6 percentage points. And I want to thank all of you. I know this is a difficult issue. I know it is now being discussed in the context of the IMF. No one will ever be totally happy, but it is important to keep the momentum moving forward on this. We have a new chair for Sub-Saharan Africa that will be in effect on November 1. I was able to meet our new Executive Director, who comes from South Africa, just in the course of this week. And we are emphasizing increasing diversity in the Management team. For the first time in the history of the World Bank, all three of our Managing Directors and our Chief Economist are some leaders in finance and development from the developing world. Over half of the officers that I have been able to appoint are women, and we have to continue to press this throughout the organization. You also agreed on a very important financial package for capital in the spring, and as I have emphasized, this is really critical for our IBRD lending. On the right, I just want to touch on the components in the form of a report. For the general and selective capital increases, we have had enough of you vote to approve this by number of countries. In terms of shares, we are at about 54 percent; we need to hit 75 percent by the spring. We have, as you requested and directed, reformed the loan maturity terms and we, as you know, focused on this issue of making sure we could tap all the existing paid-in capital done in national currency. We have $600 million done, we have informal agreement on $600 million more, and we have progress on another $450 million. And we are doing all of this in a flat budget framework even though we have been tripling our IBRD business, and for this, I want to have a special thank you for our staff, because people really are working overtime to meet the challenges of the crisis while keeping budget discipline. And I think this is something fundamental for this. I know all of you are facing tight budgets, and we will do so, too. We have interconnected these reforms in a way that will improve the results focus. I won't get into the weeds on this, but on the left, you can see that we are trying to modernize our client services. This is not only finance, but knowledge. We are trying to enhance the service delivery; this focuses on adjustments in the matrix process. We are trying to use decentralization while keeping a strong central core. And all of this has to be supported by enabling systems in terms of information technology, human resources, and the budget side. While we are expanding this, we have to pay close attention to maintaining our standards and achieving results, and the heart of that is stressing transparency and accountability, and that is why we are developing a Corporate Scorecard to measure and monitor this. The next chart shows something you will be hearing a lot more about, which is that we have launched what I think may be one of our most exciting initiatives about Open Data, Open Knowledge, Open Solutions. We will be showing some examples of this at the Development Committee tomorrow, but in brief, we have now released 4,000 development indicators, totally accessible, and all for free. A number of these are data that goes back decades, country by country; it is a tremendous treasure trove. To give better access, we are coming up with new software tools, so we can allow anybody to be able to do their own poverty calculations or use simulation models to come up with their own approach. We have added an Open Forum to be able to connect people through the internet to the discussions we are having here. We have launched what will be very intriguing to see the results--an Apps for Development competition. So we have asked people to compete, to use our data sources, trying to see how we can better come up with ideas to achieve the Millennium Development Goals. We have launched a very interesting Mapping for Results process--this will also be something that we'll try to show some greater detail at the Development Committee--and I think this has fantastic potential for showing people the work the Bank does and engaging them in practical terms. All this, as the Chair mentioned, has been combined with a new Access to Information Policy. We based it on some of the work that has been done by a developing country, India, and a developed country, the United States. Because we are multilateral, we have an Independent Panel that will review what are - in a sense -freedom of information requests. And this is the very first multilateral institution to do so, but I hope not the last. Now, looking ahead, IDA, our fund for the poorest--this helped 79 of the poorest countries, about half in Sub-Saharan Africa, and it is absolutely fundamental for the Millennium Development Goals. Many of the donors are under funding pressure, many of them have focused on bilateral programs, but IDA is truly unique because it allows ownership by developing countries which we have all learned is key for success; it allows clients to decide in an interactive process with us and also other donors; it assists with the coordination--when you have 30, 40, 50 donors, it is so difficult to do. This is often the cornerstone funding--and critically, it cuts across sectors. When I was at the UN MDG meeting, I couldn't help feeling that, yes, there is good work in education, good work in health, good work in water, good work in child and maternal mortality--but people don't fit in boxes and categories. They cut across those. So, if you are trying to deal with an intervention, you have to see how to work across the sectors. And this connects with the Bank staff, because to make this work, we work with countries to build their capacity and link them to some of the knowledge and learning points that I referenced earlier. And IDA works. We have had 27 countries that have graduated; many are now new donors in the process. IDA donors have increased from 17 to 45. We know that a focus on results is absolutely key for donors, for clients, and for us. We have been the first multilateral development bank to adopt a systematic results measurement system, and we are trying to pilot innovative results monitoring approaches. For IDA16, the key themes will be Gender, Fragile Situations, Climate Change, and Crisis Response. The next slide also emphasizes, I think, the reality. We know that donors are under budget pressure, so for months, we have been trying to build a different type of global coalition. In addition to traditional donors, we have been looking to some of the IDA graduates to see whether they could accelerate their repayments, and they have been very supportive in discussing this with us. Some of the IDA blend countries, the ones that are transitioning, are willing to harden some of their lending terms. Some of the emerging donors are increasing the contributions they will make with their economic weight, and we are getting new donors. And we are trying to see every way we can add from our own internal resources. Now, the bottom line is that depending on the overall goal that is set by the IDA donors, we estimate that some 75 percent of a reasonable increase could come from internal reflows and new donors. What this really means is that for the traditional donors--and I have been in your situation, and I know it is not easy--we need you to avoid cutbacks where you can make some modest increases, where your currency has worked to the benefit, because we have created a system where the rest is leaning forward, but we can't let you fall back. This is all about the poorest, and particularly for the Ministers in this room, we'll need your help in your home countries. Now let me identify some challenges and opportunities that we see. There will undoubtedly be pressures with a slow recovery and the high unemployment that Dominique stressed--trade, social, budget. We are going to need to rebuild buffers in developing countries that have been used in the crisis, but as we do so, we're going to need to have special attention to budget consolidation, with protection for the most vulnerable; investment in infrastructure for future growth, and tools to better manage risks. And I think, as I mentioned, we are going to need closer attention to food price volatility. Building on the success that we have seen, we can encourage developing countries to be future sources of growth. We need to take these initial poles of growth, build them stronger, and add to them, including Sub-Saharan Africa. And this is where the private sector investment will be absolutely fundamental. Lars Thunell and his colleagues created this new Asset Management Corporation, and just to give you an example of the power of this, even in this financial crisis, as the Chairman mentioned, we have already had pension funds and sovereign funds willing to invest almost $1 billion for private sector investment in Sub-Saharan Africa and Latin America and the Caribbean. And I am convinced this is just the start. Now, I know there is discussion about the G20, and I believe the G20 can help improve the cooperation that Dominique talked about, but I think everybody here knows we also have to deal with the sensitivity of non-G20 countries--particularly attention to some of the interests of the poorer and smaller developing countries. I believe there is a role for the IMF, the World Bank Group and WTO within the G20 system, offering expertise, policy ideas, resources, and then, critically, connecting the G20 to all of our shareholders, the G187. I thought I would also just list some of the possible issues that we see on the horizon--the debt management issue; possibilities of a bond bubble; another race for yield. Whenever these crises occur, people always go back and wonder why people didn't anticipate them, so I think one of the functions of these meetings is to try to start to think about some of these issues in advance. Let me close with some possible questions for the Development Committee. We have tried to group them a little bit. The first three are really for you to check our outlook, see how you view the situation, and what else we should be doing. This would include a sense of our clients' financing outlook. Next, we need your thoughts on measuring results. We know this is fundamental; we think we have made some good headway. Many of you have worked on this issue closely. We benefit from your counsel and advice on this. The next three are really to check our priorities, get your advice on private sector development and any comments on what we have done in the area of reforms or governance improvement. And finally, looking ahead, what other steps should we, and possibly donors, take to make sure we do achieve an IDA16 replenishment? This is not the pledging meeting, but we have to close this by December. We would welcome your advice on the role that we could play in the G20, including in connecting with non-G20 members. And we need your advice on the roles for our added participation in issues such as food security and climate change. Now, I know we have gone through a lot. We'll have a hard copy of this PowerPoint available as you leave, and we have added some pages on that one that will give you some data on results. Many of you have asked: "It will help us make the case at home if you show the results you are doing in IDA, IBRD and IFC," so you'll see a few extra pages. But I would like to close by thanking our Governors, our Board, and our very hard-working World Bank Group staff. We are very proud of what we have done, but we also know there are some exceptional challenges ahead. I believe we can come out of this crisis both stronger and wiser. I believe we need to work toward building a new, networked international economy and an architecture that suits it. We need a more flexible and different approach to development. You are the G187. This is a potentially powerful concept. It is rich and poor. It is North, South, East and West. So we welcome this opportunity to work with you and to build a modernized multilateralism. Thank you. [Applause.] Show Less -
Opening Press Conference Remarks
MR. HANLON: Good morning, and thank you for attending this news conference with World Bank President Robert Zoellick. Mr. Zoellick will begin with some openin... Show More + g remarks and then would obviously be pleased to take your questions. It is a busy day, and we would like to get started. Mr. Zoellick, sir. MR. ZOELLICK: Thank you very much, Carl. I would like to welcome all of you to this opening press conference for our Annual Meetings. We have reorganized these Meetings so that they will be shorter and more business-like. The official part will now only be about two-and-a-half hours long compared to the previous day-and-a-half--something that Dominique Strauss-Kahn and I talked about when we first came to the Bank and the Fund, so I am hopeful this will be of greater focus for our Governors. These Meetings are an important opportunity for me but also for the Bank staff to be able to listen and to learn about the priorities of our 187 member countries. I suspect we will be focusing on several areas where we have had discussions--assessing the crisis two years on; how the World Bank Group has responded, what more developing countries need, including IDA, and we will try to do some anticipation of future challenges and opportunities. As far as the crisis is concerned, the world economy is recovering--that is the good news--but it is recovering at too slow a pace to bring down unemployment significantly, particularly in a number of the developed countries. And whenever you have high unemployment, you have risks of other tensions. We see this now in debates on currencies. Developed countries are easing monetary policies. Some developing countries are tightening in response to growth. Some surplus countries are intervening to lower the value of their currencies to boost exports. And all this is causing international tensions. History shows there is no future in "beggar thy neighbor" policies, and in an increasingly interconnected world, we need not just to be conscious of the negative effects that policies can have on others, but we need to act accordingly. Today we face currency tensions. Tensions can lead to trouble if not properly managed. The recent crisis is still affecting jobs and livelihoods across the world. If ever there were a time that we should not turn our backs on international cooperation, it is now. We should also recognize that today's low interest rates cannot last forever. At some point, interest rates will rise. So policymakers and markets will need to be ready for what can happen next. Today's prices on bond markets will inevitably come down with consequent effects on portfolios and savings. But today's market volatility and risks should not distract us from the fundamentals, and that is particularly what we try to focus on at the Bank. We need attention to balance sustainable, inclusive growth. Some economies have high savings and export-led growth while others are fueling their consumption with debt. The world economy will need structural changes to become more balanced and sustainable and, particularly important, a focus on conditions to fuel private sector-led growth. One particular bright spot has been the growth in developing countries. They are growing at a faster pace than developed countries. Developing countries are expected to account for about one-half of global growth in the several years ahead. It is a very different world from the one even ten years ago. Their growth provides an important source of demand for exports in developed countries. But some developing countries are facing headwinds. While many have regained access to the capital markets, bank lending remains weak. In net terms--so, new loans less repayments--bank lending is likely to be negative for this year as a whole. That will be particularly hard on smaller countries, poorer countries, that don't have as good access to security markets, or smaller countries. Also, for many developing countries, the food crisis of 2008 has never fully gone away. Recent price rises and strife in Africa are a serious cause of concern. The rise in wheat prices over the last few months is affecting the price of other staples due to the increased demand for substitutes. We are very pleased that the World Bank has been able to provide $140 billion in financing for the developing world since the middle of 2008. That is our IBRD lending, our IDA fund for the poorest, also our IFC for the private sector, and that is since the middle of 2008 when the global crisis really took hold. But we know we need to do more. In New York last month, leaders affirmed their commitment to meet the MDGs by 2015. IDA, our fund for the 79 poorest countries, is a key part of this. Over the last 10 years, we estimate that IDA has helped save 13 million lives. With a robust IDA replenishment, we could immunize 200 million more children, extend health services to over 30 million people, give access to improved water sources to 80 million more people, help build 80,000 kilometers of roads, and train and recruit over 2 million teachers. We won't be discussing specific IDA commitment numbers at this meeting, but we will be asking donors to step up to support IDA by the end of the year. A new multi-polar world means a variety of things. It means more voice for developing countries. We have been able to boost the developing country representation to more than 47 percent at the IBRD. That was a shift of some 4.5 percentage points over the last two years. And on November 1, we will add our third chair for Sub-Saharan Africa. I believe we can get to equitable voting power over time. Our staff increasingly reflects the changing world. For the first time in our history, all of our Managing Directors as well as our Chief Economist are leaders from developing countries. But a new multi-polar world also means changing how we at the Bank research economics. We certainly recognize that we don't have all the answers, and we have to revisit old assumptions and open our doors to new ideas. So we are very excited about moving to a new model for development research, one that gives people outside the Bank the tools to do their own research and come up with their own conclusions. It can draw on the experience and knowledge of people in developing countries, those who are closest to the problem of poverty. This week, the Bank has doubled the number of indicators that it is releasing to the public--so we will now be at 4,000--and providing them free-of-charge. We are complementing the data by sharing software applications to led others crunch their own numbers and to double-check ours. Today we are launching an "Apps for Development Challenge" to encourage others to provide new solutions to help us reach the Millennium Development goals. Today we are also launching a two-day Global Open Forum, which will be a live internet discussion on key development issues of the day. So we are trying to throw open the doors to how we do business, and we hope others will follow, because in a networked development architecture, this will be how we need to work. We have a busy few days ahead of us. We are looking forward to working with our 187 member countries. I'll be pleased to try to answer your questions. MR. HANLON: Okay. Now we'll throw it open for questions. Let's start with Phil Thornton here in the front row, please. QUESTION: Thank you. Phil Thornton from Emerging Markets newspaper. Mr. President, you had some very strong words on the currency issue, but I would imagine that a lot of the countries you are concerned about are effectively sort of victims of a drive-by shooting. I was wondering if you could indicate quite how bad the impact is likely to be on developing countries, lowest-income countries; and more importantly, if you could be specific about what you would like concrete to come out of these Meetings. Do you want the new Plaza Accord to oversee coordinated management of currencies? MR. ZOELLICK: Well, this really started with the breakdown of the fixed-rate exchange system, the old Bretton Woods system, in the early seventies, and a lot of these issues are not new. I was at the U.S. Treasury at the time of the [inaudible] Plaza Accord, so this was an issue of volatility and disputes in the 1980s. I think what has changed are two things. First, we have more and different players, and particularly some of the emerging market players, unlike the old G7. And second, we are in the midst of a very severe economic downturn, and that adds to tensions. So my suggestion would be that first, one needs to manage the tensions. If one lets this slide into conflict or forms of protectionism, then we run the risk of repeating mistakes of the 1930s. Second, in general, surplus countries should try to resist intervention to boost exports. Third, I think we need to recognize that it is hard to come up with a new system to manage some of these problems at a time of tension, but we also need to recognize--and I have seen this over 30 years--that when the tensions recede, so does the interest. So this will be a question for the countries because they have different perspectives and positions on this, but maybe they should urge some combination of whether it be the IMF, the WTO, the World Bank or others could help in this process, to look at some of the options for dealing with these issues that arise. This is something that Keynes talked about at the creation of the IMF in terms of obligations of surplus countries. There is some loose language for the IMF to deal with this. But it has never fully taken hold, and ultimately, it will have to be the countries who decide this--and they are on different sides of the issue. But maybe, if we can get them to recognize that over time, everybody has an interest in making the system work, maybe there is a need to re-look at some of those issues. But the fourth--and perhaps this is the most important issue from my perspective--is that one should not divert from the fundamental issues of growth and some of the structural issues that allow us to rebuild a healthy world economy. So, for example, I have emphasized in the case of China that while I believe the currency should appreciate, that is not a silver bullet, and this will have to go to some of the issues of switching the savings-consumption balance. We have talked with the Chinese about some ways to do that. The Chinese have themselves expressed interest in doing that and building it into their next Five-Year Plan. But it is not only a responsibility for the Chinese. The U.S. has the reverse situation. It has relatively lower savings and higher consumption. So these will be issues that the U.S. will need to deal with, particularly in terms of spending and budget issues. And the core one, at least as I see the international market, is that all of these tensions add risks for the private sector. Over a year ago, when I talked about getting out of this crisis, I mentioned a hand-off from the public to the private side. It is very important that the policies continue to create an environment for private sector-led growth. MR. HANLON: Okay, thank you very much. Let's go to the gentleman in the front row here, please. QUESTION: Thanks, Carl. Dani Jiang from Xinhua News Agency. Mr. President, you mentioned that we need to rethink the development economics nowadays, and I know that you just came back from a China trip. Do you have some specific ideas how China and other emerging markets can contribute to development nowadays? You mentioned last year that China is a stabilizing force in the global recovery. Do you still think so? Thank you. MR. ZOELLICK: Well, as for your first question, part of the focus since I came to the Bank is recognizing that we are beyond an era of North-South knowledge transfer, but we are in a world of South-South knowledge transfer and potentially South-North. So, at a time when many developed countries are concerned about budgetary issues, I find it interesting--I saw a news report of a U.S. commission looking at infrastructure, and it was all government financing. And with the full range of developing countries I look at now, it is often a mixture of public and private financing, so there are ideas that can come from all sides. Clearly, China suggests that there are lessons that people can try to draw. China has always, I think, been correct in assuming that there is no one-size-fits-all, that there is not a direct transfer. I think it was Deng Xiaoping who said years ago "What you should learn from us is not the specifics, but learn from the method about questioning and trying to find one's own way, drawing from others." So, one of the things that I did on this most recent trip was actually go to one of the poorer provinces, Guizhou Province, where I think there can be additional support in the rural finance system, the small and medium-size enterprise system. This really relates to the structural question. The nature of Chinese development has tended to focus on some of the big enterprises and financing. I think there can be more done in the rural and small and medium enterprise side. But in general, I will say that I find that in our discussions with the Chinese officials, whether it be provincial leaders or in Beijing, there is a real interest in this exchange and dialogue. In fact, there is this topic of how to make the rebalancing work effectively, whether it is better social services so people don't need the high savings rate, whether it is some of the industrial structure. That is a very live topic that people want to engage with. Equally important are topics such as how to avoid the so-called middle-income trap. When you get to $3,000 to $6,000 a year, sometimes countries tend to stall. This is a subject in China. How to have innovation in an open fashion, so not one that closes off others. How to have more open and inclusive growth. So this is what the Bank is about, and when I was in China, we had an African delegation there, but there are also things--and I think this is the Chinese approach--that it can learn from others. So this is the type of environment we are trying to create. Your second question was is China still--I think the Chinese growth has been very important in this recovery, and I think it had a very strong and effective stimulus program. I think this rebalancing issue that we are talking about is one that is goingto be in China's interest to address as well as others. MR. HANLON: Thank you very much. Larry Elliott, please, in the second row; thank you. MR. ELLIOTT: Larry Elliott of The Guardian. There could be an easier time to be rattling the tin for IDA replenishment than the current one, with virtually every country in the world trying to cut public spending and have austerity programs. How is that program going? Are you confident of getting as much for IDA16 as you got for IDA15, and what sort of message are you sending to some of the more reluctant donors this time? MR. ZOELLICK: I hope so, Larry, but we will have a meeting of the IDA Deputies right after this Annual Meeting, and we'll get a better sense. I guess I would send the following message. One, all you have to do is walk through the Atrium in our building, and you can see the focus on results. And understandably for donor countries, there is a critical interest in being able to show that there is value for money, people can get specific purposes, and IDA has had a very good record on that. Second, as we have discussed here, part of the nature of the new world economy is that the help for developing countries also comes back and helps developed countries. If they are healthy and growing, if they eventually become multiple poles of growth, this will also be a source of demand for the developed world. Third, recognizing that this was going to be a tough period, I started to work with some of my colleagues to come up with some innovative ideas to generate additional internal funds. So we have been talking with some, what are called "IDA blend countries" that are on the border of moving out, about whether they would be willing to harden the terms a little bit so we get more money back. We have talked with some of the past IDA borrowers about whether they would be willing to prepay earlier so as to get money back. We have talked about--we are adding donors, some of them being former IDA recipients, so we are getting some of the emerging markets to contribute more, and that was actually something that we linked to our share increase. So this depends on the overall target, but I think we have a reasonable shot of having about 75 percent of the added resources from some of these new tools. But to drive that forward, we do need the donor countries to continue to try to make good contributions, and we want to try to work with them and their parliaments and others to make the case. I am pleased in the case of the UK that even though there is an environment of cutting down the budget, they are going to try to defend development assistance. MR. HANLON: Okay, thanks very much. Bob Davis I think had a question. QUESTION: President Zoellick, when you were answering the question about currency, you said that perhaps some sort of combination of the IMF and the WTO might get involved, and you also made reference to Keynes. I think--my history may be off--but I think Keynes' suggestion had something to do with penalties, tariffs, for countries that were out-of-whack. Can you explain what you were thinking of? MR. ZOELLICK: Bob, I don't have a specific proposal by any means. What I was reflecting on in part with the added discussion was my experience dealing with this in the eighties, realizing that you now have a wider set of countries, and that if you believe in multilateralism, I think there is a role for institutions to play an intermediating part with the key countries. We can't ignore the fact that the countries are the ones who make the decisions here. So the reason I referenced Keynes was that the traditional problem in this field-- whether it was at the time of Keynes or whether it was at the time when I dealt with these issues in the eighties--was that the burden is all on the deficit country, not on the surplus country. As you know, the U.S. at that time rejected Keynes' approach, so the language in the IMF is much weaker, but there is a reference to this. So my point was not to try to push a specific solution. It really is to say--and it is a recognition that given the tensions that have been created, my first priority is to manage the tensions and get on to the fundamentals of growth. But given the way the international system works, with the G20 and others, maybe there could be some thinking about having the institutions look at these in a slightly less tense context and try to come up with some issues that will benefit different countries, because as the question suggested, some developing countries, as you have had a looser monetary policy--there is money going, a lot, out there; it is chasing yield--some of this for the developing countries has meant that their currency appreciates. That puts them under stress versus others. So this isn't a developing/developed country issue. You have some developed countries that have surpluses that have been intervening. So I think there should be a common interest in trying to figure out how to manage this. I am not so naïve as to think that there is going to be an automatic system, but maybe the time has come. One of the things, Bob, that I have seen over the years is that sometimes, when you have a moment like this, it is important to try to take it and steer it in a constructive direction. So that was just the nature of the suggestion. MR. HANLON: Okay. Let's take a final question if we could, please. Mr. Brummer? QUESTION: Alex Brummer, Daily Mail London. In your opening remarks, you referred to the 1930s and protectionism in relation to currencies, and I just wondered how fearful you were that these tensions could go wrong and that we could spin off in that direction, with people putting up trade barriers against each other. MR. ZOELLICK: I don't think it's the most likely course by any means, so while I know the nature of the business is to try to find aspects that kind of emphasize the tensions, my own sense is that we have managed a lot of these trade protectionism issues relatively well, but as the head of a multilateral institution, I see part of my function as trying to anticipate and trying to see potential risks and trying to speak out on them before they occur, which is some of what we have talked about today and some of which I'll do with the Governors, so hopefully, we can try to avoid them. So I have avoided some of the rhetoric that some people have used that is a little bit more inflammatory on these topics, and as I referenced, I have seen this in different contexts for some 30 years, but I don't think one should take this situation for granted, because my primary message is that we are still in a very fragile recovery, and people have to be careful about some of the downside risks. In particular--and you can see this across developed countries--with slow growth, it is growth--and by the way, I don't expect that we are going to have a double dip--but with slow growth, you are going to have unemployment stay relatively high, and that puts political pressures on people. So it is important that we try to create an environment where they work to resolve those differences in a cooperative fashion as opposed to ones that exacerbate tensions. The last point on this goes to the point I have emphasized. From the start, I thought there were some important government interventions, but for an effective recovery, you are going to need to get the private sector investment and consumption back to a more normal pattern. People see that, for example, in the U.S., the corporate sector is in pretty good shape, large amounts of money ready to invest. But the more we create an environment of risk and uncertainty and fear, well, that's going to make it less likely that people will invest. MR. HANLON: Once again, thank you so much for joining us. We will be making Mr. Zoellick's remarks available on our website Show Less -
Empowering girls and women in South Sudan : report from the field
The scant available data authors have (from the 2006 Sudan household health survey and anecdotal updates) conveys the dire situation of girls and women in South Sud... Show More + an. South Sudan is one of the six countries in the Adolescent Girls Initiative (AGI) and, after Liberia which started a year earlier, is among the first to begin implementation. The $3m initiative will reach 3,500 adolescent girls in 4 states with technical, life-skills and business development training for income generation/employment. Increasing the government's capacity to mainstream gender issues and coordinate programs that help girls and women is a key complementary element to the above initiatives. Finally, the gender project will support the Ministry through the construction of new office facilities to help centralize and improve internal coordination. Show Less -
World Bank Group Opens Data to All
WASHINGTON, April 20, 2010 — The World Bank Group today announced that it has thrown open the doors to its statistical databases and is challenging the global community to use the data to create new a... Show More + pplications and solutions to help poor people in the developing world. Recognizing that transparency and accountability are essential to development, the World Bank Group is now providing free, open, and easy access to its comprehensive set of data on living standards around the globe - some 2,000 indicators, including hundreds that go back 50 years. The data will be available in Arabic, French and Spanish in addition to English. "I believe it's important to make the data and knowledge of the World Bank available to everyone," said World Bank Group President Robert B. Zoellick. "Statistics tell the story of people in developing and emerging countries and can play an important part in helping to overcome poverty. They are now easily accessible on the Web for all users, and can be used to create new apps for development. " Drawing from numerous data sources and working with statistical partners, the Bank Group has worked intensively to modernize its storehouse of statistics to create data.worldbank.org, a new, user-friendly data access site. In the coming months, the World Bank will also launch an "Apps for Development" competition, challenging the developer community to create tools, applications, and "mash-ups" using World Bank data with the goal of producing better tools for understanding development. The new open data initiative coincides with the launch of the World Development Indicators (WDI) 2010, the Bank's popular statistical resource. Apart from giving open access to the WDI, with nearly 1000 indicators, the initiative also opens up the Global Development Finance, Africa Development Indicators, Global Economic Monitor, and indicators from the Doing Business Report. Broader access to the data will allow policy makers, researchers, and civil society to track the impact of policies, develop new solutions, and measure improvements more accurately.Users will be encouraged to provide feedback and to make use of the data through new tools and applications. This knowledge sharing initiative will be followed by the July 2010 launch of the World Bank's new Access to Information Policy, which will make available an expanded range of reports, documents, and information. Show Less -
World Bank Lowers Remittances Forecast for 2009 as Financial Crisis Deepens
March 24, 2009—Unemployment in Calfa, Moldova, is high. The few jobs available pay little, and government pensions are as low as $10 dollars a month. The money that flows back from those who left, mos... Show More + t often for Russia or Italy, is a lifesaver."If those working abroad came back, our living standards would drop below the poverty level," says Calfa Mayor Ludmila Ceaglic.Like Moldova, many developing countries depend heavily on the money millions of workers send home from abroad.Yet migrant workers are facing more difficult circumstances—job losses, anti-migrant sentiment, even violence—as the financial crisis deepens around the world.World Bank researchers predict remittances will fall more than originally expected this year—from $305 billion last year to an amount closer to $290 billion in 2009.Even with a drop of between 5 and 8 percent, remittances will still outstrip private capital flows, expected to fall by half in 2009, and official development aid, typically around $100 billion.Stock of Migrants Will Keep Remittances ResilientRemittance flows will stay "resilient" because many countries have a well-established "stock" of migrants who are unlikely to leave their adopted countries. They will continue to send money home, even if they have to reduce the amount they send, says economist Dilip Ratha, who leads the World Bank's Migration and Remittances team.Although newspapers are reporting a large number of migrants returning home, migrant workers are still moving to destination countries, although at a slower pace. They, too, will add to the flow of remittances, says Ratha.A new study by Centre for Cities finds that migrant workers from Eastern Europe are mostly staying put in the United Kingdom even as unemployment rises.And Ratha has heard that many Tajik migrants don't want to leave Russia despite incidents such as the attack and beheading of a young Tajik migrant worker near Moscow in December. A Russian nationalist group calling for an end to immigration claimed responsibility."Anecdotes are coming out that despite the violence against migrants, despite the very serious heightening of anti-immigration sentiments in Russia, especially against the Tajik migrants, there are reports that the migrants don't want to come back. They want to stay on where they are. They find that back in Tajikistan the situation is even worse," says Ratha.Workers' Earnings DecliningRatha's team predicts remittances will amount to about 1.8 percent of GDP for developing countries in 2009, a slight drop from 1.9 percent of GDP in 2008.However, considering that officially recorded remittances registered double-digit annual growth in the past few years, the expected fall will cause hardships in many poor countries, says the Bank's revised Migration and Development Brief.Remittances flowing to developing countries from Russia, South Africa, Malaysia and India are "especially vulnerable to the rolling economic crisis," says the brief.Remittances decelerated sharply in the second half of 2008, with the steepest drop expected for Europe and Central Asia.Countries such as Tajikistan, Moldova and Kyrgyz Republic with large numbers of workers in Russia will see remittances declining as a share of GDP "by much higher numbers," says Ratha.One reason for the overall decline is migrant workers' salaries are expected to fall more steeply than those of native born workers. In preparing the remittance forecasts, the team has assumed that migrant workers' salaries would fall by an additional 5 percentage points compared to the decline in the salaries of native born workers. The decline is assumed to be even larger in Russia, Malaysia, and the Gulf countries, says Ratha.Official Statistics Don't Tell the Full StoryRatha says employment of foreign-born workers in the United States is holding steady in wholesale and retail and going up in the restaurant and hotel sector, though their employment in construction has fallen faster than that of native born workers, based on new US Bureau of Labor Statistics data.But the official statistics perhaps don't tell the full story, he adds."Migrant workers are more flexible. They are cheaper. They work harder and they don't insist on all the right employment conditions. They don't ask for too much. And I think there is an additional reason –a lot of workers that have dropped out of the payroll officially continue working off the books.""I suspect a lot of construction workers, undocumented workers and unskilled workers have lost their documentation status and are still staying. So employers would find them easier to employ also because of tax reasons."Tapping the Potential of RemittancesRatha has urged developing countries to tap the wealth of their overseas diasporas by issuing diaspora bonds. In Africa, for instance, such bonds could help countries dependent on limited official development assistance.Countries should also make it easier and cheaper for migrants to send remittances home, he says.Currently, the average cost of sending money through official channels is over 10 percent of the value of the transaction. In some places, the cost rises to 25 to 30 percent.A World Bank Group online remittances database tracks the costs of such transactions."At this time of crisis, we want countries to have more resources, and remittances are a great way to help countries because remittances flow directly to the people and are very well targeted to the needs of the people," says Ratha.Top 5 Recipients of Remittances in 2008:India: $45 billionChina: $34 billionMexico: $26 billionPhilippines: $18 billionPoland: $11 billion Show Less -
An Inclusive & Sustainable Globalization
Having now served as President of the World Bank Group for 100 days, I wanted to share my initial impressions and ideas for strategic directions.I greatly appreciate the encouragement and support I ha... Show More + ve received from many quarters. I sense that people around the world – in developing and developed countries – recognize both the need for and potential of this unique creation. The World Bank Group is one of the great multilateral institutions established after World War II. Sixty years later, it must adapt to vastly different circumstances in a new era of globalization.The staff of the World Bank Group has helped me learn, shown me our vital work in the field, and offered fresh ideas as we set a course for the future. The Board is offering experienced guidance as we strive to turn good intentions and analysis into productive actions.The Face of the World Bank GroupYet the real face of the World Bank Group is not the one usually seen in Washington, or in the drawing rooms of the capitals of our major shareholders.When I visited Yen Bai Province in the northern mountains of Vietnam this August, I met a woman who now has electricity to help grind rice, pump water, power fans, and light her one room household so her children can study at night – because the World Bank financed a Vietnamese electrification project. Electricity now eases the chores of over 90 percent of rural households in Vietnam. As in other societies, rural electrification most of all empowers the women who bear the brunt of daily farm labor.In Honduras, the World Bank is helping save Pico Bonito National Park through the Bio Carbon Fund, which supports farmers who are shifting from cutting the native Redondo trees to selling their seeds and replanting saplings. As one farmer said, "We still have our trees and I can still make money, even more than I did before. We even take care of the wild seedlings."In Nigeria, the International Finance Corporation, our private sector arm, helped a single mother in the village of Ovoko to obtain a microfinance loan to become a village phone operator. Villagers used to have to travel a day to make a phone call. Now this entrepreneur helps her neighbors connect to the broader world, while earning money to pay for her children's school fees and medication for her own HIV/AIDs treatments.Given the opportunity, people everywhere want to build a better life for themselves and their children. That impulse, if given a chance, can contribute to a healthy and prosperous global society.An Inclusive & Sustainable Globalization: The NeedsWe live in an age of globalization. Yet its contours are uncertain. Since the end of the Cold War, the number of people in the world market economy has increased from about one billion to four or five -- vastly increasing the productive labor force, building new manufacturing and service centers throughout the developing world, boosting demand for energy and commodities, and creating vast possibilities for increased consumption. New pools of savings are adding to global capital flows that are drawn to investment opportunities offered by both emerging markets and transforming developed economies. The transfer of skills, technologies, information, and applied practical knowledge is rushing ahead.The global flow of trade has more than doubled since 1990. More open economies lower the cost of goods and services. More countries are relying on export-led growth. While the purchases from developed economies remain important, new trade patterns reflect regional and global supply chains and increasing "south-south" trade. Nearly 300 million people have escaped extreme poverty.Yet many remain on the fringes and some are falling further behind. They can be counted as countries, as regions and groups within countries, or as individuals. Their exclusion has many causes – including conflicts, poor governance and corruption, discrimination, lack of basic human needs, disease, the absence of infrastructure, weak economic management and incentives, lack of property rights and rule of law, and even geography and weather.We can also see the environmental challenge of this extraordinary surge of growth, with rivers that run black, skies that block the sun, and threats to health and climate.Globalization offers incredible opportunities. Yet exclusion, grinding poverty, and environmental damage create dangers. The ones that suffer most are those who have the least to start with – indigenous peoples, women in developing countries, the rural poor, Africans, and their children.It is the vision of the World Bank Group to contribute to an inclusive and sustainable globalization – to overcome poverty, enhance growth with care for the environment, and create individual opportunity and hope.In 2000, the countries of the United Nations established eight Millennium Development Goals —ambitious targets to halve poverty, fight hunger and disease, and deliver basic services to the poor by 2015. These goals, our goals, are posted by the main entrance of our headquarters building, reminding us everyday of what we come to work to accomplish.These aims of sound social development need to be combined with the requirements for sustainable growth, driven by the private sector, within a supportive framework of public policies.Consider some of the needs.Every year, malaria strikes some 500 million people worldwide. Yet we could get close to overcoming this leading killer of African children. It would take an investment of approximately $3 billion a year over the next few years to provide every household vulnerable to malaria with treated bed nets, medicines, and modest amounts of indoor insecticide.The International Energy Agency estimates that developing countries will need about $170 billion of investment in the power sector each year over the next decade just to keep up with electricity needs, with an extra $30 billion per year to transition to a low carbon energy mix.An additional $30 billion per year is needed to achieve the Millennium Goal of supplying safe water to 1.5 billion people and sanitation to the 2 billion people who lack these most basic necessities, also improving gender equality in poor countries.There is need for another $130 billion a year to meet the transportation infrastructure requirements of growing developing countries, including an estimated $10 billion a year for maritime container terminals to accommodate opportunities in trade.And to provide primary education for some 80 million out-of-school children, another Millennium Goal, low-income countries will require about $7 billion per year.How the World Bank Group Can HelpMeeting these needs is not, of course, just a question of money. Nor is it the role of the World Bank Group to finance the investments by itself.It is the purpose of the Bank Group to assist countries to help themselves by catalyzing the capital and policies through a mix of ideas and experience, development of private market opportunities, and support for good governance and anti-corruption – spurred by our financial resources.It is the purpose of the Bank Group to advance ideas about international projects and agreements on trade, finance, health, poverty, education, and climate change so that they can benefit all, especially the poor seeking new opportunities.We should be expanding the frontiers of thinking about policy and markets, pioneering new possibilities, not just recycling the passably proven with a modest financial advantage.I have been stressing the idea of the World Bank Group to make a point. We are a single institution, operating through specialized affiliates, as is the case for many large financial firms. We must strengthen our interaction and effectiveness as a Group.Our Group has four principal parts. The International Bank for Reconstruction and Development (IBRD) is our public finance arm, providing loans based on market prices, risk management, and other financial services, combined with deep development experience. The International Development Association (IDA) is an aid conduit that provides interest-free loans and grants to the 81 poorest countries, as well as significant debt relief. The International Finance Corporation (IFC) is our private sector arm, making equity investments, loans, and guarantees, while offering advisory services in developing countries. And the Multilateral Investment Guarantee Agency (MIGA) supplies political risk insurance. Operating together, we can leverage these tools to ensure that the whole is greater than the sum of its parts.All of these components share a body of expert learning and experience covering a host of development disciplines. Delivering, expanding, and testing this knowledge – in tandem with financing or separately – is the most important part of our work.First StepsOver the past two months, working closely with our Board, the management of the World Bank Group has begun to take actions to move forward. In doing so, we are also strengthening the synergies among these companion entities.This year, we are replenishing funds for IDA, the Group's principal financing tool for the poorest countries, and for Africa in particular. This is the 15th IDA replenishment; each new refunding covers the next three years.We have been discussing with about 40 donor countries, along with borrowers, how to set priorities, strengthen policies, and improve our effectiveness with IDA countries. The generosity of donors is fundamental to the success of this replenishment, and we have been encouraged by their support for an ambitious result.I wanted all donors to know—in concrete terms—that the World Bank Group will "put its money where its mouth is" when it comes time to boosting IDA.So I am delighted to announce that our Board has concurred that the Bank Group should be leading the way by seeking to contribute $3.5 billion of its own resources to IDA 15. This is more than double the $1.5 billion we pledged to IDA 14 in 2005. With this stronger hand, we will challenge donor countries to commit to an ambitious increase in numbers to help the poorest, especially in Africa and South and East Asia. South Africa has already set a good standard by pledging a 30 percent boost in its IDA funding. Now we need the G-8 and other developed countries to translate their words from Summit declarations into serious numbers, too.Our IDA contribution depends, of course, on the annual income of the IBRD and IFC, as distributed by their Boards each year, but we believe this stretch goal is possible. We urge others to stretch, too.Second, we are committed to a stronger growth strategy for IFC. IFC is well-capitalized and is bolstering its private sector investments in IDA countries, low-middle income countries, and needy regions and sectors in middle income countries.Third, we will deepen the cooperation between IDA and IFC to boost the private sector in these economies. Last year, 37 percent of IFC's investments were in IDA countries, and we will increase that figure. IFC is also launching new infrastructure and microequity funds for IDA countries. Furthermore, IDA and IFC can co-invest to support public-private partnerships in infrastructure projects, especially in the energy, transportation, water, agricultural, and microfinancing sectors. These projects can support the integration of regional markets, which is especially vital for smaller and land-locked states in Africa.Fourth, even though IBRD is very well-capitalized, our loan business has been shrinking. Today, about 70 percent of the poor live in India, China, and the middle income countries served by IBRD. These countries have asked us to remain engaged in their search for how best to meet their diverse needs. So the IBRD should be growing, not contracting. Of course, as I will discuss, our services to middle income countries must continue to expand far beyond lending. Yet our pricing patchwork, reflecting adjustments made in 1998, confused our clients. IBRD loans -- combined with customized, cutting-edge policy expertise -- remain valuable. Our mix of lending and knowledge services is especially important to help countries with their social development and the expansion of energy and infrastructure in an environmentally sound fashion.Therefore, in order to better meet the great needs of emerging market countries, I asked our Board to simplify and cut our prices so we could expand our lending to support development and growth. I am pleased that the Board has agreed, clarifying our fees and reducing rates back to the pre-Asian crisis level. This step can help us catalyze the expansion of our services. But we have more to do. We must also address the non-financial costs of doing business. We aim to be faster, better, and cheaper.These steps are just a start. They point the way, through concrete milestones, towards an expanding horizon.An Inclusive & Sustainable Globalization: A Multilateral ApproachGlobalization must not leave the "bottom billion" behind. This assertion is based on more than respect for the worth of our fellow men and women, and beyond an appreciation that any of us might have been born in similar circumstances. Inclusive globalization is also a matter of self-interest. Poverty breeds instability, disease, and devastation of common resources and the environment. Poverty can lead to broken societies that can become breeding grounds of those bent on destruction and to migrations that risk lives.Globalization also has brought uneven benefits to the billions in middle income countries who have started to climb the ladder of development since the end of the Cold War. In many lands, social tensions are weakening political cohesion. The middle income countries are home to 60 percent of the world's forests and 40 percent of global emissions of CO2 from fossil fuels. Together with developed countries that produce most emissions, these nations will be key to crafting a global approach to climate change. These middle income countries need to continue to grow, to offer inclusive development, and to adopt environmental policies for sustainable prosperity.The greater influence of developing countries presents another question: What will their place be in this evolving global system? This is not only a question of how large developing countries will interact with developed countries, but also with the poorest and smaller states of the world. It would be ironic indeed for the Bank Group to withdraw from work with middle income countries at a time that governments are recognizing the need to integrate these countries more effectively in diplomacy and political-security institutions: Why not integrate them as partners in the institutions of the multilateral economy, too?Two years ago, I suggested that China build on its success by becoming a "responsible stakeholder" in the international system. This is, of course, a challenge for others, too, if we are to achieve an inclusive and sustainable globalization. And with responsibility, there should be greater voice and representation. We need to advance the agenda to strengthen the participation of developing countries throughout the Bank Group's work and workforce.Developed countries are also facing the opportunities and strains of globalization. People are anxious about the rate of change, even as many in younger generations adapt with amazing flexibility.The common sense of publics in developed countries leads them to recognize there is no successful recourse to isolation. Common decency – as well as self-interest – drives them to recognize the interdependence, even as they debate how best to pursue it.In comparison to the scale of these global challenges, the World Bank Group is a modest institution. Yet along with its multilateral partners – the United Nations and its specialized agencies, the IMF, the WTO, and regional development banks – the World Bank Group needs to play an important role in advancing an inclusive and sustainable globalization. The multilateral institutions have been buffeted and battered. They need to combine deliberations with effective results. They must overcome internal weaknesses and build on their strengths. Together, we must show that multilateralism can work much more effectively—not just in conference halls and communiqués—but in villages and teeming cities, for those most in need.Inclusive and sustainable globalization needs to be fostered by global institutions. The World Bank Group has significant financial resources; an experienced, knowledgeable, and dedicated staff; convening power; people in more than 100 countries; and 185 member states. When at its best, the Bank Group can mobilize other resources – public and private, financial and human – to generate demonstration effects and multiplier effects. When successful, the World Bank Group is a catalyst for market dynamism that seizes the opportunities of globalization, inclusively and sustainably.Six Strategic ThemesWhat, then, should be the strategic directions the World Bank Group should pursue?Today, I will briefly highlight six strategic themes in support of the goal of an inclusive and sustainable globalization. In a week, we will have the Annual Meeting of the World Bank Group and the IMF. On that occasion, I hope to discuss these six themes in greater detail with the Governors of the Bank, as well as with the broader community of interested parties, including civil society organizations, businesses, and foundations.First, the World Bank Group faces the challenge of helping to overcome poverty and spur sustainable growth in the poorest countries, especially in Africa. IDA is our core financing instrument for the 81 poorest countries.In these countries, we need to focus intensively with our partners on achieving the Millennium Development Goals. These basic needs will set the foundation for the future.Yet the message I received when I traveled in Africa in June and Asia in August was that social development objectives are necessary but not sufficient. The good news is that 17 African countries, home to 36 percent of the population, achieved average annual growth of 5.5 percent from 1995 to 2005. These countries want assistance to build infrastructure for higher growth – especially energy and physical facilities that can support regional integration. They also want us to help develop local financial markets, including for microfinance, that can mobilize African savings for Africa's growth.African leaders see great potential to expand agriculture, increasingly through productivity growth. The World Bank Group's forthcoming World Development Report will highlight that GDP growth from agriculture benefits the poorest four times more than growth in other sectors. We need a 21st Century Green Revolution designed for the special and diverse needs of Africa, sparked by greater investments in technological research and dissemination, sustainable land management, agricultural supply chains, irrigation, rural microcredit, and policies that strengthen market opportunities while assisting with rural vulnerabilities and insecurities. More countries need to open their markets to farm exports, too.Another 8 African countries, home to some 29 percent of the population, have averaged growth of 7.4 percent from 1995 to 2005 due to their oil resources. For these states and some IDA countries in other regions, the priority development challenge is encouraging good governance and anti-corruption policies, along with an expansion of local public sector capacity, to ensure that resource revenues build a sustainable future for all citizens.Second, we need to address the special problems of states coming out of conflict or seeking to avoid the breakdown of the state.When the visionaries at Bretton Woods conceived of the IBRD over 60 years ago, the "R" stood for the reconstruction of Europe and Japan. Today, the "R" points us toward the challenge of reconstruction in states harmed by modern conflicts.Paul Collier writes in his book The Bottom Billion that 73 percent of that billion live in countries that have endured civil wars. Sadly, these conflicts not only lead to extraordinary suffering for the people directly involved, but the spillover effects drag down their neighbors too.Frankly, our understanding of how to deal with these devastating cases is modest at best. I suspect we will need a more integrated approach involving security, political frameworks, rebuilding local capacity with quick support, reintegration of refugees, and more flexible development assistance. The Bank Group's constructive work in Bosnia, Rwanda, and Mozambique shows what is possible. IDA's adaptability and quick disbursements have proven vital in post-conflict environments, and we are working with donors to increase our effectiveness.Today, we are at work in Southern Sudan, Liberia, Sierra Leone, DRC, Burundi, Ivory Coast, Angola, Timor Leste, Papua New Guinea, Pacific island states, Afghanistan, and Haiti, among others, often through trust funds established by donors and in concert with the UN. If there is an effective peace accord in Darfur, backed by a strong UN-AU security force, the World Bank Group would want to help.Third, the World Bank Group needs a more differentiated business model for the middle income countries. These states continue to face major development challenges. Critical social services and infrastructure remain underfunded. In many cases, rapid economic growth has failed to provide opportunities for the poor. Environmental problems are acute. And there remains a continuing potential for volatility in the flow of capital to these countries – like those we witnessed through the 1980s and 1990s.Recognizing these challenges, our middle income members want the World Bank Group to remain engaged with them through a competitive menu of "development solutions." But this engagement needs to reflect major improvements in their financial position and institutional capacity over the past decade. They want IBRD, for example, to provide much more flexible and better-priced banking services, with less red tape and shorter turn-around times. They are looking to IFC to help develop private sector solutions for undeveloped markets and even social needs. And they are holding us to ever-higher standards of quality, consistency, and cost-effectiveness in our advisory services. In short, they want performance, and that is what we intend to give them.For some middle income countries, our services will be increasingly in the areas of risk management and the application of global know-how to local needs. We can offer credit enhancements, hedging, and neutral expertise that will help build the capacity for asset management. We can encourage local securities markets by helping construct local currency bond funds and indices. We can finance in local currencies to help combine our lending with the management of currency risk. To encourage inclusive growth within countries, we can work with subnational authorities. We are now developing contingent financial instruments to assist with emergency liquidity needs during financial shocks, as well as insurance market facilities to broaden availability and lower the cost of coverage for natural catastrophes, such as hurricanes and earthquakes. Some of these activities may lead us to explore how best to provide services and knowledge for fees, offering our client countries a choice of delivery with or without financing.Fourth, the World Bank Group will need to play a more active role in fostering regional and global public goods that transcend national boundaries and benefit multiple countries and citizens. It is our calling to ensure that this agenda is linked to the aims of development.The World Bank Group has already demonstrated its potential to assist in countering communicable diseases through our work on HIV/AIDS, malaria, avian influenza, and vaccine development. We are in the midst of reexamining ways to strengthen the nexus between aid and trade, including through IFC's innovative trade finance project, focused principally on Africa, which within two years has already backed almost $2 billion of trade.We are working with our Board to significantly step up our assistance to the international efforts to address climate change. At our upcoming Annual Meetings and at the UN Climate Change Conference in Bali this December, I hope to outline a portfolio of ways the World Bank Group can help integrate the needs of development and low carbon growth. We need to focus particularly on the interests of developing countries, so that we can meet the challenge of climate change without slowing the growth that will help overcome poverty.Our work on regional and global public goods will require close cooperation with other agencies that have specialized expertise, such as WHO, UNEP, UNODC, and the WTO. We also must determine the Bank Group's comparative advantage to best focus our resources through selective, differentiated approaches. Given our specialization in working on development at the national level, our most important operating challenge will be to support countries as they determine how best to integrate public goods policies—and regional and global opportunities—into national programs. These opportunities should draw on private sector entrepreneurs and energies, too.Fifth, one of the most notable challenges of our time is how to support those seeking to advance development and opportunities in the Arab World. In the past, these lands have been at the center of trade and learning, suggesting the potential if they can move beyond strife and barriers to growth and social development. Without broad-based growth, these countries will struggle with social tensions and a large number of young people who cannot find jobs. The UN's Arab Human Development reports offer powerful self-assessments.When I served as the U.S. Trade Representative, I worked closely with leaders from the Maghreb to the Gulf who were opening economies and societies. Some had plenty of energy resources and capital but little economic diversity and ability to create jobs. Others were seeking to improve schools, strengthen the adoption of technology, and expand employment through business deregulation and trade. A number were deepening productive ties with Asia, through cross-investments, trade, and the growth of service centers.Our recent "Doing Business 2008" report shows there is progress. Egypt tops the list of economies reforming regulations to make it easier to do business. Saudi Arabia eliminated layers of bureaucracy that had made it one of the toughest places to start a business and also did away with minimum capital requirements.These are encouraging developments, but there is much more that can be done. An inclusive globalization must deliver benefits for all the people in these states. As Arab governments seek to provide social services effectively to all their peoples, we can offer comparative experience. We can assist in creating hospitable environments for business – whether local or foreign. For some, we may be able to finance development projects, operate donor trust funds, or spur the expansion of private sector services through the IFC. Today, we are helping provide basic social services and support for good governance and private sector growth in the Palestinian territories, which could provide the economic foundation for hope if the parties choose the path of peace.Finally, while the World Bank Group has some of the attributes of a financial and development business, its calling is much broader. It is a unique and special institution of knowledge and learning. It collects and supplies valuable data. Yet this is not a university – rather it is a "brain trust" of applied experience that will help us to address the five other strategic themes.Such a capability requires special recognition and sustenance. Yet we also must keep challenging ourselves by asking: what does it take to achieve inclusive and sustained development and growth?This challenge requires humility – and intellectual honesty. Many development schemes and dreams have failed. This is not a reason to quit trying. It is cause to focus continually and rigorously on results and on the assessment of effectiveness. This is the best way to earn the confidence and support of our shareholders, stakeholders, and development clients and partners.These six strategic themes offer a direction – to be discussed, refined, and improved. To bring these ideas to fruition, we need to understand the particular needs of our clients. We welcome the counsel and guidance of our shareholders. There is a great need – and a compelling opportunity – for the World Bank Group at this point in history.Internal Challenges: Good Governance & Anti-CorruptionTo be successful, the World Bank Group must also squarely face its own internal challenges. We need to use our capital more effectively and focus more on client service. We should strengthen our ties with civil society organizations and NGOs so we can learn from them. Reflecting the new "architecture of aid," we need to work more effectively with national aid programs, funds focused on particular projects such as diseases, foundations, NGOs in the field, and private businesses interested in development challenges.We need to assist staff with better professional development and improve mobility within the organization. We need stronger human resources policies to support our field staff as we encourage greater decentralization. And we need greater voice and representation on our Board and diversity in our workforce.As a recent report of an experienced panel led by former Federal Reserve Board Chairman Paul Volcker underscored, we also have work to do in strengthening our approach to dealing with governance and corruption. The panel gave us an extensive set of recommendations to consider to bolster the work of our internal investigators and make sure their product is put to best use. We are following up promptly, welcoming the views of others, discussing ideas with our Board, and moving toward operational improvements.My experience has been that the people at the World Bank Group recognize how critical the Governance and Anti-Corruption agenda is. They are proud of the development mission they serve, want to uphold the integrity of their institution, and know corruption steals most from the poor and powerless. We will do better together.The World Bank Group can also offer leadership by integrating good governance and rule of law policies in the development agenda. Just last month, we joined with the UN to launch a Stolen Assets Recovery—or StAR—Initiative to get developed and developing countries to work together to recover the financial plunder of corruption. Our successful "Doing Business" report makes clear that poor regulatory and licensing policies not only stifle entrepreneurs, but also create opportunities for graft.Conclusion: Two VoicesToday, I have offered a sense of direction for the World Bank Group. To really understand what we are about, let me close with the voices of two others.Deramma is a woman who belongs to a village self-help group in the Indian state of Andhra Pradesh. She is one of more than 8 million women who, with the support of the World Bank, established self-help groups to pool resources. This most basic of intermediation and support services has increased incomes for close to 90 percent of rural households – that's approximately 40 million people. Deramma told us, "It used to be a hand-to-mouth existence. But now we are self-reliant, and can educate our children. We now have the confidence that we can climb out of poverty."Dinalva Moura, a mother of three, has been part of Brazil's Bolsa Familia program, which offers small sums of money to parents of 11 million families who keep their children in school and take them to regular health checks. The Bank Group offered financial and technical assistance to support the Brazilian Government's impressive initiative. Dinalva told us, "The Bolsa Familia helps me buy food—sometimes even fruit for the children. And they don't skip school, because they know the money depends on their going."These are the voices that tell you the story of our day-to-day efforts to create new possibilities for the poor. And these are the voices that echo the compelling need for a dynamic World Bank Group that will connect them to other people, to ideas, and to opportunities. This is what inclusive, sustainable globalization is all about. Show Less -