text:
All What's New
- Today
- Past 7 Days
- Past Month
- Past Year
- Specific Date Range
- Date
Green Bonds & Climate Policy: Building a Foundation for Scalable Investment
I am delighted to be here today with several of the creators of the Green Bond Principles and pioneers of today's green bond market. In just one year, the principles are having an impact on transparen... Show More + cy and definitions, and the market is growing fast.You must be proud of what you have accomplished with green bonds in such a short period of time. You are fostering a financial product that holds great promise to mobilize new capital flows toward investments in clean, sustainable growth that addresses climate change. Nurture it carefully. Don't take your eyes off the prize.I will be talking today about how bonds can rise to that challenge, and some of the hurdles to overcome. I'll also touch on what we're doing with green bonds at the World Bank Group and get into four ways that, together, we can scale up the use of green bonds for climate finance.At the World Bank Group, we have two overarching goals: to end poverty and increase shared prosperity. Climate change makes both much harder to achieve. It threatens to roll back decades of development progress and puts lives and property at risk.The green bond market is opening up one avenue of opportunities for investment in clean growth and resilient development that are necessary to mitigate climate change. Each of us in this room can use our resources to innovate and help the market evolve to help meet the global climate challenge.The ChallengeGlobally, we need a smooth, managed transition to low-carbon and resilient growth or we will pass on a dwindling economy, hemmed in by the impacts of climate change and scarcity of natural resources. It will be crucial to have effective policies in place in each economy that both send signals that we share a long-term goal of low-carbon growth and resilience and provide a support structures that protects the poor and vulnerable so we leave no one behind.The challenge is clear and the science underpinning it is also clear. We need, by the end of this century, to have a global economy that meets the needs of humanity and which is in balance with the Earth's chemistry.That means getting prices right, getting finance flowing, and working where it matters most. We need to increase energy efficiency, scale up renewable energy, and manage land differently to reduce net emissions. In many ways, we need to live differently to create a cleaner world.At the same time, as we transition towards low-carbon and resilient development, we need to solve the political issue of how to mobilize $100 billion per year by 2020.This is where green bonds can play a bigger role.Developed countries have committed to invest $100 billion annually to help developing countries adapt to and mitigate climate change. This is money that will come from both public and private sources. Right now, only about $34 billion is actually flowing North to South, primarily through the multilateral development banks. The question the international community is grappling with is how to fill that approximately $70 billion gap in order to strike a political deal at the climate talks this year in Paris.The cumulative green bond market currently stands at about $59 billion, with some 300 bonds from 19 countries in 23 currencies.Globally, new green bond issuances more than tripled last year to about $36 billion, after more than tripling the year before. They could double or triple again this year to $70 billion or even $100 billion. You heard S&P estimate this week that we could see $30 billion in new green bonds issued by companies alone this year. That which is flowing from North to South should count towards the $70 billion gap.So, how can green bonds help? By branching out into more project-level green bonds, expanding the market to new currencies, supporting new issuers and considering new forms of green bonds, and by expanding the green bond concept to resilient infrastructure, we can play a major role in expanding the flow of new North-South finance.What We DoBefore we tackle the evolution of green bonds, let me describe what we do now.At the World Bank Group, we issue green bonds through two separate bodies – the World Bank and IFC.The World Bank Treasury helped launched the modern green bond market in 2008 and has issued more than $8 billion in green bonds in 18 different currencies since then. It has issued index-linked green bonds for retail investors and a 30-year green bond. Its green bonds have funded energy efficiency in Eastern Europe, clean energy in Asia, and public transportation in Latin America, among many other projects and locations.IFC, the arm of the World Bank Group focused on private sector development, has issued about $3.7 billion in green bonds, including two $1 billion issuances, which provided much needed liquidity to spur investor participation in the market.Some of the projects supported include:In Indonesia, a geothermal project supported by World Bank green bonds is designed to increase access to affordable, clean energy and reduce 1.1 million tons of greenhouse gases every year.Another World Bank green bond-funded project in China is reducing costs through improved energy efficiency in factories and is expected to cut greenhouse gases by 4 million tons a year.And IFC green bonds are financing a 44 megawatt wind power plant that is increasing Croatia's wind energy capacity by 35% and is estimated to cut emissions by 33,000 tons of CO2 per year.Together with many of the issuers represented here, we support the framework of the Green Bond Principles because they highlight transparency in the criteria for defining "green," for selecting projects that meet the criteria, for earmarking proceeds, and for impact reporting.The World Bank and IFC have been working with other multilateral development banks to provide examples of good practice. We are expanding the toolkit for measuring results in addressing climate change, such as harmonizing greenhouse gas accounting and developing risk management products.Right now, we are working with the African Development Bank and the European Investment Bank on a draft reporting framework that shares ideas on how to report on the impact of green bond-eligible projects in more consistent ways. The draft framework includes some suggested core indicators, starting with energy efficiency and renewable energy. The objective is to build broader consensus and refine the framework over time.Telling fixed-income investors how their money is used is proving to be a powerful tool – we're seeing that in the green bond market for a couple of reasons. Increasingly, segments of the bond investor market care about extra-financial characteristics of their investments. And even with incomplete policy signals, the general public and institutional investor stakeholders are demanding a move towards more responsible investing.The simplicity of the market helped it become what it is today. We need to develop guidance and encourage greater transparency, but also encourage growth in a new directions. We can bring in more issuers who can support climate-friendly growth, encourage more investors to expect a positive impact from all their investments, and get more innovative products building the finance needed.The risk-return fundamental of investing is no different for green bonds than for any other investment – this is about investors looking for meaningful impact.Climate FinanceSo, we know this is a market with momentum and great potential to help build a better world.Moving forward, the challenge from the perspective of expanding the flow of finance to support the orderly transition to low-carbon is that most green bonds tend to be "use-of-proceeds bonds," where investors are relying on the issuer's credit rating in addition to its project selection, due diligence and monitoring.If the World Bank Treasury issues $1 billion in green bonds, that money goes to support climate-smart projects, but the projects are still on the World Bank's balance sheet, supported by the World Bank's capital regardless of the source of funding. Direct project finance at the World Bank and IFC requires a lot of expertise, and that carries additional costs. Through green bonds, investors can build their green credentials without being exposed to project risk. They're only exposed to the risk of the issuer, and the World Bank and IFC are both triple-A.This is helping to build investor expertise around climate finance as the market is in its early stages, but the bonds are still priced flat to other bonds. At some point, the risk needs to be shared beyond the issuer.What kind of bonds do we need to get finance flowing?So as the market matures, how do we leverage green bonds to get more climate finance flowing? Where do we want to see this market go so it has a significant, credible impact on climate finance?I would like to focus on four ideas: greater use of asset-backed bonds, greater support for new and local markets, using local currencies, and investing in resilient infrastructure.Asset-Backed BondsProject-level finance is not a large part of fixed-income investments in general, and the bonds are likely to be lower rated or unrated because of the construction and delivery risk. But interest is growing from investors looking for diversity in credit ratings and duration. Asset-backed bonds pool that project risk.Hannon Armstrong Sustainable Infrastructure, for example, started assets-backed bonds in 2013 with a $100 million bond backed by the cash flow from over 100 wind and solar power and energy efficiency projects.We're happy to see more corporates and subnationals getting involved and issuing green bonds, but the fact is, most green bonds remain on balance sheets. There have also been very few issued in developing countries.How do we move to more investors taking appropriately mitigated project-level risk rather than simply relying on big issuers' balance sheets?Asset-backed bonds are one avenue. There are also different ways of using credit enhancements, such as guarantees, to get finance flowing. OPIC has issued a couple of green guarantees, which act like green project bonds backed by a U.S. government guarantee, for solar and hydro in Chile.Local MarketsDevelopment banks – in addition to being issuers – can bolster new markets to help grow climate finance. IFC is currently considering investing $50 million in a green bond for infrastructure issued by India's Yes Bank. By being a buyer, not just an issuer, IFC would signal to the market that the bond has credibility and that it meets IFC standards.Local CurrenciesCreating green bonds in local currencies also expands the investor base. The World Bank has issued green bonds in 18 currencies, including rubles, pesos, Turkish lira and Australian dollars. The IFC's issued a green bond in Peruvian soles last year that allowed a Peruvian insurance company to invest.We are in the early stages of a mandate to support green financing that could include the issuances of green sukuk. There is no market yet, but we have discussed the possibilities, and the UAE is considering issuing the first Sharia-compliant bond aimed at financing green energy projects this year.Specialized BondsWe can also do more with the green bonds concept to finance resilient infrastructure. We saw the need earlier this month when Cyclone Pam devastated the Pacific Islands of Vanuatu and wreaked havoc on its neighbors. Should we be looking at resilience bonds that rely on standardized climate risk screening?Building climate finance isn't easy. Building a market isn't easy, but look at what you've done so far. We need to be looking ahead to what needs to happen next.So, we can move beyond balance sheets and push for more project-level and asset-backed bonds.The development banks can work with governments – subnational and sovereign – to issue their own bonds in accord with the Green Bond Principles.We can issue green bonds in local currency to expand the investor base and buy locally issued bonds.And we can consider new forms of green bonds, such as Islamic finance and bonds for resilient infrastructure.We can look beyond the current paradigm – always recognizing the need for integrity.I urge all issuers to continue to be transparent in how they approach the market, what they include as green, and how their processes work. And I encourage new issuers and investors to get involve and to take on more risk to support additional climate finance.At the World Bank Group, we are pleased to have been involved in the green bond market from its beginning, and we're looking forward to future growth and greater scale of a robust, deep, and diverse green bond market.These four routes are just a few of the ways the green bonds market can innovate to increase climate finance and support projects that are necessary to bring down greenhouse gas emissions.All of you in this room are specialists in this area. You can lead the innovation in this market. These are the things we are thinking about. I'm looking forward to hearing from you how you feel we can help build the market. Show Less -
Mapping Subnational Poverty in Zambia
Minister of Community Development, Mother and Child Health – Hon. Emerine Kabanshi, Hon. CSO Director, Mr. John Kalumbi, Senior Government Officials. Members of the Media, Distinguished Guests, Ladies... Show More + and GentlemenFirst, let me take this opportunity to thank the Zambian Government for the ongoing collaboration in our common agenda to uplift the lives of Zambians and promote economic growth. The World Bank's current commitment to investment operations in Zambia amounts to US$570 million. This financing is complemented by analytical and advisory work, and other global knowledge that helps Government in making decisions on policies, programs and reforms.This report on Mapping Subnational Poverty in Zambia is an example of work that we do to help Government make informed decisions. Last year, the Government of the Republic of Zambia through the Central Statistical Office (CSO) and the World Bank embarked on a poverty mapping project aimed at creating poverty estimations up to the lowest administrative levels in the country using the 2010 Census of Population and Housing, and the Living Conditions Monitoring Survey of 2010. Hon. Minister, at the outset, I really would like to commend Government for this type of collaboration. It makes working on development such a pleasure as we think through challenges together using the same information basis.Through this report we are launching today, we now know that some of the poorest wards in Zambia are concentrated in the Western, North Western, and Luapula provinces, while the largest concentrations of the poor population are in some of the wards in the Lusaka, Eastern, Central, and Northern provinces. We also learn that those wards with highest poverty rates are also those with lower rates of household education, higher numbers of individuals employed in the agricultural sector, farther average distances to primary and tertiary roads, and lowest concentrations of rainfall precipitation.As you see, the whole exercise of mapping poverty is important for enhancing current understanding of the country's distribution of poverty and the geographic and biophysical conditions where the poor live. Honorable Minister, Ladies and Gentlemen, it is our view that this information will assist policy makers, Development Partners and other stakeholders in designing interventions to reduce poverty. Such information is even more critical now considering that Zambia's recent economic growth of above 6% has not improved living conditions for the poor. I'm here thinking of people in places such as Kapiri Mposhi, and Mansa in Central and Luapula Provinces respectively, which have very high concentrations of poor populations not yet enjoying the economic growth rates and Zambia's status as a lower middle income country. Such people must be reached.Perhaps, the most significant and immediate impact of the information contained in this report is the shift towards an evidence-based approach to policy making and resource allocation in the areas that need them most. Information on poverty at constituency and ward levels can be compared against access to amenities such as markets, schools and health facilities to derive plans for a faster and better access to such amenities. Such information could also be contrasted with job growth poles and local agriculture development.Hon. Minister, ladies and gentlemen, I would like to share with you a very practical example of how the Kenya Constituency Development Fund uses poverty estimates at subnational levels to allocate part of its resources to cater for poorer constituencies. The Kenya CDF targets development projects at grassroots level in constituencies. Part of the resources of the CDF are divided equitably among Kenya's 210 constituencies, whilst the remaining portion is divided based on a poverty index to cater for poorer constituencies. This has helped to achieve equitable distribution of development resources across regions, and to control imbalances in regional development brought about by partisan politics.Zambia also has a Constituency Development Fund. The estimates of poverty ranges at the constituency level could be a powerful tool for allocating transfers in the Zambia CDF. Such an approach could facilitate the putting up of new water, health and education facilities in remote areas of the country that would otherwise get overlooked during funds allocation in national budgets.Honorable Minister, we are aware of the Government's commitment towards reducing poverty and in particular the expansion of its safety net system through programs such as the Social Cash Transfer Scheme and the preparation of the Rural Women Empowerment Project. This effort is commendable as it will make a dent on poverty if well implemented. While there is a need to be judicious about the information constraints to undertake some of these tasks, it is clear that using the subnational poverty estimates obtained in the report would be extremely helpful in improving the geographic allocation of resources to the poor as part of these interventions.Honorable Minister, CSO Director, Ladies and Gentlemen, let me conclude by confirming that the World Bank is indeed fully committed to a continued partnership with Zambia as it strives toward lessening poverty. The mapping report we are launching today attests to this, and further, we are already supporting the CSO to conduct the next round of the Living Conditions Monitoring Survey this year. The new survey will provide vital baseline information for National Development Plans, and for us all to measure and rethink results for Zambia's development.I thank you for your attention. Show Less -
Remarks by World Bank Poland Country Manager Marina Wes at PSIA Learning Event
Good morning everyone. We are very pleased to start our day today with such a broad range of technical experts. It is my sincere pleasure to welcome representatives from government, from academi... Show More + a, from civil society organizations from 17 countries, and from donor agencies to this important learning event.What brings us together in Warsaw these two days is an interest we share in finding better solutions to end extreme poverty and to achieve shared prosperity. The benefits of economic growth are well known. But growth is not always equally distributed among different groups of the population. A rising tide does not necessarily lift all boats.Reforms that are clearly justified from a fiscal and macroeconomic point of view, might have negative impacts on the most vulnerable groups. Identifying and understanding these potential negative effects is important, also to help us to find good ways to mitigate them. This can only be achieved through a policy formulation process that is evidence-based, considers both positive and negative consequences, and includes an understanding of the incentives of the different stakeholders in the reform process. This is exactly what Poverty and Social Impact Analysis (PSIA) is about.Sometimes important reforms can have significant impacts on vulnerable groups making such reforms highly sensitive and unpopular. Protests, and even calls for governments to step down as a result of proposals to eliminate or reform subsidies, to increase retirement ages, or to consolidate schools, are not uncommon. It takes a strong political will, and a good understanding of the incentives of different stakeholders affected by a reform, for governments to truly own the reform process. For this reason, it is important to broaden the recommendations from PSIA work beyond technical solutions to include an emphasis on stakeholders, institutions and processes involved in the design and negotiations of policy reform.Our partnership on PSIA in Europe and Central Asia goes back to the early 2000s. In those early days the analysis relied heavily on quantitative methods, often focusing on utility reforms. This has evolved over time and PSIAs now cover many sectors and topics, including education, health, justice, labor, social protection, forestry, and social inclusion. PSIAs now often incorporate social, institutional and political economy analysis, with focus on incentives of stakeholders.The partnerships on PSIA have received a big push from the support of five donor countries—Norway, Germany, The Netherlands, UK and Switzerland—resulting in the establishment of the PSIA MDTF in 2010. The MDTF has funded 64 grants in 21 countries in Europe and Central Asia, and more than 230 grants in over 80 countries around the world.There are many good examples of PSIA work across Europe and Central Asia. Here in Poland, for instance, a number of important energy efficiency reforms have been spearheaded by the government. To strengthen the case for these reforms, a PSIA supported the Government in designing pro-poor energy efficiency reforms in the residential sector. This PSIA facilitated a dialogue between policy experts, civil society, think-tanks, local and regional government, to help address constraints for low-income households and elderly people.Another PSIA, launched recently, assesses the impacts of recent changes in Polish legislation on the promotion of employment and labor market institutions, with a focus on the most vulnerable and socially excluded groups. Using a mix of quantitative and qualitative methods, this PSIA undertakes an institutional mapping and analysis of gaps in the access and delivery of social services at the local and regional levels. This work is expected to enhance the capacity of Government and civil society to inform policy development and implementation, and improve the delivery of social services.Another example, this time from Moldova, is a PSIA on the impacts and risks involved in the school consolidation process. Data was initially collected on 66 thousand students in eight southern regions of Moldova, which were to be the most affected by school closures. The recommendations derived from the analysis were adopted by Government to implement the consolidation process. Given the richness and usefulness of the information produced by this exercise, led the Ministry of Education to develop a student-level Education Management Information System (EMIS).You will hear many more examples during these two days.Once again, and on behalf of the World Bank, I am very happy to welcome you in Warsaw. This event is an opportunity to celebrate our meaningful and productive partnerships on PSIA. Maybe most importantly, this event will facilitate sharing each other's experiences and lesons learned along the way. We aim to take these partnerships to the next level by planting the seeds of a network of PSIA practitioners in Europe and Central Asia. We believe that knowledge exchange and partnerships across sectors and stakeholders with different affiliations, perspectives and experiences, is particularly fruitful. We, at the World Bank, learn so much from our partners in Poland, and we like to facilitate two-way knowledge sharing among our client countries, including topics close to our heart.We wish you a pleasant event and look forward to working with you all.It is my pleasure to introduce our first speaker of this event, Malgorzata Sarzalska, who is Director of the Department of Economic Analysis and Forecasts in the Ministry of Labor and Social Policy in Poland. Show Less -
World Bank Albania Country Manager Tahseen Sayed Remarks at the Signing Ceremony of the Albanian Health System Improvement Project
Dear Minister Cani,Dear Minister Beqaj,Representatives of Ministries of Finance and Health,Ladies and Gentlemen!I am delighted to be here with you today at the signing ceremony of the Albanian Health ... Show More + System Improvement Project. Project signing is a moment of gratification as it is the culmination of a long preparation process and is the first step towards implementation and delivering results for the people of the country. However, today's signing is of special significance for two reasons: it's the first project being signed between the Government of Albania and the World Bank in 2015; and it's the first project being signed in the presence of Mr. Patrizio Pagani, Executive Director in the World Bank Board, who is on his maiden visit to Albania.I would like to thank Mr. Pagani for participating in this event and sharing this fruit of our partnership with Albania. At the outset, I would like to express my deep appreciation to the Minister of Health for his leadership in stewarding reforms in the health sector, and for his personal championship which enabled us to reach this stage. It is not often that we see the Minister of Health personally engaged and leading technical discussions. Thank you, Mr. Minister!The World Bank is Albania's longstanding partner. Our over two decades of engagement has included diverse sectors, including health, and with good results in many areas. We remain strongly committed to support Albania in its goal of accelerated and inclusive growth, which would contribute to reducing poverty and boosting shared prosperity for the citizens of the country. As you may know, we are currently finalizing the World Bank Group's new Country Partnership Framework for Albania which will define our next five year program of support.One of the key areas under this upcoming new partnership framework is our enhanced support for Government reforms aimed at strengthening governance, equity and quality of public service delivery. We believe that this area complements and deepens the broader macro-economic and structural reforms being vigorously implemented by the Government. Improving delivery of public services is critically important. The project we are signing today is especially needed as health services touch each and every citizen's life.Improving access, equity and quality of public health services thus translates into bringing tangible improvements in the lives of each and every citizen. The encouraging news for Albania is that health outcomes, including life expectancy, are relatively high compared with neighboring countries. However, quality of care requires significant improvements. This sector also faces governance concerns and is most associated with widespread informal payments. Public spending in health suffers from inefficiencies and inequities. Of particular concern is the weak protection of households against high out of pocket expenditures. Out of pocket payments are among the highest in the region, accounting for 55 percent of total expenditures on health. We are highly encouraged by the government's strong commitment towards undertaking much needed reforms in several key areas, including in health financing systems, hospital services, pharmaceuticals, and expanding health coverage. Efforts to improve health care service delivery and financing are already underway.The project we signed today will support Government in its reform of the hospital sector, and the associated program to improve health financing as well as monitoring and management of services. It will also provide support to government efforts in improving equity and regional imbalances so that poor and the vulnerable are protected.It gives me great pleasure that other development partners are joining efforts to support the sector including the Swiss Development Cooperation, the Austrian Cooperation, the Italian Cooperation and Council of Europe Development Bank (CEB). On behalf of the World Bank I would like to acknowledge with huge appreciation the excellent cooperation and technical engagement of the team from the Ministry of Health, and to especially appreciate the team's tireless preparation of this project. I also thank my team in the World Bank which supported this process with exceptional commitment, and brought expertise from various other parts of the world. I also must acknowledge the strong support of the Ministry of Finance and the continued guidance of the Minister of Finance.I wish you a successful implementation of this important project. Show Less -
Speech by World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati at China Development Forum
Global Leadership in the New Normal(As Prepared for Delivery)Excellencies, Honorable Delegates, Ladies and Gentlemen,It is a great pleasure to once again address the China Development Forum. I want to... Show More + thank Vice Minister Liu Shijin for his kind introduction and for his long standing support for the partnership between the DRC and the World Bank. And I would like to thank Chairman Xu Shaoshi for his insightful remarks.Given our topic today the question to start with is: What is normal today? With a gradual rebalancing of the economy towards services and shifting demographics, China's 'New Normal' presents a different picture. But strictly speaking it is not that new. New directions for China's economic course have been in the making for years, and the indicative growth rate of about 7 percent for next year is in line with this trend. Reforms for the New NormalChina can afford lower growth rates while continuing to deliver the necessary jobs. Not only that, the lower growth rates can also open the space to implement the reforms needed to achieve the 'New Normal.' The route to rebalancing demand is complex. China will have to bring down debt to GDP ratio and gradually wean itself off credit-driven investment as a driver of demand growth. While external demand can take up some of the slack, a return to the high current account surpluses of the past is neither desirable, nor doable in a world of lackluster growth. So consumption will have to fill the gap, which means either larger central government consumption, or higher household consumption. The latter will require a higher household share in national income, which in the short run can best be achieved through fiscal policy as well. Therefore, a smooth transition is likely to require an active fiscal policy that targets consumption, more so if the slowdown were to turn out more rapid than currently foreseen.The list of changes underway is long: fiscal reforms, financial sector reforms, land reforms, and environmental management. The revised budget law and new rules on local borrowing, a more flexible RMB and deposit rate. New property rights for farmers, including the right to trade rural construction land and opening up of hukou for small and medium cities.These are remarkable and profound changes already being implemented.China is moving fast - not just in comparison with its own past performance, but also compared to other economies in need of structural reforms—and these include almost all other G-20 countries. But there is no time for complacency and it is important to stay the course. The next phase of reform agenda could get tougher.As Premier Li told the National People's Congress:"Systemic, institutional and structural problems have become 'tigers in the road,' holding up development. Without deepening reform and making economic structural adjustments, we will have a difficult time sustaining steady and sound development." For China the issue is not that it has to deal with the tigers in the road but how to tackle them – so that its people will benefit in a changing environment.China's reform path ahead will be different from its past measures. It will require persistence because the results may not manifest themselves as quickly as the costs and the burden.Let me focus on three areas to make China's 'New Normal Growth' inclusive, sustainable, and efficient.First, making growth more inclusive.China's record on fighting poverty remains unprecedented. More than 600 million people moved out of poverty since reforms took off in 1978. Without this achievement the millennium development goal of halving global poverty would have been unreachable. Yet, China has seen a rapid increase in inequality.Rapidly rising income inequality is a global concern. In China it has been rising fast since reforms took off, although it has been coming down slightly in recent years following a set of measures taken. China has made tremendous investments in leveling the playing field: in education - to increase people's capabilities to benefit from growth; in infrastructure - to connect people with markets; and in safety nets - to protect the most vulnerable in its society. As a result, China's education budget is 7 times higher than in 2000, and the number of people benefiting from China's safety nets increased from 5 million to over 70 million in the same period.But from the perspective of growth and development, inequality of opportunity is key.A major area to address is the urban-rural divide. As I mentioned, China is already reforming its hukou system to provide some 100 million migrants access to urban life. At the same time, there are currently some 250 million migrants in China's cities, and tens of millions more will move to the cities in the years to come.According to our joint urbanization study with the Development Research Center, China can afford to integrate all migrants into the urban fabric, much like Japan and Korea did in their phase of rapid urbanization. To do so would require further reforms in the fiscal system, in pensions and health insurance, in affordable housing, and in rural land rights.None of these are easy.However, the pay-offs of such reforms would be large: a mobile, more urban labor force that is as productive and that will increase much needed consumer demand.Another area of reforms that would increase equality is health care. China has dramatically expanded the health insurance system in the past five years, and more than 90 percent of its people now have coverage. The next wave of reforms should focus on improving the quality of health care, while controlling its price tag. The choices that China makes in the coming years will determine how cost-effectively it can care for its aging population and its rapidly rising incidence of non-communicable diseases.Together with our Chinese partners, we are currently studying better health care delivery, and we will share our findings later this year. International experience suggests reforms, including: moving away from fee-for-service payments, strengthening the role of health insurers as buyers of services, and shifting demand away from hospital care to primary care. Defining, regulating and supervising the role of private health care providers could equally contribute to more cost effective service delivery. Further reforms to the fiscal system could also address inequality. With China's labor force becoming more mobile, China needs to ensure that people have access to health care, education, and pensions, where they live. To enable jurisdictions to provide quality services, China could apply a "money-follows-people" principle. The key to financing this principle could be the equalization grant, which currently plays a subordinate role compared to shared taxes and earmarked grants. For this to work, local governments need to be held accountable for delivering the services that can empower people to improve their lives and that of their families.The second item on the 'New Normal' agenda is to make growth more sustainable.In the past two decades, China has made major efforts to reduce emission intensity and control pollution. China is already the largest producer of renewable energy in the world, and the current Five-Year Plan has hard environmental targets to control energy intensity, pollution, and water use. People not only demand but also deserve a cleaner environment. China understands that to be well-off, its children have to be able to play outside and breathe clean air.China just confirmed that it will commit to enforcing its new environmental law. For the next Five Year Plan, China could achieve a breakthrough by implementing measures currently under consideration. These may include capping energy use, particularly coal and expanding the carbon cap-and-trade-system that is currently piloted in 7 localities across all of China—or alternatively, introducing a tax on carbon. Last year's drop in coal production by almost 3 percent—the first such drop in decades—signifies that such ambitious goals are feasible. Crucial for China's success is matching its green ambition with greener governance. This means building the right institutions, sharpening the instruments of environmental policy and providing the right incentives for local officials to pursue environmental goals. This requires authorities to better coordinate their river management, anti-air pollution measures and the pricing of environmental goods—and taxing of the environmental bads.And finally, for local officials to pursue environmental goals, will require a change in the way they are evaluated. Being green should have its rewards.Internationally, the importance of the joint declaration of China and the USA regarding greenhouse gas emissions cannot be overestimated. China's submission to the COP-21 meeting could solidify the country's commitments to global environmental goals and hold or even reverse greenhouse gas emissions by 2030 or before. The next Five Year Plan will be crucial in solidifying the basis for meeting that goal which would not only help China become healthier, but the rest of the world too.Finally, China aspires to make its growth more efficient and more sustainable. The ongoing fiscal and financial reforms will go a long way in achieving better use of people's talents and savings.They are a start, but much remains to be done, including clarifying responsibilities for different levels of government, strengthening the revenue base for local authorities, further liberalization of interest rates and establishment of a new framework for monetary policy suited for China's evolving macroeconomic environment.Going forward, China needs to harmonize the coexistence of market mechanisms and the role of the government. Two crucial shifts towards more innovation and efficiency have already been made: the 3rd plenum's principle that the market should play a decisive role in resource allocation and the 4th plenum's principle of the rule of law. Premier Li has spelled out what this fundamental change will mean for the way China is governed: A decisive role for the market requires the government to step back where it can, but regulate and supervise where needed. Rule of law means that – without exception – it is applied equally, irrespective of ownership or nationality of origin. In the 13th Five Year Plan, these principles can be shaped in a variety of ways:First, China can continue to open up sectors for private investment, as it has already done effectively in the Shanghai Free Trade Zone and elsewhere. A move to a nationwide negative list for restricted industries, rather than the positive list currently used could accelerate this process. The reduction of administrative burdens on small enterprises, which caused the number of new businesses to jump by 50 percent, is evidence that further improvements in the business climate has much scope to generate growth and jobs in the years ahead.Second, achieving higher efficiency and more innovation requires more competition. For the overwhelming majority of China's enterprises, the domestic market will be the main or only market, and ensuring entry and competition in this market and avoiding the distortions and waste that come with monopolies and oligopolies is key.China could consider raising competition policy to a different level by establishing an independent competition authority that can impartially rule over uncompetitive behavior and level the playing field. Third, China can accelerate State-Owned Enterprise reforms. Provinces are currently developing their own reform plans, and are separating commercial from non-commercial enterprises, which is a good first step. Focusing on the return on assets of commercial SOEs and their contribution to the government budget is a second element of reforms. Allowing more mixed ownership in SOEs across the board can improve the way these enterprises are governed and the efficiency with which they use society's resources. But increasing transparency of SOEs, increasing accountability, and hardening budget constraints are crucial for higher performance and more efficient growth.This will also be critical for China's role in the international arena where a level playing field – in trade, investment, and development – will be critical too.Let me acknowledge that reforms of the depth and nature that China is pursuing are not only tough but unprecedented. As I mentioned at the outset, they often come with trade-offs and are triggering opposition by those that benefit from the status quo. As Premier Li recently told the media:"Reforms will upset vested interest. It is like taking the knife to one's own flesh. But despite the pain we will continue."Withstanding the temptation to slow or weaken the reform path towards the 'New Normal' will require strong leadership. So it is good to see that China's leaders are focused and aware of the challenges ahead.If China manages to implement a truly inclusive, sustainable and efficient growth model, a triple win may be in reach: For its people, for its country and for the global community. Show Less -
Remarks by World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati at 11th ASEAN Central Bank Governors Meeting
'Financial Inclusion and Access to Financing'Thank you very much.It is a pleasure to be here today and talk about financial inclusion.Financial inclusion is critical in the fight against poverty, yet ... Show More + too many people have no access to financial tools or credit.An estimated 2.5 billion people in the world do not have access to formal financial services linked to account. This includes 80 percent of the people living on less than $2 per day. Up to 200 million small businesses globally lack the financing which they need.Financial development matters because it not only promotes growth, it is also a catalyst for ensuring that prosperity is widely shared. So the deficit in financial access can hold people back from moving out of poverty and increasing inequality.People who are "unbanked" find it difficult to save, plan for the future, start a business, or recover from crisis or loss.Access to financial services improves access to health and education - through cheaper payments or remittances, better savings options and access to credit.Without access to affordable financial services or credit small businesses are constrained in their ability to invest, grow and create jobs.Emerging evidence indicates that access to financial services can enable individuals and firms to smooth consumption, manage risk, and invest in education, health, and enterprises.For example:In Kenya, access to a basic savings account led to an average 38-56% increase in productive investment and 37% higher personal expenditures at household level.In India and Mexico the expansion of bank branches and other access points has been linked to reduced rural poverty, increased incomes and employment.In India, bribe payments went down by 47% as a result of more efficient and better targeted social transfers to the poor, made through accounts rather than in cash.In Brazil, similar measures lowered administrative costs by 82%.Women still face more severe constraints to accessing and using financial services than men.Women in developing economies are 20 percent less likely than men to have an account and 17 percent less likely to have borrowed formally in the past year.Women also have less access to safe, regulated, savings services. Too often legal barriers prevent them to open bank accounts or get credit for their businesses. They are therefore more likely to use informal – and often riskier and more expensive – mechanisms.Women entrepreneurs in developing countries are more likely than men to cite access to finance as a primary constraint, which constrains productivity and economic activity.If women had better access to the formal financial system it would increase asset ownership and serve as a catalyst to greater economic empowerment.Even a basic financial tool such as a deposit account at a formal financial institution can be of great value. A formal account provides a safe place to save and creates a reliable payment connection with family members, an employer, or the government.But most importantly, when women earn money and have more control over household spending, they spend in ways that benefit children by investing in education and health.It is therefore our goal at the World Bank Group to achieve universal financial access - by 2020.We want both women and men globally to have access to a bank account or an electronic instrument, like a mobile phone, to store money, send and receive payments.This is a basic building block for people to manage their financial lives. It can be the stepping stone to full financial inclusion, providing a pathway to accessing a broader range of responsible financial services provided through stronger and more diverse financial sectors.Increasing financial inclusion in ASEAN will be critical for achieving universal access.ASEAN countries represent 12.3% of the world's unbanked[1], with Indonesia accounting for 5.9% and Vietnam for 2.1%, given their relatively large populations.Small and medium size enterprises make up 96% of all firms in ASEAN countries overall, and contribute between 23%-58% to GDP.Yet less than 15% of those firms are estimated to have sufficient access to credit.There is impressive progress to expand financial access and to tackle these constraints, across the ASEAN region.ASEAN central banks and governments have taken the lead in setting ambitious goals for financial access and inclusion. The national commitments by Indonesia, Malaysia and Philippines are notable examples.Moreover, in 2014 ASEAN adopted the Yangon Outcomes making financial inclusion a key policy objective for all its member countries.At the World Bank Group we are looking forward to support the execution of this agreement, including the work program of the new Financial Inclusion Advisory Group for ASEAN. It is of critical importance that the private sector is providing more and more innovative financial services.National authorities can enable and encourage the private sector to invest more in financial services by following through with their commitments to create a more conducive regulatory and policy environment.One of the key benefits for government will be more effective ways to deliver services to their people.Better access to accounts, linked to the digitization of cash payments can help governments and firms to better target subsidy and benefits programs.It will also reduce leakages thereby increase public expenditure savings.The World Bank Group is therefore scaling up its financial, technical, and knowledge support to national authorities and to the private sector.We have agreed to assist ASEAN in:Measuring levels of financial development;Monitoring compliance with core international standards for financial sector supervision;Upgrading financial infrastructure development, such as payments, remittances, and credit information systems; andBuilding capacity for the application and enforcement of financial sector laws and regulations to give the unbanked access to low cost and safe financial services.The World Bank Group is supporting financial inclusion strategies in very practical ways:We convene donors and other international financial institutions to address financial inclusion barriers in ASEAN countries.For example: We support authorities in Indonesia and Vietnam to bring low income people into the financial system through digitizing social transfers. We have launched a new program of technical support with Indonesia to expand access points for financial services through agent networks, raise levels of financial awareness and capability, and strengthen regulation and supervision of non-bank financial institutions. In the Philippines, Vietnam, and Indonesia we are providing technical support for financial education and consumer protection. While in Myanmar we are designing a comprehensive new program of financing and technical support that covers payments infrastructure, supervisory capacity, and the expansion of access points.We are very pleased that as chair of ASEAN in 2015, Malaysia has made financial inclusion one of its top priorities and has requested the support of development partners, including the World Bank Group, to achieve further progress in ASEAN.We are scaling up a partnership with Malaysia, including through a new World Bank Group office, to mobilize Malaysia's expertise to assist countries in ASEAN and other regions of the world to scale up financial inclusion. Malaysia has world-class expertise on critical areas for financial inclusion, including Islamic finance, payment systems, mobile financial services, prudential regulation and supervision, corporate governance, small and medium size enterprise finance, capital markets, and development finance.Malaysia has made notable progress towards universal financial access. The long-term vision and leadership of Bank Negara Malaysia and the Ministry of Finance have played a critical role in achieving this.Let me highlight that we are also developing new guidance and models which harness the potential of innovative financial services which leverage digital payments, data, and technology, including through the G-20 and Standard-Setting Bodies.I want to make one final point before I take your questions:We are very concerned about the so called de-risking by banks and the affects it may have on the cost of remittances, global trade, and financial crime.Take for example remittances. They are an important source of revenue for lower income countries, including in ASEAN -- Philippines 9.8%, Vietnam 6.4%. We worry that more people will be driven into unregulated channels. Our message is that risks should be managed, not avoided altogether.We are working with the G20 Global Partnership for Financial Inclusion to collect data on the phenomenon of de-risking so that we can have a better understanding of the problem and how to address this issue.I look forward to hearing from you how we can further support you to meet your financial inclusion priorities in each ASEAN country, and in the region as a whole.[1] according to Global Findex survey data Show Less -
Remarks by World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati at ASEAN Finance Ministers' Meeting
The Role of Fiscal and Monetary Policies in Reducing Poverty and Promoting Shared ProsperityYour Excellencies, Ladies and Gentlemen,It is a pleasure and honor for me to attend this meeting today and s... Show More + peak on a topic close to my heart: the role of fiscal and monetary policies in reducing poverty and promoting shared prosperity.As you know, this topic is broad and I will focus on a few key issues. Let me begin with what we all know -- the most important function of fiscal and monetary policies is to maintain macroeconomic stability. A stable macro environment is an essential prerequisite for reducing poverty and promoting shared prosperity for two reasons.First, without macro stability it is impossible to sustain the growth we need to improve the welfare of the extreme poor as well as of those at the bottom of the income distribution.Second, the clearest manifestation of macro instability – high and variable inflation – hurts the poor the most.From the East Asian Crisis to the Global CrisisI know that I don't need to stress the importance of macroeconomic stability to this audience. Historically, the countries of this region have had strong macroeconomic fundamentals, as the World Bank's East Asian Miracle study, among others, recognized this over 20 years ago. However, the East Asian crisis in 1997 and subsequent collapse in growth showed us all that macro stability could not be taken for granted.But the countries in this region recovered quickly with strong stabilization measures and applying the right lessons. So, policymakers in this region were ready when a global crisis threatened economic stability and growth in 2008. Today, developing East Asia – including ASEAN – is the fastest-growing part of the developing world and one of the engines of global economic growth.So, what do these two crises and the responses to them show us about fiscal and monetary policies? I think three key measures have helped ASEAN countries to be more resilient today: -- the need to be fiscally prudent; to use monetary policies to target low inflation; and to maintain flexible exchange rates.On aggregate fiscal policy, ASEAN countries have done well in rolling back the stimulus programs they implemented in the wake of the global financial crisis and in reducing fiscal deficits.Monetary policies, implemented by generally independent central banks, have also been tightened from their accommodative stances in the aftermath of the crisis so as to target low and stable inflation.Finally, more flexible exchange rates have helped to manage current account balances and foreign exchange reserves better than in the past.These aggregate fiscal and monetary policies are essential for maintaining stability and necessary for eliminating poverty and boosting shared prosperity. But they are not enough. Let me suggest two specific aspects of fiscal and monetary policies that can further support the focus on poverty and shared prosperity within ASEAN. Rebuilding Fiscal Space and Using It WellAmong the priorities for the countries in ASEAN is the need to rebuild fiscal space. By this I mean the ability to mobilize resources for public spending without adversely affecting the sustainability of the government's fiscal position or that of the economy. There are both short- and long-term reasons for countries in ASEAN to expand fiscal space at this time.In the short term, countries in ASEAN as elsewhere need to be ready to adopt counter-cyclical fiscal policies if the global recovery were to slow significantly. As the World Bank's recent Global Economic Prospects report suggests, counter-cyclical fiscal policy works most effectively when economies have fiscal space, i.e., low fiscal deficits and moderate debt burdens. Where countries have fiscal space, their fiscal multipliers can be 20 percent larger.This was one reason that the stimulus packages that many ASEAN countries used in 2008 and 2009 were effective -- they were implemented in contexts where fiscal buffers had been rebuilt. However, those stimulus packages also meant that deficits and debt climbed steeply thereafter. And while ASEAN economies have generally done well in reducing deficits and restoring fiscal buffers, debt burdens still remain large in many economies. Rebuilding fiscal space is also important for the longer term since ASEAN countries will need to finance infrastructure as well as health care and long-term care costs as their populations' age. Developing East Asia will require about US$ 750 billion annually to finance new infrastructure. Beyond this gap, infrastructure investment is contributing much less to growth than is consumption, in part because public investment has fallen both due to budgetary restraint and implementation constraints. While we need private financing on board, experience from richer OECD economies shows that the public sector will need to continue to have a major role particularly in infrastructure and health care spending.How can this fiscal space be created? Increasing revenues is the most important priority. A number of ASEAN countries collect revenues of the order of only about 15 percent of GDP, which is low by the standards of comparable low- and middle-income countries. They need a stronger effort to raise revenues through reforms in tax policy as well as improvements in tax administration. In most ASEAN countries, more than a third of all government expenditures and a significant share of service delivery have now been decentralized. So, increasing the capacity and responsibilities for revenue mobilization by local governments will be critical.Finally, many countries in ASEAN also have the scope to increase revenues through reducing tax expenditures – a topic that my colleague discussed in an earlier session in the context of reducing tax competition.Not only does fiscal space need to be rebuilt; the available fiscal resources obviously also need to be used well. Improving the quality of public spending by reallocating expenditures to more productive uses that are better targeted to the poor is particularly important in this regard.Reducing energy subsidies is one way to achieve this. It can help by freeing up the space for expansions in pro-poor areas like health, education and social protection. Energy subsidies are typically regressive in that they benefit the relatively well off. Such subsidies have other costs as well: they encourage waste and discourage investments in a more diversified energy mix that increases the share of renewables. In the long run, they lower the energy supply and impose environmental costs by worsening pollution and congestion.The recent dramatic fall in oil prices offers an exceptional opportunity for subsidy and tax reforms in oil-importing countries, especially since these low oil prices will likely persist for some time. Among ASEAN countries, Indonesia and Malaysia have already used this opportunity to take the politically-difficult step of reducing fuel subsidies. But sustaining this policy shift in the long run will be more challenging. Governments will need to ensure that energy prices are market based so that when prices rise, the price increase is passed on to consumers without hurting the poor. This may require building safety nets to soften the impact of higher prices. Even where countries do not subsidize petroleum products, lower oil prices offers an opportunity to consider raising revenues in a much less distortionary way than through taxes on labor or capital. Generally, petroleum products within the ASEAN are lightly taxed at present suggesting that revenues could be raised by adjusting tax rates.Strengthening the Institutional Foundations for Monetary PolicyEffective monetary policies play a key role in reducing extremely poverty and promoting shared prosperity by helping protect the poor against high and variable inflation. They can also help foster financial deepening and financial inclusion. Achieving these goals can be a difficult balancing act given the openness and global integration of ASEAN economies and the volatility of financial flows and exchange rates. The divergence of monetary policies among the advanced economies and the possibility that U.S. interest rates will rise in the coming months add to the challenge of implementing monetary policy.Given these complex challenges, many ASEAN countries face the task of strengthening the institutional foundations for conducting monetary policy. By this I mean three things.First, efforts to enhance Central Bank independence need to continue while the technical capacity to conduct monetary policy is strengthened.Second, monetary policy needs to be made more rules based. Here, experience elsewhere suggests that inflation targeting (or in some cases, targeting nominal GDP) can be an effective rule to follow even in middle-income countries. Moving away from targeting monetary aggregates or exchange rates provides greater flexibility to policy makers and transparency for enterprises and individuals.Finally, as the ASEAN Economic Community comes into being at the end of this year, and integration moves beyond trade in goods to trade in services, especially in the financial sector, there will be greater need for policy coordination and cooperation across the Community.So, despite the progress that has been made, there remains an unfinished agenda to ensure that fiscal and monetary policies play their role in eliminating poverty and boosting shared prosperity. Thank you once again for giving me this opportunity to share my thoughts on these issues. Show Less -
Remarks by Elisabetta Capannelli at An Emancipation Dialogue on Equal Opportunities in Romania
Distinguished Speakers, Dear Moderator, and Guests,March is a special month in our calendar not only because of Martisor and the welcoming of spring, but also because it allows us to celebrate women a... Show More + nd the key role women have in society.One of the first things I noticed after I started working in Romania is the strength and diversity demonstrated by women here – across all walks of life. I have encountered well-educated professionals leading sophisticated work in the private sector, in universities and government ministries, charismatic leaders of non-governmental organizations, and hard-working heads of household in rural communities coping with heavy burdens.Yet more often than not, women's economic contributions go unrecognized and their work undervalued. A country needs to make the best possible use of all of its assets – especially to all of its human capital. So, gender equality is an economic imperative in addition to a social one. Growth cannot be achieved without equal opportunities, especially in aging societies like Romania.The World Bank considers gender equality as an essential component of effective development. In the past two decades gender equality has progressively taken center stage for the international development community. Equality not only guarantees basic rights but also plays a vital role in promoting the robust, and shared growth needed to end poverty in our increasingly competitive, globalized world.In Romania we are fortunate to live and work in the European Union where the equal treatment of men and women has been at the core of the Union's value systems since its inception and the principle of gender equality is central to all its activities.Even so, in Romania there remain challenges and areas that need improvement in reducing the gender gap and providing opportunities for all. I would like to bring to your attention just a few significant gender challenges that need to be addressed:First, increasing labour force participation of women – activation on the labour market of inactive women (low educated and with limited/no work experience) in their prime age living in rural areas;Second. Concerning one of our largest marginalized communities, the Roma - developing human capital among the women is likely to impact positively educational outcomes of children, labour force participation and better maternal and infant health;Third. Preventing widespread poverty among elderly women - the demographic shift will result in the elderly population being predominantly female in excess of 60 percent in Europe and Central Asia. With this in mind I am grateful that we will have two important speakers joining us today in an engaging dialogue on equal opportunities - Professor Miroiu whose contribution to equality of opportunity and gender agenda recommends her in promoting the role of women in society and Dr. Bitu, an equally energetic feminist active in the social field.I look forward to hearing about their rich experience and to our dialogue on how to best empower women, enhance their ability to make decisions, and take advantage of opportunities. Women have the potential to change their own economic status, as well as that of the communities and countries in which they live.Thank you. Show Less -
Remarks by World Bank Group President Jim Yong Kim at the Foreign Correspondents Club of Japan
Thank you all for coming today. For the first time in its history, the World Bank Group has two goals that shape its mission: ending extreme poverty by 2030 and boosting shared prosperity. To accompli... Show More + sh the first, we aim to lower the number of people living on less than $1.25 a day to below 3 percent of the world's population within 15 years. To accomplish the second, we need to ensure gains from economic growth accrue at a higher rate to the lower 40 percent of income earners in developing countries than the national rate. We now know that the only way to reach these goals is to accelerate a kind of economic growth that's more inclusive, socially sustainable, and protects the environment. That's precisely our plan. These targets are ambitious, but how humbling it is to know that we are the first generation in human history that can actually end the scourge of extreme poverty in a generation. If we succeed in just 15 years, close to 1 billion fewer people will no longer experience what one of my predecessors, Robert McNamara, called in 1973, "a condition of life so degraded by disease, illiteracy, malnutrition, and squalor as to deny its victims basic human necessities." I'm in Japan for the UN's Disaster Risk Reduction Conference because without better disaster risk management it will be extremely difficult to accomplish our goals. The government of Japan has shown exceptional leadership in improving disaster risk management around the world by supporting critical work in expanding expert knowledge and by sharing its own expertise with the world. Prime Minster Abe and his cabinet have been the lead partner in this area and Japan's continued support is essential if we are to help countries prepare for future disasters. We could not be more serious about this issue. Disasters – whether they be geological, meterological or biological – tragically result in loss of life and significant reductions in economic growth.Over the past 30 years, the world has lost more than 2.5 million people and almost $4 trillion because of natural disasters. More than three quarters of these disaster-related deaths are in developing countries, with almost half of them in low-income countries.In 2010, the earthquake in Haiti destroyed more than a decade of growth. In 2013, Typhoon Haiyan pushed nearly half a million Filipino households into poverty. In the worst affected areas, poverty rates rose to 56 percent. And over the past 16 months, the Ebola epidemic has killed nearly 10,000 people in Guinea, Liberia and Sierra Leone. Let me state clearly that we are still not done in controlling this epidemic and the economic consequences will be continue to be severe until we get to zero cases. In 2015, for example, the World Bank Group estimates that these three countries will forfeit $1.6 billion in economic growth because of Ebola. Prior to the start of the epidemic, these three countries had some of the highest growth rates in the world; now their rates are expected to be near or below zero.The bottom line is that, to end poverty, we must continue to expand our understanding of how to manage disasters and deploy this knowledge aggressively. Because of climate change, the frequency, intensity, and duration of extreme climatic events will increase. Thus, the disaster risk posed by droughts, earthquakes, and typhoons will only become worse in the future.Those with much to lose from these developments know these dangers well. According to a Towers Watson survey in 2013, insurance industry executives identified pandemics, hurricanes and earthquakes as the sources of risk that they feared most. And according to this year's Global Risk Report, compiled by the World Economic Forum, environmental threats topped economic risks in the view of CEOs and business leaders. These views are driven largely by our failure to adequately prepare for disaster risk. The World Economic Forum's Risk Report attributed the CEOs' and business leaders' conclusions to, in its words, the "marked increase in experts' negative assessment of existing preparations to cope with challenges such as extreme weather and climate change." We share this concern, and would add that risks and potential damage increase in those countries that can least afford it. Over the past two decades, the international community committed just under $110 billion to disaster relief, prevention and preparedness. This is a small sum when you consider that costs related to disaster recovery worldwide now average close to $200 billion per year, with almost 75 percent of this due to weather-related disasters. And only a little more than 10 percent of disaster aid has funded prevention and preparedness. Compare this to Japan, which allocates about 80 percent of its disaster risk management budget to preparedness. There's good reason for Japan's focus on doing things before a disaster strikes: it saves lives and money. In the fall of 2013, Cyclone Phailin in India tragically took the lives of 40 people. But a storm the same size in 1999 killed 10,000 people.The difference was that the people of India were prepared: A new early warning system and a growing network of cyclone shelters enabled 900,000 people to find a safe haven from the storm. We estimate that every $1 invested in early warning systems can provide as much as $36 in economic benefits because it prevents losses to property and businesses. According to initial research by the World Bank and others, neglecting disaster prevention may also cause slower economic growth, undermining the most powerful engine we have for ending poverty. Specifically, inadequate prevention measures can lead to a culture of excessive risk aversion when it comes to investment, especially for people who have previously experienced a disaster. People and businesses simply choose not to put capital at risk. We see a form of this in the Ebola epidemic. According to our models, aversion behavior – where people decide not to engage in economic activity in attempts to avoid the risk of exposure – has been driving much of the declines in growth in Guinea, Liberia and Sierra Leone. Based on this knowledge, we are working to refocus developing countries on prevention and preparedness when it comes to disaster risk management. For example, since last July, we've been evaluating the development projects funded through the International Development Association, our fund for the poorest countries, for exposure to these risks. We've also incorporated this information into the country partnership frameworks, which define our work in any given country. This means that, going forward, our projects in the poorest and most vulnerable countries will be much better prepared for disasters and climate change. We're also working with partners to reduce developing countries' vulnerability to natural hazards and adapt to climate change. Japan has been an especially good partner in this regard. After the Sendai Dialogue in 2012, we set up a $100 million program to assist countries in managing disaster risks. Run out of Tokyo, this initiative guides countries' national programs, investors' investment strategies, and the World Bank Group's operations.One of the most important steps we can take to prepare for disasters is to ensure the immediate availability of funding preparedness – something again that Japan knows well. In 2008, a Japanese agricultural cooperative, JA Kyosai, purchased a catastrophic bond from a German reinsurance company, Munich Re, which would pay up to $300 million to the cooperative in the event of certain pre-defined metrics. After the Great East Japan Earthquake of 2011, this instrument became the first catastrophic bond to pay out on the occurrence of a geological event. Japan has been supportive of the World Bank Group's efforts to make similar kinds of innovative financing mechanisms available to governments of developing countries. Since 2008, we've approved $1.38 billion in contingency loans to help nine countries secure response funding before disaster strikes. Using capital from Japan, we've also provided financing for the Pacific Catastrophe Insurance Facility, which helped countries in the Pacific Islands secure $43 million of earthquake, tsunami, and tropical cyclone risk insurance coverage in 2014. Given the success of these initiatives, we're examining whether similar approaches could work in crisis situations where financing is absent, such as pandemics. The Ebola crisis shows why this is needed. Once we recognized the severity of the epidemic, the World Bank Group committed more than $500 million quickly to the governments of Guinea, Liberia and Sierra Leone, to help finance their immediate response.But this money only started flowing about eight months after the outbreak began because we and the international community failed to recognize the urgency of the crisis.We must remember this important lesson from Ebola: We need to respond much more quickly to the next outbreak. To help do this, the World Bank Group is currently developing the concept of a pandemic emergency facility. Our goal is to work with partners to create a financial instrument that rapidly disburses a large amount of funds within eight hours, not eight months, of an outbreak that meets certain objective criteria.The other main goal of a pandemic facility is to promote greater country investments in preparedness, which starts with having a strong, resilient health system. The Ebola crisis lays bare the consequences of inadequate public health capacity, from disease surveillance and laboratory analysis to frontline health services and community health workers: People die; economic growth rates decline; and countries, their neighbors, and the entire world, are put at risk. These consequences show why Japan's recent $20 million contribution to support our Ebola recovery efforts is so important. As we take a look at all we've learned from the largest Ebola outbreak in history, we can begin to piece together what a global response capacity that's truly equal to the challenge of even the worst pandemic, might look like. It might look like this – rapidly disbursing financial mechanisms, strong global technical coordination led by a much bolstered World Health Organization, and well-rehearsed and tightly choreographed interventions involving corps of medical professionals; logistics experts; transport, pharmaceutical and communications companies; a United Nations-wide response; and support from multilateral and private sector financial institutions. And perhaps the most important element of preparedness is to build strong health systems in every country.The goal of a strong health system must be to achieve universal health coverage: Everyone must have access to essential health services; and poverty must not be a litmus test to qualify for care. We know that investing in health systems is an investment in both better health and stronger economic growth. Japan has once again been the global leader in promotion of universal health coverage, and ensuring access to health care for all has been very important for both low and middle-income countries. We are proud to have such a close partnership with this country around two concepts that will hold the key to protecting millions of people and the global economy from the next pandemic – disaster risk management and universal health coverage.We expect to present more detail on this pandemic emergency facility proposal in the next few months. For the reasons I've stated, we'll be drawing on Japan's experience in preparing for disasters and universal care. That accumulated wisdom has shown the world that taking the proper precautions can save thousands of lives as well as billions of dollars in lost economic growth. It also can help end extreme poverty. Thank you. I'm happy to take your questions now. Show Less -
World Bank Managing Director Sri Mulyani Indrawati at the Egypt Economic Development Conference
Excellencies. Ladies and Gentlemen. It is a great pleasure to be here today on behalf of the World Bank Group.This event marks an important step for Egypt. It shows that Egypt is open for business. It... Show More + gives the world the opportunity to learn more about the country's vision. For us at the World Bank Group it is part of our ongoing dialogue. It is a chance to identify better ways in which we can support Egypt in building a sound and equitable economic foundation that benefits all of its people.But as we all know well, the country is facing challenges. This conference comes after four years of tumultuous political transition. Transitions are difficult. But they can pave the way for socially inclusive and equitable economic reforms.Despite the challenges, there are signs that Egypt could be on the right track.We see promising attempts to address the macro economic imbalances, for example by reducing the fiscal deficit. They could bear fruit when spending is adjusted in favor of areas that improve productivity and address inequality. One such area is infrastructure: Investing in infrastructure projects could provide jobs for low-skilled workers. Improving public transport will increase mobility while giving more people better access to the formal private sector. Safe and reliable public transport also encourages women to join the workforce.While fiscal adjustment is critical, the Egyptian government is also aware of the need to protect the poor. It is good that Egypt wants to improve its social safety net by expanding its cash transfer system to the poorest members of society. The system Egypt is designing aims to reach an extra half a million households this year and could expand to another one million households over the next two years. The World Bank will provide initial support of US$400 million to this program.Finally, the private sector can only be successful if it operates in a business climate that encourages competition and levels the playing field. Reforms in this area will be critical to making Egypt's economy grow. A successful private sector can create the jobs and livelihoods that millions of people are waiting for. Moreover, the government knows that in order to unleash the private sector it needs to address governance. Good governance means rule of law as well as transparent and accountable public institutions and as such it is critical for achieving widely shared prosperity and reducing poverty. The Egyptian government has passed important legislation in this area. But the temptation to stay away from tough issues, like addressing corruption or lowering barriers for competitors, will be high. So for reforms to yield results they need to be bold, and it will take persistence and strategic focus to stay on course.Egypt has some way to go.If reforms are done well, the benefits for the Egyptian people could be countless. We know from experience that a positive business environment creates a large and diverse set of jobs. Vibrant private sector will contribute to Egypt's growth by helping develop capital, technological know-how, and management skills.We remain a committed partner to the Egyptian people and often serve as a convening agent for the donor community. Our current portfolio of US$5.5 billion will be scaled up and will increase by US$4 billion in the next 4 years. We are preparing projects that strengthen social protection, increase affordable housing and better access to sanitation.Other key sectors we already support range from transport, energy, to agriculture and irrigation. Together with our hosts we focus on reforms that bring better health services and better education to the poor and vulnerable.It is the young who are currently shouldering the burden of the jobs shortage. More than three-quarters of the unemployed are between 15 and 29 years old. At the same time poverty rates have increased to almost 25 percent. High poverty and high unemployment require serious attention and our joint efforts to improve education and vocational training, especially for the youth.Our private sector arm, the International Finance Corporation, is playing a strong role as well. Over the last four years IFC committed almost US$1.1 billion to 20 projects that are supporting companies with the ability to create jobs, boosting access to finance for small and medium enterprises, and demonstrating Egypt's long-term potential to investors. Looking ahead, it will pursue and strengthen its effort.I am very pleased that the government of Egypt and the World Bank Group have agreed to work together on two issues for the next five years:Creating jobs, particularly for young people through a large and diverse private sector.And improving governance, a key ingredient to achieving social and economic progress.Let me close by reminding all of us that development is not a sprint. It is a marathon. We are all aware of this. Egypt needs an environment in which the private sector can thrive to create the jobs Egyptians need to build better lives for themselves. The country cannot afford to slow the reform progress. So patience and perseverance are important.It is good to see that Egypt is open for business. We should now work hard to push the door as wide open as possible. The people of Egypt expect us to go beyond talking and put words into action.Thank you. Show Less -
Keynote speech by Anabel Gonzalez at the Jamaica Investment Forum 2015
· Good morning, most Honorable Prime Minister Portia Simpson Miller, Honorable Minister of Finance Peter Phillips, Honorable Minister of Industry, Inves... Show More + tment and Commerce Anthony Hylton, ministers, business executives, partners and colleagues.· Let me start by thanking Jamaica's leadership for organizing the Jamaica Investment Forum 2015 and inviting me to speak today on the competitiveness and growth agenda.Background and context· Transforming a country's economy requires a long-term vision, but also pragmatic steps and bold actions.· Jamaica has taken the first step with its National Development Plan, "Vision 2030 Jamaica," and has put itself on a positive trajectory. · This plan include key reforms to stimulate private investment and growth, including achieving macroeconomic stability, improving the business environment, and ensuring that the structures of its industries are internationally competitive.· This is part of a historic moment in Jamaica.· To quote Minister Hylton: "Jamaica is putting its house in order." · These actions have already produced positive results:o The Jamaican economy is expected to grow at 2-3 percent over the medium term, clearly seizing a unique opportunity to escape the trap of high debt and low growth.o In World Bank Group's most recent Doing Business report, Jamaica had the Caribbean's highest ranking on the ease of doing business and made the sharpest year-over-year improvement.o Jamaica recorded $567 million in FDI in 2014 -- a five-year high.· And the country is embarking on an exciting initiative that has the potential to position Jamaica as a logistics hub in the Caribbean, and could generate significant growth.· The Logistics Hub Initiative (LHI) capitalizes on the country's position along busy trade routes between the Panama Canal and Miami, and has the potential to not only attract investment, but create jobs and retain the country's young talent.Connecting Jamaica's economy to the global economy· The main reason we are gathered here today is because we recognize that offshore investment in the Jamaican economy has the potential to drive economic growth and diversification.· Countries grow because they produce better goods and services or find better ways to produce those goods and services.· Foreign investment helps this all happen.· Throughout Jamaica's growth process, an important step will be to connect the domestic economy with the international private sector.· This means increasing the country's participation in global value chains (or GVCs) -- production processes that cross borders, from conception, to inputs, to distribution to the final consumer. · Integrating with global value chains helps creat jobs and bring capital and new technologies.· It also creates incentives for broadening and upgrading workers' skills. This would allow countries such as Jamaica to specialize in specific tasks, while compelling Jamaican firms to meet high standards of quality, timelines, and efficiency.· But the benefits are not automatic, and here is where our technical focus on global value chains can help.· In the World Bank Group's Trade and Competitiveness Global Practice, our experts know that success in economic development lies in innovation at the level of small and medium-sized enterprises.· It lies in ensuring that exporting firms – whether large Jamaican companies or large offshore companies – work together to strengthen the country's smaller firms and their ability to manufacture in Jamaica.· We also know that one of the most important government responsibilities in helping a country benefit from GVCs is predictability in regulatory actions.· Frequent changes in regulations can create uncertainty in domestic and foreign investment returns.· It is also important to implement reforms – not stop after creating a plan.· Ultimately, success in connecting the domestic sector to FDI and reaping the benefits of GVCs depends on many factors.· One is building human capital through access to strong education and training.· Another factor is developing linkages between the domestic and international economy.· To do this, many countries have developed very effective programs that better connect domestic suppliers with foreign FDI. · Countries also need to develop international and domestic connectivity.· Investment promotion is critical for all emerging markets, and especially for smaller economies such as Jamaica.· In particular, governments must continuously demonstrate their commitment to improving their countries' business environment.· They must make efficient and transparent regulations and embark on competitiveness strategies that include industry-specific and firm-level innovations efforts.World Bank Group support to Jamaica· The World Bank Group, and in particular the Trade and Competitiveness Global Practice that I lead, is committed to assisting Jamaica to become a more competitive player in the global economy.· I am accompanied here by colleagues, including IFC resident representative Rajeev Gopal and acting World Bank representative Kathy Lalazarian, who are ready to support Jamaica directly in encouraging private sector investment.· And, in fact, just as Jamaica's reforms have put it on a hopeful path, our institution's internal reforms mean that we can be a better partner in those efforts.· In our global practice we have brought together experts in both private sector development and trade policy, and our approach includes practitioners in investment and in logistics.· With this new approach, our teams span more disciplines and are more nimble.· We respond to clients with integrated solutions that are coordinated at many levels. They might include economy-wide proposals, such as trade policy changes, but also sector-specific advice and firm-level interventions.· We have expertise in many specific areas relevant to Jamaica and to your businesses here – including logistics, manufacturing, and tourism, to name a few.· We also work across regions, as we are doing with our participation in the Caribbean Growth Forum, helping countries identify competitiveness strategies and reforms.· In Jamaica, the World Bank Group's work is defined by a Country Partnership Strategy (CPS) that is guided by the priorities of Vision 2030 Jamaica.· This strategy proposes a lending program of $510 million over four years focused on strengthening both the public and private sectors while improving social safety nets and the conditions of the most vulnerable.· A recently-approved, $75 million Development Policy Loan is part of that program and will help Jamaica continue to make reforms that improve its investment climate and competitiveness, as well as its public financial management.· In July 2014, the World Bank approved the "Foundation for Competitiveness and Growth Project," a US$50 million loan that provides support for investment climate reforms, strategic investments, and SMEs. · This project has rallied investment from the IFC and guarantees from MIGA, the World Bank Group's insurance arm. It is helping to complete the chain of development from growing SMEs to building special economic zones to increasing trade.· In addition, the Logistics Hub Initiative, also supported by the World Bank Group, has aligned public and private players around significant investments in ports, airports, and other transportation infrastructure. · The LHI has a lot of promise:o It will increase the connectivity of the country, reducing the time and costs to access markets for Jamaica's domestic exporters, and enhance competitiveness.o It could help the country attract enhanced skills and develop new business opportunities.· Of course, it also has risks.o There will certainly be competition amid the changing regional shipping dynamics.o Other countries throughout the Caribbean and Central America could try to compete as shipping and services hubs bases on similar geography and skills advantages.o To keep its advantage, Jamaica will need to ensure that its infrastructure services operate at a high level of productivity and quality.· To ensure that the LHI and Jamaica's competitiveness and growth agenda succeeds, it is important to keep trade costs low.· Jamaica has made recent improvements in this area, but still has some distance to go.· We are here to help, especially in key areas, such as improving transparency in trade and simplifying border control processes and coordination at the border.Conclusion· Let me finish by reiterating the World Bank Group's commitment to supporting Jamaica in implementing its national development plan.· In particular, we support its trade and investment policy strategies that are pushing the country along on its current path of recovery and long-term growth.· Thank you very much for your attention. Show Less -
World Bank Group President Jim Yong Kim's statement on the Fourth Anniversary of the Great East Japan Earthquake and Tsunami
TOKYO, March 11, 2015 — The following is a statement by the World Bank Group President Jim Yong Kim:"On the occasion of the Fourth anniversary of the Great East Japan Earthquake an... Show More + d tsunami, the World Bank Group remembers the thousands of people and families affected by the disaster.We would like to pay tribute to the determination and resilience of the people of Tohoku, which is a source of inspiration around the world.The Third UN World Conference on Disaster Risk Reduction, hosted by the Government of Japan in Sendai, alongside related events in Aomori, Iwate, Fukushima and Yamagata prefectures, offers an historic occasion for global leaders to renew their commitment to curb rising losses stemming from disasters and protect the poor and vulnerable from the threat of future disasters.The World Bank Group reaffirms its commitment to work with its partners towards creating a safer world, by building on the knowledge and experience of the people of Japan."On March 16, the World Bank/GFDRR, the Government of Japan, the European Commission and USAID are hosting a special round of the Resilience Dialogue series as part of the World Conference on Disaster Risk Reduction (WCDRR). Show Less -
World Bank Albania Country Manager Tahseen Sayed Khan Remarks on Successful Coastal Project
I would like to thank our partners from EU Delegation, the Governments of Austria, Netherlands and Japan for their continuous engagement and support. Our big thanks to all! I also acknowle... Show More + dge my own team's passion for results and intensive support during implementation. It is due to the collective effort of so many people that we are assembled here today to take stock and discuss results.Let me now touch upon some of the results. I am sure that other speakers in this workshop will talk about these in more details. It is not often when a project meets all its indicators when it closes. For instance, the Gateway of Saranda – passenger terminal was built and is in operation. Large cruse boats have been docking since August 2014. Porto Romano cleanup has been completed reducing the health hazards for the entire community of 5000 people. A regional landfill in Bajkaj, meeting EU standards will allow for sanitary disposal of waste in the next decades, thus potentially solving a long standing problem of the southern coast of Albania.The Coastal Village Community Development Program provided water supply infrastructure, access roads for the population of 13 villages. In addition, 15 roads and village square rehabilitation were completed, 9 water supply projects provided water to nearly 1200 households and one sewage services for Himara. Saranda citizens and Navarica village benefited from increased water supply and improved sewage network. The establishment and increased protection of the Butrint national park and support to local communities in the park area contributed to the protection of natural endowment of the area which also supports communities' livelihoods. The outcome of the infrastructure investments has significant development impact on the coastal areas which was confirmed by the beneficiary survey which will be discussed later today. We hope that the continuous engagement with local communities will be maintained to protect local economic and cultural assets.The World Bank Group is currently preparing its next five year new Country Strategy for Albania which will support the country's goal of accomplishing sustainable and inclusive economic growth. The government's priorities to accomplish this goal include sustainable and inclusive land and natural resource management. This project has not only demonstrated concrete results but has established the building blocks for future coastal regeneration and sustainable tourism development. Going forward, tourism can be a leading growth generating sector for Albania's economy and can also create new jobs. There is no reason why this vision cannot be accomplished – the country has abundant and beautiful natural resources, coupled with a rich cultural heritage. However, it is critical for the development of tourism: a) to proceed in an integrated and sustainable manner, b) to move with the participation and ownership of local communities, and c) to ensure that infrastructure and associated developments do not undermine natural endowments. You have already seen how the beautiful Saranda coastline has been affected by uncontrolled development. Integrated management of coastal areas and promotion of sustainable tourism, if done right -- and by learning lessons from Albania's own experience and other countries' experiences – can protect Albania's natural endowments, yield economic benefits for the local communities, create jobs and contribute to the country's economic growth. A win-win proposition!Today's event is timely to take stock of project results and its impact on the coastal area and on people's lives. It is also an excellent opportunity to exchange ideas on future engagement for the protection and regeneration of the coastal area – Albania's beautiful natural asset -- which can serve as the stepping stone for sustainable tourism. We look forward to our partnership in this area.Thank you. Show Less -
Statement by Keith Hansen, Vice President for Global Practices, World Bank Group High Level International Conference on Ebola
Your Excellencies, Distinguished Guests, Ladies and Gentlemen,I am pleased to affirm the unwavering commitment by the World Bank Group to help Guinea, Liberia, and Sierra Leone end the Ebola epidemic ... Show More + and rebound from this crisis.The World Bank Group has made a major contribution to the global Ebola response, working closely with the governments in Guinea, Liberia, and Sierra Leone and with our bilateral and multilateral development partners, civil society, and the private sector. To date, the World Bank Group has mobilized more than US $1 billion for the affected countries to combat Ebola and its impacts. This includes US $518 million in unprecedented emergency response funding from IDA, the WBG's fund for the poorest countries, which is mostly all in the form of grants, and has been supporting the affected countries and UN agencies to provide Ebola treatment and care, contain and prevent the spread of infections, deploy domestic and foreign health workers, conduct safe burials, deliver food and essential supplies, step up contact tracing, and deliver other basic health services.We have also committed at least US $450 million from our private sector arm, IFC, in commercial financing to promote trade, investment and employment, ensure continued operations of business and supplies of essential goods and services and help some 800 small and medium enterprises. Ladies and gentlemen, this is a critical moment in the Ebola crisis. On one hand, we welcome the substantial progress that has been made in slowing the epidemic as a result of the global and government-led response efforts.On the other hand, the response was far too slow to mobilize. We continue to see a substantial number of new Ebola cases each week. And it is particularly troubling that a majority of the new cases in Guinea and Sierra Leone still arise from unknown chains of transmission.One case of Ebola is too many. This deadly virus has a history of resurgence, so we must remain vigilant even where things look promising. Until we reach and sustain zero Ebola cases and zero transmissions, the health of the citizens and the economies in the three countries, the region, and beyond remain at risk.In the three most-affected countries, this epidemic has had a devastating impact on lives, livelihoods, and the overall economy, wiping out many recent development gains. Our most recent estimates are that these 3 countries will lose at least US$1.6 billion in forgone economic growth in 2015 as a result of the epidemic. We also have estimated that the broader economic cost to the region could rise as high as $6 billion. This is why even as we continue to focus intensely on the immediate response to get to zero cases, we are working with the affected governments to plan for, and expedite, recovery.But to truly recover and rebound in a sustainable way, the world must learn the lessons from the Ebola crisis. Let me highlight a few:First, we must ensure that every country has a robust and resilient health system. This means a system that is well-led, well-financed, and well-equipped to deliver access to quality essential health care and preventive services to all citizens, even in the remotest areas; that has effective disease surveillance and diagnostic capabilities in place; with a smart information and telecommunications infrastructure, and the coordination and capacity to rapidly identify, treat, and contain future outbreaks with a whole of government response. These are some of the functions Nigeria, Senegal, and Mali deployed to contain the spread of the epidemic and become Ebola-free.The Ebola crisis also has made clear the significant economic downsides of failing to invest adequately in the health sector. Second, informed citizens and empowered communities are the most effective front line of preparedness and response. We know, for example, that a major driver of the epidemic was unsafe burials. Top-down instructions from public health authorities regarding safe burials – which required abandoning traditional rituals – were met with suspicion and even outrage by aggrieved family members and communities. It was not until communities and traditional and faith leaders were engaged in leading the messaging and response that the situation began to turn around.Going forward, Ebola-related investments that have been made in community health workers and community mobilization can be deployed to reinforce behavior change and strengthen the overall health system.Third, the Ebola crisis exposed the fragility of these countries beyond the health sector – and how a health crisis can become a development crisis, for example in agriculture and education.That's why we last month announced that the Bank Group is providing US $15 million in financing to deliver a record 10,500 tons of maize and rice seeds to more than 200,000 farmers in the 3 countries in time for the April planting season. This support will help revive the agricultural sector and to avert hunger for more than 1 million people at risk in the three countries. And today I am also pleased to announce that the Bank Group will provide at least US$12 million to get children across the three countries back into school and learning. Students in more than 18,000 schools will benefit from efforts to clean and sanitize their schools, build or repair hand washing stations and water points in schools, provide new textbooks and refresher training for teachers.The Bank's Ebola Recovery and Reconstruction Trust Fund is enabling these and other activities to jumpstart recovery such as providing cash transfers and counseling to families, repairing roads, and helping people get back to work.Fourth, this crisis showed that the global health system is ill-equipped both in terms of outbreak preparedness and response. It took months before the international response swung into action, and even longer before containment efforts began to take hold. We must strengthen the global health architecture to enable all actors – public and private - to play their respective roles effectively. Resources should begin to flow in 8 hours, not 8 months. A speedy response can save thousands of lives and billions of dollars.At the request of G20 leaders, the World Bank Group is now working to develop a global pandemic emergency facility, with new finance mechanisms so when the next global health emergency is declared, the world can quickly deploy the money, trained health workers, equipment, medicines and whatever else is required. We are now in discussions with potential donors, private investors, the insurance industry and other development partners on the design of this proposed facility.The fifth lesson – perhaps most important of all for this discussion – is the importance of country leadership and political will. While the global response has played a key role in turning the tide on this epidemic, the strong government-led coordination efforts in each country have paved the way.Today is an important step on the road to recovery. As international partners, our role is support the countries in realizing their own visions to build back better – to move from food subsistence to food surplus; from disease spread to disease prevention; from unemployment to opportunity. But we must maintain the momentum. So today I am pleased to announce that at our Spring Meetings in Washington in mid-April, the World Bank Group will host a next high-level international meeting to follow up on today's actions and outcomes, provide an opportunity for the countries to present their more developed plans, and accelerate the recovery process. In closing, our support will remain steadfast – to ensure that the people of Guinea, Liberia and Sierra Leone are able not only to recover, but ultimately to rebound and become stronger and more resilient than before. Thank you. Show Less -
The Power of Mining to Transform Development in Africa
Good afternoon and thank you for this opportunity to address you today.First, let me say what a pleasure it has been to attend my first African Mining Indaba. It has provided rich ground on which to r... Show More + enew old friendships, make new ones, and to learn from the vast array of viewpoints represented here.I have talked at length with many Ministers, with mining company CEOs, with civil society representatives, and with the many partners working - as we do - to help overcome the development challenges that Africa continues to face.From these conversations, a similar theme has been emerging. That is: the need for much more genuine and lasting partnerships between mining companies and the countries in Africa that host them. Governments rightly expect the industry to be a reliable partner for sustainable development for their people and economies. Beyond the profit motive, mining companies are looking for stability, security and certainty. Getting these two agendas to add up to stronger economies based on sustainable growth over the long-term is what we should all be working for – no matter which perspective we bring.As Former Prime Minister Tony Blair said here yesterday, countries want and deserve more than just deals. They want to move away from a relationship based on transactions to one based on collaboration. From my perspective, that collaboration must lead to opportunities for people to get a good education and jobs; for women to have equal access to the benefits that flow from mining revenues; and for society as a whole to grow and develop in a healthy, safe environment.SynergyAbout eight months ago, when the World Bank Group President – Dr Jim Yong Kim – asked me to become the new Senior Director of our Energy and Extractives Global Practice, I could see the potential for synergy.Combining the forces of our teams working to end energy poverty with those working to improve outcomes for countries with large extractive industries, made a lot of sense to me. Strong energy sectors and sustainable extractives sectors have similar underpinnings: good governance; open and accountable institutions; sound practices; clear policies…At the same time, the development implications of the two sectors are enormous. A reliable energy supply is essential for countries to move people out of poverty and toward shared prosperity. And a well-managed extractives sector can deliver huge economic and social benefits that further enhance development. Nothing motivates me more than the fact that if we continue with business as usual, by 2030 more than 650 million people in Africa will be living without energy – and this on a continent blessed with abundant energy potential and enviable growth rates. Power of the MineOn Monday, here at Indaba, we launched a groundbreaking study entitled "The Power of the Mine" that, for me, showed the synergy between energy and extractives in action.The report highlights the potential for connecting mining's demand for power in Africa with the opportunity to bring affordable, reliable energy to the one third of Africans still living without electricity. Over the last 15 years, mines in Africa have spent more than $15 billion to cover their own electricity investment and operating costs and have installed close to 1600 megawatts of generating capacity. None of this power made it onto a national grid.Rather than supplying their own energy on site, we say that mines can become anchor customers for electricity utilities or other private power producers which can then grow to bring low-cost power to the wider community.Power-mining integration can be a good deal for everyone. For mining companies, it means lower cost energy and improved competitiveness. For governments and utilities, it means more consistent revenues to help with energy expansion plans. And most importantly of all, for communities across Africa, it means a better, more reliable power supply.We recognize that in this new and relatively unchartered area obstacles exist – prominent among them a lack of transmission links, and the sometimes fragile commercial viability of electricity utilities. But these are not insurmountable challenges and we have plenty of examples of countries which have overcome them.At a time of much lower commodity prices, the mining industry may argue that this is not a further risk worth taking. I would argue that the volatility of commodity prices only strengthens the case for mines to combine forces and partner with national utilities to plan for their long-term energy needs. This is especially so when - as we heard on Monday from a mining CEO on our panel - energy costs can be as high as 30 percent for some mining operations.To be successful, power-mining integration needs the commitment and collaboration of governments, power utilities and mining companies. For our part, the World Bank Group can help bring everyone to the table, generate a dialogue, share knowledge, and where it makes sense, provide tailored financial and risk management instruments. We think this synergy could help turn Africa's energy challenges around.Governance and TransparencyOf course, as the potential of the mining industry grows in Africa, so does the need for improved governance of the extractives sector. We work in 35 countries across Africa advising governments on everything from rules of disclosure of payments to policies for managing the granting of mining licenses fairly and transparently.We are working with governments on mining governance programs in the Democratic Republic of Congo, Malawi, Tanzania, Guinea, Mozambique, Cameroon and Sierra Leone.We also work across Africa to strengthen transparency in extractive industries through implementation of the Extractive Industries Transparency Initiative (EITI). That translates into action on the ground in countries like DRC and Guinea, where we are working with the government to develop efficient and transparent frameworks for managing mineral rights.All of this work delivers results. In Tanzania, for example, strengthening mineral governance has led to more efficient government oversight and improved geological knowledge that in turn brings further investment to the country. The reforms have helped transform extractives revenues in Tanzania which have quadrupled since 2009. Helping the PoorestWhile improved governance of extractives is critical at the macro-level, partnering to improve the livelihood and working conditions of small-scale miners can have a multiplier effect – both for small and large-scale mines. Recently, we began an innovative pilot project in Tanzania to help small-scale miners work with large mining companies to learn and develop healthy and safe practices. This Multi-Stakeholder Partnership Initiative involves the Government of Tanzania, the World Bank Group, AngloGold Ashanti, Acacia Mining and small-scale miners of the Geita region.Large-scale mines are donating the time of technical employees to assist the small-scale miners in the areas of mining, geology, health and safety issues. With small-scale mining employing over 1 million people in Tanzania, this partnership has huge potential to impact the lives of some of the poorest people in the country.We are also working to improve outcomes for local suppliers to large mines. In Guinea for example, the IFC and Rio Tinto are working on a local supplier development project that strengthens the technical, management, and health and safety skills of small businesses so that they can become suppliers to the Simandou mine project. Now, over 60 small businesses are reporting improved performance, with better incomes. More than 130 stable jobs have been created. These are the kinds of results that make benefit-sharing a reality at the local level.Investment and Capacity BuildingUnlocking the potential of mining in Africa means investing in local capacity so that a flourishing mining industry can be led by local professionals.Capacity of government negotiators to develop fair and transparent mining agreements is an essential part of a genuine collaboration. That's why we recently brought over 70 government mining negotiators from around Africa to regional workshops with the world´s leading mineral law experts.Sustainability and GenderBut fair contract negotiation is just the first step, then comes the challenge of ensuring mining projects are environmentally sustainable as well as socially inclusive.Women in particular often miss out on the potential benefits of the extractive industries and bear an unequal share of its burdens. Formal unemployment rates for women in mining communities can be as high as 90 percent in some countries. Without a focus on gender, employment and incomes are largely captured by men. Women will also be exposed to risks from loss of productive agricultural land, marginalization and an increase in health risks, including HIV.That's why we work with governments to develop strategic Environmental and Social Assessments. We need to anticipate the impacts of mining and encourage better policies and regulatory arrangements that protect people and places. Health and EbolaSome risks are harder to predict and plan for. Ebola continues to heavily impact the economies of Guinea, Liberia, and Sierra Leone even as transmission rates show signs of slowing. The Bank Group estimates that these three countries will lose at least $1.6 billion in forgone economic growth in 2015 as a result of the epidemic.In response to the crisis, The World Bank Group mobilized nearly $1 billion in financing for the countries hardest hit by Ebola. This included $518 million for the epidemic response, and at least $450 million from IFC, to enable trade, investment, and employment in Guinea, Liberia, and Sierra Leone.It's at times of crisis like this when companies and investors can show that their partnership with the country is not only about the good times.Many mining companies are making major efforts to prevent the spread of disease in their operations and in nearby communities because they tend to have the infrastructure and resources that can have the quickest local impact.On Monday here at Indaba, we hosted a panel discussion that brought out many case studies of governments and mining companies collaborating to prevent the spread of disease. More signs of long-term partnerships in action.Ladies and gentlemen, these are interesting times for mining in Africa. When prices are down, the instinct is often to flee or circle the wagons. But these are the times when a collaborative, long-term and genuine relationship with countries can pay off.Now is the time to plan to cut energy costs by finding ways to connect to national grids. Now is the time to build the capacity and skills of local people and local suppliers. Now is the time to ensure employment policies encourage equality across genders. Now is the time to get your long-term social and environmental house in order.The World Bank Group, as a long-term partner of countries across Africa, is ready to work with you in all of these areas. Together in partnership we can help to transform development in Africa.Thank you. Show Less -
Speech by Colin Bruce at the Second ECOWAS/UEMOA/World Bank Group Tripartite Meeting
Esteemed Presidents of ECOWAS and UEMOA, Distinguished Commissioners and Directors, fellow colleagues of the World Bank Group (WBG) and partner institutions, ladies and gentlemen.On behalf of the WBG,... Show More + I would like to thank you for this opportunity to share some reflections on four topics: (a) progress since our first tripartite in Abidjan in June 2013 and lessons for our future collaboration; (b) the changing global and regional contexts to which we must respond; (c) possible priority areas in the next phase of our partnership; and (d) proposed next steps.Since we met in June 2013, we have made considerable progress in implementing our ambitious joint action plan in the six areas that we prioritized--Agriculture, Education, Trade and Trade Facilitation, Transport, Regional Investment Climate and Sahel. Quite rightly, agriculture was number one on our list because 60 percent of the population of West Africa and 80 percent of West Africa's poor still depends on the sector for their livelihood. The main goal of our efforts has been to increase productivity by raising the quality and improving the availability of agricultural inputs. Raising agricultural productivity would help to improve the growth elasticity of poverty reduction which is only -0.7 for Africa compared to -2.0 for developing countries as a whole. So we focused on policies for seeds, pesticides and fertilizers. As a result all the ECOWAS countries, with one exception, published regulations to improve quality and availability of seeds. We put in place electronic platforms with information on certified seeds and technologies, and began supporting ECOWAS in implementing a road MAP to transform the centers of specialization into regional centers of Excellence for Agriculture. We finalized the review of one study—on a Warehouse Receipt System and Commodity Exchange—and will shortly send to you two other studies on (a) Opening up the Markets for Input Trade in West Africa; and (b) Regional Food Staples. In addition, we provided technical assistance on Meat and Livestock Trade Facilitation which culminated in a conference in Ndjamena in December 2014.The acquisition of higher education is associated with higher earnings at the national level, for example, of 30 percent in Cameroon and Ghana, and 15 percent in Nigeria. This is the type of evidence we presented to the Board of the WBG when it approved the ambitious $150-million Africa Higher-Education Centers of Excellence (ACE) project in April 2014. The project will fund 19 university-based centers for advanced education in Benin, Burkina Faso, Cameroon, Ghana, The Gambia, Nigeria, Senegal, and Togo; support regional specialization among participating universities in mathematics, science, engineering and ICT; and strengthen their capacities to deliver quality training and applied research. In coming months we plan to add Cote d'Ivoire to the list of beneficiary countries, and are adapting and transferring the ACE approach to other parts of Africa.In trade and trade facilitation, we completed all agreed actions with UEMOA by December 2014, including developing modern Customs Union instruments and supporting implementation of the Bali Agreement. We are pleased with the joint work done to prepare to implement ECOWAS's Common External Tariff (CET) which became effective on January 1, 2015, and with the technical support provided for negotiating the Economic Partnership Agreement (EPA) with the European Union (EU).In transport, we continued to prioritize the Abidjan-Lagos corridor which handles more than 2/3 of the trade, transport and transit activities in West Africa and records traffic of about 47 million people every year. Our assistance targeted basic regional access and mobility of goods, through four main components—trade facilitation, improvement of road corridor's infrastructure, project management and coordination, HIV/AIDS programs and `corridor performance monitoring. We are pleased that by December 2014 the number of kilometers of roads rehabilitated had increased to 65km and port dwell times came down from around 18/21 days to 12/13 days.On investment climate, five African countries were among the top ten improvers globally in the 2015 Doing Business Rankings for 2013/14. Four of them—Benin, Togo, Côte d'Ivoire and Senegal—were from West Africa. Overall, Africa accounted for the largest number of doing business regulatory reforms—75 of the 230 worldwide. And reforms are continuing. In November 2014, Presidents Ouedraogo and Soumare launched a new EU-funded project to: (i) remove regional barriers to cross-border investments; (ii) promote more transparent and sustainable investment incentives regimes; and (iii) reduce investor uncertainty by addressing unpredictable transfer pricing rules. The historic trip in November 2013 by leaders of the United Nations, WBG, African Union Commission, African Development Bank and EU was a significant milestone in fulfilling our commitment to the Sahel. The visit renewed attention to the peace and security needed to boost economic growth and lift people out of devastating poverty. During the visit, WBG President pledged $1.5 billion in new regional investments over the next two years, nearly four times our commitment during previous periods. This amount was additional and complementary to our funding through country programs. By December 2014, our Board had approved close to $800 million of priority projects in areas such as cross-border energy, social safety nets, and health services and economic opportunities for women and girls. MIGA provided $585 million in political risk guarantees in May 2014 for the Banda Gas to Power Project while the EU pledged additional support of about $7 billion over seven years. This commendable progress, on multiple fronts, is a tribute to all of you—Presidents, Commissioners, Directors, Managers, and Technical Specialists. Without your drive, commitment and willingness to collaborate, none of this would have been possible! I would also like to acknowledge the effectiveness of the Coordinating Country Director-model in this sub-region, where one Country Director steers the agenda and other Country Directors lead in particular sectors.Notwithstanding these many positive developments, our journey together is only just beginning, and there is much to learn from our successes as well as our shortcomings. These shortcomings include: (a) the absence of significant strides in air transport; (b) substantial increases in the dwell time at one major port and in the number of road blocks in some areas; and (c) an almost doubling of the time to cross a few borders along the Abidjan-Lagos corridor. This is compelling evidence and a sobering reminder that modernizing transport in West Africa, as in other parts of the world, requires coordinated policy and regulatory reforms and enforcement, and not just investments in bricks and mortar.Energy remains a top priority but we must pursue areas where our partnership can add value, perhaps in the push on policies, regulation and interconnections that facilitate energy trade. The renewed interest in railways across the continent is one that we share but this agenda requires significantly more technical analysis, financial resources, and demonstrated political will to make difficult choices. As such, we have to be pragmatic, prioritize what is feasible and remain open to other possibilities as and when conditions for progress are in place.With regard to the Sahel, we must embrace the leadership of the Group of Five frontier states and stand ready to support their development priorities.We did not anticipate the Ebola crisis and the response at all levels was slower than it should have been, including by the WBG and the rest of the international community. The crisis also unmasked serious weaknesses in regional infectious disease prevention and surveillance systems. We are strongly committed to working with you and the rest of the development community to prevent and more effectively attack any such future threat. In that regard, we are currently helping the Nigerian Government to contain the recent resurgence of the Avian Influenza.Since we met in June 2013, the world and the sub-region have continued to change and we should use our discussion today to decide how the priorities of our collaboration should change in response. For several years, buoyant commodity prices (and abundant capital inflows) generated powerful tailwinds that helped support growth in the sub-region and across Africa. Those tailwinds have now transformed into headwinds: Oil prices have fallen by over 50% in the last four months, reflecting both supply and demand factors. The prices for many metals and minerals have been falling at a more moderate pace, but also for a longer period.The Ebola Virus Disease epidemic that began in a forest area of Guinea in December 2013 quickly spread to Liberia and Sierra Leone. Since then, more than 22,000 probable, suspected or confirmed cases, and over 8,800 deaths, have been reported across the three countries. In addition to the huge costs in terms of lives, human suffering and anxiety, the latest estimates suggest that the three countries may lose as much as US$ 1.6 billion - or 12% of their combined GDP - in forgone output growth in 2015. Across Africa, conventional and large-scale conflict events and civil wars have been receding in scale and intensity. However, in some parts like Central-West Africa, a new generation of threats is emerging—drug trafficking, maritime piracy, and armed insurgents like Boko Haram in Nigeria and the Tuareg and Arab uprisings in Mali. Driven by exclusion, ideology and extremism, some of these threats don't only terrorize communities, villages, women and girls, but they also challenge the authority and existence of nation states as we know them. Meanwhile, instability has increased in Libya and reportedly, this has exacerbated the supply of illegal weapons, compounded the plight of returnees and given further impetus to migration of vulnerable groups across borders. In essence, the region is facing a number of endogenous and exogenous security shocks. Given what is at stake, defeat is not an option.We must also be mindful of the reality that in 2015, the citizens of at least a dozen African countries, including four in West Africa, will go to the polls to elect their national political leaders. Some of the polls are expected to be hotly contested and turbulent, while others are predicted to bring little change. We hope, of course, that none is marred by violence on any scale.These developments aren't all of equal importance but together, they represent serious additional risks to the sub region. ECOWAS and UEMOA have important roles to play in helping to mitigate and in some cases, eliminate these risks. At the same time, there are some opportunities, particularly for oil importing countries, which we hope ECOWAS and UEMOA will help them to seize.While broad sectoral reforms must continue and build on the progress already made, we should explore a few priorities that could significantly diversify and transform the sub-region, and reduce major threats. To introduce the discussions, we would like to propose the following five priorities: (i) Deepening our joint efforts in agriculture, (ii) Supporting the implementation of the CET; (iii) Assisting in establishing an effective Abidjan-Lagos Transport Authority and making the air transport market more efficient; (iv) Sustaining the Region's efforts to fully eradicate the EBOLA virus and prevent the spread of other infectious diseases; and (v) Creating cross-border conditions for communities to create mutually beneficial economic opportunities and prevent conflict. This would not mean stopping other activities completely but rather focusing our joint efforts on fewer main themes over the next year. A key priority should be to accelerate reforms that simulate more diversified, inclusive and sustainable economic growth by unleashing the potential for private investments. There are some low hanging fruit from already adopted policy reforms but now the emphasis must shift to rigorous implementation. This applies particularly to policy reforms for seeds, pesticides and fertilizers. Access to adequate fertilizers and modern seeds could easily increase the yields of food staples by two or three fold in the region. ECOWAS and UEMOA should continue to work with member states on other measures like eliminating de jure and de facto barriers to intra-regional trade. This should be combined with a push to help countries develop national social safety nets that reduce the pressures for export bans and other inefficient measures aimed at improving food security. Since all countries may not be ready to move forward at the same time and pace, ECOWAS and UEMOA should also consider advancing reforms based on the principle of variable geometry. We will provide technical support for the implementation of the CET and EPA—arguably the most significant developments in trade policy in over a decade. There is, as yet, no consensus on key issues such as: (i) the revenue loss arising from the EPA and whether such losses have been adequately reflected in the compensatory package accompanying the EPA; and (ii) the impact of both the CET and EPA on domestic industries, jobs, consumers and poverty. The World Bank Group analysis for Nigeria and initial results for Ghana and Senegal showed that the EPA would benefit most manufacturing firms through lower costs for inputs and capital equipment. Most firms for which a negative impact might materialize are currently making above average profits, and the effect of the EPA would be to reduce them by a small amount. However, initial findings on the CET reform also seem to indicate that impacts from the added protection of the CET (on what are essentially core consumption products) will affect the poorest more than other segments of the population. Impacts also vary significantly by country. Ministers have requested that as implementation of the CET and EPA proceeds, the WBG should provide continued assistance in the form of country-specific and regional analysis and dialogue. We will do so. Improving the performance of the transportation system within the sub-region would boost competitiveness and productivity, and help maximize the benefits of the CET and EPA. We welcome the formal decision last March at the 44th Summit of ECOWAS Heads of State and Government in Yamoussoukro to establish the ECOWAS Abidjan-Lagos corridor authority to construct and manage the six-lane highway, and establish a corridor management authority with supra-national status. We also welcome the commitment of the signatories to contribute $50m for preparatory activities under the project. There is considerable global experience in effectively structuring and managing corridor authorities, and we strongly believe that such an effective body can significantly transform West Africa. We stand ready to share international experience, mobilize financial resources, and support complementary institutional, policy and regulatory reforms to help realize this transformational impact.We are encouraged by the decision by Heads of State at the African Union Summit two weeks ago to establish a Single African Air Transport Market for African airlines by January 1, 2017. We welcome the decision by Egypt, Ethiopia, Kenya, Nigeria and South Africa to open their respective air transport markets immediately and without conditions. These are steps in the right direction but more will have to be done. West Africa's 24 million passengers/year aviation market is unbalanced and characterized by low intra-regional volumes. More than 60 percent of West Africa's 24 million passenger traffic takes place in Nigeria; only three other countries have total demand in excess of 1 million pax/year (Ghana, Cape Verde and Senegal). Domestic traffic flows represents nearly half of total demand with 88% of them generated in Nigeria. Traffic rights with West African countries are still managed and governed by Bilateral Service Agreements which are often too constraining and protective of national carriers. As a result, air transport in West Africa is substantially more expensive than in other parts of the world, less reliable and imposes high burden on passengers and the economy as a whole. Liberalization of the air space will help, and a low hanging fruit would be the multilateral application of the Yamoussoukro Decision. There is also a need for regional agreement on the maximum level of taxes and on air transport infrastructure charges to foster higher demand and financial solvency for airlines. We call on ECOWAS and UEMOA to seize the opportunity to lead the sub-region in an initiative that would develop air transportation services that are at least comparable to those in Eastern and Southern Africa. We stand ready to assist you in preparing A Policy Paper on West Africa Air Transport and in providing technical support for: (i) benchmarking the system; (ii) consulting stakeholders in the industry; and (iii) reviewing aviation charges; with a view to presenting a concrete proposal to the Heads of State and Government at their next Summit.A more connected sub-region also needs to have better capacity to deal with infectious diseases, while supporting post-Ebola recovery in the three directly affected countries. I commend and encourage the efforts by ECOWAS and its member states to share experiences and in particular, learn from those countries that quickly contained the disease. Up to now, the World Bank Group has mobilized nearly US$1 billion in financing for the countries hardest hit by the Ebola crisis. This amount is comprised of US$518 million from the International Development Association (IDA) for the epidemic response, and at least US$450 million from the International Finance Corporation to enable trade, investment, and employment in Guinea, Liberia, and Sierra Leone. IDA also created the multi-donor fund for Ebola recovery last fall, called the Ebola Recovery and Reconstruction Trust Fund (ERRTF). The ERRTF complements other Bank financial instruments in getting children back to school; establishing more secure and accurate payment systems for health workers; helping farmers acquire seeds for planting; and providing resources to upgrade rural roads, for example. We are now prepared to invest up to $300 million in building up regional health systems, including strengthening networks of laboratories for early diagnosis and facilities for treatment.Finally, a more connected sub-region needs to be a more secure sub-region to fully benefit from regional integration. We should use effective diplomacy to build strong coalitions across the political, security and development communities to help shift the current dynamic in the sub region toward more peace, stability and shared prosperity. At the recent AU Summit, African leaders agreed to send 7,500 troops to help fight the Boko Haram insurgency in north-east Nigeria, with support from the international community including the United Nations. Since May 2013, the World Bank Group has combined efforts with the United Nations and other partners in bold development diplomacy to address the regional drivers of some of the most intractable conflicts in Africa, and the poverty, extremism and local and global threats they generate. The Sahel initiative mentioned earlier was the second of the three undertaken so far. We are prepared to explore the scope for a fourth such regional initiative around Central-West Africa if there is political commitment at the regional and national levels to do so.We look forward to a fruitful discussion today that will identify a few transformational priorities, work programs, timelines and division of responsibilities. In doing so, we want to build on the model that has worked since June 2013 with minor tweaks that reflect lessons from our shared experience. We hope to discuss the highlights of our deliberations with President Mahama, the Chairman of ECOWAS, and propose to him some items for consideration at the next ECOWAS Heads of State Meeting.Our Directors, Managers and technical experts are ready to share responsibility with their counterparts to work on deliverables within agreed timelines.We would like to propose that during our Spring Meetings (the week of April, 12, 2015), we meet with Mr. Diop, Regional Vice President, to take stock of progress and further build momentum. We also hope that Mr. Diop, would be invited to participate in the next ECOWAS Heads of State Summit to help advance our agreed agenda.Colin Bruce is a Regional Integration Director in the World Bank's Africa Region Show Less -
World Bank Country Manager in Albania Tahseen Sayed on Public–Private Partnerships in Albania
We will support Government in accelerating private sector growth through policy, technical and advisory work such as being done under this workshop and through World Bank financing to support Albania ... Show More + in areas such Competitiveness and Jobs, and development of sustainable tourism. We will also work with Government in its legal and regulatory reforms to address the major constraints to private sector growth. At the same time, we intend to ramp up IBRD engagement on addressing infrastructure constraints – mainly in energy and transport sectors. Today's event on PPPs needs to be viewed in the broader context of this World Bank Group engagement.PPPs offer the private sector the opportunity to engage in areas which have traditionally been seen as part of public sector domain. These areas can benefit from the private sector's capacity to innovate, leading to an increased efficiency and in offering a better value for money. PPPs have been successfully used in a number of OECD countries and in Central and Eastern Europe. While each country's story is unique, there are some lessons which can be drawn for Albania to outline the principles for well-designed PPPs:Albania is a country with a huge economic potential, due to its demographics, geographic location and natural endowments. Public – Private Partnerships can serve as an effective instrument to bring private sector investment and for using private sector efficiency to deliver better results. They are often seen as benefiting both public and private sectors – the reasoning is that both sector share specific qualities and if those qualities are combined, they lead to better results. And risk sharing is a major consideration in combining these qualities. Typically there is contractualization of risks in a very precise manner to attract private sector financing.The process requires:(i)An ability to reorganize sectors around such risks – by itself a complicated process requiring specialized expertise which public sector typically needs to develop; (ii) Adequate development time : a key lesson from global experience is that a badly prepared PPP rarely succeeds ( as it does not attract private sector interest ) and some patience is needed as preparing a PPP takes time – by some reckoning two years or longer (from concept to start of construction);(iii) A fit for purpose environment from the legal perspective ( such as PPP law/ PPP institutions), an overall investment climate attractive to investors , an ability to attract long term bank financing , and an ability for specific sectors to be organized in such a way that private sector investment can happen;(iv) Careful focus on sectors -- most PPP takes place in infrastructure sectors (such as energy transport, water and sanitation, telecom) and to a lesser extent in what are generally called soft sectors ( such as health).(v) Attracting investors is likely to require a portfolio approach (a pipeline of projects is more attractive to investors). Smaller countries may have limited projects to develop. Right screening for projects is important, with a clear understanding of which project should be undertaken as PPP or not.Underlying all this is the necessity of maintaining a transparent management of the procurement process.Finally, I would like to say a few words on fiscal risks. Selecting a PPP versus a traditional public investment needs to be based on a cost-benefit inquiry and value-for-money comparisons. Experience shows that the government could indeed encounter larger fiscal costs with a poorly designed PPP, especially those related to resorting to guarantees to secure private financing or contract renegotiations. Guarantees are a crucial element in negotiating a PPP. They are necessary to hedge the private sector from risks which cannot be predicted such as exchange rate risks. However, at times guarantees may not be scrutinized in the same detail as a traditional public expenditure is during a budget process. Hence, Government needs to carefully examine the degree of risk transfer related to the PPP projects and to be mindful of potential contingent liabilities arising from them. In Albania's case greater fiscal transparency and proper disclosure of contingent obligations is particularly important as fiscal consolidation is a top priority of the Government.Let me wish you a very successful workshop leading to productive outcomes. I would like to thank the Government and WBG teams who have worked very hard to organize this event. Show Less -
Romania: The Environment Provides Great Value That Should Not Be Ignored
Q: What are these values you mention? And what are the negative consequences, exactly?A: These values refer to the damages caused by economic activity to us through air, water and soil pollution, thro... Show More + ugh the destruction of ecosystems, and the depletion of our forests and other habitats. The negative consequences are premature mortality, illnesses, reductions in the income from activities that depend on the natural environment, such as tourism, recreation etc.Q: Why is climate change a game changer for Romania? Why is it important for Romania to have a strategy dedicated to climate change?A: It is really important for Romania to recognize that climate change will have major impacts on the country. As temperatures increase steadily over the rest of this century, agricultural yields for different crops will change, with some of them declining quite a lot by 2100. In addition, rainfall patterns will alter, with lower precipitation in the summer and some possible increases in the winter. These changes will be accompanied by an increase in the frequency of extreme events – more droughts and floods. Also, global warming implies a rise in the sea level and an increase in storm surges, making coastal towns liable to increased flooding. The degree to which these things happen is not pre-determined. If the world succeeds to reduce greenhouse gas (GHG) emissions significantly, then there will be less warming and a smaller increase in extreme events. But some changes are inevitable and your country has to prepare for them. As a member state of the European Union, Romania also has significant obligations to reduce GHG emissions. These reductions will imply some costs as we move away from a carbon intensive economy, but they also have benefits, as lower burning of fossil fuels reduces air pollution, and benefits public health. The new infrastructure that goes with a shift to low carbon also creates jobs and can be an impetus to economic growth.Q: Beyond strategy, what are the other important factors in terms of climate change that Romania needs to pay attention to?A: The thinking is increasing towards "green growth" – ways in which we improve living standards and create employment while at the same time reducing our use of fossil fuels and switching to renewable sources of energy. There is a lot of work on this. A central feature is the role of city development and land use planning in the future so that it reduces the need for travel, and supports low carbon mobility such as walking and cycling. Energy efficiency in the building sector is also of great importance and a lot can be done on that.Q: Tell us what needs to be done so that more people become aware of the impact of climate change on their lives and on the future of their children?A: Climate change is not something only for governments to address. It is for people to start changing their mindsets so they think of ways to reduce their carbon footprint, and encourage their children to think of these factors as well. Education and awareness and very important, and lifestyle changes need leaders from society. Reducing the use of cars, increasing public transport and walking and cycling all have a role to play. Well, we can all do little things, like not driving for short journeys when it would be possible to walk or cycle, and it would be better for us; reducing energy consumption by switching off electric devices when they are not in use but in stand-by mode; cancelling our carbon footprint by supporting programs of afforestation, where we can get a formal credit for each ton of carbon captured. Show Less -
Joint Statement by Diariétou Gaye on Behalf of the Social Protection Development Partners Group at the National Social Protection Conference
Despite sustained economic growth, poverty and vulnerability continue to affect large sections of society and we still have more work to do. While poverty rates have declined from 52.2% in 2000 to an ... Show More + estimate of less than 40%, the number of poor in Kenya remains high. Poverty and vulnerability is not evenly spread in Kenya. On average, almost three-quarters of the people in arid and semi-arid areas live below the poverty line, with the highest incidence of poverty being 96% in Turkana. Furthermore, around three-quarters of children in Kenya - 15 million - are unable to enjoy at least one of their rights as provided in the Constitution.Social protection is an important part of the government's strategy to fight poverty and vulnerability, and promote sustained economic growth and resilience to shocks such as drought. Governments, globally and in this region, recognize that social protection is a crucial component of national development strategies for achieving inclusive, pro-poor, and equitable growth. Brazil's remarkable success in reducing poverty and inequality in the 2000s can be attributed to expanding Bolsa Familia, a family grant conditional on sending children to school and using preventive health services.Social protection is also a tool for governments to realize human rights. In Kenya, social protection is enshrined in the Bill of Rights of the Constitution. We applaud this. Moreover, social protection contributes to social and economic rights, particularly for those excluded from society. For example, studies show that children benefitting from these programs are more likely to attend school, are better nourished and healthier than poor and vulnerable children who do not receive cash transfers.However, the needs are still greater than the response and we must invest more in social protection programs. Cash transfers for poor and vulnerable households have expanded significantly, though coverage still remains low, reaching less than 10% of the population. The government and the development partners have invested significantly in these schemes and are working in close partnership to expand and strengthen these important programs.Let me mention some of the achievements we have made so far:Expansion of cash transfers: Over the past 10 years, the government has launched cash transfers for older persons, orphans and vulnerable children and persons living with severe disabilities. These programs today provide cash transfers to over 400,000 households in Kenya. Since 2004, development partners have provided funding and technical assistance aimed at building capacity to deliver these programs to all parts of the country. For example, the very first Cash Transfer Programme for Orphans and Vulnerable Children (OVC) was initiated in that year by the Government, with support from Sweden and UNICEF. Early evaluations of this program showed important results such as improved child health and increased income opportunities for beneficiary households. These positive results have encouraged the Government to use its own resources to scale up social protection programs. We highly commend the Government for this.Cash transfers for the arid and semi-arid lands: In 2008, under the then Ministry of Northern Kenya, DFID and the then AusAID began to pilot the Hunger Safety Net Program (HSNP) in the poorest, drought prone counties of Turkana, Wajir, Marsabit and Mandera. It wanted to test an alternative to ad-hoc, often late and costly emergency food aid. The HSNP has had positive impacts on poverty, food security, education and health spending. The program is now expanding and the Government is increasing its support in what is now seen as a flagship program for Kenya. HSNP makes electronic payments directly into beneficiary bank accounts and aims to reach up to 100,000 households with regular transfers. It is also aiming to open bank accounts for over 275,000 more people, in order to provide them with emergency cash transfers in a time of drought. This is a useful platform for the Government and development partners to use in any future, early "no-regrets" response.Cash for Assets Program: The Government, with support from WFP and USAID, launched the Cash-for-Assets program, whose goal is to create productive assets that build resilience to drought across the arid and semi-arid lands, and to provide predictable cash transfers to 65,000 food insecure households. The program is growing and is now supported by a broad group of development partners including the governments of Sweden, Germany, Japan, Canada, the United States and Finland. Similarly, the cash-based national schools meals program addresses children's short-term hunger and improves their ability to concentrate and learn in primary schools across the arid and semi-arid regions, and provides a predictable market for local producers.The National Safety Net Program: In FY2013/14, your Government doubled its budgetary allocation to all the cash transfer programs. In the same year, the Government, with support from the World Bank, and other partners, launched the National Safety Net Program. The NSNP is a US$250 million four-year program designed to improve the welfare and resilience of beneficiaries harmonizing the cash transfers for older persons, orphans and vulnerable children, persons with severe disabilities and the HSNP. It is supported through a Program-for-Results, which means the World Bank disburses funds to the Government after it achieves results we have jointly agreed. For example, ensuring any expansion of programs and their targeting is poverty focused; or making sure payments reach beneficiaries on time. This is the first Social Protection program globally to be supported in this way, and the first program of this kind to be implemented in Kenya. We are learning together as we blaze a trail globally!These efforts have helped to strengthen program governance and accountability and harmonize delivery systems, while also increasing the scale of the programs. The coverage of the cash transfer programs in the NSNP has grown from 500 households in 2004 to almost 500,000 households in 2014.Today, cash transfers are supported by innovative delivery mechanisms that help to reduce benefit errors and fraud. This includes the use of biometric authentication, smartcards and bank accounts, to deliver timely, secure and efficient payments to beneficiaries all over the country. Beneficiaries can use a smart card to access their payments electronically from Point of Sale devices at local businesses, banks, or other agents close to where they live, reducing travel costs and injecting those resources back to the local economy.While access to quality healthcare is a constitutional right, health insurance remains out of reach to millions of Kenyans who cannot afford to pay for health services at public or private clinics. But, thanks to a collaborative Health Insurance Subsidy Program (HISP), launched by the Government last year, this trend is being reversed. HISP extends financial risk protection to Kenya's poorest by providing them with a health insurance subsidy, which covers both inpatient and outpatient care in public and private health facilities. The program is supported by the World Bank Group, and other development partners including DFID and the African Health Markets for Equity program.The development partners are also aware that there is a draft National Social Security Fund Bill whose intention is to address the main existing challenges to Social Security so as to increase benefit levels, expand coverage of the scheme and to better manage the fund resources. We, therefore, look forward to working jointly with the Government to enhance the functioning of the NSSF.Social Protection Policy: Finally, it is important to recognize that these developments have been underpinned in the draft National Social Protection Policy, which was approved by the Cabinet in 2012. We look forward to this Bill being enacted into law. The Development Partners represented here are committed to providing the necessary support to improve the social protection sector in Kenya, in line with the country's development priorities.Let me take this opportunity to once again thank you, Your Excellency, for being here with us. It demonstrates the importance that you personally, and your Government, attach to the welfare of all Kenyans.Thank You. Show Less -
World Bank Country Manager in Romania Elisabetta Capannelli on Poverty Alleviation in Romania
Your Excellencies,Dear Ministers,Distinguished guests,I am happy to join you today at the launch of the Norway grant 'Programme for Poverty Alleviation in Romania. The World Bank is a very active play... Show More + er in this area of the world and a long standing partner of Romania. This is a good opportunity to discuss the challenges of poverty alleviation with our counterparts in the Government of Romania, our Norwegian friends, and with the experts and stakeholders present here.We share the view that poverty is one of the most important challenges for our societies today. Poverty, extreme poverty especially is not only a personal drama for millions of families around the world. Poverty, social exclusion and lack of opportunities are all major determinants to a country's instability, economic and political backwardness, all lead to a huge loss of creative potential.Significant progress has been achieved in the last several decades in fighting poverty in the world. The share of population living on less than US$1.25 a day (the international definition of poverty) has fallen from 30% in 2000 to 10% in 2009.Unfortunately, after 2008, progress in alleviating poverty has stalled in many regions of the world as the economic growth - which is the natural antidote to poverty – stagnated due to the crisis. Worse still, increasing income inequalities enhanced the problem of relative poverty even in developed countries. There are 80 million people in the European Union that live under the poverty threshold, defined at 60% of the national median income. These are unacceptable figures.Romania has made major progress in the last 25 years to fight poverty and promote measures that alleviate it. However, the country still registers the highest poverty rate in the European Union. Over 21% of Romanians live below the national poverty threshold. Three-quarters of the poor have been poor for at least three years, which means that poverty is persistent. Poverty is also persistent across generations - children born in poor families have fewer opportunities for a better life, partly because they do not attend school, or if they do attend they drop out of school early.Lacking the basic skills required for getting a job as young adults they join their parents and communities in informal employment, inactivity and at times delinquency. To further complicate matters, many poor families have a precarious health and therefore reduced labor ability, while their medical coverage is inadequate.Poverty is also concentrated in rural areas and in the Eastern part of the country. The Roma population has a ten-time higher risk of being in poverty than the general population in Romania. There is a significant number of deprived communities in which all of these problems come together, making it very hard for the poor to break the exclusion cycle. Sustained and integrated external support targeted to these communities is a must.I visited several times marginalized and deprived communities and I really feel that the large number of people there deserve better. Birth circumstances should not dictate the fate of the children in poor communities in Romania.Alleviating poverty and promoting social inclusion requires a lifecycle approach. Because children who grow up in poor households face a higher risk of poverty in the future, breaking the intergenerational cycle of poverty makes it essential for the government to adopt programs that can tackle both child and adult poverty in the same household simultaneously.First - it is critical to equip all Romanian children with the education, skills, and experience they need to achieve their full potential, including as contributors to the country's future economic success.Second - it is equally important to ensure that every adult has the opportunity to fully participate in the economic, social, and cultural life of their community. Whether or not parents are employed has huge implications for their children's prospects – both in terms of the income they generate and the example they create.As a country with an aging and shrinking population, Romania cannot afford to tolerate that a single child is deprived of opportunities. Extra measures have to be taken to enhance access to quality education especially for children from disadvantaged background.Our experience from Romania, Europe and the world provides clues as to the ingredients of successful poverty alleviation policies. A holistic approach is required for the poor in Romania.To name a few:Quality early childhood development services - this includes programs for parents of children below the age of 3 as much as quality preschool programs for children between the age of 3 and 6 to prepare them effectively for primary school.Quality primary and secondary general education which is mindful of the specific challenges of poor kids resulting from household background and poverty - this includes the need to adequately resource and staff schools with large shares of poor and disadvantaged children and using Roma education mediators.Adequate housing and access to basic infrastructure services are urgently required.Quality health services catering to marginalized communities, adequately staffed with experienced and well trained personnel.High quality employment services with the capacity to effectively support the most disadvantaged job seekers.Social work outreach into marginalized communities to better understand the nature and dimensions of deprivation and to better integrate necessary services.Romania is lacking in these areas due to reasons of inadequate policy, low capacity and resource constraints. However, the forthcoming National Strategy on Social Inclusion and Poverty Reduction provides a candid assessment of shortcomings and a strong commitment to tackle multiple challenges. Growth cannot be achieved without this.We at the World Bank feel privileged to have had the opportunity to advise the Romanian Government in preparation of the new National Strategy and being able to support Romania on critical reforms and investments in education, health and social protection.One major conclusion of our work is that the Romanian Government's objective of reducing the population at risk of poverty by 580,000 people - as committed in view of the EU2020 Strategy - is not easy to achieve, excluding the optimistic scenario of high growth.Active policies - such as those mentioned above - are required to increase the employment and wage rates of the poor and improve social protection for the poorest quintile of the population.The World Bank's twin goals are to reduce extreme poverty and boost shared prosperity. Throughout our activity in Romania - technical assistance and lending - the World Bank has committed to foster sustainable income growth for the bottom 40% of the population and support poverty reduction in key sectors and areas of intervention such as education, social protection, labour market, health, social inclusion, aging population, etc.We will continue to partner with you all and with the Government of Romania to achieve such objectives.I look forward to today's interventions and discussions to help us improve our understanding of the issues, challenges and solutions applicable to alleviating poverty in Romania. Thank you very much! Show Less -