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A sustainable forest management program in Senegal puts communities in charge of local natural resources, increasing income and opportunities for electricification. Read More »
The Jiji and Mulembwe hydropower project will finance construction of two hydropower stations of combined 48 megawatts capacity and will provide Burundians with affordable, clean, reliable, and sustainable energy. Read More »
A new project, approved by the World Bank's Board of Executive Directors on March 20th, will assist the government of DRC as it begins work to bring electricity to 9 million citizens. Read More »
With support from the World Bank, a micro-hydro plant in Yandohun has been restored, bringing electricity to homes and businesses. Read More »
Sierra Leone's six million residents are closer to having access to reliable electricity and public finance reform with the recent signing of two project agreements. Read More »
A Guide for Mining Tax Collectors to Help Make Revenue Work for Development
"This sourcebook will be a key tool to have a robust framework in place to ensure that mining revenue and its benefits build national equity to boost shared prosperity and ensure channels for sustainable... Show More + revenue generation, " said Vijay Iyer, Director, Sustainable Energy and Extractive Industries Department, The World Bank Group.Administrative Capacity Building is Key"As governments focus on attracting investment in developing countries, they often forget that once those revenues start rolling in the state needs to be prepared to administer them," said Boubacar Bocoum, Lead Mining Specialist at The World Bank. "Tax collection capabilities must be prepared to handle the complexities of the mining industry.""How to Improve Mining Tax Administration and Collection Frameworks, A Sourcebook" is aimed at meeting this need. It is designed to assist Ministries in charge of Finance and Mines to analyze and improve their effectiveness and efficiency in handling common issues that arise in the administration of mining revenues. The Sourcebook was produced by the World Bank's Oil, Gas and Mining unit in partnership with the Centre for Exploration Targeting of the University of Western Australia. The Centre's team assessed mining revenue collection and practices in Burkina Faso, Ghana, and Mali.Review highlights included:Physical and financial control points.Adequacy of information collection and sharing;Skills, systems, processes, cooperation, and coordination mechanisms between various government administrations that affect the collection of mining revenues. Data collected from the countries were analyzed and supplemented with key elements from best practices in mineral tax collection administration procedures and processes found in developed countries, in particular Australia.The Sourcebook focuses on administration and collection of mineral royalties. It analyses the relevant administrative processes for the most common types of royalties. The publication also provides insights into royalty audit processes and the administration of penalties for delay or default of royalty payments.Need for Better Communication and Greater TransparencyLastly, the Sourcebook examines the organizational and resourcing aspects of an effective and efficient mineral revenue administration system. Included is a discussion of the institutional structure needed for dealing with the mining industry, including the need for fiscal policy formulation to take into account administrative capacities, allocation of roles and responsibilities, and avoiding overlaps. The sourcebook also addresses the benefits of a culture of information sharing between revenue agencies (generally in the Finance Ministry) and agencies with knowledge of mining processes and equipment (generally in the Mines Ministry)."Information sharing between the Ministry of Mines and the Ministry of Finance is critical for effective tax collection," said Abou Bakar Traoré, Former Minister of Finance from Mali. "It is very difficult for the Ministry of Finance to collect royalties correctly if they are not informed of contracts, negotiations and other technical information that may be in the area of the Ministry of Mines."In the end, improved mineral tax collection in the extractive industries will increase the capacity of many countries to generate internal revenue and assure they are collecting the correct amount. The Extractives Industry Transparency Initiative (EITI) has made great progress on bringing transparency to the payment of extractive industry revenues but the EITI does not allow countries to verify if the correct amount of revenues is being paid. Strengthened tax collection capacity facilitates greater coordination and information sharing to be sure that the correct amount of revenue is paid from companies to governments. "How can we know what the mining companies are paying if the tax collection administration is not professionally organized to capture and provide this data correctly?" said Kwaku Boa-Amponsem, Administrator of EITI Ghana.Training Workshops to Implement Best PracticesTax administration authorities from countries throughout Africa will be participating in training workshops during 2014 to incorporate best practices from the Sourcebook into their work. Starting with South Africa in February, Tanzania in May and Ethiopia in late summer, these workshops will bring together authorities from ministries of finance and mines, as well civil society, to learn how best to improve mining tax collection in the context of their country. Show Less -
Country-Based Action to Achieve Universal Access to Energy
In response, the World Bank Group is launching a global program to help countries achieve universal energy access, as part of its support to the Sustainable Energy for All initiative. The Sustainable Energy... Show More + for All Technical Assistance Program (S-TAP), with US$15 million in initial funding from the World Bank's Energy Sector Management Assistance Program (ESMAP), will start in five countries in Sub-Saharan Africa: Burundi, Guinea, Liberia, Mozambique and Senegal. The program will deliver a comprehensive package of support to help countries expand energy access, and build a prospectus of investment-ready projects that will facilitate that expansion. Together, these are expected to catalyze further funding and investment from donors and the private sector that will allow countries to achieve universal access to electricity and safe household energy solutions by the year 2030."We cannot end extreme poverty without tackling energy poverty," said S. Vijay Iyer, Director of the World Bank Group's Sustainable Energy Department. "The low access rate in these countries is both a cause and result of poverty. Change will require investment, knowledge sharing, and a long-term, collaborative effort with governments and development partners." Discussions are underway to expand the program beyond the first five countries to Central America and Asia. The program will also work to support the further development of regional power pools in Sub-Saharan Africa. The program is designed to eventually extend to 20 countries, with an end goal of catalyzing access to electricity and modern cooking fuels for 200 million people by 2030.The current participating countries are characterized by low rates of energy access. Senegal is working to double rural electrification to 50 percent by 2017, and to minimize power outages. Liberia is rebuilding infrastructure damaged by its recent civil war, but at present less than 2 percent of the population is connected to the grid – one of the lowest rates in the world."The scale of the challenge for these countries is daunting, but experience shows that it can be done," said Rohit Khanna, Manager of the World Bank's ESMAP, which will implement the program. "Take Rwanda, which was able to triple household energy access in only three years. Or Vietnam, where a generation ago fewer than 15 percent of rural homes had access to electricity. Today, over 95 percent do."S-TAP will focus on developing a detailed action plan and an investment prospectus for each country. The investment prospectus will determine the policy and financing support needed for each country to meet its targets, and will include pre-feasibility studies for specific investment opportunities. These opportunities are expected to cover both expanding electricity access and solutions for cleaner household cooking and heating.Other activities include a stock-taking of current energy access programs, capacity development, and policy and regulatory advice focused on two areas:improving the power sector investment climate by helping countries develop more credible and predictable regulations, and adopt global procurement standards;improving the governance and financial viability of power companies, through better accountability, autonomy and cost recovery.Taken together, this support is expected to lay out a clear roadmap for each country to achieve universal energy access by 2030. Show Less -
World Bank Sees Warning Sign in Gas Flaring Increase
WASHINGTON DC, July 3, 2012 — New data showing a two-billion cubic meter increase in flared gas in 2011 over the previous year is a warning that efforts to reduce flaring need to be sustained and even... Show More + scaled up, said officials with the World Bank-led Global Gas Flaring Reduction partnership (GGFR).The slight increase in flaring from 138 billion cubic meters in 2010 to 140 bcm in 2011, revealed in latest satellite data, is due largely to increased hydrocarbon production in Russia and shale oil and gas operations in the US state of North Dakota. While not significant when viewed against the longer-term 20% drop in flaring since 2005 — from 172 to 140 bcm — the new increase is a warning sign, World Bank officials said. Gas flaring reductions since 2005 have cut greenhouse gas emissions by a volume equivalent to that emitted by some 16 million cars."The small increase underlines the importance for countries and companies to sustain and even accelerate efforts to reduce flaring of gas associated with oil production," said Bent Svensson, manager of the GGFR partnership. "It is a warning sign that major gains over the past few years could be lost if oil-producing countries and companies don't step up their efforts."Some of the highlights from the 2011 satellite data on flaring include:Overall, global flaring has increased by 2 bcm, from 138 bcm in 2010 to 140 bcm in 2011.The USA, Russia, Kazakhstan, and Venezuela are the main contributors to this increase. These countries need to step up their efforts in associated gas utilization. The same applies to Iraq.Most of the increased flaring in the USA comes from North Dakota, where there has been an important increase in activity related to shale oil and gas production.Russia still tops the world's flaring countries, followed by Nigeria, Iran and Iraq. The USA is now the fifth flaring country in the world, with some 7.1 bcm of gas flared in 2011.Latest satellite estimates also show some continuous progress in flaring reduction in Nigeria, Algeria, Mexico and Qatar. These countries need to sustain their flaring reduction and gas utilization efforts."By reducing gas flaring, oil-producing countries and companies are improving energy efficiency and mitigating climate change," said S. Vijay Iyer, Director of the World Bank's Sustainable Energy Department. "Instead of wasting this valuable resource, we now need to develop gas markets and infrastructure so the associated gas can be utilized to generate electricity and cleaner cooking fuels."Inconsistent data and often under-reporting of gas flaring by governments and companies has complicated the global effort to track progress on flaring reduction. GGFR's cooperation with the US National Oceanic and Atmospheric Administration (NOAA) to use satellite data aims to improve the reliability and consistency of global gas flaring data. This has now resulted in more consistent national and global estimates of gas flaring volumes from 1995 through to 2011.The GGFR, a public-private initiative of some 30 major oil-producing countries and companies, aims to overcome the challenges for the utilization of associated gas, including lack of regulations and markets for associated gas utilization. GGFR partners' main objective is to reduce the environmental impact of gas flaring, as well as the waste of a valuable energy source.Global gas flaring, estimated in 2011 at 140 billion cubic meters (bcm), also accounts for some 360 million tons of greenhouse gas emissions. Eliminating these annual emissions is equivalent to taking some 70 million cars off the road.Note to Editors:The GGFR partners include: Algeria (Sonatrach), Angola (Sonangol), Azerbaijan (SOCAR), Cameroon (SNH), France, Gabon, Indonesia, Iraq, Kazakhstan, Khanty-Mansiysk (Russia), Kuwait Oil Corporation, Mexico (SENER), Nigeria, Norway, Republic of Congo, Qatar, the United States (DOE), Uzbekistan; BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Marathon Oil, Maersk Oil & Gas, Pemex, Qatar Petroleum, Shell, Statoil, TOTAL; the European Union, the European Bank for Reconstruction and Development (EBRD), the World Bank Group; Associated partner: Wärtsilä. Show Less -
World Bank Announces Winners in "Apps for Climate" Competition
WASHINGTON, June 28, 2012 – A software application developed in Argentina that teaches about energy consumption, climate change and the actions needed to reduce carbon emissions took first place in the... Show More + World Bank "Apps for Climate" competition today. "Ecofacts" was one of 14 finalists from around the world that were celebrated tonight at the Connecting for Climate event at the Newseum in Washington, DC."From carbon calculators and classroom tools to new ways of visualizing climate data and planning policy responses, the "Apps for Climate" submissions are impressive. These developers rose to the challenge posed by the WB's Open Climate Data Initiative and have produced some outstanding products," said World Bank Managing Director Caroline Anstey, who gave the keynote speech at the event."Apps for Climate" was announced in December 2011 during the United Nations COP-17 climate conference in Durban, South Africa. Developers had until March 16, 2012 to develop and submit their applications, which are now publicly available. A total prize purse of $55,000 was awarded to the finalists.Entries were reviewed by a panel of expert judges, including Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change; Rachel Kyte, World Bank Vice President of Sustainable Development; Juliana Rotich, Executive Director of Ushahidi; Andrew Steer, World Bank Special Envoy for Climate Change; and Patrick Svenburg, Director, Developer & Platform Evangelist in Microsoft's Public Sector division.The top three winning apps in the "Apps for Climate" competition are:1st Place: Ecofacts, (Argentina, $15,000). Ecofacts teaches users about energy consumption and climate change, by showing how individual actions can translate into large-scale changes at the national level.2nd Place: My Climate Plan (Norway, $10,000). My Climate Plan allows users to create their own hypothetical national plans for reducing greenhouse gas emissions. The program currently focuses on Norway, but could be adapted for other countries.3rd Place: Globe Town (United Kingdom, $5,000). Globe Town shows how countries are connected globally through trade, immigration, or international assistance, along with country profiles of issues such as energy use and climate adaptation."Winning the Apps for Climate competition is a great honor," said Andres Martinez, who took first place in the competition. "Ecofacts is an "open source" project, so anyone can access the source code for use in their own tools, or create improvements. In the future, I hope that Ecofacts will be useful to other developers and users alike."In addition "CC Climate for Children" from Macedonia won in the "Popular Choice" category, and was awarded $5,000. "Climate for Children" is a collection of interactive classroom presentations and games for teaching climate change issues to students. "ClimaScope," an app from the United Kingdom that visualizes future climate scenarios for planners and policymakers, received the Large Organization Award."Solving the problem of climate change requires behavior change. People in all walks of life will need to make decisions based on the best available data," said Rachel Kyte, World Bank Vice President of Sustainable Development, speaking at the ceremony. "Data collected is just data. But data interpreted and visualized becomes something fundamentally more empowering. These apps have the potential to provide knowledge to those who need it to understand how a changing climate will affect their lives.""These apps demonstrate the potential of how open data can improve understanding and lead to new insights," observed Shaida Badiee, Director of the World Bank's Development Data Group. "For example, one app integrates climate models with open data from the UN Food and Agriculture Organization to show how future forecasts could impact planting and irrigation of major crops around the world." Show Less -
Globalization: Made in the Americas
Introduction Thank you for the honor of your invitation to commemorate the 30th Anniversary of the Inter-American Dialogue. The origins of this Dialogue stretch back to a discussion between Peter... Show More + Bell and Abe Lowenthal on a park bench. Peter and Abe were disturbed by the breakdown in inter-American exchanges during the Falklands/Malvinas war, and by the lack of ties with the rising democrats of Latin America. So they discussed bringing together leaders from across the hemisphere to set a new inter-American agenda. The Dialogue held its first ad hoc conference in late 1982. Today, 30 years later, Latin America's very success offers the opportunity to remake that Hemispheric partnership around new pillars:A revived free trade policy that will aid structural reforms for growth in all our countries;An energy transformation, ending the Hemisphere's energy dependency; A new diplomacy infused with private sector pragmatism to solve public problems;Shared security; andThe first Democratic Hemisphere. For the United States, this new agenda could enable us to rely on a great, home-grown asset – Hispanic-Americans – as the vanguard of U.S. connectivity in a new Western Hemispheric economy. This Dialogue can – and I believe will – help drive this change: to create a "Globalization: Made in the Americas." Under Peter Hakim's and now Michael Shifter's energetic leadership, the Inter-American Dialogue has become the leading U.S. center for policy analysis, exchange, and communication in the Western Hemisphere. The idea at the heart of the Dialogue remains very much the same as that which emerged from the conversation on the park bench: that through dialogue and shared vision, interested citizens across the hemisphere together can plant the seeds of new policy ideas and practical proposals for progress in the Americas. So tonight, let's put that idea to work. A Different Vantage Point Just two months ago, the leaders of the Western Hemisphere met in Cartagena for the Summit of the Americas. Colombia was an excellent host, and the Summit showcased the country's many hard-won achievements. But the news reports were, frankly, disappointing. Aside from the behavior of some Secret Service agents, the coverage focused on disagreements about Cuba and drugs. Some even suggested this would be the last Summit of the Americas. The agenda seemed stuck in a time warp. So when Carla Hills asked if I could join you this evening, I thought the best way to celebrate the Dialogue's Anniversary was to offer new possibilities for the Americas in a fast-changing global economy. My vantage point on our hemisphere is different from many U.S. contributors to the Dialogue. I am not a specialist in Latin America. Like many of my U.S. foreign and security policy colleagues, much of my energy has been concentrated on the issues of Europe and the Asia-Pacific, the Middle East and Southwest Asia. Yet because of my economic background, Latin America and Canada have loomed larger on my global map. In the 1980s and early 90s, working with Secretary of Treasury and State James Baker, we were immersed in issues of Latin American debt and reforms for growth, the Canadian and North American FTAs, and Central American security and democracy. In 2001, as U.S. Trade Representative, we were fortunate to build on that experience, negotiating FTAs with Chile, Colombia, Peru, Panama, the five countries of Central America and the Dominican Republic. Together with NAFTA, these FTAs cover 54 percent of the economy of our hemisphere, not including the United States, offering an underutilized web of free traders that could support deeper integration in the Americas – even hemispheric free trade and democracy. Five years as President of the World Bank Group has added to this perspective. Why am I stressing this global outlook on Latin America? Because, while working on the issues of our region, I have urged my Latin counterparts to look globally, too. Instead, for too many years, the dialogue within our hemisphere seemed constrained by a North-South framework. The United States loomed large – whether as a hegemon, source of support, market, model, danger, or even frustrating land of inattention. On development, debt, investment, competition, and trade, Latin Americans need to see the wider horizon – especially to benchmark with East Asia. And beyond East Asia, Latin America has a new role to play in building multiple engines of growth with other emerging markets. It is time to break out of that North-South construct. Consider Canada's experience in combining regional integration with global reach: of course, Canada's FTA with the United States in 1988 deepened the two countries' economic integration – but in addition, the competitive adjustment driven by that accord made Canadian business more competitive globally. A new hemispheric partnership requires leaving old habits, old mindsets, and old models of dependency behind. That partnership will necessitate a new mix of partners, public and private. That partnership should be the next challenge for the Summit of the Americas and this Dialogue. Latin America's Record of Gains Latin America's recent record of gains now puts it in a position to remake the Hemispheric partnership. The numbers tell the story. Between 2003 and 2010, the income of the average Latin American increased by more than 30 percent. A silent revolution in macro-financial policy has strengthened the economic immune system of many countries. We saw the payoff after the fall of Lehman Brothers: Sound policies in Latin America enabled expansions to offset the downturn without the aftershocks that now threaten Europe. About 73 million Latin Americans have been lifted out of poverty since 2003. Today, almost a third of the region's population is considered middle class. Latin America is breaking a pattern of persistent inequality, including through an increase in women's involvement in the economy, particularly from poor families. Colombia and Peru have buttressed this trend by boosting opportunities for people of African and indigenous origin, seeking to overcome divisions that populists have exploited. Mexico and Brazil have led in developing well-targeted conditional cash transfer programs that have revolutionized public assistance. These programs couple income grants for poor families with incentives for health check-ups and keeping children in school. Mexico's Oportunidades program has probably done more for women's health than anything in the country's history. These are safety net programs that appeal to a fiscal conservative: They cost only about half a percent of GDP. The World Bank has helped export this model to 40 other countries, ranging from Pakistan to the Philippines. Latin America is "going global." As the global trade negotiations have stalled, leading Latin American free traders have tried to keep up the momentum. Mexico has FTAs with 59 countries; Chile with 43. Colombia offers a leading example of how a democracy can combine security, development, and good governance to overcome narco-traffickers, kidnappers, and terrorists. Peru demonstrates how sound economic policy and political commitment across administrations can reverse years of stagnation. Brazil's influence is expanding – through its companies, agricultural and mining experience, development work, peacekeeping in Haiti, and interest in Africa. Brazil's leaders of the left have also turned a page in history by sticking with democracy. Rising leaders of the left in other Latin American countries have seen the benefits for the poor of Brazil's example, compared to authoritarians who tear down institutions to consolidate personal or party power. Looking Ahead So what's ahead for Latin America? Latin America's per capita income is still only at 30 percent of the U.S. level. To climb higher, Latin American economies will need to leap beyond the so-called middle income trap. Many developing economies make early rapid gains. But then productivity and growth tend to slow. This is a global challenge. In 1960, the World Bank ranked 101 economies as middle income; by 2008, almost half a century later, only 13 had made it to high income levels – and one was Greece. Many Latin American countries will need to translate the commodity boom into broader, more diversified economies. This region has lived through roller-coaster booms and busts before. Higher productivity is the antidote to the middle income trap. Since the 1980s, Latin America has underinvested in infrastructure – electricity, roads, bridges, ports, transport – and maintaining and operating these services. Currently, Latin America spends 2 to 3 percent of GDP on infrastructure, less than half the rate of investment in East Asia. Public-private infrastructure partnerships not only offer a source of financing, but also better design, maintenance, and operations to deliver high-quality services on time. Colombia has experimented with PPPs in urban water supply and sanitation. Mexico's new Highway Concession Program has mobilized PPP projects of around $11 billion, expanding the country's major toll roads network by some 25 percent. Latin America has to anticipate its human capital needs. The region is aging rapidly: today, about 11 percent of Brazil's working age-population are seniors; by 2050, it will be nearly half. Latin America also needs to improve the results of its investments in education. By age 15, the learning achievement of the average Latin American student lags two years behind his or her developed country counterparts. Latin America is recognizing that gender equality is smart economics. Today, women in Latin America outnumber men in schools and universities. Working age women represent roughly 40 percent of the entire labor force in the region. To continue to grow, the region will need more competition and innovation in the service sector. Competitive services increase productivity. They supply the 'software' of integration: transport, where delays and losses can impose significant costs; information technology, because accurate data and effective communication is vital; financial services, to create a supportive business environment; and logistics systems, which are a driver of business competitiveness. A New Agenda What do these challenges mean for a new hemispheric partnership? What should have been the news coming out of Cartagena? Let me offer five ideas. First, the Western Hemisphere needs to revive an activist free trade and economic reform policy, globally and regionally. We need fresh approaches. The United States will be cutting agricultural subsidies, especially given high prices, and eliminating protection for ethanol. Why not deploy these to prod others? Service sector liberalization can boost productivity, open new businesses, create new jobs, and cut the "Latin cost" that many countries impose on their own businesses. Why not deploy this economic need to revive a mutual interest in negotiation? A strong self-interest can drive this renewed call for liberalization. Latin American economies still need much investment and more robust capital markets – especially in local currencies – that can help Latin American entrepreneurs and family-owned businesses to expand. Infrastructure investments require capital goods and services, as Panama's 21st Century Canal project is demonstrating. Why not dismantle barriers to lower the cost of infrastructure expansion? Better logistics make economies more competitive. The World Bank's 2012 Logistics Performance Index estimated that Latin American logistics costs are between 16 and 26 percent of GDP – that's two to four times the average in Europe or East Asia. The World Bank has helped Colombia and Peru to implement a "single window" approach to customs clearance and border management. In Brazil and Peru, the Bank has worked with international freight forwarders to connect rural, remote villages and small businesses to export through national postal services; in the first six months, more than 300 small firms in Peru became exporters, most for the first time. Even as the WTO works toward a Trade Facilitation agreement, the Americas could develop an accord that points the way. Brazilian officials are focused on exchange rates. Yet to really boost growth the target should be productivity. Better infrastructure can help, and so can more efficient and effective public services. The World Bank Group has launched a deeper partnership with the Governors of the Northeastern states of Brazil to overcome these impediments. Over time, however, the United States and its free trade partners should be working with Brazil to rebuild the case for a hemispheric initiative to realize the benefits of trade liberalization and economic reforms. It takes two to tango, and this agenda requires changes on the part of the United States, too. The United States is no longer leading the open trade agenda, as it relies increasingly on defensive measures. The United States has its own high costs of trade – antiquated ports and laws to protect special interests. The United States should work with its current free trade partners in the Americas to deepen ties of development, reform, and investment. The current architecture of US FTAs in the hemisphere offers a solid legal framework, but it needs to evolve into a home for an ongoing dialogue – across countries and with business, academic, civil society, and environmental communities – to see what else can be done to lower costs and barriers and create opportunities. The United States and its partners could explore progressive integration across the FTAs, for example by expanding provisions to cumulate inputs among partners while qualifying for free trade. The United States needs to make its hemispheric FTA network dynamic, linked to business and investment policies, and improved governance. A new concept of an FTA network in the Americas could also support inclusive and sustainable development as the foundation for open societies and borders. Second, innovation in the energy sector, led by the United States, could transform energy security for North America, the Hemisphere, and the world. In 2008, imports supplied 70 percent of US oil demand. By 2020, PFC Energy estimates that imports could be down to 40 percent of US oil demand – or even 20 percent if Canadian oil is counted as part of the home market. If natural gas for Canada and the United States is added, U.S. net energy imports from the rest of the world could drop to five percent of U.S. demand. That's an amazing game-changer in energy. If Mexico opens PEMEX to real outside investment, the outlook is even brighter. With the discovery of the giant deep offshore PRESAL oil and gas fields, Brazil can play a major role in supplying oil and gas in the region. Yet there is a need to connect these energy supplies – through infrastructure – with countries in Central America and the Caribbean that have suffered from high prices and limited access. Increased efficiency and alternative sources could help the energy poor, too. It's long past time for a hemispheric energy policy – blending consideration of inclusive growth, the environment, and indigenous communities' interests. Third, this new Hemispheric partnership needs to break old patterns of diplomacy. There are now vibrant private sectors all across the hemisphere. The challenges of overcoming the middle income trap and structural reforms to boost productivity need private sector advice and solutions. All across the developing world, the World Bank is encountering a new pragmatism about involving the private sector in areas that used to be public monopolies: infrastructure; education; healthcare; skills training; delivery of public social services. Advanced economies such as the United States should be taking note, too. Yet government-business dialogues can be stilted showcases. The Summit of the Americas – and perhaps the Dialogue – should review which approaches work better and why. With some guidance, businesses can better connect possibilities with policies. Governments can commit to responses, commitments, openness, and results. Fourth, the new Hemispheric agenda should help all 35 countries overcome security threats to growth and opportunity. The fragile governments of Central America are at risk of being overwhelmed by crime and violence linked to drug trafficking, organized crime, gangs, and firepower. Spain, which has roughly the same population as Central America, has about 400 murders per year; in 2010, Central America had over 18,000. The region pays a heavy economic price for this insecurity – as much as 8 percent of GDP. The basic legitimacy of governments and institutions is fraying: About half of Central Americans say a military coup could be justified when crime levels are high. Experiences from Medellin and Rio de Janeiro have shown that the best way to attack criminal insecurity is through an integrated approach: combining stepped-up policing, prevention, and community investments. Quick turnarounds are possible. Strong regional cooperation is indispensable. The United States has an unfortunate pattern of ignoring dangers in Central America until they explode. This time U.S. diplomacy should work with Mexico, Colombia, and Panama to develop a coherent strategy – not band-aids. As in Colombia, the Central American private sector must also be part of the solution. And the United States should also take responsibility for the drug habits of its public that fuel demand for narcotics from the south. Fragility in the Caribbean is another soft spot. But small economies can be competitive in many sectors. Accelerating integration in the Caribbean can share services, add to resilience, and boost economic prospects. Latin America should also be looking toward a greater role in global security – through practical steps, not the old G-77 policies of the past. My friend and former colleague, Bernie Aronson has proposed, for example, that Brazil could lead by voluntarily ending its uranium enrichment program and then calling on other nations – including Iran – to follow its example. If Brazil wants to help shape the 21st Century, leadership in preventing the spread of nuclear weapons – with an idea and action – would send a powerful signal. Fifth, the debate over Cuba at Cartagena sounded like hollow echoes from another era. Look ahead, not back. Chavez's days are numbered. If his subsidies to Cuba and Nicaragua are cut, those regimes will be in trouble. The democrats of Latin America – left, center, and right – should be preparing. The calls for democracy – for an end to intimidating thugs, human rights, fair elections, and rule of law – should come from all its capitals. There will soon be an opportunity to make the Western Hemisphere the first Democratic Hemisphere. Not a place of coups, caudillos, and cocaine -- but of democracy, development, and dignity. This transformation will not be achieved by the Calvo doctrine. By divisive populists. By corruption. By acquiescence. By silence. You know well that if Latins leave the work to Washington and Ottawa, the opponents of liberty and human rights will play the cards of gringoism and neo-imperialism. Trump them. Conclusion For the United States, a new partnership in the Western Hemisphere offers opportunities for renewal at home, too. All the debates about macroeconomic issues – fiscal and monetary policies – as important as they are, risk inattention to microeconomic incentives, structural reforms in the United States. Energy. Infrastructure. Education. Human capital. Competition. Environment. Innovation. The United States also needs to clear away old rigidities on these new fundamentals. The United States also needs to draw on the energies, intelligence, and drive of all its citizens. As my friend Luis Alberto Moreno of the Inter-American Development Bank has pointed out, the 50 million strong Hispanic community in the United States is a growing market, source of entrepreneurship, and resource for a Hemispheric economic strategy. At over $1 trillion, the purchasing power of Latinos in the United States is larger than the economies of every Latin American country except Brazil. According to the U.S. Census Bureau, there are between two and three million Hispanic-owned businesses in the United States. Many are small. But they create jobs, earn revenues, and pay taxes. As Latin America grows, the Hispanic businesses in the United States offer an incredible asset. Hispanics in the United States could be in the vanguard of a new Western Hemispheric economy. Small and medium-sized Hispanic-American businesses will need help to expand their entrepreneurialism – information about markets, financing, and risk management services. To be most effective, this assistance should be decentralized – perhaps drawing on local chambers of commerce in cities and states where most Hispanic businesses can be found. The Small Business Administration, OPIC, Ex-Im Bank, the Inter-American Development Bank, and the World Bank could then deploy their resources to help. The world economy is still struggling to recover from the worst blows since the 1930s. Europe is a danger zone. U.S. leadership remains vital to get through the storm, to reach a new world economy of multiple poles of growth. This is why the news coming out of the Cartagena Summit was disappointing. This is not a time for drift, for old North-South debates, for retreat behind borders, old mindsets, or out-dated dependencies. This is a time for the New World to again inspire novel thinking – about development, growth, structural reforms, rule of law and human rights, democracy, and security. This Dialogue should aim high: To have the Western Hemisphere shape this next era of globalization – so that future historians will title the next chapter, not "The Passing of the New World," but "Globalization: Made in the Americas." Show Less -
New Initiatives Give Hope to a Carbon Market Facing Challenges
World Bank releases State and Trends of the Carbon Market report 2012COLOGNE, GERMANY, May 30, 2012 – The total value of the carbon market grew by 11 percent in 2011, to $176 billion, and transaction volumes... Show More + reached a new high of 10.3 billion tons of carbon dioxide equivalent (CO2e) according to a new report from the World Bank. According to State and Trends of the Carbon Market 2012 this growth took place in the face of economic turbulence, growing long-term oversupply in the EU Emissions Trading Scheme (EU ETS) and plummeting carbon prices. The report, released here at the Carbon Expo in Cologne, describes how even as prices declined, the value of the global carbon market increased in 2011, driven predominantly by a robust growth in financially motivated transactions. By far, the largest segment of the carbon market was that of EU Allowances (EUAs), valued at $148 billion. There was also a substantial increase in the volume of secondary Kyoto offsets (which grew by 43 percent, to 1.8 billion tons of CO2e, valued at US$23 billion) fueled by increased liquidity in the Certified Emission Reduction (CER) market and in the nascent secondary Emission Reduction Unit (ERU) market. Following the same pattern observed in previous years, the global carbon market in 2011 was primarily driven by the EU ETS. With the end of the first commitment period of the Kyoto Protocol in 2012, the value of the pre-2013 primary CER, ERU and AAU markets declined once again in 2011. Not surprisingly, however, the market is starting to look beyond 2012 and consequently the post-2012 primary CDM market increased by a robust 63 percent, to US$2 billion, despite depressed prices and limited long-term-visibility. Although China remained the largest source of contracted CERs, African countries – largely bypassed in the pre-2013 market – emerged stronger in 2011 and accounted for 21 percent of post-2012 CERs contracted during the year. Against this backdrop, several new domestic and regional carbon market initiatives gained traction in both developed and developing economies in 2011. Five new jurisdictions passed legislation adopting cap-and-trade schemes. "It is heartening to see that, while leading economies continue to experience difficulties and the carbon market faces major challenges, we see increasing interest in, and support for, new market-based mechanisms to mitigate climate change in the long term," said Joëlle Chassard, Manager of the Carbon Finance Unit of the World Bank. The Australian Parliament passed the Clean Energy Act, the California Air Resources Board adopted a cap-and-trade regulation, and Québec adopted its own cap-and-trade program. The province is now working toward linking it with California's starting in 2013. Last month, both Mexico and the Republic of Korea passed comprehensive climate bills, laying the foundation for future market-based mechanisms. "Together, these initiatives will drive substantial resources towards low-carbon investments and they have the potential to unleash a truly transformational carbon market, in support of a global solution to the climate challenge," said Alexandre Kossoy, Senior Financial Specialist, World Bank Carbon Finance Unit. Show Less -
Food Prices Rise Again on Higher Oil Prices and Adverse Weather
Increases reverse downward trend that began in October 2011WASHINGTON, April 25, 2012— Global food prices increased by 8 percent from December 2011 to March 2012 due to higher oil prices, adverse weather... Show More + conditions, and Asia's strong demand for food imports, according to the World Bank Group's latest Food Price Watch.The World Bank's Global Food Price Index was only 1 percent below a year ago and 6 percent below the February 2011 historic peak. If the current forecasts for increased food production do not materialize, global food prices could reach higher levels, underscoring the need to remain very vigilant."After four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people," said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM). "Putting food first must remain a priority for the international community and in our work in developing countries."According to the quarterly Food Price Watch report, prices of all key staples increased between last December and March of this year, except for rice, due to both abundant supply and strong competition among exporters. Maize prices increased by 9 percent, soybean oil by 7 percent, wheat by 6 percent, and sugar by 5 percent. Crude oil prices rose by 13 percent.In addition, domestic food prices remain high, especially in Africa as the result of a combination of large food imports and local factors, such as trade restrictions between neighbors, hoarding, civil unrest, high fuel transportation costs and bad weather conditions.In a global context, domestic food price increases have been larger than price declines across countries. Wheat prices from March 2011 to March 2012 rose 92 percent in Belarus, while the price of maize increased by 82 percent in Malawi, 80 percent in Ethiopia, and 71 percent in Mexico.Production outlooks remain strong for 2012/13 and a number of factors have kept pressures on prices at bay. Record prices in late 2010 and early 2011 led to increased production of major crops worldwide, and are a key factor in the strong projections for the 2012/13 season. The slowdown in maize use for ethanol production in the U.S. and weak global demand due to the euro crisis are contributing to keeping upward price pressures on check.How the World Bank Group (WBG) is helping to put food firstIn response to drought in the Horn of Africa, the WBG is providing $1.8 billion to save lives, improve social protection, and foster economic recovery and drought resilience.A first-of-its-kind risk management product, provided by the International Finance Corporation (IFC), will enable protection from volatile food prices for farmers, food producers, and consumers in developing countries.The Global Food Crisis Response Program is helping 40 million people in 47 countries through $1.5 billion in support.The WBG is boosting spending on agriculture to some $6 to $8 billion a year from $4 billion in 2008.Supporting the Global Agriculture and Food Security Program (GAFSP), set up by the WBG in April 2010 at G20's request. Seven countries and the Gates Foundation have pledged about $1.1 billion over 3 years, with $612 million received.The WBG is coordinating with UN agencies through the High-Level Task Force on the Global Food Security Crisis and with non-governmental organizations.Advocacy for more investment in agriculture research -- including through the Consultative Group on International Agriculture Research (CGIAR) – and monitoring agricultural trade to identify potential food shortages.Supporting improved nutrition among vulnerable groups through community nutrition programs aimed at increasing use of health services and improving care giving. As part of its response to the food crisis, the Bank has supported the provision of some 2.3 million school meals every day to children in low income countries.IFC will invest up to $1 billion in the Critical Commodities Finance Program, aimed to support trade in key agricultural and energy-related goods, to help reduce the risk of food and energy shortages, as well as improve food security for the world's poorest. Show Less -
Transcript: Development Committee Press Conference
MR. MILLS: Well, thank you very much for joining us for this closing press conference. Our participants will each make an opening statement and then we'll take... Show More + your questions. If I can ask everyone to please turn off your mobile devices or put them to vibrate, we would appreciate it. Chairman Belka. MR. BELKA: Thank you. As we are late, I am not going to be very descriptive about the meeting of the Development Committee. You know the agenda. The discussion was very rich, centering around the social safety nets, the private sector involvement in growth initiatives, as well we discussed modernization of the World Bank. However, one thing that is obvious, it took so long because all the delegates took the opportunity of this Development Committee meeting to express gratitude and admiration for the achievements of the outgoing President of the World Bank, Robert Zoellick. So, I give you the time to ask questions both to him and Christine Lagarde. Please. MR. MILLS: Very good, thank you. President Zoellick. MR. ZOELLICK: Okay. Well, I'd like to welcome Marek Belka as the new Chair of the Development Committee. I have great respect for what Poland has achieved over the past 20 years and also respect for Marek's service to his country and to Europe. So, I'm delighted that he can share his country's and his own experience with the Development Committee. And I want to thank Christine for a fine stewardship of the IMF at what's clearly a critical time for the world economy. The next meeting of the Development Committee will be in Japan with a new President: Jim Yong Kim. I'm sure he'll do a great job. And I also want to extend my thanks to the members of the Development Committee. I am pleased our shareholders have endorsed the World Bank Group's efforts to boost support for efficient and fiscally sound social safety nets, including conditional cash transfers, public works and school feeding. At international meetings, we hear a lot about global financial safety nets, and we need to focus equal attention on the human safety net. As we know, there are dangers that, when institutions are too big to fail. But let's remember that beyond the talk of financial systems and of regulations and of firewalls, it's people who are too important to fail. The shareholders also want us to continue to assist developing countries with multi-pronged approaches to deal with higher and volatile food prices. I'm pleased our shareholders have support for the moves for more innovative and stronger partnership with middle-income countries – home to 70 percent of the world's poor. A key element of this is the development of infrastructure to boost future growth, including through Public-Private partnerships. Shareholders endorsed the Bank's knowledge agenda, whether it be on safety nets or global public goods or the South-South agenda. The global recovery depends on proper incentives for private financing, and the World Bank Group has been a leader in developing public policies to encourage private sector innovation, investment, and job creation. And our private sector arm, IFC, has done a particularly good job in innovative financing, technical assistance, investments, and mobilizing others. At the end of the day, the best safety net is a job. So, finally, I'm pleased that Ministers endorsed our modernization agenda with its focus on results and openness and accountability. They commended the work to date and called for the momentum to continue. It's more vital than ever that support be continued to help developing countries to navigate the tricky road ahead. So, I'd like to just close with a special word of thanks to the World Bank Group staff, including our talented and diverse Senior Management team. They're superb people who bring ideas and energy and commitment from around the world to our service to our clients and shareholders. It's been a privilege to serve with them and I wish them the very best. Thank you. MR. MILLS: Thank you. Managing Director. MS. LAGARDE: Thank you very much. Very briefly, because this is late in the day and it's a day for Bob, not for me. I will just begin by saying how privileged I have been in the last nine months to work across the road from Bob and I thank him for the learning experience that this has been, including to this very last moment when he was congratulated and highly supported by his constituencies. Just very briefly, what the IMF focuses on in terms of low-income countries, and in particular developing countries in general is, number one, making sure that we have the right tools and the right analysis specific to the low-income countries and this is something that we will continue to work on going forward, because the low-income countries are facing specific risks, if they have done reasonably well, including in the post-crisis period, much more so, actually, than the advanced economies. They have the share of risks, as well, and they have clearly the risk of the external shock coming out of the advanced economies in crisis. They have less room to maneuver because they have used much of the buffers that they had before entering into the crisis. They have less scope to use policies, and they have the longer-term challenges that Bob has been dealing with and addressing during his tenure in the last five years: Make inroads in reducing poverty, generating more inclusive growth, developing infrastructure, and all the rest of it. Now, what are the priority actions for the IMF and the international community? It is moving forward on three priorities. First of all, helping countries manage global uncertainty and volatility more effectively, and to do that we need to have the right tools. We will be this summer looking at all the tools that we use for low-income countries, making sure that they are rightly adjusted to very specific needs. We also need to have the right resources on the right terms, that is, concessional terms, and we've received a boost to that effort this week, but more is going to be needed. Second, we need to push the quality of growth. It needs to be inclusive, it needs to be associated with strong social safety nets, and it needs to be creating jobs and reducing poverty. This topic was discussed yesterday at the Rio+20 breakfast, as well. And third, clearly, we need--and that's more of an internal matter, but it really means quite a lot to the low-income countries, as well. We need to push our governance reform at the IMF and make sure that the quota reform of 2010 and the governance reform actually delivers on the credibility of the institution, it's representativeness, so that it secures the voices of not only the low-income countries but more generally all countries appropriately in accordance with an appropriate share of the global economy. So, those are the directions in which we are working to make sure that we serve our constituencies in that particular respect. MR. MILLS: Thank you very much. Yes, right here in the first row. QUESTION: Thank you. Daniel Jiang with China's Xinhua News Agency. I have a question for President Zoellick and one question for Madam Lagarde. President Zoellick, what is your insight on the process of modernizing multilateralism in a multipolar world you propounded on several years ago, as well as evolving of the Bretton Woods system, and how can the Bank facilitate the process. And for Madam Lagarde, what do you hope to achieve at the Tokyo meeting? Thank you. MR. ZOELLICK: Well, as for your question to me, I think the heart of it is to focus on clients and recognize that the diversity in the developing world requires customizing approaches, but increasingly, we're able to draw from across the developing world and bring experience and insight from some developing countries to other ones. And as an institution, it's important that we recognize that good intentions are not sufficient. So, we have to be rigorous in focusing on results. We also have to be accountable, and to be accountable, it helps to be open. So, I think one of the key aspects of the modernization agenda are the initiatives we've taken in terms of open information, open data, open research. And the more we can expand that not only to the governments around the world but take it all away to communities with the use of different technologies that now enable us to engage social accountability. And one of the initiatives that we took this week in starting an effort for a Global Partnership for Social Accountability, I think is a good example of that. I think on the notion of customizing, one of the topics that came up in today's discussions was the key need for the Bank to continue to adjust to the special needs of middle-income countries. These are the countries where you still find 70 to 75 percent of those living under $2 a day. They have special challenges. And as in the case of China, as you know, we made that adjustment by working with DRC and China on a report to examine the possibilities of future structural reforms as part of China's changing growth model. In other countries, we'll use a combination of knowledge and financing. But I think that will be an ongoing dynamic for the institution. MS. LAGARDE: All right. You asked me what are my expectations or my goals for the Tokyo Annual Meetings. I have four objectives. The first one is to make sure that we have programs in place for some of the Arab transition countries. Second objective is to enhance and tailor to low-income countries our surveillance tools. Third is to get as close as possible, and if possible, the finishing light of the quota and governance reform. And fourth, I want to replenish the Poverty Reduction and Growth coffers. Thank you. MR. MILLS: Yes, Sandrine. QUESTION: Sandrine Rastello, Bloomberg. Mr. Zoellick, I'd like to follow up on the comments you made about China and working together with China, especially in the light of the contribution that China just--or that we expect China to make for IMF resources. As you know, China has become a lender of its own in Africa. I was wondering whether we see the future of the World Bank lending alongside China, and because I don't think we've seen many cases or examples of that so far, and what it would take, especially in terms of safeguards for lending. MR. ZOELLICK: So, Sandrine, you mean lending with China in third countries, or investing in third countries? Yes. Well, I think you're going to see an increase of outward investment, not only from China, but if we're looking over the medium and long term from other emerging market economies. And that's an area where IFC, our private sector arm, is already working to develop partnerships. I think there is also a key aspect in terms of the knowledge and experience transfer. Just to give you an interesting one, Indonesia was bringing some of its experience with community development after difficult situations to Haiti. So, this is much more than a Chinese issue. Brazil--I was here this past week with the head of the Brazilian Development Bank and we're talking about cooperation with the African Development Bank and areas of agriculture development. So, I think it's much broader than the Chinese side. I will say, though, that one other aspect that my colleague Justin Lin has encouraged, and I think has got very interesting prospects is that as China has a population that, over the next five years, there will be more people leaving the labor force than coming in. So, there's a need to move up the value chain, and that means increases in productivity that will warrant additional wages which warrants a higher living standard. Justin estimated the share of about 85 million workers in low-wage manufacturing in China. In all of Africa, South and North, there's about 8 to 10 million. So, some of those jobs--and one of the Party secretaries in Guangdong, Guang Yang has emphasized this. Some of these jobs are likely to move out of China. Now, some of them will move elsewhere in Asia, Southeast Asia, but Justin actually visited a recent operation in Ethiopia where there are plans for substantial numbers, even by the end of this year and over a few years probably manufacturing employment of about 25,000, which would be the same as the number they have in China. Now, to create this, we have to create an environment of ports and infrastructure and roads and energy and other things that China has had as part of its growth model. So, one of the reasons that I've been so adamant about the need to connect with the middle-income countries is that not only do they face development challenges, but I don't want the Bank to be hollowed out. I think that those countries will be very important in the future of the Bank in helping a lot of the poorer countries, because you can already see with trade and investment and even foreign assistance flows. As I noted in one of my recent remarks, last year, a conservative estimate of the traditional foreign assistance from new donors was about 15 billion. That's about 15 percent of the 100 billion that developed donors make. For our IDA process, we not only got contributions but a number of developing countries, including China, prepaid their IDA credit. So, that's one reason we're able to get a record number of 49 billion. So, there are huge opportunities. And what it just underscores is if you think about the issues that Christine was dealing with in terms of growth and macroeconomic stability, if you think about the Rio+20 issues and environment, frankly, it's going to be true in the security area, we want to draw more to bring these countries--not only China, but all the middle-income countries--as effective beneficiaries and contributors to the international multilateral system that the United States and Europe and Japan created in the first 20 years after World War II. MR. MILLS: Thank you. To the gentleman right over there, in the fourth row. QUESTION: This is Asit Mishra from Mint Newspaper, India. This is to Mr. Zoellick. The G-24 countries have expressed concern over falling development finance in the World Bank. So, this is happening at a time when your sister organization is able to garner some 430 billion for a fund. So, how do you see it? Do you see that it's lack of interest in development finance and poverty reduction among the member countries? MR. ZOELLICK: Well, I'll let Christine explain, I think, the benefits of the additional funding or backstop for the IMF, but I think they're designed for the global economy, and that would certainly include developing countries, and obviously this is part of an overall effort that's also done by the Europeans on their own behalf, but the World Bank also had a capital increase, the first one in 22 years. Our equity-to-loan ratio is about 28 percent. So, we've got some significant ability to expand, even with our current equity. I did suggest in the meetings that I think we need to continue to be creative about other ways we could support countries such as India. For example, when I was in India, we talked about a public-private partnerships infrastructure facility. It might draw some government money from the Indian government, from the World Bank Group, but also from other private partners. But to do so, we'll need perhaps to use the IFC approach to those projects as opposed to some of the things with the traditional IBRD approach. As you may know, we increased the single borrowing limit for India, made an exception. I personally think that India's credit should allow us to expand that more. Another tool that we could use and is used in the case of India is that if some of the reserves that countries hold are in the form of IBRD bonds, which actually have better returns than some of the things that they invest in, that allows us to expand the lending. So, that's another tool. And one of the things I briefed the Development Committee about is when, in the autumn of last year where financial markets were particularly in a risky situation, a number of emerging markets came to us and said, "What's most important to us is have access to large amounts of credit, regardless of whether you have to adjust the price or maturity. And we--with our current capital account we could expand that considerably if we do some flexibility and maturity in pricing. So, there's a lot of tools that one can use either from the IFC or the IBRD side. India is also in a transition stage with IDA, and some of the types of things that--where countries made contributions to the Fund are similarly the type of things one might be able to do in an IDA account where you have long-term credits at very modest interest rates. But again, I think they're slightly different. I mean, you want to be careful with the apples and oranges, because they're a backstop facility often done by central banks in the case of the Fund. And so, the idea is to have them there but not necessarily to draw on them. And what we're talking about here are ways that you can actually put investment funds to work on growth strategies. MR. MILLS: Is that fair? Okay. Yes. Lesley. This is the last question. QUESTION: Lesley Wroughton at Reuters. Bob, I wanted to find out from your discussions over the last few days what are the biggest concerns for the low-income countries as far as the spillover effects. I mean, we know the IMF is saying they're not seeing a slowdown in the low-income--in Sub-Saharan Africa, but what are you hearing? From the Finance Ministers' meeting, they were saying that they're pretty afraid of how this could really set itself into the economies. And then, for Ms. Lagarde, as the negotiations get underway for the next governance reforms, including the formula and then moving into--I think it's the 15th review--what do you think are the issues at stake here? I mean, the emerging markets want more say. The Europeans don't want to lose further power. They want to obviously hold onto something. What are the issues that you think that the membership needs to focus on to get the deal done? MR. ZOELLICK: Well, Lesley, as for your question to me, just realize this is a slight difference from your focus, but I think what we've been trying to stress is growth is one of those things that's not a zero sum; and so if you have the emerging markets in developing countries growing, that benefits developed countries and other developing countries. So, two-thirds of global growth has come from developing countries. So, it's in everybody's interest to continue their growth. I shortened my initial remarks, but what I've tried to emphasize in these meetings is that, in addition to the macroeconomic stability, which is very important, it is important for developed and developing countries alike to focus on the structural reforms, the microeconomic reforms that will drive future growth. And indeed, the Chair of the IMFC, Tharman of Singapore, made this point very well, how the fiscal adjustment needs to focus on the foundations for future growth. Now, more particularly, and I think Christine and the IMF staff have made this point: Some of the emerging markets have less space and so they have less fiscal movement and, in some cases, depending on their monetary policy, they have less flexibility if things turn down. A point that Pascal Lamy of the WTO and I have emphasized is we have some worries in the trade finance area, driven in part by the deleveraging of European banks, many of which were very active in trade finance, combined with some of the Basel rules, which have been changed but, in my view, still use as their examples more consumer finance and mortgage than the evidentiary basis for trade finance, but we will help develop the evidentiary basis for that, and that's particularly because for when you have a credit squeeze, it tends to hurt the smaller countries and the smaller banks and the smaller businesses, and those are ones that are obviously important for some of the future development. And particularly, if you're trying to build future growth models, it would probably be the intra-African trade as opposed to the African commodity trade with others. So, that's a second area. Third, it depends on the clients. The fragile states are obviously, by definition, fragile. So, they're worried about anything that could shock the system. There's a worry about oil prices, if you're an oil consumer as opposed to oil producer. And if you're a middle-income country or low-income country, I pick up a very strong interest in the infrastructure agenda, which is why I just touched on it briefly, but I think there's things that we started to do at the Bank, not only with our own investments but with public-private partnerships and really to try to make that a bigger deal flow, and what would be appealing is if we could then combine it with the private capital markets, as we're starting to do with a fund that IFC and Singapore are putting together. So, it varies a lot by market. MS. LAGARDE: Okay. On your question about governance, quota, formula, I take reforms one step at a time. So, my focus at the moment is make sure that we implement the 2010 reform, for the Tokyo Annual Meetings. Then, we have the January 2013 deadline. We've begun the discussions about the formula review of the quota. That will take its course, its time, its discussions. Everybody wants to have a bigger share of the same pie, so there will have to be gives and takes. And the 15th review will be in January 2014. So, we have a little bit of time. MR. MILLS: Very good. Thank you very much. [Whereupon, the press briefing was concluded.] Show Less -
Transcript of Opening Press Conference with World Bank Group President Robert Zoellick
MR. MILLS: Good morning, everyone. Thank you for joining us for our World Bank Group press conference for the 2012 Spring Meetings. Joining me this morning is the President of the World Bank... Show More + Group, Robert Zoellick, who will have an opening statement and then take some of your questions. If I could please ask everyone when they ask a question to identify themselves and your organization; and once again, I am sure you have been asked, but if we could have our mobile devices switched off or to "vibrate." So, President Zoellick. MR. ZOELLICK: Thank you, Rich. Welcome, and thanks to all of you for coming. This marks my last Spring Meetings as the President of the World Bank Group, so I would like to begin with a few words of thanks to the Ministers who have supported us and worked with us; to our Executive Board, who have labored hard to help our Management team to modernize the important multilateral institution; to the excellent Senior Management team that I have been proud to help build and to lead; and to the World Bank Group staff in Washington and around the world. They are motivated, they are committed, they want to make a difference, they are a tremendous asset, and we have been able to draw the best now from 170 countries. This has been a pretty busy five years, so I suppose my tenure at the World Bank Group has had three phases--a turnaround from a time of some trouble; quickly moving into faster and more flexible, large-scale support for our client countries across the food, fuel and financial crises--in financial terms alone, about a quarter-of-a-trillion dollars; and the start of the modernization of the World Bank Group for the future. That ongoing modernization effort will be a large part of my presentation to the Development Committee later this week and my discussions with our Governors. With the first large recapitalization of the IBRD in over 20 years and two record-breaking IDA replenishments totaling more than $90 billion, I am pleased to turn over a well-resourced Bank with a AAA rating. Yet we always need to think ahead about how to mobilize resources--for the growing interest in IFC and private sector development, for the poorest, and for the changing needs of our middle-income clients, which are still home to three-quarters of those living on under $2 a day. Our Modernization Agenda is driven by our focus on clients, listening to their priorities, as opposed to an old top-down approach, and modernization involves a rigorous focus on results, openness, and accountability. So our initiatives for open information, open data, and open access to knowledge may turn out to be the most important legacy of the past five years. These steps are key to democratizing development, and these steps lay the foundation for expanding social accountability, fighting corruption, and building better governance. Last year, I proposed that the World Bank and others should recognize that investments in civil society and good governance are as vital as investments in roads, factories, and clinics. So I will be pleased to announce later today the formation of a new Global Partnership for Social Accountability that will provide support to civil society organizations in their work on social accountability. Now, much of what you will hear over the next few days will deal with the ongoing shock waves of the financial crisis--issues of macroeconomic stability, fiscal and monetary policies. That is certainly important, but it is not enough. Countries, both developing and developed, need to focus on the structural reforms that will be the drivers of future growth; otherwise, the world will keep stumbling along. The World Bank Group will be emphasizing the structural growth agenda. Structural reforms and changing growth models fit with our recent major reports such as the China 2030 Report and the Golden Growth Report that looked at Europe. You will also encounter structural growth in our priorities for infrastructure, especially public-private partnerships; social safety nets, to protect human capital in a volatile and uncertain world; gender, so that countries can gain growth opportunities from empowering all of their people; and financial inclusion, including at these Meetings, a first-of-its-kind report on measurement to access financial services that will show that three-quarters of the 2.5 billion people living on less than $2 a day are shut out of access to banking. Developing countries have provided two-thirds of global growth over the past five years. These are no longer charity cases; they are vital to the world economy. But of course, they face huge challenges, too. So it is the World Bank Group's aim to keep focusing the world's economic leaders on growth--not just stability; on human safety nets--not just financial safety nets; and on modernizing multilateralism so that all 188 of our shareholders can work together for their common interest. Finally, I had an opportunity to talk to Jim Kim after his selection as my successor. We will have a chance to meet shortly after the Spring Meetings on the transition process. I think he will do a great job, and I wish him and all others associated with the World Bank Group every success. I am pleased to take your questions. MR. MILLS: Yes, Sudeep? QUESTION: Sudeep Reddy with the Wall Street Journal. I was hoping you could address the European crisis from two angles. One, you previously noted that European countries had bought a lot of time with liquidity measures. I am curious what you think about how they have used that time and what they need to do next; and more broadly with emerging market countries, how are they faring with the shock waves from Europe, and is there anything in particular they should be doing now given the potential for another round with Spain? MR. ZOELLICK: Well, on the first one, I think the euro zone in particular and the European Union is going to be walking a very fine line. First, as you noted, with the anxieties late last year, I think the ECB's extraordinary actions were appropriate, but I think some misled themselves because they only bought time, and the time has to be used. I think that, as the IMF has pointed out, on the one hand, the future of the euro zone depends on actions of individual countries, particularly the steps they take for fiscal consolidation and, as I have emphasized, the steps they need to take for structural reforms and future growth. It is very difficult to take those steps in a no-growth environment, so it has to be balanced with steps that might be able to support demand and longer-term changes of growth. So this week, I tried to make some suggestions on the supply side and ways in which the single market could also further deepen integration to support growth. Now, again, as the Fund has pointed out, the banking system also remains under significant stress, and at the one hand, you need the banks to build their capital; on the other hand, what we have seen is that if the banks build their equity ratios by shrinking, as they by and large have been doing, that is going to put a stress on credit contraction and undermine the basis of growth. So I think the debate understandably reflects the fact of trying to balance these issues, but I think we are now in a phase where, after the ECB provided very attractive financial resources to a number of the banks to be able to buy government debt, as we have seen in various newspapers--I think your own today, as I saw one story--they are about at the end of that point and limit. So I think further actions are going to be called for, and the point I keep emphasizing, wherever it is around the world, is not just to focus on the austerity and macroeconomic stability measures, but you need to do this in a context of growth, in part because we have to face the political economy issues. So, as I have emphasized, the real countries that are critical because of size at this point are Italy and Spain. You have governments that are taking strong actions. It would certainly help if they got some support from some of the types of things that I and others have talked about so as to help with growth and the politics of reform. As for your second question, the deleveraging process in European financial institutions has certainly begun. I tend to agree with I think the IMF report and others that said that there is more to go. We have seen the effects, differential effects, around the world. I just came from East and South Asia. You have definitely had a pull-back in some of the project lending and sale of some of the assets in East Asia. A number of the Asian banks have stepped in, so it has not really had a significant contractionary effect. Starting late last year, I again worked by my friends at the EBRD and EIB and EC to try to reactivate the Vienna Agenda because I have been most concerned about the Southeastern European and the Balkan countries. And there, working with the banks, we are seeing the contraction. So far it has been orderly, but it is a good example of trying to get ahead of the curb, Sudeep. I was talking about this late last year, and people did not yet see the numbers, and as you saw the first quarter with the BIS numbers, you started to see this contraction. And I was actually pleased--through the IBRD, we were able to expand our commitment over the next couple years by about $4 billion, IFC another $2 billion, so our total, I think, is about $27 billion. I think that is an example of the types of things you need to do, frankly, even in the months ahead to get ahead of some of these problems. North Africa has clearly been affected by this, and this is again the political implications, because for a number of the North African countries, Europe is a very important export market, so it is important. I was with the Tunisian Finance Minister yesterday, and I am going to meet them again--as they undertake these difficult reforms, they need to get support from us and others along the way. And an area that Pascal Lamy of the WTO and I have been watching particularly closely is trade finance. A lot of the European banks were big players in trade finance, particularly the French banks, so you are seeing some shrinkage of that. In the areas, what I am most concerned about--and by the way, this is where the new capital rules from Basel III are going to have to be watched very closely; the Basel Committee took some steps to alleviate some of the changes that they had put in, overly stringent, in my view, but now we are trying to gather some data with the WTO and others to make a stronger case for easing some of the strictures they have--because what I am most worried about is a place like Sub-Saharan Africa, where I suspect that the exporters of major commodities to the U.S. and Europe will still get trade finance, but if you are a small country, if you are a small bank, if you are a small client, if it is intra-African trade--which should be the future of growth--those are likely to get squeezed. So, again, what I try to do in these meetings, Sudeep, with my G20 colleagues, because we see all these marketplaces, is to try to anticipate some of those issues, and those are some of the ones that I am focusing on. And then, the last one, of course, which is implicit in your question, is that we are not out of this mess yet, so if you have a more seismic event because of failures of management, that is going to hit everybody hard. It is still a fragile economy, as we and the IMF have pointed out. MR. MILLS: Yes, the woman in the second row, please. QUESTION: Yes, Antonella Ciancio from Reuters. We would like to know how concerned are you with Argentina's move to nationalize the country's leading oil company, and if this somehow threatens to further isolate the country. Thank you. MR. ZOELLICK: Well, I think it is a mistake, and I think it is a symptom that we have to watch out for of, under economic pressure, whether countries will move to more national, autarchic policies, respond more to populism, respond more to protectionism. So I think it was the wrong thing to do. MR. MILLS: Thank you. Yes, Howard? QUESTION: Hi, Bob, and thank you. Howard Schneider with The Washington Post. On the Arab Spring, I was just curious--Madame Lagarde laid out what is basically now a stalemate between the IMF and Egypt over support there, and I was wondering from your perspective, to what degree you think political uncertainty in those countries is holding up the type of support you feel needs to come from the outside to get their economies back on track. And then, secondly, briefly, what is your advice to Kim on transition? What are the mechanics of that going to look like, and what are you going to be able to do to help him in the door? MR. ZOELLICK: Well, on the first one, Howard, it varies a lot by country. So let's take Tunisia, which I referenced with Sudeep. You know, Tunisia has gone through an election process. They have an Islamic-based government. The government seems to be stressing the continuation of the policies that the prior interim government focused on, and those are policies we are trying to do everything we can to support--not just basic financing, but policies of inclusion, because you have had sort of a growth model that didn't pay enough attention to people in the west and central part of the country--trying to focus on some of the youth unemployment issue, and--very nicely with the agenda we are setting on openness and social accountability--when we did a Development Policy Loan, they accompanied it with a series of changes to try to open up their process. And I think it is not only good politics, it is good economics, obviously, to have the society feel that they are engaged in the process. But the Tunisian economy is still under significant stress; it has lost tourism; it has lost some of the effects of exports to Europe. So IFC, our private sector team, has also been doing investments in there. So, in the case of Tunisia, this is not going to be done overnight. They are going to face a tough year. But I think it is in everybody's interest to try to support them if the government stays on the current path, because again, looking at this from a bit of an economic history point of view, I think the North African transformation is going to take a while, but what I saw happen in East Asia and elsewhere is that countries that undertook the reforms become models for others. Morocco has had a fast-paced evolution as opposed to revolution. They are making a series of reforms, so we are trying to support them, again, on the openness side, the investment side, the private sector side. We are trying to support Jordan. Jordan is going through a combination of political and economic reform. In a country like Libya, they have the resources. There, we have been trying to work with some partners in a difficult security environment to help create the capacity for basic financial management and other activities. So, the big one obviously is Egypt, which you referred to, and here, as I suspect from what you have said that Christine mentioned, they not only face an economic and financial challenge, but they are in the process of a political transition. And I understand that there will be a need to be able to base the legitimacy of whatever economic relationships they have on the Fund and the Bank with the people who will be exercising power under the new Constitutional arrangement. So I think that that does slow up the process. Life is full of twists and turns. That is kind of the facts of life and the reality. There are things that I think the interim government can do to create a better environment for this. We have kept doing investment lending, and we have tried to focus some of the investment lending in Egypt on some of the sectors in need, but the bigger policy loans that we would do would depend on the macroeconomic issues that the IMF is addressing; and frankly--at least it has been my guidance--they will also be based on some of the openness and social accountability issues that we have seen in Tunisia and other countries. And that, I think--that is also important because I think you are going to be going through a political transition process, and the more open it is, then, whoever is elected in this year or next year or others I think will have a better sense of engagement with the economic changes in Egypt and the relationships with the World Bank. So this is one of the things, I think--we have also had to learn lessons from the Arab Spring. Economic growth alone is not enough. It has to be inclusive. And frankly, the more we can emphasize the things I have been talking about, about openness and social accountability, I think that is the future direction of the Bank as well as these countries. You asked a second one--oh, on Dr. Kim. Well, I have been through a lot of transitions in my life, so I have some experience with them. We tried to centralize a team to avoid the standard problem of the 500-page briefing book by focusing on some of the issues that will come up first. I think these Spring Meetings are timely because we will get a sense from the Governors and the Board about some of the issues that would be of nature to be a continuation--some of the things that I have talked about in this Modernization Agenda which has both internal and external aspects. And beyond that, I always think that as you are turning something over, you have to actually have some degrees of restraint. You know, he will be the person in charge. I happen to believe that change is good for institutions as well as me, and it is good to have a fresh person come in. So we will try to explain where we think some of the issues are. He certainly has a lot of perspectives, I am certain, from the tour that he took around the world and the discussion with the Board. So I am certain that by the time he takes office, he will have a pretty good feel for the challenges ahead. MR. MILLS: Yes, right over there, to the gentleman with his hand up--no, to the gentleman. Thank you. QUESTION: Larry Elliott, of The Guardian. In your five years at the Bank, what do you consider to be your biggest success, and what do you consider to be your biggest failure? MR. ZOELLICK: Can I hold on the second one? [Laughter.] MR. ZOELLICK: Well, I tried, Larry, briefly, in the opening, sort of anticipating this question, to say that in my own mind, I have seen these three phases. So, first, when I came into the Bank, as for those of you who have covered it, it was a tumultuous period. And so I had the challenge of a leader trying to turn around an institution. And to the credit of the institution, the best way to get out of some of the internal strife was to focus people on the mission--that is why people came to the Bank--and we were able to do that relatively quickly. We had some complicated issues to deal with in governance and anti-corruption and others where Paul Volcker and others helped. Second, before too long, we had the food and fuel crisis start to hit us in late 2007, so I am particularly pleased that sort of a combination of my international experience and kind of reading what was happening in the market, we moved quite quickly, and I think if you talked to people in the food security community, they felt that the Bank was more agile than it might have been in the past, but--and in addition, we start to see this as an opportunity to invest in agriculture going into the future. And then, as I have mentioned, in the financial crisis, doing about a quarter-trillion dollars of support is not only important financially, but it was important to how we designed a lot of it. So the fact that in trade finance, Lars and the IFC team leveraged our financing to keep a lot of banks in the market. I mentioned the Vienna Initiative. In Indonesia, we organized with the Asian Development Bank, the Australians and Japanese, a backstop proposal. So part of my point here is that it is not just financing; we need to be able to leverage it and kind of innovate it in innovative ways, and I think we were able to do that, including some things that I hope will become seeds of very important future growth, like this Asset Management Company which is a subsidiary of IFC, where we are now tapping the sovereign funds and pension funds, and we already have $4 billion of money that the Bank would have never seen going into African equity markets. So it is not only the response in financial terms, but it is also the innovation. And then, as part of that, it goes to this modernization phase which I think has just been begun, and there, as I mentioned briefly in my remarks--and here, I credit some of my team, Caroline Anstey, Sanjay Pradhan--together, we decided this focus on really opening up the Bank as an institution was key to not only development, but frankly, having a healthier Bank. And so an Open Information policy, it is the first among multilaterals, based on an Indian and U.S. Freedom of Information Act--this Open Data Initiative is just going to--I have already seen it--it is going to drive a whole new way of doing policy, because we are making this accessible with mobile phone technology in any country around the world, so we are going to have a much more interactive process. And just to connect this to a little bit of the transition debate, Larry, it was interesting that--and I am not saying this was any of the three candidates--but some others were saying: Oh, the Bank is doing too many things. It must focus on these three things. In my view, that was a mistake that elitist economists made 20 years ago, where they said "We know what developing countries need." And maybe it is because of my private and policy background--my approach has been fundamentally different. It says let's focus on the client; let's hear what the client needs, and then let's take the innovation from the world and apply it so, and then, in the process, we can learn with the client through an open process about how to do it better. So I think--I am sure you have encountered this with The Guardian, but I have encountered it at university campuses – is that you know, the Bank is still a big, multilateral, Washington-based institution, but the more you open up an institution, it is the best antidote to conspiracy theories and better policy. Pardon? QUESTION: [Inaudible; no microphone.] MR. ZOELLICK: Well, I'll let you be the judge of the failures; how about that? [Laughter.] MR. MILLS: Yes--thank you--to the gentleman right here. QUESTION: Thank you. IMF Managing Director Christine Lagarde just said that low-income countries have to deal with lower aid resources. I would like you to elaborate a little bit more specifically on Latin America, if you have figures. And I would also like to know if the World Bank is concerned about the rise of protest movements and more social demands in different countries, even the Occupy Wall Street movement here in the United States, in Europe, and all this situation. MR. ZOELLICK: Well, on the first one, I guess the way I would approach the concerns for low-income is not just in certain countries but across countries, because one thing a lot of people have lost sight of is that two-thirds of the people living on under $2 a day are in so-called middle-income countries. I was just in India, where I met with women with a Self-Employed Women's Association. These are extremely poor women. So one of the challenges for the Bank is getting people to recognize that you are going to need to deal with poor people in a variety of different countries. Now, foreign assistance is clearly a piece of that, and it's under stress. By and large, if you look at the OECD numbers, the countries have sort of generally kept up what they were doing. But I guess my suggestion on that goes to some of the things we have said in modernization. Take a country like the United Kingdom, which has maintained its effort to reach the 0.7 percent of GDP under difficult budget circumstances. It is a heroic effort. They, the Australians, Canadians, and others have done good work on this. But they need to show value for money, so this goes right back to the Results Agenda. And this is where some of the things we are trying to do to have evidence-based learning about what works and doesn't work--I think it is something Dr. Kim is interested in--this will be very important for the future. But another point of it is, one reason that it is important to draw the middle-income countries into the multilateral institutions is about a conservative estimate of the foreign assistance from the emerging borrowers, or the emerging countries, was about $15 billion last year. That's about 15 percent of the total, and it is probably a conservative estimate. And recognize, part of my view is you've got different sources of funds. You are also going to have investment funds. So the rise of China and the increase in commodity prices has probably been one of the best things for Latin America. The challenge, however, will be for Latin America to use that--and that is one of the things I will be talking about with the Governors--as a broader basis for more inclusive growth. So I tend to--I gave a speech last year where I talked about "Moving Beyond Aid," and the idea was not that we can overcome that today, but we need to move beyond kind of a charity model to the notion of investing in human capital, in infrastructure, with developed and developed countries, and in some ways, the best test is Sudeep's opening question--what are people most worried about today--Europe. And if two-thirds of the global growth comes from developing countries, we have to change people's mindsets. These are potential poles of growth. I just met yesterday with the African Governors. What are they interested in? Energy. Infrastructure. Regional integration. So those are the elements that we need to focus on. And I guess the last point on the poorest--the world is an unpredictable place. We are not going to change that. So people who believe they can control this price or that price, I wish them--well, I don't wish them good luck--but anyway, it is not going to work. What we should be doing, however, is making sure that every country has an effective social safety net, and we had a function on this yesterday, because we have learned a lot from developing countries about how to do this in a cost-effective way. The Bolsa Familia Program in Brazil, the Oportunidades in Mexicos--these are done for half of one percent of GDP. Trust me, if the U.S. Congress could get their entitlement programs down to any remote degree of that, they would be pretty happy; and yet they cover 15 to 20 percent of the people, and they provide a ladder up. So, and Ethiopia has a different model. So we at the Bank have helped extend conditional cash transfer programs to about 40 other countries. So we had the Philippines Secretary here yesterday, and they have expanded to 3 million families. So to me, the message for aid is not just the aid number but its effectiveness, and for the poorest, let's focus on basic safety nets for every country to deal with the volatility and uncertainty, because the other lesson we learned is if you wait until the crisis, it is too late. MR. MILLS: Okay. I think we have time for one more question. Yes, we'll go to the gentleman in the back, please. QUESTION: Hi. I am Bernard Busuulwa from Uganda. Now, Robert, I would like to know--you talked about the pending problems with trade finance among African exporters. I would like to know what is your first advice to central bankers in Africa who are terribly challenged in getting their banks to increase access for the exporter, and pro-poor growth in cross-border trade, especially at a time when their economies are also feeling the heat of the euro zone stress and weakness in the American economy. MR. ZOELLICK: Well, my first advice is not necessarily to the African central bankers; it is to some of, the Basel and developed world central bankers that, as they develop these rules, build back in feedback loops, because as sure as we are sitting here, they are going to find ways that over-constrict--it is the way the pendulum works--and I am most concerned about the effect of over-constriction on poor countries and developing countries. And in the area of trade finance--something that Lamy and I have talked about--part of the problem is they put in capital requirements and they don't have very good evidence, but frankly, the evidence we have is that it is a pretty short-term loan, and, it's a pretty - it tends to get repaid. So my first start is with the developed world. But secondly--again, I would not focus so much on the central bankers--there is a huge opportunity in Sub-Saharan Africa to remove border barriers, to create more integrated markets. So--you are from East Africa--I visited a one-stop border place that we helped open up--I think it was actually Kenya and Uganda--and it had gone from two days for goods transporting to two hours. And this does not require huge sums of money. We now have the systems. We have worked with some private sector firms to develop the software on this. And it means sort of systematizing the process. Then, if we can combine that with infrastructure development so, whether it is roads or railroads or ports or electricity, to be able to strengthen it. So you are right--at least, I think you are right--by saying that subregional integration--and I would focus on sub-regions--East Africa, West Africa, Southern Africa, Central Africa--is the way to really start to drive a potential for growth. And I just keep coming back to this, because when I read most of the press accounts of these meetings, everything is focusing on the macroeconomic/fiscal/monetary. Fine. I am not denying that. But you are not going to ever deal with this problems unless you create sources of growth, and there are sources of growth in Africa, and I see it with private sector firms being interested in it, but Africans have to create the right enabling environment. MR. MILLS: Very good. Thank you very much. Show Less -
Zoellick Congratulates Dr. Jim Yong Kim as New World Bank Group President
Washington, April 16, 2012 — World Bank Group President Robert B. Zoellick today congratulated Dr. Jim Yong Kim for being chosen to become the 12th president of the development institution and offered... Show More + his support in ensuring a successful handover for July 1. "I am pleased to work with Jim Yong Kim during the transition. He is an impressive and accomplished individual. Jim has seen poverty and vulnerability first-hand, through his impressive work in developing countries. His innovations in health-care have helped to save numerous lives. As President at Dartmouth College, Jim has had to take tough managerial and financial decisions while running a large, multidisciplinary organization. His rigorous, science-based drive for results will be invaluable for the World Bank Group as it modernizes to better serve client countries in overcoming poverty." Show Less -
Statement from Dr. Jim Yong Kim regarding his selection by the World Bank's Executive Directors as 12th President of the World Bank
WASHINGTON, April 16, 2012 - Dr. Jim Yong Kim today released a statement in response to his selection by the World Bank's Executive Directors as 12th President of the World Bank: "I am honored to... Show More + accept the Executive Directors' decision to select me as the next President of the World Bank Group. I am delighted to succeed Robert Zoellick, who has served with excellence and distinction during the last five years, and I am grateful to the Bank's member countries for the broad support I have received. I have spoken with Minister Okonjo-Iweala and Professor Ocampo. They have both made important contributions to economic development, and I look forward to drawing on their expertise in the years to come. It is befitting that I conclude my global listening tour in Peru. It was here in the shantytowns of Lima that I learned how injustice and indignity may conspire to destroy the lives and hopes of the poor. It was here that I saw how communities struggle to prosper because of a lack of infrastructure and basic services. It was here that I learned that we must raise our sights to match the aspirations of those most excluded. And it was here that I learned that we can triumph over adversity by empowering the poor and focusing on results. As President, I will seek a new alignment of the World Bank Group with a rapidly changing world. Together, with partners old and new, we will foster an institution that responds effectively to the needs of its diverse clients and donors; delivers more powerful results to support sustained growth; prioritizes evidence-based solutions over ideology; amplifies the voices of developing countries; and draws on the expertise and experience of the people we serve. My discussions with the Board and member countries point to a global consensus around the importance of inclusive growth. We are closer than ever to achieving the mission inscribed at the entrance of the World Bank - "Our Dream is a World Free of Poverty." The power of this mission is matched by the talent of the World Bank Group staff. May this shared mission embolden our efforts to end the disparities which too often diminish our shared humanity. Let us work together to provide every woman and man with the opportunity to determine their own future." Show Less -
World Bank's Executive Directors Select Dr. Jim Yong Kim 12th President of the World Bank Group
WASHINGTON, April 16, 2012 - The Executive Directors met today to select a new President of the World Bank Group. The Board expressed its deep gratitude for Mr. Robert B. Zoellick's outstanding leadership... Show More + and his dedication to reducing poverty in its member countries, the core mandate of the World Bank Group. The Executive Directors followed the new selection process agreed in 2011 which, for the first time in the Bank's history, yielded multiple nominees. This process included an open nomination where any national of the Bank's membership could be proposed by any Executive Director or Governor, publication of the names of the candidates, interviews of the candidates by the Executive Directors, and final selection of the President. The Executive Directors selected Dr. Jim Yong Kim as President for a five-year term beginning on July 1, 2012. The President is Chair of the Boards of Directors of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The President is also ex officio Chair of the Boards of Directors of the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the Administrative Council of the International Centre for Settlement of Investment Disputes (ICSID). We, the Executive Directors, wish to express our deep appreciation to all the nominees, Jim Yong Kim, José Antonio Ocampo and Ngozi Okonjo-Iweala. Their candidacies enriched the discussion of the role of the President and of the World Bank Group's future direction. The final nominees received support from different member countries, which reflected the high caliber of the candidates. We all look forward to working with Dr. Kim when he assumes his responsibilities. Dr. Jim Yong Kim is currently President of Dartmouth College. A U.S. national, Dr. Kim is a co-founder of Partners in Health (PIH) and a former director of the Department of HIV/AIDS at the World Health Organization (WHO). Before assuming the Dartmouth presidency, Dr. Kim held professorships at Harvard Medical School and the Harvard School of Public Health. He also served as chair of the Department of Global Health and Social Medicine at Harvard Medical School, chief of the Division of Global Health Equity at Brigham and Women's Hospital, and director of the François Xavier Bagnoud Center for Health and Human Rights at the Harvard School of Public Health. Dr. Kim was awarded a MacArthur "Genius" Fellowship (2003), was named one of America's "25 Best Leaders" by US News & World Report (2005), and was selected as one of TIME magazine's "100 Most Influential People in the World" (2006). He was elected in 2004 to the Institute of Medicine of the National Academy of Sciences—one of the highest honors in the fields of health and medicine—for his professional achievements and commitment to service. He has published widely over the past two decades, authoring or co-authoring articles for leading academic and scientific journals, including the New England Journal of Medicine, Lancet, and Science. Born in 1959 in Seoul, South Korea, Dr. Kim moved with his family to the United States at the age of five and grew up in Muscatine, Iowa. Dr. Kim graduated magna cum laude from Brown University in 1982. He earned a medical doctorate from Harvard Medical School in 1991 and a Ph.D. in anthropology from Harvard University in 1993. He is married to Dr. Younsook Lim, a pediatrician. The couple has two young sons. Show Less -
OPED: Europe is distracted by endless firewall talk
Policy makers under pressure can get preoccupied with the fixation of the moment. For the eurozone, that idée fixe has been "the firewall". How big is big enough? Who contributes and how?Now that the eurozone... Show More + finance ministers have exhausted themselves with a multilayered package of hundreds of billions of euros, the debate will go global at this week's spring meetings of the International Monetary Fund and the World Bank. The next preoccupation will be how many more hundreds of billions of euros should be pledged to the IMF. It will be Firewall II: the Sequel.I beg to differ. Not with firewalls exactly, but with the preoccupation.The survival of the eurozone now depends on Italy and Spain. They are the countries that are too big to fail – or to rescue. Extraordinary action by the European Central Bank has lowered the interest rates that Italy and Spain pay on their debt, but not solved their problems.In one sense, the much-badgered Germans are right. The fates of Italy and Spain depend on the steps their governments take to cut spending, reduce debt, strengthen banks and make structural reforms. Firewalls offer reassurance to markets, but the governments' action, their political support and the ECB's liquidity will be decisive.The firewall preoccupation distracts from the fundamental issue: what should the EU do to help Italy and Spain retain political support for reforms? Structural steps are painful for any government. They are devilishly difficult without growth. Reforms can disrupt an economy for a time as investment, business and workers adjust.In Italy, Mario Monti, prime minister, has begun an exemplary combination of fiscal consolidation and reforms of pensions and labour markets. But unemployment is rising. Will Italy sustain the politics of reform without supportive EU policies? Mariano Rajoy, Spain's prime minister, has set a similar course, but even modest concessions on the path to reduce the deficit, combined with 23 per cent unemployment and challenges in elections and on the street, have prompted a rise in Spain's borrowing cost. The economics of adjustment and the politics of reform would be easier if Italy and Spain could be boosted by European growth.Yet as one European told me, economics is a branch of moral philosophy in Germany, so do not expect expansionary demand policies to trump rectitude, discipline and belt-tightening. There is, however, a supply-side growth alternative: strengthening investment, the single market, and the EU itself.Instead of quarrelling over firewalls, Europeans should add just a fraction – say €10bn – to the capital of the European Investment Bank. Under current conditions, the EIB may actually have to reduce lending. Instead, the EIB could use more capital to borrow and then invest to support structural reforms, showing Spaniards and Italians that their sacrifices will draw productive investments. The EIB is now even led by a talented German, Werner Hoyer, from the governing coalition. President José Manuel Barroso of the European Commission should also demand disbursement of the billions of euros of structural and cohesion funds that sit on its books while poorer parts of Europe go wanting; find the logjam and break it.The single market – the very fibre of EU integration – could also come to the rescue. Although goods move freely in the EU, the service sector in many countries – including Germany – could open up more. Labour movement is also far more limited than in a true single market. Whether the cause is language, habits, matching jobs with workers, or cost of relocation, now is the moment to overcome the hurdles and advance the true unification of the EU. Show people who want to work that the EU wants them, too.The combination of fiscal and structural reforms, EIB and EC investments, the opening of service markets, and easing the movement of workers will pay dividends. Mr Monti has travelled to Beijing to show China's sovereign investment fund that Italy is becoming a good place to invest. That makes more sense than lobbying the Chinese to add to firewalls, especially if the EU itself invests and makes the single market more attractive.Firewalls have their purpose. But this debate risks becoming a distraction. Europeans and their partners need to keep their eye on the strategic Schwerpunkt: helping Italy and Spain with growth and the politics of fiscal consolidation and structural reforms that will boost business, competition and jobs. The ECB has done its work. The other institutions of the EU need a burst of activism on investment and strengthening the single market to preserve and secure their union.The writer is World Bank president. Show Less -
"Dirty Money" in Illegal Logging Can be Tracked and Confiscated—World Bank Reports
Washington, March 20, 2012 – Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe. A new World Bank report released today shows how countries... Show More + can effectively fight illegal logging through the criminal justice system, punish organized crime, and trace and confiscate illegal logging profits. The report, Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging, affirms that to be effective, law enforcement needs to look past low-level criminals and look at where the profits from illegal logging go. By following the money trail, and using tools developed in more than 170 countries to go after 'dirty money,' criminal justice can pursue criminal organizations engaged in large-scale illegal logging and confiscate ill-gotten gains. The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10–15 billion annually in criminal proceeds. Mostly controlled by organized crime, this money is untaxed and is used to pay corrupt government officials at all levels. The new report provides policy and operational recommendations for policy makers and forestry and law enforcement actors to integrate illegal logging into criminal justice strategies, foster international and domestic cooperation among policy makers, law enforcement authorities and other key stakeholders, and make better use of financial intelligence. "We need to fight organized crime in illegal logging the way we go after gangsters selling drugs or racketeering," said Jean Pesme, Manager of the World Bank Financial Market Integrity team that helps countries implement effective legal and operational frameworks to combat illicit financial flows. Despite compelling evidence showing that illegal logging is a global epidemic, most forest crimes go undetected, unreported, or are ignored. In addition, estimates of criminal proceeds generated by forest crimes do not capture their enormous environmental, economic and societal costs— biodiversity threats, increased carbon emissions and undermined livelihoods of rural peoples, with organized crime profiting at the expense of the poor. "Preventive actions against illegal logging are critical. We also know that they are insufficient," said Magda Lovei, Sector Manager at the World Bank. "When implemented, the recommendations of this publication can have a strong deterrent effect that has been missing in many actions taken against illegal loggers." Organized crime networks behind large scale illegal logging have links to corruption at the highest levels of government. The investigation of forest crimes is made even more complex by the international dimension of these operations. Recognizing these challenges, this study calls for law enforcement actions that are focused on the "masterminds" behind these networks—and the corrupt officials who enable and protect them. Show Less -
Connect4Climate Competition Winners Announced
Durbanite's Photo and Kenyan's Rap Video Receive Top Honors Durban, December 5, 2011 – A riveting photo "Solar Panels: The Sunny Energy" by a young Durbanite, Dina Osman, and a catchy rap video "Me... Show More + and My Bike" celebrating bicycle transport by Dickson Oyuki of Kenya won top honors in the Africa-wide Connect4Climate competition announced in Durban today. Robyn Curnow, South African CNN Anchor, announced the winners at the packed Africa Pavilion of the COP 17 meeting. The event celebrated and showcased the creative energies of African youth, ages 13 to 35, who contributed 639 photos and 47 videos to answer key questions such as, How is climate change affecting Africa? Your country? Your community? You, your friends, and your family? "The C4C competition was first and foremost an effort to hear the voices of African youth and engage their creative talents to create climate smart solutions for tomorrow," said Andrew Steer, World Bank Special Envoy for Climate Change. "The response was enthusiastic with entries from every country on the African continent. The photos and videos we see today are proof positive that even as governments deliberate climate change, people are taking action on the ground and achieving results." The 54 winners hail from 20 African countries including Angola, Benin, Cameroon, Chad, Egypt, Eritrea, Gambia, Kenya, Lesotho, Madagascar, Malawi, Morocco, Niger, Rwanda, South Africa, Somalia, Sudan, Tunisia, Uganda, and Zambia. Prizes include solar backpacks, digital video and still cameras, and computer tablets. Commenting on the importance of the awards, Monique Barbut, CEO and Chairperson of the Global Environment Facility, a C4C sponsor, said, "C4C is an inspiration for those most often regarded as too young to be heard. Now, young Africans can reach world audiences through this new platform. I am convinced that the search for solutions to today's climate change challenges must include those who will suffer its consequences the most and have the most to contribute through their daily actions. These are the young stakeholders." Young people submitted climate change stories related to one of six categories: agriculture, energy, forests, gender, health, and water. The response to the competition was impressive, with entries from budding photographers and filmmakers from every country on the African continent. The winning photographs include powerful images of drought and floods as well as innovative solutions such as solar panels, clean cookstoves, and reforestation projects to name just a few. The C4C campaign unites over 110 partners, including international organizations, social media networks, UN agencies, civil society including academic institutions, as well as youth organizations and private sector representatives. Since launching in September, C4C has built a Facebook community of over 100,000 followers with a weekly online reach of six million. The Italian Ministry of Environment is a core sponsor and founding member of the initiative. In a message, Corrado Clini, Italy's newly-appointed Minister of Environment said, "Today's rapidly changing social media environment presents a great opportunity for global discussion, advocacy, and participation. The C4C campaign is amplifying local voices and enabling policymakers to listen and learn from the innovations that are happening throughout Africa and helping to bring together environmentally-engaged citizens from all corners of the globe." Connect4Climate is a global partnership initiative supported by the World Bank and the Italian Ministry of Environment. Connect4Climate Knowledge Partners include:Adamawa State University in Mubi, African Forum on Mobility and Development, Africa Rural Connect-National Peace Corps Association, African Union Commission, African University College of Communication, African Virtual University, African Youth Initiative on Climate Change, Ahfad University for Women, Anlo Awomefia Senior High School, American Renewable Energy Day, Boston University, Brainforest, Center for Girls and Interaction, Centro de Estudos Mocambicans e Internacionais, CISP - International Committee for the Development of Peoples, Cittadinanzattiva Onlus, Children's Radio Foundation, Coaches Across Continents, Columbia University Center for Research on Environmental Decisions, Communication for Sustainable Development Initiative, Conserve Africa, Educate!, Ethiopian Global Initiative, FAO, FOCSIV – Volontari per lo sviluppo, Flickr, George Mason University Center for Climate Change Communication, Georgetown University Center for Social Impact Communication, Ghana Institute of Management and Public Administration, Global Alliance for Clean Cook Stoves, Global Unification-The Gambia, Horn Relief, Institute of Tropical Agriculture-Kumasi, Inter Press Service, International Centre for Environmental Research, iYPTDI, Jeunesse Secours, Johns Hopkins University School of Advanced International Studies, Liceo Marconi Asmara Madre Terra Chiama Uomou – Africa '70, Mahatma Gandhi University, Maranyundo School, MILMUN Milan International Model United Nation, Momenta, Mwelu Foundation, MXit, Nigerian Youth Climate Coalition, NR2154, Obafemi Awolowo University, Orbicom, Oshwal Academy Nairobi – Junior High, Pastoral Environmental Network in the Horn of Africa, Plan International, Project Diaspora, Qamar Zaman, Radio FM Liberté, Reuters AlertNet, Rio Conventions Pavilion, RITE FM, Solar Sister, Somali Aid Foundation, Sorgenia, Soundtracker.fm, South East African Climate Consortium Student Forum, Stella Maris Polytechnic, Television Trust for the Environment, Tony Blair International Academy, Trees for the Future Ghana, Uganda Medicinal Plant Growers Ltd., UN Decade on Biodiversity, UN Foundation, UN Women, UN Association – National Capital Area, UNDP, UNEP, UNESCO, UNFCCC, UNIC Pretoria, UNICEF, Unite4Climate Zambia, University of Massachusetts Boston Center for Governance and Sustainability, University of The Gambia, World Bank Institute IMAGE Network, Youth Initiatives Kenya, Youthink! Prizes kindly provided by the Global Environment Facility (GEF), Autogrill, and Unicredit. Show Less -
The Road to Rio+20 and Beyond: 20 Years on from the Earth Summit
A Framework for ActionRio 1992 was about setting an agenda for action. We hope Rio+20 will be about realizing that agenda by shifting economic incentives and systems and rallying political will. As part... Show More + of the design of a global roadmap for sustainable development, the World Bank Group suggests Rio+20 strives for agreement on:The adoption by countries of development strategies that are consistent with the concepts of green and more inclusive growth while maintaining a strong poverty reduction focusA global methodology and process for incorporating natural capital and ecosystems services into countries' national accounts by 2030A discreet set of sustainable development goals by 2030 complementing the MDGs e.g. for energy, sanitation, water, land, and oceans, and reinforcing them for biodiversity.We support the three global energy goals outlined in the Action Agenda of the UN High-Level Group on Energy and the United Nations "Sustainable Energy for All" year 2012:Universal access to modern energy servicesDoubling the rate of improvement in energy efficiency, andDoubling the share of renewable energy - all by 2030.We are ready to support efforts to develop more sustainable development goals.Toward a Green and Inclusive Growth PathWe will maintain our focus on growth given its centrality to poverty reduction, but growth needs to be green and inclusive. The world needs a form of growth that is socially and environmentally sustainable that takes resource limits and climate change into account. GDP growth in developing countries will still be necessary to enhance living standards, reduce poverty, and cope with growing populations. But we know that growth per se is not enough. During the recent global economic downturn, some countries continued to see growth at levels of 7 percent a year or more, yet millions of people fell below the poverty line.Green and inclusive growth is climate-resilient, water-smart, land-saving, energy-efficient and reliant on diverse energy sources. It also generates decent jobs and improves livelihoods across a diverse set of productive and service sectors. It is underpinned by properly valued natural capital, the value of which is fully integrated into countries' systems of national accounts. Green and inclusive growth paths factor environmental considerations into government policies and business decisions, placing sustainable natural resource management – with its benefits flowing to people – at the heart of future development and growth. The improved health of people that stems from cleaner air, land and water benefits from and feeds back into this new growth path. Gender equality when recognized as "smart economics" enhances productivity and further improves development outcomes.Enabling the TransitionGreen and inclusive growth policies need to be fully integrated into countries' overall development strategies and assessed in terms of their contribution to development and well being. Measuring growth with the right tools, promoting sound public expenditure management and fiscal policies, and getting prices aligned with the true value of environmental services are key parts of the transition. The private sector will need to consider how to report on business growth differently, especially in terms of social and environmental value created.These considerations mean that climate and other environmental concerns are no longer the exclusive concern of environment ministries but of government as a whole, especially ministries of finance, economy and development. In addition, Rio 1992 made it clear that these issues are not the exclusive concerns of government. Now, more than ever, the effort to shift growth paths requires the engagement and participation of all parts of society.Measuring green growth also requires new tools. GDP indicates whether an economy is growing, but gives no information on whether the growth is sustainable. That is why putting in place comprehensive wealth accounts that focus on the value of natural capital and ecosystem services, and integrating them into development planning is an important part of mainstreaming green growth.Sound public expenditure management and institutions are critical to ensuring that public spending for sustainable goals is wisely allocated, managed and transparently tracked. Engaging citizens to set priorities and oversee public spending is also essential for transparency, accountability and effectiveness. In developing countries, the role of public policy will also be to remove distortions, barriers and weaknesses impeding private innovation. These efforts can include improving the quality of and access to communications networks, reducing domestic barriers to firm entry and exit, improving access to finance, opening up trade and investment regimes, while at the same time assuring sound environmental and social performance of production and innovation, and strengthening skills and capacity development.The role of fiscal policy is central in allocating public resources to activities with high social and development returns, consistent with green growth principles. Market-based fiscal instruments – like taxes, targeted subsidies, renewable energy feed-in-tariffs, energy efficiency certificates, and emission trading schemes - are critical to ensuring the right incentives for shifting consumption, production, investment and innovation to efficient, clean, least-cost options. Targeted fiscal policies can help create the conditions for the poor to contribute to green and inclusive growth, while reducing unintended costs in terms of public health, social tensions and violence.The role of the private sector in driving the green, inclusive growth agenda needs to be emphasized. Sound public policies and investments are central but are not enough. The private sector is the engine of innovative solutions and the main channel through which the benefits of growth are shared through incomes for rural and urban populations. Green and inclusive growth requires the private sector to operate in ways that decreases its environmental footprint and assures healthy and fair conditions for its workforce. The private sector is a repository of organizational and management expertise that can increase the effectiveness of service delivery, develop new business models and help finance the research and development necessary to transform growth paths.As companies develop more inclusive business models, they will be able to provide goods, services, and livelihood opportunities to underserved populations, creating high development impact in financially sustainable and scalable ways. Growth in businesses that engage with people living at the base of the economic pyramid has so far been driven by talented and resilient business entrepreneurs as well as by value-conscious consumers. Taking successful models to scale will require improvements in many countries' investment climates as well as innovative, long-term investment decisions by the private sector.Establishing innovative financing mechanisms will be vital as sectoral transitions will require significant investments, both public and private. In Rio 1992, the focus was on how to raise new and additional resources, and transactions were assumed to be from developed to developing countries. Now there is a broader choice of private and public finance available which can be mobilized domestically, internationally, and through instruments like the Climate Investment Funds. Targeted international and national public finance, including climate finance, can serve as a catalyst to leverage private sector investment, enhance development policy and lead to transformational change. Developed countries, meanwhile, need to honor their global commitments – such as those agreed at Monterrey (on official development assistance) and Cancun (on climate finance).For middle-income countries, domestic financing options such as green taxes and Payments for Environmental Services are becoming viable options for leveraging financing for environmental investments. In the interim, concessional financing will still be necessary to promote sustainable energy and environmental efforts. Less developed countries will rely more on international transfers and private capital flows to meet their needs to finance the transformation. Private investors will need stable investment climates and different incentive structures, promoting accountability through transparency, and deploying inclusive business models in sourcing and distribution. Financial markets have a key role to play in mobilizing financing that is long-term and suitable to finance the transformation. Special attention needs to be paid to how such innovative mechanisms are structured to ensure that the poor and vulnerable are not further marginalized but are empowered to contribute actively to realizing the goals of sustainable development. Social protection policies can complement such mechanisms so as to ensure that the livelihoods of vulnerable groups are resilient in the face of episodic shocks and chronic stresses.More rapid green growth is inconceivable without technological innovation. Frontier innovations shift out production possibilities, allowing the production of more environmentally-friendly outputs with fewer inputs. For developing countries, innovation includes frontier or "new-to-the world" innovations and adaptation to local conditions, and dissemination of existing technologies.Advancing the green growth agenda requires a systematic consideration of equity, social inclusion, gender, equality and indigenous people's rights. Environmental degradation is often highly skewed, disproportionately affecting the poor and disadvantaged, where women, children and the elderly are often the worst affected. Carefully designed social protection programs can help alleviate these shocks on the most vulnerable in society. There is growing evidence of the positive links between human development outcomes and more evenly distributed gains from economic growth, higher levels of civic engagement, and the empowerment of women in governance at all levels. The equity agenda goes beyond the use of fiscal and social protection policies as mere compensation for losses incurred by growth elsewhere. Rather, it is a question of harnessing and realizing the economic potential of poor and excluded groups, and ensuring that they have voice and are empowered to contribute to sustainable development.Ensuring the TransformationCombined with an integrated development strategy, the green growth transformation requires targeted action at various levels – globally and locally. Priority action is needed in the following areas that are listed as key topics for Rio+20 by the UNCSD (Rio+20) Secretariat:Infrastructure and Energy: Infrastructure plays a key role in responding to regional and global issues like rapid urbanization, energy sector and sanitation challenges, and climate change. The next five to 10 years present a major opportunity as huge investments in infrastructure will be made across the developing world. For at least the next 25 years, cities will grow by some 250,000 additional people every day – 2 billion more urban residents by 2035. Green growth discourages investment decisions that entrench countries, cities, and communities in environmentally damaging, carbon-intensive systems. There are tremendous win-win opportunities for improving energy efficiency, reducing greenhouse gas emissions, improving air and water quality, tackling urban poverty as well as reducing vulnerability to climate change at the city-level.The three sustainable energy goals put forward by the UN on universal access to modern energy, doubling renewable energy use and improving energy efficiency by 2030 are ambitious but achievable. They are vital for improving the lives of the 1.4 billion people without access to electricity and the 2.5 billion people now using polluting, traditional cooking stoves.Private investments in renewable energy, in particular in solar and wind, have grown tremendously over the past five years, and as the cost of production drops, removing implicit subsidies for fossil fuels will help further transform the global energy balance. There is a need for energy transition, and hydropower represents an important clean energy source which will become a larger share of the world's energy production as lower income countries develop their capacity. Regional power projects and transmission infrastructure will be needed to make best use of available natural resources, including renewable energy resources.Developed and developing countries need to embark on low emission development (LED) paths to sustain growth. An approach that minimizes energy consumption and pollution from transport can be achieved through the adoption of carbon savings technology and sustainable planning of accessible transport services and infrastructure. Strategies for achieving these goals must be gender-sensitive if they are to be effective and benefit those who are most adversely impacted. LED is a critical ingredient to protecting growing urban populations from fine particle inhalation, which often results in increased mortality and morbidity through respiratory and cardiovascular diseases. Reaching WHO-set air quality standards is critical to improving basic environmental health conditions.Measurable targets could include reduction in urban poverty, reduction of greenhouse gas emissions, improved air and water quality, increased energy efficiency in buildings and appliances, reduced energy losses in generation and distribution, and share of trips taken by low carbon modes of transportation. Strong enforcement to reach nationally and particularly internationally-set air and water quality standards is needed.Water and food and energy nexus: A world free of poverty is not consistent with 800 million people without access to safe drinking water, 1.6 billion without access to electricity, and one billion suffering from hunger. Water resources must be allocated between agriculture, energy, urban consumption, mining, and increasingly threatened ecosystems. Population and economic growth are expected to increase demand for food, energy and water further, making the efficient allocation of water absolutely critical.Currently, 70% of the world's withdrawn freshwater resources are being used for agriculture. By 2030, it is estimated that 30-45 percent more water will be required to meet increasing food demands. Already, 50 percent of food globally comes from irrigated areas, and of this irrigation water, 50 percent comes from aquifers which are being depleted at a rapid pace in many countries. And with more than 50 percent of the world's population now in cities, urban centers will increasingly compete with farms for water.Another 15% of the world's withdrawn water resources are being used for industry, mostly for energy production. Hydroelectricity and many solar energy systems – two key alternative sources of clean energy – require water. Stable and ample energy supply is important for water provision and food production. Maintaining biodiversity and ecosystem services also requires an overall decrease in groundwater withdrawal, and these ecosystem services are critical for groundwater supply. To turn these linkages from a vicious cycle into a virtuous cycle, water management must become much more efficient.In addition to the lack of safe drinking water, there are 2.4 billion people living without basic sanitation. To meet the challenges of providing water and basic sanitation to the bottom billion, regressive subsidies need to be removed; sustainable solutions that work need to be scaled up; innovative results-based financing instruments that reward efficiencies need to be promoted; incentives to reduce water use need to be supported; institutional frameworks and water utilities need to be strengthened; and capacity building for service providers in long-term planning needs to be promoted.Oceans: Healthy and biologically diverse oceans are essential for humans, providing food, jobs, recreation, and pharmaceutical resources. Oceans are also the planet's main carbon sink by capturing and storing a large part of greenhouse gas emissions. Today, oceans are absorbing more CO2, which is changing the pH and oceans are becoming more acidic. Climate change is also leading to ocean warming since oceans moderate our climate. Human pollution – approximately 6 million tons of solid waste plus industrial, agricultural and human waste runoff – is also affecting the health of the oceans.Warming, acidification, and pollution are also affecting coral reefs and mangroves. In turn, this "natural infrastructure" provides critical ecosystem services at a time when fish resources are already direly affected by over-exploitation. The world's oceans and shared seas provide 20 percent of the animal protein and 5 percent of the total protein in the human diet. They also provide food and livelihoods for 8 percent of the world's population. Bold action to improve governance of marine resources is needed to reverse the loss of habitats, restore fish stocks, and manage coastal environment so that it provides socio-economic benefits for communities and maintains countries' natural resource wealth. Catalytic funding is needed to: move towards rights-based fisheries management, increase marine protected areas, harmonize certification of wild and cultured fish, improve coastal zone management and reduce marine pollution. Currently, only 1 percent of oceans are under some form of protection. For shared seas, in particular, environmental management across all riparian countries is critical.Biodiversity: The planet is in the throes of a sixth great extinction that is liquidating the goods and services on which pro-poor growth and sustainable development depend. IUCN has listed 208 species as "possibly extinct", and a further 17,300 species are considered under threat. We must deliver on the Aichi Targets established at the CBD COP10 in Nagoya, Japan. This includes targets for mainstreaming biodiversity considerations across government and society; reducing the direct pressures on biodiversity; safeguarding ecosystems, species and genetic diversity; and enhancing the benefits from biodiversity and ecosystem services. To do this, countries need to mainstream biodiversity considerations into planning processes and production sectors, set public policy to ensure that the private sector deploys sourcing, production and distribution practices that leverage biodiversity as an asset, strengthen civil society to become an effective partner in protecting biodiversity, and meet targets for safeguarding at least 17 per cent of terrestrial and inland water, and 10 per cent of coastal and marine areas by 2020.Social development: The early years of the 21st century have brought home just how complex, interconnected, hazardous, uneven and uncertain patterns of global development have become. It is increasingly recognized that socially inclusive and resilient as well as environmentally sustainable patterns of growth require attention to good governance, voice and representation for those who are marginalized from the economic and political mainstream. Twenty years ago in Rio, consideration of women was just an add-on. Now, gender equality is part of smart economics as it enhances productivity and improves development outcomes. We expect that gender will be far more prominent in the debate around Rio+20.ConclusionRio 1992 compelled the world to face up to the environmental, social and economic crises of its own making. It put the idea of sustainable development on the table and, to a certain degree, brought about a global shift in thinking – away from "progress at all costs" toward "inclusive growth." It backed up the talk with an agenda for action that, in many ways, defined international efforts for a generation.Rio+20 presents the world with an opportunity to shift the thinking again – this time through a transformation to green and inclusive growth that will be supported by a new kind of GDP – one which acknowledges that growth which depletes natural and social capital is not sustainable. Agreeing on a set of sustainable development goals for 2030 that build on the MDGs will help ensure global efforts are focused.In Rio 1992, government participation was made up largely of environment ministries. At Rio+20 we expect to see much broader participation from ministries of finance, development, and planning. In 1992, women and children were added on to documents under pressure from civil society. Today, gender inclusion is regarded as smart economics. Rio 1992 focused on mobilizing additional financing. Now it is clear that without broader and more innovative financing mechanisms, we will not see results. There is also a realization that transferring knowledge from north to south is not enough. Now knowledge must also flow from south to south and south to north.The World Bank Group itself has come a long way since 1992 – our thinking and actions have shifted enormously towards a focus on sustainable development. We see Rio+20 as a vital agenda-setting moment in history and we embrace the opportunity to put our skills, experience and thinking behind the next phase of global transformation.World Bank Group Actions to Support Green GrowthThe World Bank Group's comparative advantage is that it can help developing countries try innovative ways to sustainably grow their economies in sustainable ways by leveraging knowledge, fostering innovation, sharing of good practices and lessons learned across the world and building capacity to implement them. We also provide innovative financing instruments and partnerships with public and private sector to fund action along with advice on metrics to measure progress.Our contribution to the Rio +20 agenda is guided by a number of sustainable development sector strategies which include: agricultural and rural development, energy, infrastructure, information and communication technologies, water, oil and gas, transport, urban, social development, manufacturing, mining, and environment. At the program level, our support to meeting the Rio+20 agenda includes:Green Growth Knowledge: The Green Growth Knowledge Platform will facilitate continued work on identifying and remediating knowledge gaps and implementing green growth policies in developing countries. The knowledge platform is also a mechanism to develop partnerships and join "conversations" with an emerging community of practice involving scholars, policymakers, practitioners, and other concerned individuals and institutions in developed and developing countries. The platform will provide online tools for collaboration and discussion on green growth issues. The Bank" main partners in this are UNEP, OECD, and the Global Green Growth Institute. We will present a flagship report on green growth providing detailed recommendations for "how."Green issues will play a growing role in the World Bank's ongoing dialogue with finance and economic ministries on fiscal policy, macroeconomic stability, growth, competitiveness, poverty reduction and equity issues. Careful analysis of the growth and distributional impact of environmental pricing policies is needed. The Bank Group will continue to support countries to assess such effects and to design and implement transfers or other social protection programs to help address them. We will also continue working with developing countries to strengthen budget and public expenditure management systems, while paying careful consideration to public oversight and social accountability mechanisms, including systems to evaluate and allocate environmental spending relative to other fiscal priorities and to better ensure that allocated spending is accountably and efficiently used.Wealth Accounting and Valuation of Ecosystem Services (WAVES): Through the WAVES global partnership, launched at the Nagoya CBD COP in 2010, the Bank Group will expand the number of countries undertaking environmental accounting. Already, WAVES is undertaking pilot programs in six developing countries while partnering with developed countries leading the way in the area. WAVES will build knowledge and experience and gradually, broaden the number of countries participating. A key goal of the Bank Group's work in this area is to demonstrate how countries can use environmental accounts to improve decisions about more sustainably managing natural capital.Low-Emission Development: Our Low-Carbon Development Studies, undertaken between 2008-10 in seven client countries, have been scaled up into Development Policy Operations and Clean Technology Fund Investment Plans, among other options. Numerous low-emission development studies have also been undertaken. The creation of a decentralized knowledge platform for low emission development that can provide upstream advice and support to developing countries is being considered with external partners. This includes paying careful attention to the distributional, poverty and social impacts of policies designed to bring about low-emission development, with systematic use of Poverty and Social Impact Analysis (PSIA) to help better inform policy choicesWe will continue to support developing countries with their Nationally Appropriate Mitigation Action plans (NAMAs), enhancing access to the carbon market including through the newly established Partnership for Market Readiness, capacity building activities, and the establishment of innovative financing schemes for LED.The elements of reducing an institution's footprint (also known as CSR) are fundamental ingredients of a green economy. The World Bank Group will continue to support projects and programs in its client countries to improve environmental and social performance in public and private sector operations. Internally, the World Bank will continue to be 'walking the talk' by continuing to measure and reduce the environmental impact of its own corporate operations to set an example to other public and private agencies.Renewable energy and energy efficiency: Our support for the common goals on access, energy efficiency (EE) and renewable energy (RE) has come in the form of financing and technical assistance. Our work in these areas has contributed to increased access to electricity through grid-based and off-grid electrification. Bank Group support has also helped develop enabling policy reforms, institutional frameworks, and innovative financing for EE and RE projects. IFC has invested, in FY10 alone, $1.7 billion in energy efficiency and renewable energy projects, aiming to increase the relative share of financing into this segment to about 20% of its commitments by 2013. Importantly, IFC financed and advised on, through partnerships with over 60 Financial Institutions around the world, a large and growing portfolio of energy and resource efficiency investments by Small and Medium Enterprises, a sub-set of the private sector which to reach is critical for green growth to take off.The WBG has also built a strong alliance of partners to further these goals. For instance, the Global Alliance on Clean Cookstoves will help distribute nearly 100 million advanced cookstoves, through gender-sensitive strategies, thereby reducing indoor air pollution and increasing safety for the users of these stoves and other household members. Through the Lighting Africa project, WBG in collaboration with the private sector is promoting the market-based provision of safe, affordable lighting based on solar systems to nearly 2.5 million people in sub-Saharan Africa.The goal of universal access to modern energy will benefit from harnessing the power of the private sector. For instance, removing barriers to private sector entry, especially in rural areas far from electricity grid access, will substantially accelerate access to modern renewable energy sources. In countries with some of the lowest rates of access to electricity, the private sector has found new ways of providing rural populations with clean options: biomass-fueled generators using agricultural by-products such as rice husks, sisal or copra are leading to village-sized mini-grids, and photovoltaic-based solar home systems and energy efficient lamps are distributed by private providers at prices affordable to low-income users.The Bank Group plans to increase its investment in preparatory analysis in the area of sustainable hydropower to ensure benefit sharing and adequate social and environmental protections and will also conduct analysis on how best to manage water releases to ensure downstream flow regimes can be managed as sustainably as possible. This analytical work will aim to help clients to adapt their policies and approaches in hydropower to reach their energy goals.The Bank Group is helping to conserve conventional energy resources through a public-private partnership, Global Gas Flaring Reduction. Converting flared natural gas to productive uses will reduce both greenhouse gas emissions and energy poverty.Clean transport: We are committed to addressing the linkages between poverty and social exclusion, environmental quality and human health with efficient transport services. In line with its 2008-2012 business strategy for Safe, Clean and Affordable Transport, the Bank's transport sector seeks to establish the governance, strategies, policies and services that will deliver safe transport for development in a way that is economically, financially, environmentally and socially sustainable. The strategy focuses on reducing GHG emissions which has shifted our lending portfolio accordingly.Climate-smart agriculture: CSA is a core part of the broader green development agenda for agriculture, which is about meeting the needs of people for food, fuel, timber and fiber and contributing to economic development and poverty reduction and food security while maintaining and enhancing the productivity and resilience of natural ecosystem functions.Food security: The IFC has launched a private sector component of the Global Agriculture and Food Security Program to assist in the implementation of pledges made by the G-8 and G-20 to strengthen food security in low-income countries. The program will channel donor funding to support private initiatives developed by client countries to improve governance, productivity, and competitiveness of their agribusiness sectors. Good practice guidelines include safeguards concerning the land rights and natural resource claims of local land users. IFC will provide long- and short-term loans, credit guarantees, and equity to local companies and financial intermediaries. As part of the integrated WBG approach to food security, IFC is providing investment and advisory services to the agribusiness sector across the agricultural supply chain to enhance productivity, help mitigate price and weather-related shocks, and support small and medium agribusiness enterprises, particularly in the poorest countries.Water: The Bank Group will continue to help client countries tackle water issues through a growing portfolio of investment and knowledge that supports improved integrated water resources management, improved irrigation/agricultural water management, and improved access to water supply and sanitation. Water is at the core of many countries' climate adaptation strategies and improved water resources management in the agricultural sector and across sectors, more productive irrigation, and better knowledge about how climate change will affect water variability (eg through more frequent droughts/floods; glacier melt) is fundamental to meet increasing global food demands in a changing climate. Public funding for water is limited but there is growing private sector interest in industrial water-demand management and efficiency, as well as improved wastewater management. Public-private partnerships are helping balance competing demands for access to water and ensure sustainability. The Water Resources Group Entity, a neutral platform where public, private-multilateral, and nongovernmental-organization actors can collaborate on transforming the water sector was formally launched in October, 2011. The entity, which is to be housed at IFC, is the result of a partnership between the World Economic Forum and the Water Resources Group to provide expertise to governments wishing to transform their water sectors.Climate-resilient development: The Bank Group has developed a considerable body of knowledge and experience on climate adaptation through its projects and the Pilot Program for Climate Resilience under the Climate Investment Funds as well as through knowledge products like the Economics of Adaptation to Climate Change. Our experience in developing and implementing innovative climate-related disaster risk financing and insurance tools helps countries reduce, pool, and share climate-related disaster risks, particularly through risk financing and transfer mechanisms. Increasing attention is being paid in this context to how the design of such instruments, and their coherence with complementary social protection and other policies, can help build resilience in the livelihoods of the poor and vulnerable in particular.Sustainable cities: We have a significant work program underway on sustainable cities, with a specific thematic emphasis on climate change. In particular, a knowledge paper on "Towards a Partnership on Sustainable Cities" is being developed, that outlines the framework and elements for sustainable cities, and identifies priorities for action by various sectors and actors. Other recent progress includes: collaboration with the group of 40 cities known as C40; an international standard for measuring city GHG emissions that has been agreed with C40, ICLEI, OECD, UNEP, and UN-Habitat; an Urban Risk Assessment framework; the Mayors' Task Force on climate change, disaster risk and the urban poor; and a guide to adaptation in cities. Implementation of the Eco2 cities program in several pilot cities is underway. A new global initiative on municipal solid waste is also under development. Analytical work is underway that articulates a common definition and standardized measures/tools for sustainable cities, building on initiatives like the Global City Indicators Program. The Bank Group will continue its support to clients in sustainable urban growth and transport, water and sanitation, wastewater management, and climate resilience projects.Oceans: We are exploring options for an Ocean Initiative (OI) with the world's premier ocean-focused organizations, combining cutting edge knowledge with finance for workable solutions to meet country demands for improved marine resource management. Our clients are seeking catalytic funding to move towards rights-based fisheries management, increasing marine protected areas, improving coastal zone management and reducing marine pollution. In line with our open data and transparency agendas, the OI would support knowledge sharing and connecting practitioners.Biodiversity: The Bank Group has accumulated considerable experience in supporting a variety of biodiversity programs around the globe – from saving species to protecting key biodiversity areas as well as supporting civil society to advocate for biodiversity. Our investments and operations demonstrate that biodiversity is a key element of the solution to many global challenges, from food insecurity to climate change mitigation to fuel crises and water stress. Biodiversity conservation and ecosystem-based approaches – employing a range of different institutional arrangements such as protected areas and payment for environmental services schemes, can spur and sustain clean, green and resilient development, generate jobs and attract private investment in the rural frontier, all while reducing vulnerability against natural disasters in an era of adaptation.Social inclusion and gender: The Bank Group is working to ensure that development benefits those who need it most, including women and youth. Women are critical to economic growth and job creation and gender equality is an area of priority focus for results under IDA16, the World Bank's fund for the poorest. IFC is helping increase access to finance and eliminating gender-based barriers to investment. IFC is also working with public and private partners to ensure that youth in developing countries acquire the skills necessary to meet the job opportunities that will emerge as these countries.We are also undertaking analytical work on how climate and other environmental trends affect households and communities, access to opportunities, vulnerability and outcomes. This provides bedrock information for building well-designed policy responses to help the poor and vulnerable adapt to environmental change.In engaging the private sector to create more inclusive business models that would provide goods, services, and livelihood opportunities to people at the base of the income pyramid IFC has deployed targeted investments and used its convening power to share knowledge and promote innovation across the business community. About 150 IFC clients today are using inclusive business models to provide direct benefits to the underserved population at the base of the pyramid, creating high development impact in financially sustainable and scalable ways.Pollution management: We will continue to assist developing countries in scaling-up, accelerating and expanding their initiatives leading to stronger pollution management and environmental health performance. We share good pollution management results and experiences with developing countries through, for example, extensive South-South collaboration and substantive environmental awareness events. An updated Sourcebook on Pollution Management is close to completion.Strategic environmental assessment: Over 100 countries already successfully use Strategic Environmental Assessments (SEA) and Impact Assessments (IA) through directives, policies or laws. SEA and IA help ensure that policies, programs and projects are designed and implemented to have more sustainable outcomes while reducing poverty and advance green economy objectives. Their results are used to inform the development of future proposals. SEA and IA should be recognized as effective high level decision support processes that can assist in the implementation of political commitment to Sustainable Development and Green Economy initiatives. At the Bank Group, SEA is increasingly used in the forestry, mining, water and transport sectors in countries where we are working. Show Less -
Reforestation Projects Bring Carbon Revenues And Co-Benefits To Poor Communities
Project rules and processes need to improve, says World Bank reportMarrakesh, July 5, 2011 – Carbon markets can successfully bring revenue to poor rural communities through reforestation projects but the... Show More + processes involved need reform and improvement. That is the conclusion of a World Bank report released today which draws on seven years of experience of afforestation and reforestation (A/R) projects in 16 developing countries under the World Bank's BioCarbon Fund (BioCF).The report, released at the Africa Carbon Forum in Marrakesh, Morocco, finds that A/R projects in developing countries face numerous regulatory, capacity, finance and land tenure issues. Despite these barriers, the projects are not only mitigating climate change by contributing to the storage of carbon dioxide, they are also improving rural livelihoods, increasing resilience to climate change, conserving biodiversity, and restoring degraded lands."Since 2004, the World Bank's BioCarbon Fund has built one of the largest portfolios of afforestation and reforestation projects under the UN's Clean Development Mechanism (CDM)," said Joëlle Chassard, Manager, Carbon Finance Unit of the World Bank. "When analyzing the most efficient mitigation opportunities in developing countries, it is important to look toward the future while taking stock of what has worked and what has not. This report provides lessons for all involved – project developers, validators, regulators, and national authorities"The BioCF is a public-private initiative mobilizing resources for projects that sequester or conserve carbon in forest- and agro-ecosystems. To date, the Fund has contracted 8.6 million emission reductions from 21 projects, most of which are on degraded lands. More than half of the projects involve planting trees for the purpose of environmental restoration. It demonstrates that land-based activities can generate emission reductions with strong environmental and socio-economic benefits for local communities. The report, The BioCarbon Fund Experience - Insights from Afforestation and Reforestation CDM Projects, documents lessons from the early years of implementing A/R projects in developing countries.It finds that these types of projects have proven challenging to develop and implement. Complex rules for designing CDM projects are among the obstacles, as is land eligibility and non-permanence. Non-permanence, for example the risk that trees burn down and thus lose their carbon stock, is currently addressed through temporary crediting, which can limit the demand for forest carbon assets. The report suggests a number of improvements that could make the implementation of these projects easier for project developers and government officials. "Implementing one of the first afforestation and reforestation projects in Africa was a real challenge," says Hailu Tefera, Manager of Climate Change Programs at World Vision Ethiopia. "We started developing our tree planting project in 2005 and it took four years to get to CDM registration. It was not easy but well worth the effort and we now hope that others can avoid the pitfalls that slowed us down and implement similar projects – maybe even scaled up – all across our continent".The first A/R project was registered in China in November 2006. However, it was not until 2009 that more projects followed. A number of issues contributed to the slow start – the rules under the CDM were defined later than projects in other sectors and methodologies for forestry projects were complex and unclear. It took both time and funding to develop the tools required to facilitate their application. Over time, the CDM Executive Board simplified the rules, but adapting to such changes also proved to be a challenge for project developers. The report says that even now, rules will require further simplification to significantly scale up A/R projects under the CDM. A/R projects are now being developed at a faster pace with almost 50 in the pipeline, building on lessons learned, established methodologies and tools. Today, 27 A/R CDM projects are registered with the UNFCCC; 13 of them were developed with the support of the BioCF and, of these, four are in Africa.Some African countries are driving the development of A/R CDM projects. In the Democratic Republic of Congo, the Ibi Batéké reforestation project is set to absorb close to 1.6 million tons of carbon dioxide between 2008 and 2037. Also with the support of the BioCF, Africa's first large-scale reforestation project on Humbo mountain in Ethiopia's Great Rift Valley was developed and is now looking to be scaled up.In Moldova, the BioCF s supporting two A/R projects where local farmers are restoring about 30,000 hectares of severely degraded communal and public lands through soil conservation, sustainable timber production, reducing soil erosion and enhancing plant biodiversity. The projects are creating jobs while lowering greenhouse gas emissions that will generate carbon credits."These projects provide a great 'learning-by doing' example of the benefits of close cooperation between various stakeholders: international institutions such as the World Bank, local and regional forest enterprises, Moldova's Forest Research and Management Institute, townships and local communities," said Mr. Anatolie Pupoşoi, General Director of the Forestry Agency Moldsilva. Show Less -
Partnership Approves Grants for Eight Carbon Market Initiatives
Emerging economies present proposals for domestic mitigation schemes atCarbon Expo Barcelona, June 2, 2011 – Eight countries (Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand,... Show More + and Turkey) have each received an initial grant of $US350,000 to help think through and plan how they will design, pilot, and eventually implement market-based instruments for greenhouse gas mitigation. The grants are the first made under the Partnership for Market Readiness (PMR), a World Bank initiative launched at the UN climate change conference in December 2010. The idea of the Partnership is to build capacity in countries so that they can develop new market-based instruments to fight climate change. Each of the eight recipient countries will now develop a "Market Readiness Proposal" that will detail their plans.The PMR is a multi-million dollar partnership among governments, experts and organizations which aims to provide support to about 15 countries as they build technical and institutional capacities for the use of market instruments, such as domestic emissions trading schemes or new international crediting mechanisms, to scale up mitigation efforts. The fund is supported by ten contributors – Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States – which together have pledged nearly US $70 million. More countries have expressed an interest to join. "Over the past two days here in Barcelona, more than 30 countries have been meeting to talk about new initiatives in emerging economies with regard to market-based instruments", said Andrew Steer, Special Envoy for Climate Change. "We've heard remarkable plans from China, Chile, Costa Rica, Colombia, Indonesia, Mexico, Thailand, Turkey and others. These countries are taking a lead in building the capacity and foundation for a future global carbon market with the support of the Partnership for Market Readiness." PMR funding and technical assistance will place particular focus on "readiness" aspects, including shoring up data collection and management, the establishment of baselines, and the creation and strengthening of domestic measurement, reporting and verification systems, as well as support for policy analysis and the development of a regulatory framework. Mexico, for instance, is interested in developing a registry that would incorporate different carbon offset markets in one centralized system. "This will help add quality and transparency to the carbon offsets being sold, independent of the market being utilized," said Mr. Jose Antonio Urteaga of Mexico's Ministry of Environment and Climate Change. China, also a PMR Implementing Country Participant, plans to use the support of the PMR to pursue its ambitions for an emissions trading scheme. "The Government of China will, according to the requirements of the Outline of the 12th Five-Year Plan, gradually establish a market system for carbon emissions trading to promote the achievement of its carbon intensity reduction objective," said Mr. Wang Shu of the National Development Reform Commission of China. "The initial plan is to establish carbon emissions trading schemes in some pilot regions, and try to establish a unified national system in 2015." In addition to the approval of preparation funding proposals, the PMR Partnership Assembly also confirmed Morocco as an implementing country participant, bringing the total number of Implementing Country Participants to ten. The PMR, launched at the Conference of the Parties in Cancun on December 8, 2010, is targeting a total capitalization of $100 million before end of this year and aims to provide grant support to 15 Implementing Country Participants in total. The preparation grants approved at the Partnership Assembly meeting in Barcelona will be used to prepare full-fledged proposals that will, when approved, also be funded by the PMR. Show Less -
Ghana and Mongolia: A Step Forward on Transparency
December 21, 2010 - The World Bank's Oil, Gas and Mining unit is closing the calendar year on a positive note as more resource-rich countries are making important efforts to increase transparency in their... Show More + revenue management from extractive industries.This is the case of Ghana and Mongolia, which the Board of the Extractive Industries Transparency Initiative (EITI) designated as 'EITI Compliant' countries at a recent meeting in Dar-es-Salaam, Tanzania. In the same meeting Indonesia and Togo also were admitted as "candidate" countries. The EITI is the global standard for improved transparency in the oil, gas and mining sectors.In order to achieve "compliant status", countries must complete a rigorous and independent assessment of their disclosure and reporting practices. Mongolia and Ghana became the fourth and fifth countries to achieve EITI compliance, joining Azerbaijan, Liberia and Timor-Leste.The Extractive Industries Transparency Initiative (EITI), with the support of a Multi-donor Trust Fund administered by the World Bank's Oil, Gas and Mining unit (SEGOM), aims to strengthen governance by improving transparency and accountability in the extractives sector. The EITI sets a global standard for companies to publish what they pay and for governments to disclose what they receive.At the meeting in Dar-es-Salaam on October 19-20, the World Bank not only congratulated Ghana and Mongolia for their efforts, but also encouraged all stakeholders in Tanzania and other candidate countries to maximize efforts to complete the EITI validation process on time and consolidate the principles of good governance and transparency for the sustainable development of their natural resources."We applaud Ghana and Mongolia for achieving compliance status. The EITI is a valuable platform that can help the government, companies and civil society to deepen dialogue and engagement towards improving the economic and social benefits from investments in the extractive industries," said Paulo de Sa, sector manager of the World Bank's Oil, Gas and Mining unit. "We encourage all stakeholders to maximize efforts toward achieving EITI validation. The World Bank stands ready to support them."Some 3.5 billion people live in countries rich in oil, gas and minerals. With good governance the exploitation of these resources can generate large revenues to foster growth and reduce poverty. However when governance is weak, it may result in poverty, corruption, and conflict.There are now 33 countries that are recognized as either EITI Candidate or Compliant: Afghanistan, Albania, Azerbaijan, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d'Ivoire, Democratic Republic of Congo, Gabon, Ghana, Guinea, Indonesia, Iraq, Kazakhstan, Kyrgyzstan, Liberia, Madagascar, Mali, Mauritania, Mongolia, Mozambique, Niger, Nigeria, Norway, Peru, Republic of the Congo, Sierra Leone, Tanzania, Timor-Leste, Togo, Yemen and Zambia.Indonesia and TogoAt the Dar-es-Salaam meeting, Indonesia and Togo were admitted as EITI Candidate countries after the EITI Board approved each country's candidacy application.In implementing the EITI, the governments of Indonesia and Togo commit to disclose all taxes, royalties and fees they have received from the oil, gas and mining sectors. Companies operating in these sectors will publish what they have paid to the governments. These figures will be reconciled by an independent reconciler, in a process overseen by representatives from government, industry and civil society organizations. Indonesia and Togo join 28 other candidate countries that are working toward this goal.The EITI Board also decided to recognize Cameroon, Gabon, Kyrgyzstan and Nigeria as Candidate countries that are "close to compliance". These countries have completed EITI Validation, and the Board congratulated the government, companies and civil society organizations for the progress made in implementing the EITI.Contributed by Mauricio O. Ríos (SEGOM) Show Less -
Climate-Vulnerable Island States Get Boost For Moving Into Renewable Energy
CANCUN, MEXICO, December 8, 2010—Some of the smallest and most vulnerable island nations in the world will benefit from a new initiative aimed at increasing these countries' access to renewable sources... Show More + of energy.This follows the signing in Cancun today of a memorandum of understanding between the Alliance of Small Island States (AOSIS), the Government of Denmark, the World Bank, and the United Nations Development Programme (UNDP).The agreement recognizes the disproportionate harm of climate change for small island developing states and aims to support island countries to scale up their renewable energy efforts and shift to greater energy efficiency.An 80 million Danish kroner ($US14.5 million) pledge of support from the Government of Denmark has helped kick off the initiative, which is expected to help island states from the Africa, Caribbean, and Pacific Islands regions transition to low-emission, climate-resilient development paths.World Bank Group President Robert B. Zoellick jointly signed the agreement with Tillman Thomas, Prime Minister of Grenada and head of AOSIS; Lykke Friis, Denmark's Minister for Climate and Energy; and Helen Clark, UNDP Administrator. Zoellick said the initiative supports a group of nations that have been among the most active and most vocal at climate negotiations for many years."Small island developing states have been sounding the alarm about climate change for years now and have earned the title of 'the conscience of the climate convention'," Zoellick said. "They are leaders in taking actions on adaptation, and the World Bank Group has increased support to them for this purpose. This new initiative extends this support to clean energy, which will contribute to mitigation and also help reduce the islands states' very high import bills for fuel."Because of their size and remoteness, most small island developing states are heavily dependent on imported petroleum for their energy needs. Some countries spend an estimated 25 – 50 percent of their GDP on imported oil, which leads to very high domestic electricity costs."Reducing fossil fuel consumption is a 'win-win' for small island developing states", said Helen Clark of the UNDP. "It reduces the greenhouse gas emissions responsible for the rise in global temperatures, while at the same time improving energy security and freeing up national spending for investment in climate-resilient development."One of the expected benefits from this renewable energy initiative will be the freeing up of "fiscal space" for governments to spend on development and climate-resilient action."Climate change has the potential to derail all the good work that countries have undertaken for decades to overcome poverty and boost growth," Zoellick said. "In countries with the possibilities of renewable energy sources, overall development is undermined if governments are spending so much on imported fossil fuels."The World Bank and the UNDP will facilitate the trust fund that will be established from the memorandum of understanding. Show Less -