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Opening Remarks by Tony Thompson, World Bank Country Manager for Bulgaria at the National Conference on Health Financing
Dear Minister, Deputy Ministers, distinguished guests,I'm delighted and thrilled to be addressing you today.Delighted because our World Bank team of experts delivered on the important task to look clo... Show More + sely into Bulgaria's heath financing. We have been negotiating our knowledge support to Bulgaria with 4 consecutive governments and we discussed with every government where we could bring most expertise. The contours of the current Reimbursable Advisory Services were redefined many times but one thing remained constant: taking a close look at the health financing in Bulgaria.We see our role bringing a global perspective in combination with data and evidence to provide our member countries with the information and analyses they need to take good decisions on policy and implementation. We trust that we have succeeded in providing this for you.And I am thrilled to learn more today about this important topic. As you know: money matters! But from I've heard from the team they've struggled to solve a puzzle: many of the pieces of the puzzle in Bulgaria are well crafted but the overall picture which emerges when you put these pieces together is that the system is not performing the way it should.My colleague Agnès will present the work and what we have done in more detail, and this conference is dedicated to talking about it but let me describe to you just a few parts of the puzzle, namely:Bulgaria's health system is good and has strong and sound fundamentals.Total Bulgaria's spending for health (8% of GDP) is above average given Bulgaria's income level; the public spending is average compared with other countries.Given all this, however, the health status of Bulgarians should be higher. On the other hand the financial protection is poor as 4% of Bulgarians become poor each year because of out of pocket payments. These payments are 47% of the total health spending in the country – over double the 20% threshold defined by the World Health Organization.There are tremendous cost pressures and financial sustainability is endangered.Yet, in many ways, the health financing system is organized in a way which should allow it to deliver good performance. In particular, the overwhelming majority of the population is covered by a single insurance fund which is in a position to purchase services strategically from a range of providers.So, why is the system not delivering better performance?That's what we are here to discuss – the devil in the details – improving health financing performance does not necessarily require big-bang reforms but it requires courageous and consistent effort to put all parts of the puzzle in the right place. All of you are here today because you care, and you are also part of the solution.Thank you. Show Less -
Mamta Murthi Speech on Investments and Jobs at Sixth Cohesion Forum
Distinguished guests, Ladies and GentlemenThank you for inviting me today to this panel on delivery quality and achieving better performance in cohesion policy. Let me start with saying that the... Show More + World Bank sees restoring of European's citizens confidence in the future as a top priority for the upcoming years. While it is a top priority for all parts of Europe, today I will speak from the perspective of the 11 countries of Central and Eastern Europe that I cover as part of my duties at the World Bank.Cohesion Policy is similar, in many respects, to the objectives of the World Bank in developing countries and emerging markets. As with Cohesion Policy, the World Bank aims through its instruments to improve conditions for growth and jobs, to help reduce poverty and increase shared prosperity. We work at both the country level - with national and sub-national authorities - and at EU level - with the European Commission and other European partners.It is worth noting that all member states that joined after 2004 have benefited from both the World Bank's advisory services and its financial support prior to and at beginning of accession. The World Bank is still active in many of these countries, substantially supporting cohesion policies in PL, RO, BG, and HR and, more recently, since the crisis of 2008, providing technical support to countries like Cyprus and Greece. Throughout the focus of the World Bank is to support policy and institutional changes rather than financing per se.For the purposes of today's discussion, I would like to share our experience from our work in Central and Eastern Europe, as I believe that even though specific mechanisms and institutions vary between the Bank and the EU, some main lessons on what's worked and what could be changed going forward, might be useful to share, and in some cases, to apply in many countries in EuropeThere are three main observations to highlight from World Bank experience, or to put it differently three main ways in which the results focus of policies can be enhanced.First, strengthening a country's macroeconomic fundamentals provides the basis for sustained engagement to reduce poverty and improve shared prosperity.Second, the development and implementation of sustainable government strategies to guide and improve the quality of policy making and performance is extremely important.Third, ex ante conditionalities related to enhancing the capacity of intermediary bodies or implementing agencies can support faster and more effective implementation.Given the time constraints and the experience and expertise of today's audience, I would like to be very specific and give you a few examples of the World Bank's work and experience in support of each of these observationsLet me turn to my first point: strengthening a country's macroeconomic fundamentals.I believe we can all agree that enhancing macroeconomic resilience, through sound fiscal and financial systems, is necessary for growth, employment creation and shared prosperity. Besides reducing the cost of access to finance, this also allows a country to make more appropriate choices in terms of allocating domestic and EU resources efficiently, developing medium-term strategies that are translated into good investment plans and budgets, and hence better performance.To this end, the World Bank has used budget support lending operations to support policy reforms in Poland, in Romania and in Croatia. The policy reforms supported include a reduction of general government fiscal deficit and debt levels (such as in Poland, Croatia), strengthening of fiscal management and SOE performance (for example, Romania and Croatia), and improvements the environment for doing business and the functioning of markets (all three).In each area the World Bank has provided considerable technical assistance to support the reform agenda.Importantly, we do not see these operations as one-off interventions, but as a key part of an ongoing engagement in each country, which evolves and can be tailored to specific external and domestic circumstance. It is this ongoing engagement that enables the World Bank to support structural reforms that need several years/EU semester cycles to accomplishNaturally we are coordinated with the EU's new economic governance framework.Now, my second point. The development and implementation of sector strategies to guide and improve the quality of policy making is extremely important.World Bank experience recognizes that general prescriptions often fail and that growth and employment creation policies need to be tailored to each country, be time-specific and provide a link between country objectives, sector strategy and key reforms.The existence of sector strategies means that investment carried out by state or local governments is defined under the same umbrella, whether funded by EU sources or national sources. In some cases, development of sector strategies as an ex-ante conditionality can be helpful in shifting the focus from absorption to selecting investments in an integrated manner with other investment not funded by EU. Of course, development of sector strategies can require technical support. The World Bank is involved in support of sector strategies in many sectors in Romania, as well in Bulgaria, Croatia and Poland In Poland the World Bank has built on its work to support the business environment mentioned previously to assist the Government to achieve greater efficiency and coherence from its regional and national innovation policies and programs. We have also provided inputs to strengthen the forthcoming national Smart Growth Operation Program.In Bulgaria, we provided inputs into the new Water Supply and Sanitation Strategy and are now helping the Government to strengthening the functions and capacity of the water sector regulator. In Romania, the World Bank is supporting the development of the government's Strategies for Active Ageing and for Lifelong Learning and its National Strategy on Social Inclusion, particularly for the Roma population.Third and finally ex ante conditionalities related to capacity of sectors, intermediary bodies or implementing agencies can support faster implementation, and provide government's with the tools they need.Irrespective of beneficiary specific capacity, government agencies and ministries need to have strategic planning capacity, be able to articulate policies and manage their budgeting and implementation.In the absence of requisite capacity, countries may decide to allocate money to the investment priorities for which less effort is needed to comply with the related ex-ante conditionalities within the specified timeframe, or to target resources at the beneficiary which has the most capacity irrespective of the impact. There is therefore a balancing act between absorption and impact.In order to support more effective use of funds, the World Bank is working with authorities to strengthen their administrative capacity and the planning/programming capacity.In Romania, we are helping to strengthen institutional and human capacity in the agencies and local governments responsible for investment in the main regional infrastructure, as well as in public investment management at both central and regional levelsIn Bulgaria we are strengthening the planning and programming capacity of the road agency, which is one of the main beneficiaries of EU funds for regional and some TEN-T programs, complementing EIB support.In Croatia, we have provided technical assistance to enhance selected institutions readiness for entry into the EU, raising their awareness of the opportunities and challenges of efficiently utilizing EU funds. We have also been strengthening water institutions for many years. We are also providing, through a lending instrument, support to strengthen the government's capacity to monitor effective health sector policiesHaving described how we work and the main lessons, let me describe what we work on and turn to the issue of thematic concentration. What we have observed is, while growth-enhancing policies coupled with investments are important for job creation but their efficiency varies across European regions and depends on the phase of the business cycleOur experience shows that Sustained market orientated reforms pay off in terms of greater job creation and increased productivity (for example Poland and the Baltics), harnessing the potential of entrepreneurship – the so-called 'Gazelles' - is also very important to boosting job creation (for example innovation support in Poland).Much more emphasis on skills is needed as many workers, especially younger and older workers, are ill prepared to succeed in today's dynamic labor market because they lack the skills that employers needHigh labor taxes and the design of pensions and social benefits often discourage employment, and multiple barriers exclude many women, minorities, youth, and older workers from the labor marketWorkers often fail to move to places with stronger job creation potential within their own countries, making it difficult to connect them with jobs in more vibrant regions.Much greater attention is needed to all these areas, especially skills and mobility.Today, I wanted to give you a set of practical examples of what the World Bank has been doing in Central and Eastern Europe and what are the main lessons from our experience.Our essential observations are three: strengthening a country's macroeconomic fundamentals provides the basis for sustained engagement to increase growth and jobs and increase shared prosperity; it is extremely important to develop but more importantly implement a set of sustainable government strategies that link country circumstances and objectives to key reforms; and ex ante conditionalities related to enhancing capacity - tailored to country circumstances – are important for cohesion policy. In the case of this programming period countries have been slow to define their needs. This can hamper effective use of resources if not addressed quickly.Overall much greater attention needs to be paid to the issue of skills and mobility that was previously the case.Thank you for your attention. Show Less -
Bulgaria's Green Potential: Knowing, Seeing, Acting
First, AGRICULTURE.What do we know about Bulgaria's agriculture?We know that there is a need to feed a rapidly growing world population. Demand for food is expected to double by 2050. We also know tha... Show More + t what we need is "climate smart agriculture" – agriculture that increases food security and contributes to climate change adaptation and mitigation.We know that organic agriculture is one form of "climate smart agriculture", and we also know that it is rapidly growing global market, including in several EU countries. In Germany, for example, demand for organic agriculture products increased by 30 percent over the past 5 years, with sales reaching 7 billion Euros in 2012.And we know that agriculture holds tremendous potential for Bulgaria, a country with vast agricultural land, fertile soils, and diverse agro-climates. Today, farming represents about 5 percent of GDP and secures about 20 percent of total employment.What to do we see?This, for example. Run-down irrigation infrastructure. In the 1980s, more than 1 million hectares of land were equipped with irrigation facilities, but this has dramatically dropped to just about 45,000 hectares today.We also see fragmentation of land ownership, aging of farmers, and only 0.3 percent of Bulgaria's agriculture being certified organic – compared to 20 percent of Austria's agriculture - all this leading to the fact that today agriculture is the least productive sector of Bulgaria's economy.How could Bulgaria act?By strategically positioning Bulgaria's agriculture in the EU to increase its value added, its competitiveness, its environmental sustainability, and its climate resilience. Organic agriculture is one aspect of such a positioning for increased agricultural exports. This positioning needs a bold strategy and predictable, integrated support for farmers.It also needs substantial investments to revise the trend of depleting irrigation infrastructure. Increased and more effective use of irrigation will not only lead to an improvement in agricultural productivity, it will also build a more climate-resilient agriculture sector.The 2014-2020 EU Rural Development Fund provides an enormous opportunity to systematically position and strengthen Bulgaria's agriculture - from competitiveness and an environmental point of view.Second, ENERGY EFFICIENCY of buildings, in particular residential buildingsWhat do we know?We know that Bulgaria's economy is by far the most energy intense in the European Union. In order to produce one unit of GDP, Bulgaria uses four times more energy than the EU average.We also know that 40 percent of all energy in the EU is consumed in buildings. And we know that the quality of Bulgaria's building stock is below EU average, including a large part of Bulgaria's residential buildings.Finally, we know that about 60 percent of Bulgaria's households are energy poor, meaning that they need to spend more than 10 percent of their household income on energy.What do we see?We see this. Poorly insulated apartment buildings with patchwork investments. According to the OECD, energy consumption of existing buildings can be reduced by up to 50%. Given the large share of old panel apartment buildings in Bulgaria – 2.7 million Bulgarians live in those buildings - the energy savings potential in Bulgaria is even higher.But how could Bulgaria act?Imagine all Bulgarians living in apartment buildings like these – modernized apartments with proper insulation? Wouldn't it be a win-win-win situation to substantially scale up energy efficiency measures for residential buildings – win for homeowners, win for business, and win for the environment?A recent World Bank report analyzed energy efficiency policies in 7 EU member states. Following lessons learned from these EU success stories, what would be needed for a large scale residential buildings energy efficiency program?First, sustained top Government leadership and commitment. It takes more than a market for energy efficiency to work. Second, money. We know that on average one Euro invested in energy efficiency saves two Euro investments in new power generation capacity. We also know that retrofitting buildings saves money in the long term, but it needs money in the short term. The 2014-2020 EU funding period constitutes a huge opportunity to provide substantial financial energy efficiency support to homeowners. But even Government leadership and money alone will not be sufficient. What is also needed is a stable, clear and predictable enabling framework – a clear strategy and roadmap for the renovation of Bulgaria's building stock, a simple regulatory and legal framework and substantially strengthened institutional and implementation capacity.Ladies and gentlemen,So far, I have highlighted the green potentials in agriculture and energy efficiency of residential buildings. Let me conclude with a third example.GREEN MANUFACTURINGWhat do we know?We know that this is Bulgaria's past. We also know that Bulgaria's exports are still dominated by natural resources-based and unskilled labor-intensive commodities. We know that only 3 percent of Bulgaria's exports are high-tech, innovative goods and services, significantly below the EU average of 16 percent.And we know that the large shifts over the next few decades will create entire new industries and businesses, we know that already today there are substantial green growth opportunities in newly emerging sectors.What do we see?We see an increase in green investments including foreign direct investments - investments in green manufacturing. For example investments in eco-friendly technologies in automotive manufacturing, manufacturing of charging stations for electric cars or production of high energy efficient LED lighting.We also see a rapidly developing global market for green industries. The global market for renewable energy, for example, was about 200 billion Euro in 2011 – six times the amount invested just 7 years ago.How could Bulgaria actBeing close to green growth leaders in Western Europe, Bulgaria can seek closer integration by encouraging green FDI and trade in green goods and components. Enterprises in high income economies will increasingly seek cost advantages by outsourcing production.Attracting such investments requires a good business environment, but it also requires a better framework to stimulate and support green innovation. With determined actions, Bulgaria can position itself as a European investment destination for green manufacturing, leading to a diversification of its export basket with a higher share of innovative products, leading to job creation in sustainable sectors.And with the EU 2014–2020 financing framework, Bulgaria has the opportunity to stimulate green business innovation by ensuring that the new operational program on Innovation and Competitiveness puts a particular emphasis on fostering green innovation.Ladies and gentlemen,I started with this slide and the question to all of you how much risk you would be willing to take.I started with my 7 year old son. He will live in a world where the impacts of climate change will be much more severe than what we see today. But even many of us could experience the harsh impacts of a 2 degree warmer world within our lifetimes – 20 to 30 years from now. Our today's actions will determine the scale of these impacts that our children and the future more than 9 billion people on our planet will need to cope with. Our successes and failures in the fight against climate change will define our generation.Ladies and gentlemen,Climate change and green growth has become highest priority at the World Bank Group, and we are determined to work with countries like Bulgaria to speedily find practical solutions. We must meet the climate change challenges with political will, intelligence, innovation and partnership.Bulgaria's "green potentials" are substantial, but Bulgaria would need to act strategically, systematically, and on a large scale. Bulgaria needs to act with the ideas and "green" commitment of many people – people like you.Thank you. Show Less -
Transcript of World Bank Group President Jim Yong Kim Opening Remarks at Neglected Tropical Diseases Conference, Washington DC
DR. KIM: Thank you, all, so much for coming and welcome to the World Bank.As always, I have some very nice prepared remarks, and so I will give them out of respect for the people who prepared th... Show More + em, but I'm also going to talk a little bit about from personal experiences. Hundreds of millions of children and adults in Africa live at risk of disfigurement, impaired development, blindness, and even death from seven major preventable, neglected--so called neglected tropical diseases, includes river blindness, elephantiasis, trachoma, and various types of [? 00:37] [unclear] parasites. It's not that these diseases really have been neglected. It's the people who suffer from them who have been neglected. Protecting poor people from preventable diseases and from acute suffering remains a part of our mission to end poverty and [unclear] shared prosperity. The bronze statue in our atrium, the child leading a man who has lost his sight from river blindness, is a daily reminder of our mission, and for me it's the second organization that I've worked for that has that very statue in the middle of its consciousness. Five other statues exist including in Burkina Faso's capital and of course the World Health Organization capital in Geneva.River blindness is a debilitating disease, transmitted through flies that breed in river waters, as you know. The fight against this disease is where our efforts in the preventable, neglected tropical diseases began. This fight, supported by many organizations and partners including the World Health Organization, the World Bank is a true success story, and today over 80 million people a year in Africa regularly receive drugs donated by Merck to prevent river blindness. Protection again disease is not just an investment in health but an investment in the economy. As river blindness has been controlled in large parts of West Africa, families have been able to return to 25 million hectares of arable land with the capacity to grow enough crops to feed 17 million people. River blindness has also been eliminated in several endemic areas in Africa, such as transmission zones in Senegal and Mali. At the beginning of this year, the Bill and Melinda Gates Foundation, several pharmaceutical companies, and many other partners, including some very active civil society organizations, united behind a common mission to control or eliminate the seven major preventable, neglected tropical diseases in endemic countries. I'm delighted that we at the World Bank are able to support the effort to tackle these diseases in a coordinated way. Tackling these diseases in a coordinated way in [unclear 02:50] Africa. It saves lives and money, and requires expanding lessons that we've learned from our efforts to eliminate river blindness. First, a simple community health system approach. And second, partnerships with pharmaceutical companies for the free supply of drugs. A key element of this extended effort is to strengthen community health systems in these endemic countries through national health strategies that aim to reach every citizen with good quality health services. We can bring about great change by working together efficiently. You know, I remember the very first time that this idea of donating drugs became to be, and it was actually in a video with Roy Vagelos of Merck, and Bill Fahey of, at that time [unclear 03:37] Carter Center by President Carter. And I'll never forget the conversation where President Roy Vagelos of Merck was asked directly, "You mean you will supply every person in the world who needs Mectizan with the drug forever?" And he said, "Yes, forever." Now, my understanding is that at first when the Merck folks about this they weren't very happy when he made that commitment, but I have to tell you, those of us in the public health world were simply blown away. I've since had the great pleasure of working very closely with Bill Fahey and also being measured [? 04:16] by him in a very substantial way. And just yesterday I was on the phone, a videoconference with Bill and with Mark Rosenberg, who now runs the Task Force for Global Health, which manages the Mectizan Donation Program. And I've also had the great, great honor of interacting quite a bit with Roy Vagelos, who continues his great work in trying to bring medicine and cures to the poorest people in the world. So I, mostly today, just want to thank everyone in this room for your effort to continue this extremely worthwhile fight. You know, I was involved in HIV and tuberculosis, malaria, much more high-profile diseases. But having spent so many years of my life actually seeing cases of elephantiasis, seeing cases of trachoma in places like Haiti, in three countries in Africa and all over the world, I understand very clearly the enormous morbidity, the enormous suffering that comes from these diseases, and I hope that through our joint efforts, we will one day look at these as no longer neglected tropical diseases. Thank you very much. Show Less -
Remarks at IMF/World Bank 2012 Annual Meetings Development Committee Press Conference
In honor of our Japanese hosts, I would like to start my remarks by making some comments in Japanese.Mina-sama Kon-Nichiwa. Okagesama-de, Sekai Ginkou-noSousai Toshite Hajimete-no Soukai-deSenda... Show More + i-nimo Iki, Mina-sama-noYasashisa-to Tsuyosa-ni Fure,Subarashii Kizuna-wo Tsukuru Koto-gaDeki-mashita.Arigato Gozai-mashita. [Hello everybody. Thanks to your help, I could complete my first Annual Meetings and visit Sendai as the President of the World Bank. I was touched by your kindness and resilience. I am glad that we could build a wonderful Kizuna. Thank you very much.]I don't know if there was translation, but if not, too bad.I want to first of all just thank you.I want to thank the Japanese people and the government of Japan for just a truly outstanding meeting. The Japanese government I think demonstrated to all of us the character of the Japanese people by responding to the great tragedy of March 11, 2011 by insisting that these meetings focus on ensuring that all countries – especially developing countries – have access to all the tools they need for disaster risk management. We're so grateful to them.I want to thank Christine for her eloquent plenary remarks and leadership, and also DC Chair Marek Belka for his leadership and contribution.I also want to congratulate my European colleagues. Many questions have been raised in recent years about the European Union. The Nobel Committee's awarding of the Peace Prize to the EU is a powerful reminder of just what the Union has done to shape history in a positive way.These Meetings were my first as World Bank president. From my discussions with Governors, Ministers, civil society representatives, and many other stakeholders, I've been impressed by the depth and breadth of views. In fact, many took to heart our campaign "What Will It Take" - and told me directly exactly what they think it will take! Many also wore our black T-shirts that had a simple phrase: End Poverty.For me, that message – End Poverty – is what I think about every day on my job as president of the World Bank Group. I think of that message and the message of boosting shared prosperity so that families or young people can have hope for a brighter future that includes a good job, access to health-care, and good education.The economic environment today is tough and very disconcerting. I believe that the World Bank Group has a role to play in all countries around the world, and all countries of the world can work with the World Bank to find solutions to some of the most difficult issues in development today. I want the Bank to be transformed from a knowledge bank to a solutions bank that will be a clearinghouse of ideas from the north and the south on how to most effectively deliver services to those who need them the most.Let me emphasize how important it is during these times to keep developing countries in the forefront. We still live in a world that has more than one billion people living in absolute poverty. We must all work to make sure that the impressive gains in Latin America, Africa, and Asia over the past generation are not lost now. In just the last few years, growth from developing countries accounted for more than half of global growth. It is in everyone's interest that these countries continue to grow and continue to be such strong contributors to the global economy.I would like again to thank our Japanese hosts and close by highlighting the winner of the World Bank High School/Junior High School development Slogan Contest. From more than 1600 entries, the winner is Ms. Mayu Muto, from Hiroshima Prefectural Yoshida Senior High School.Her slogan was Hinkon-de Kimi-no Mirai-wa Jama Sasenai.We will not let poverty hamper your future. Thank you very much. Show Less -
IMF/World Bank 2012 Annual Meetings Development Committee Press Conference Transcript
MR. MILLS: Good evening, everyone. Thank you for joining us for the Development Committee Closing Press Conference. Thank you all for coming. ... Show More + ; Each of our participants and speakers today will make an opening statement. Then we will be happy to take your questions. I would just like to remind everyone to identify yourself and your organization when you ask a question, and if you could make sure that your cell phones and pagers are turned off. The topic of today's press conference will be on the Development Committee and development issues. Thank you. Chairman Belka? MR. BELKA: Thank you. Good evening, ladies and gentlemen. I am the Development Committee Chairman. I am pleased to be joined by Jim Kim and Christine Lagarde. Today's meeting gave us a chance to exchange views on several important areas. First, the global economy remains vulnerable. Challenges persist in many developed economies. Growth is slowing in major emerging economies. We reiterated our commitment to taking decisive actions to promote growth and development, to continued support for an open global economy and to meeting our pledges of development assistance. Second, we discussed the new World Development Report on Jobs. Third, we shared views on ways that countries can better prepare themselves to minimize the impact of natural disasters on their development. We thank the Government of Japan for hosting these Annual Meetings as well as the Sendai Dialogue on Managing Risks from Natural Disasters. Finally, we took advantage of this opportunity to welcome President Kim, the Bank Group's new President, and to begin to explore the new thinking he is bringing to the Bank Group. More details are in the Communiqué, background papers, and Governors' statements, which are all publicly available. Thank you very much. Now I would like to pass the floor to Jim and Christine. DR. KIM: In honor of our Japanese hosts, I would like to start my remarks by making some comments in Japanese. [INTERPRETED FROM JAPANESE]: Good afternoon, ladies and gentlemen. With grateful support, I am attending the Annual Meetings as President for the first time. I have been to Sendai. I have enjoyed the hospitality and kindness of the Japanese people. I have enjoyed an extremely good bond. Thank you very much indeed. [IN ENGLISH]: I don't know if there was translation, but if not, too bad. I want to first of all just thank-- [Applause.] DR. KIM: --thank you--I want to thank the Japanese people and the Government of Japan for just a truly outstanding meeting. The Japanese Government I think demonstrated to all of us the character of the Japanese people by responding to the great tragedy of March 11, 2011 by insisting that these Meetings focus on ensuring that all countries, especially developing countries, have access to all the tools they need for disaster risk management. We are so grateful to them. I want to thank Madame Lagarde for her leadership, her mentoring of me, her eloquent Plenary remarks, and also to Development Committee Chairman Marek Belka for his leadership and contribution. I also want to congratulate my European colleagues. Many questions have been raised in recent years about the European Union. The Nobel Committee's awarding of the Peace Prize to the EU is a powerful reminder of just what the Union has done to shape history in a positive way. These Meetings were my first as World Bank President. From my discussions with Governors, Ministers, civil society representatives, and many other stakeholders, I have been impressed by the depth and breadth of views. In fact, many took to heart our campaign "What Will It Take?" and told me directly exactly what they think it will take to end poverty. Many also wore our t-shirts that had the simple phrase: "End Poverty." For me, that message, "End Poverty," is what I think about every day on the job as President of the World Bank Group. I think of that message and the message of boosting shared prosperity so that families or young people can have hope for a brighter future that includes a good job, access to health care and good education. The economic environment today is tough and very disconcerting. I believe that the World Bank Group has a role to play in all countries around the world, and all countries of the world can work with the World Bank to find solutions to some of the most difficult issues in development today. I want the Bank to be transformed from a "knowledge Bank" to a "solutions Bank" that will be a clearinghouse of ideas from the North and the South on how to most effectively deliver services to those who need them most. Let me emphasize how important it is during these times to keep developing countries in the forefront. We still live in a world that has more than one billion people living in absolute poverty. We must all work to make sure that the impressive gains in Latin America, Africa, and Asia over the past generation are not lost now. In just the last few years, growth from developing countries accounted for more than half of global growth. It is in everyone's interest that these countries continue to grow and continue to be such strong contributors to the global economy. I would like to again thank our Japanese hosts and close by highlighting the winner of the World Bank High School/Junior High School Development Slogan Contest. From more than 1,600 entries, the winner is Ms. Mayu Muto from the Hiroshima Prefecture Yoshida Senior High School. Her slogan was: "Hinkon-de kimi-no mirai-wa jama sasenai." "We will not let poverty hamper your future." Thank you very much. Managing Director? MS. LAGARDE: Thank you very much. Many of you have heard me before, and I am going to just limit my comments to three points. One is I am absolutely delighted to have Dr. Jim Kim as my neighbor across the street and as President of the World Bank. For those of you who would worry about our relationship, we are working together very well, and we are very, very pleased to do so, and we will continue to do so, particularly in the area of jobs and growth, with our respective expertise and in response to our respective membership as well. Second, last year, I had told you that I would commit to raise resources, and I did. In April, I came to you to confirm that I had raised $456 billion for the general resources of the Fund but that I was now embarking on my fundraising exercise for the low-income countries. Job done. The Poverty Reduction and Growth Trust Fund is now replenished. The first tranche of the windfall profit on the sale of gold done by the IMF has now been allowed into the PRGT. We reached the 90 percent majority that was required. And the second tranche that was necessary for the PRGT to be sustainable after 2014 has now been approved by the required majority of 74 percent of my membership. So, on the funding, we have--the membership has done the job--and there is no concern about the financing of the Poverty Reduction and Growth Trust going forward. Third, we have conducted a study of how efficient our facilities are for low-income countries. If the conclusion had been that they were not efficient, that they had to be improved, we would have changed them. The conclusion of the research--and we have done many, many programs over the years on low-income countries--is that the facilities we have available are fine and suitable for the job. More to the point, it also shows that those low-income countries that have used such facilities have in the main fared better than those low-income countries that have not used the facilities of the IMF. So I am not claiming credit for that, but it clearly shows that it has been efficient. And a final point in the area of what the Fund can do. We are just about to open a fifth Regional Training Center in Africa to respond to the very heavy demand on capacity building and training in the areas that the Fund is good at--that is, institution building in the field of public finance, essentially. Thank you. MR. MILLS: Thank you very much. Thank you for your patience. We started a little late. We would like to try to keep on schedule, so if you could keep your questions short, please. Yes, right there in the third row. QUESTION: Thank you very much. I am Toshiko Ogata with the Asahi Shinbun, a Japanese Newspaper. I have a question to Dr. Kim, and first of all, thank you very much for your kind remarks in Japanese. We all Japanese really enjoy your kind words. And first of all, my question is about disaster risk management, as you touched on. There has been a lot of talk on that issue throughout this meeting, but there were opinions or voices from developing countries which said that risk management, disaster risk management, would be important but there is a real need for food or health for them. So, it would be difficult for them to prioritize those needs. How can you strike a balance on those issues? And secondly, just quickly, on slowdown of the emerging and developing countries it is now clear that the emerging economies and developing economies face ripple effect from global crisis. How can you help those countries, how can you help those needs a World Bank President. DR. KIM: Did you say "ripple effect from food prices"? QUESTION: From global crisis, so financial crisis, European financial crisis. DR. KIM: Financial crisis? Okay. Let me start with disaster risk management. So, there are two parts of disaster risk management: There's the prevention and of course there's the capacity to respond. The effort that we're embarking on with the strong support of the Japanese government is to really tackle both of those issues. For example, the contrast couldn't have been more clear: Driving through Sendai, of course there was tremendous devastation along the coastline, but in the city, despite a 9.0 earthquake, the buildings were all standing, and that's because the building standards here are just the highest standards in the world. And contrast this with a country that I've worked in a lot, Haiti, everything collapsed with that earthquake, and it was actually a milder earthquake than the great East Japan earthquake, including the presidential palace. I mean, can you imagine? The presidential palace crumbled to the ground. So, the task is to now try to work into our building standards a different level of prevention. We understand very much that it's not easy, but we are supporting the poorest countries in going down that path. Moreover, once a catastrophe happens, the ability to respond quickly is usually not present. And so, we've set up something called catastrophe drawdown mechanisms, where the money we make available immediately--and so that, if there is a--it's like a form of insurance, and if there is a catastrophe they will immediate have access to it. So, both on the prevention side and in the response side, we feel that we're prepared. In terms of the overall effect of the global economic downturn, maybe Madame Lagarde can talk about it, but I can tell you what we're doing. One of the great stories of the last five to ten years is that the average growth in Africa has been 5 percent. Latin America has been growing and even with the crisis the growth has continued although at a lower rate, and many Latin America countries rebounded very quickly to the crisis. And so, our main concern is to ensure that the gains of the last ten years are not wiped out with this crisis, and we're doing it in many different ways, but the key for us is to continue to invest in developing countries and continue to help the countries down a path where it is not just responding to the crisis, but thinking in terms of long-term responses, as well. And when I say--is there's all kinds of ways of responding quickly. You can ban food exports, you can close down trade channels, and we think that's not a good idea, that they need to understand the fundamentals that help them have that growth over the last decade and continue down that path. MR. MILLS: Yes, right here. Thank you. QUESTION: Thank you very much. My name is Kim Chanam [phonetic], I am journalist. Would you know the [unclear 0:05:09] and I think of China and Korea and Japan, there are many, many problems. So, like European--EU--European Union, tradition of Asia Union I like--would you [unclear 0:05:41]-- DR. KIM: Well, it's what I--I'm sorry, I didn't understand. QUESTION: [In Korean – not interpreted]. DR. KIM: Well, so, it's--this is a very complicated question and, at this point, these are issues that have to be resolved by these governments and I--let me just say this: I think while there are conflicts now over territory and the like, I have to say that my own sense is that the forces that bind China, Korea, and Japan together are far more powerful than the forces that pull them apart, and I think that, in my discussions with leaders, all of them understand on a very deep level that increasing trade and increasing cooperation between these three countries is critical for the growth of all three. And I think that, over time, and maybe even very soon, the problems will be resolved and they will continue to find ways of cooperating more effectively. MR. MILLS: Yes, and to the back, please. Yes, yes. Thank you. QUESTION: Asit [phonetic] from Mint Newspaper, India. There have been concerns raised by many countries, including the G-24 recently, about the declining financial resources of the World Bank. So, Mr. Kim, do you--what exactly the World Bank is doing regarding this. DR. KIM: Well, we're actually in a very good financial situation. We've had very good financial management and I--at this point, there are lots of opinions about financial adequacy and we're actually doing very well. The management of the resources has been very good. Now, in a low interest rate environment, our income does go down. And so, if the low interest rates continue for a very long time, then I think we'll have to be creative. But right now, we're doing okay, and our capital is relationship to the demand. And so, we respond to the demand that we have. And right now, I would just say that we're keeping up. Any discussion of capital, though, has to include all of our member countries, because it's a very difficult and important issue. So, I don't think we need to have that discussion right now, but if we do, we'll be sure to have it with all of our member countries. MR. MILLS: Yes, sir, right here. QUESTION: [INTERPRETED FROM FRENCH] Thank you, I'm Bashir Sila [phonetic] from La Republique of Guinea Conakry. I would like to hear Madame Lagarde come back on the trust fund, the PRGT, what has constituted it and what will it be used for, and to what extent with the World Bank and the IMF be able to help countries with good natural resources to husband those resources and use them to their best. We in Guinea are working with the multinational corporations to have a cooperative approach so that we can use the proceeds to combat poverty. MS. LAGARDE: [INTERPRETED FROM FRENCH] Well, hello, and I will answer you in French, since I have that opportunity. As to the financing of the poverty reduction and growth trusts, it is a fund which provides concessional lending. The interest rate at present is zero, and this is provided to the countries classified as developing countries, so, where we have been able to have the first tranche, and this came from the windfall savings from the sale of gold, with more than $1 billion to finance this trust and we also have additional resources which were not scheduled but were able to be derived from the sale of gold, also to replenish and finance this PRGT trust, and this is something that enables us to have fairly clear sailing, financially speaking, for this trust. As to the husbanding of natural resources, we are working in terms of training and we are helping countries to manage their resources, particularly for the countries that you were referring to. MR. MILLS: Right here, in the second row. This will be our last question. QUESTION: This is for Mr. Kim. I am Amir Sakir from the Sandalidas [phonetic], Sri Lanka. Does the World Bank have a development agenda for Myanmar? DR. KIM: So, let me answer that question in several ways. First of all, we are very engaged in Myanmar right now. We're in the process of working with the government to really sort through the arrears there. We're working with them to have a full understanding of the nature of the arrears and we are very anxious to move forward, together with other donors. We are in Japan right now, and of course the Japanese are very eager to move forward, as are many other countries. And so, we are expecting that in the early part of 2013, we will have been able to sort through the arrears and put together a plan for clearing them and then move forward. In terms of a development agenda for Myanmar, it's really important to point out that it will be their development agenda. Myanmar has very clear ideas about where they'd like to go, infrastructural projects. I think that as in any country, the country has to take the lead, and we are already in discussions about what the priorities might be. I think there is a great concern about providing basic services to the people. And so, we will follow Myanmar's lead, and I would say this: The other thing that is very important, I have met with leaders of Myanmar, especially at the UN General Assembly meeting some weeks ago, and we're very impressed with reforms that they've gone through, but they are still a ways to go. I mean, there is still more to do and we are very supportive of the current government and we will be especially supportive as they go through with further reforms. MR. MILLS: Very good. Thank you very much. Show Less -
Transcript: Opening Press Conference Annual Meetings in Tokyo, Japan
MR. MILLS: Good morning, everyone. Thank you for joining us for our press conference with World Bank Group President Jim Yong Kim.President Kim will deliver some opening remarks, and then we wil... Show More + l be very happy to take your questions. I am sure you have been warned before, but if everyone could just turn off their cell phones and put their beepers on "vibrate," that would be great; and when you ask your question if you could please identify yourself and your news organization. President Kim.DR. KIM: Thank you for coming. I know many of you attended Annual Meetings before. This is my first, and I am looking forward to meeting with Governors and our stakeholders.First, let me thank the Government and people of Japan. The planning and work done and the hospitality extended to us has been just wonderful.I think it is especially meaningful, because this year marks the 60th anniversary of the strong relationship that the Bank and Japan have enjoyed over the years.Japan started out as our client in the 1950s and 1960s, borrowing a total of $863 million for 31 projects, including signature projects such as the "Bullet Train," the Kuroyon Dam, and the Tomei Expressway. Japan now is our second-largest shareholder and the third-largest donor to the International Development Association, the Bank's fund for the poorest.It is truly a success story and a remarkable show of generosity. But it doesn't end there. Japan has shared its knowledge and experience with the rest of the world as it evolved from a developing country to a developed country. I was just at one such platform, the Sendai Dialogue, yesterday. The Government of Japan has asked us to use the convening power of the World Bank to help them share the lessons learned on disaster risk management from the earthquake and tsunami in March 2011.Many nations take tragedy and improve. Great nations like Japan take tragedy and share lessons learned with others.We know the world is interconnected. Knowledge gained in one part of the world can apply to another. Things that are happening in one part of the world, such as in Europe, can have huge impacts in other parts of the world.We are in challenging times. Food prices remain high and volatile. Growth in high-income countries is weak. And developing countries, which have been the engine of growth, will not be immune to the increased uncertainty in the global economy.The economic announcements emanating in recent weeks have been sobering. Everyone is vulnerable during times of uncertainty, but especially the poor, who have few if any safety nets and resources and live from day to day.Our job at the World Bank Group now is to make sure the growth over the last five years that we have seen in developing countries in Africa and Latin America and Asia is not destroyed by further worsening in the situation.As part of starting a dialogue around barriers and solutions to ending poverty, the World Bank has launched a global online conversation, a "What Will It Take to End Poverty" campaign in the lead-up to these meetings, with crowd-sourcing ideas and comments through social media and video. It is a great way to drive a conversation around real, practical results, because ultimately, this is about results.I am asking our teams: What can we do to fundamentally change the arc of history to end absolute poverty more quickly than is currently predicted?It is our job to have a catalytic effect on poverty. The good news is that around the institution, the World Bank Group, the answer has been a very strong: Yes, we can bend the arc of history.That is why we came to work at the Bank. We want to fight poverty, and we want to make a difference in history. It has been my life's work, and I have worked in situations of great poverty. This organization has always embraced that work.I have been on the job for 104 days. While I am excited by how much the Bank has changed around openness and results and accountability, I believe the Bank can go further. We need to be more nimble and focused on delivery. During these meetings, I will not only share my thoughts on areas of reform, I will listen to the views of our stakeholders and look for ways to enact effective reforms.Thank you very much.MR. MILLS: Yes, sir; right here in the second row. There are microphones right in the audience.QUESTION: Thank you. Welcome, Dr. Kim, to Tokyo. So, first I want to ask you about the future hope for Japan in terms of the collaboration and the cooperation with the World Bank.Secondly, I just want to ask you about the relationship between the World Bank and emerging economies. As you know, the BRICS countries are now making the currency swap agreement within them, and also, there is a very basic idea of a BRICS Bank. So, clearly, they are making financing work within them by using their own currency, not by using the advanced economies' currency. But the role of development and crisis response has been played by IMF and World Bank since World War II, so what is your idea for the future of those kinds of global relationships? Will the World Bank and IMF coexist with them, and sometimes they might be competing, or will the World Bank and IMF will include them within and inside by increasing their money and their people? Thanks.DR. KIM: I think this meeting is a very good example of the kind of very effective cooperation that the World Bank can have with Japan. So, for example, we were at Sendai yesterday, and what I saw was a country that had faced just enormous tragedy, and the commitment of the government was that: In the context of our tragedy, we are going to do everything we can to help other countries, especially poor developing countries, get better at managing risk, and the focus is on several things.First, one of the things we know is that Japan has probably the best early warning system and the best prevention system of any country in the world, and still there was enormous damage.A country that I know very well, that I have worked in for years--Haiti--when they faced their own earthquake, most of the buildings collapsed, including the Presidential Palace.So the Japanese Government is working with the World Bank to try to find ways of improving prevention, that our buildings--not building buildings in flood plains. There are all kinds of things that we can do that the Japanese understand, I think, as well or better than any country in the world, and the explicit commitment is that we will work with the Japanese Government to help the poorest countries do better at prevention and then also do better at response once disaster happens.Another area of cooperation is on health care. So the Japanese are rightfully very proud of their health care system which provides universal access to very high-quality care. So there will be meetings today to discuss ways in which the Japanese experience in health care can be used to help countries all over the world build these kinds of comprehensive, universal access-type programs.So it is an ideal relationship in the sense that Japan continues to be a very generous donor, but what we are very excited about is the fact that specific areas where they have special expertise, we are going to help them spread those lessons to the rest of the world.And as far as the BRICS, you know, we still are deeply engaged with the BRICS countries. You know, many of the BRICS countries really don't need our money anymore, but what we find is that they consistently want to work with us because of our knowledge, because of the depth of experience we have in making projects work.The most recent example is that I just visited South Africa. And again, South Africa doesn't necessarily need our money, but we have agreed to build what we are calling a Delivery Knowledge Hub in South Africa.In other words, their biggest challenge right now--they feel that they have very good political processes, they feel that they have great policy, but they want to get better at actually implementing and delivering results for their people.So, what we are going to do is we are going to bring the breadth of our experience. The World Bank has what I could call "master practitioners" of development--people with wonderful academic backgrounds who have, for 10, 15, 20, 30 years sometimes, been working to actually deliver results on the ground, and they have experience in many, many different countries. So the breadth of experience we think will always be of value to the BRICs countries.So my sense is that we will always remain deeply engaged with the BRICS countries. And you can get some sense of the nature of my commitment to the BRICS countries by looking at some recent appointments.We recently appointed Jin-Yong Cai from China to be the head of our International Finance Company, our International Finance Corporation, IFC, our private sector wing; and we just recently appointed the distinguished scholar, Mr. Kaushik Basu, from India, who just finished his work as the Chief Financial Advisor to the Prime Minister of India. He is now our Chief Economist.So the presence of the BRICS in the Bank is profound, and my full expectation is that our relationship with them will only deepen over time.MR. MILLS: Yes, you in the front row, yes.QUESTION: Thank you. Marta Garcia [ph.] from La Nacion Paraguay. What is the scenario of food prices, and how is Latin America exposed to the situation?DR. KIM: So we are of course very concerned with food prices, and from our perspective, the response to the increases in food prices has to be multifaceted. So what we are doing immediately is making resources available to countries to support their--to provide an emergency capability of helping to purchase food.You know, the biggest issue for us is that increasing food prices often push the poorest families to having to make terrible choices--either feed my children or send the girls to school--and you have to choose between one and the other.So, through the provision of budget support-type loans and grants, and also through our emergency facility, we provide direct access to resources to purchase food.But that is really not the whole picture. What we think is even more important is to ensure that there is a long-term plan for agricultural sustainability. There was an agreement coming out of the latest--of the G20 Meeting--the Annual Meetings from last spring and also the G20 discussions, and we have now formed something called the Global Agriculture and Food Security Program.And so, while we will always stand ready to help with short-term needs for food security, we are also very engaged in trying to help each of our member countries build in long-term sustainability in their agriculture systems.MR. MILLS: Yes, sir, right there.QUESTION: Thank you. My name is Mo Khalif [ph.]. I am from the Islamic Development Bank Group.I would like to ask what strategy and programs does the World Bank have for supporting post-conflict countries that are emerging from conflicts in Sub-Saharan Africa, especially countries like Somalia, Ivory Coast, the Democratic Republic of Congo. Thank you.DR. KIM: As you may know, the subject of one of our recent World Development Reports was on fragile and conflict-affected states.I have a very special interest in and experience with fragile and conflict-affected states. I mentioned it earlier. I have worked in Haiti since about 1988.So I have shared with the development world deep frustration over our relative inability to lift fragile and conflict-affected states out of fragility.So I am going to make this a special part of my Presidency. We are going to move forward with much urgency, a great sense of urgency, in trying to find ways of lifting countries out of the state of fragility.It is significant that the very first country I visited as President of the World Bank was Cote d'Ivoire, and Cote d'Ivoire provides some very important lessons.First, this is a country that is about 40 percent of the West African economy. And it is also a country that had an educational system--artists, scholars--that was the envy of its neighbors. And then, 20 years of conflict have really set the country back.Now there is a President, President Ouattara, who used to be the Deputy Managing Director of the IMF, a very smart man who is deeply committed to his people. And when I visited Cote d'Ivoire, I saw right in front of me the nature of our task. There was a training program that I went to visit, and there, ex-combatants in the war were learning how to be electricians. And one young man stood up and said to me: "You know, this is great for me. I am learning how to become an active member of the society, to have a job, and it is great. But you know, my friends, my sisters, my brothers don't have this opportunity, and if they don't have the opportunity, when conflict happens again, they will pick up their arms again."So, for us, the task is urgent in the sense that we have to find ways of boosting economic growth. And in this particular case in Cote d'Ivoire, it was the cooperation of the government and our groups--both the World Bank itself, IBRD/IDA, and the International Finance Corporation, our private sector group--to provide the kind of training and create an environment in which small and medium enterprises can grow, in which smallholder farmers can get access to global markets.The task of building the economy so that ex-combatants can have jobs and see a different future for themselves was critical, and we have to move quickly.So we are aggressively searching for ways for us to be ever more effective at working in fragile and conflict-affected states.MR. MILLS: Yes, ma'am. Please raise your hand so the microphones can get to you.QUESTION: Good morning. Shahir Edriz [ph.] from Future TV Lebanon. Mr. Kim, in light of change in Middle East, what new policies does the World Bank have in mind, especially for the Arab Spring countries and regarding Syria?DR. KIM: Well, the changes that have happened in the Arab Spring countries I think also teach us critical lessons about development, and these are lessons that I have learned personally in the field over many years, but let me tell you what I think the most important ones are.First, I think that we have now--there is really no more question that if you have economic growth that is not inclusive, especially of young people, you are building instability into your system.Many countries and we at the World Bank for years have talked about inclusive growth, and that has never been made more clear. So I think that in many of the Arab Spring countries, there is a fundamental rethinking that is happening. For any country to grow in a way that is inclusive, in a way that is shared, you have to think about, for example, inputs. Are the educational systems set up so that young people can join the work force and get good jobs? This is what everybody wants, after all. Are the health care systems set up?Another major question in the Arab Spring is the participation of women. You know, we seem to learn over and over and over again that putting women at the center of development is critical. We learned a lesson from the Grameen Bank decades ago, that providing loans to women made the programs work. We learned the lesson again in Mexico and Brazil through the conditional cash transfer programs.And I think fundamental values like making sure that the inputs to spur further economic growth are in place, to ensure that economic growth is inclusive of young people, especially young women, that women in general are at the center of the development process--these are all critical issues. And you know, in countries like Yemen, of course, a very fragile country--I recently met with the President--there are so many things that we have to do to provide basic inputs, infrastructure development.So let me just say that there is no one-size-fits-all approach to the Arab Spring countries, but we are very much engaged with almost all of them--not yet in Syria--but we think that there are important lessons to be learned and that our engagement there is critical.MR. MILLS: Yes, perhaps we could go to the back, to the gentleman--yes, you. Thank you.QUESTION: I am from Myanmar. Good morning, Mr. Kim. Do you see any possibility to give more assistance to Myanmar from this Annual Meeting--and I mean debt forgiveness and bridging loans, proposals by the Japanese Government. Thank you.DR. KIM: Yes. I have met with officials from Myanmar around the UN General Assembly meetings, and I have to say that, like so many others, I am very encouraged by the reforms that have been taking place in Myanmar. There are still things to do--I mean, there is still more progress that needs to be made--but I am very encouraged by what I see in Myanmar.We have a team in Myanmar right now, and we are working with the government to really catalogue the arrears that have accumulated over the years, and our hope is that we can move forward very soon as a united global community to support the reforms and to help the people of Myanmar with things like health, education, infrastructure, and also to help Myanmar boost its private sector so that more businesses can grow in that environment.And for the sake of the people of Myanmar, I would simply encourage the Government to keep going in pushing forward important reforms.MR. MILLS: Yes, sir, right there.QUESTION: Good morning, sir. I am Jerome Radis [ph.] from the Philippine Star. Sir, it happens that several emerging markets, particularly in the ASEAN region, are very prone to disasters, to effects of climate change; so, moving forward, how do you see the World Bank in terms of its cooperation, actions, evolving in this region, and particularly in the Philippines, how do you see the actions of the World Bank work, operations, particularly in the Philippines? Thank you.DR. KIM: Yes. Let me address a couple of questions more generally.You mentioned that the Philippines especially is vulnerable to disasters and also to the effects of climate change, so let me start with climate change.You know, I am trained in science, and since becoming President of the World Bank, I have looked deeply into the data on climate change. And I have to say that I was surprised at--even in the last six months to a year, the data on climate change has become ever more frightening. Things that we thought would happen only with higher degree change in the average temperature are happening now. And as a scientist, I feel that it is my moral responsibility to be very clear in communicating the dangers of climate change.So, for the first time in history, the climate scientists declared that the drought that happened this past summer, that contributed to rising food prices, was the result of man-made climate change.Ninety-seven percent of climate scientists now agree that man-made climate change is real.Now, as a person trained in science, that is an almost frightening amount of unanimity. There are very few things in medicine, as a physician, that we agree 97 percent on.And so I think the question we have to ask ourselves is not simply is climate change real or not. I think we have to begin looking hard at what the world is going to look like for our children.I have a three-year-old son, and when I really dug into the data, when my three-year-old son is my age, he could possibly be living in a completely different world than we are living in today. If we get to where people think we are going to get, we are going to lose the coral reefs, the fisheries will change fundamentally, the water will rise. There are going to be changes that we simply have to face up to.Now, I think our task is to find ways of encouraging ever greater efforts at both mitigation and adaptation to climate change, but mitigation is really critical. Can we find ways of creating an enormous market for new technologies focused on mitigation of climate change? I think we simply must do it.So you are going to be hearing from me over the next six months and over the entire term of my Presidency--you are going to hear me talking a lot about climate change.Now, it is not--I am not going to just give you the Doomsday picture. I think there are tremendously exciting possibilities of what it would look like to live in a very low-carbon world, and we simply have to find those opportunities, and we have to encourage the best and brightest companies and countries to seize that opportunity and seize their--and understand that their path to economic growth could very well be engaging in finding new technologies and new approaches of mitigating climate change.MR. MILLS: Okay. We have time for one more question. Yes, ma'am, right there, please, in the third row; yes. Thank you.QUESTION: Mr. President, the World Bank has released a report in February saying that China should complete its--sorry--it is from Hong Kong, Hong Kong Economic Times--a report saying that China should complete its transition to a market economy and strengthen its private sector in order to achieve its goal of a new structure of economic growth.Given the large scale of China's economy and the world is still suffering in the crisis, in your view, how long do you expect the transition progress to take, and what challenge do you expect China to face during this transition? Thank you.DR. KIM: Well, right now, China, like just about every economy in the world, is facing particular challenges. We know that the volume of their exports has gone down. We know that their internal consumption has suffered recently.But what really encourages me about China is that we recently went through a process with them and produced a document called "China 2030," and in that document, we were very encouraged to see just how deeply the Chinese Government was willing to engage in a process that looked at their growth strategy, not over the next five years but over the next 10, 20 and 30 years. And there were really important insights. One was that--a recognition that internal consumption probably was going to be a major driver of economic growth.So the lesson for me is that every, single economy in the world has to now be focused on the medium and long-term prospects for growth. Because of the crisis, I think there is a tendency to only look at the short-term—you know, how to respond to the crisis as it might hit us--but I think evidence is very good that the countries that start thinking right now about medium and long-term competitiveness are going to do much better in the long run. And this is part of the work that we do. I mean, we have experts inside the World Bank who have walked with many, many countries through their own process of economic growth, and we stand ready to work with any government in the world, all of our member countries, in thinking about medium and long-term approaches to growth.MR. MILLS: Very good. Thank you very much. Show Less -
Remarks by World Bank President Jim Yong Kim in Tokyo Japan Opening Press Conference
Thank you for coming. I know many of you have attended Annual Meetings before. This is my first, and I'm looking forward to meeting with Governors and our stakeholders.First, let me thank the governme... Show More + nt and people of Japan. The planning and work done and the hospitality extended to us has been just wonderful.I think it's especially meaningful because this year marks the 60th anniversary of the strong relationship the Bank and Japan has enjoyed over the years.Japan started out as our client in the 1950s and 1960s, borrowing a total of $863 million for 31 projects, including signature projects such as the bullet train, Kuroyon-Dam and the Tomei Expressway. Japan now is our second largest shareholder and the third largest donor to the International Development Association – the Bank's fund for the poorest. It is truly a success story and a remarkable show of generosity.But it doesn't end there. Japan has shared its knowledge and experience with the rest of the world as it evolved from a developing country to a developed country.I was just at one such platform, the Sendai Dialogue, yesterday. The Government of Japan has asked us to use the convening power of the World Bank to help them share the lessons learned on disaster risk management from the earthquake and tsunami in March 2011. Many nations take tragedy and improve. Great nations like Japan take tragedy and share lessons learned with others.We know the world is interconnected. Knowledge gained in one part of the world can apply to another. Things that are happening in one part of the world, such as in Europe, can have huge impacts in other parts of the world.We are in challenging times. Food prices remain high and volatile; growth in high-income countries is weak; and developing countries, which have been the engine of growth, will not be immune to the increased uncertainty in the global economy.The economic announcements emanating in recent weeks have been sobering. Everyone is vulnerable during times of uncertainty, but especially the poor who have few, if any, safety nets and resources and live from day to day. Our job at the World Bank Group now is to make sure the growth over the last five years that we've seen in developing countries in Africa and Latin America and Asia is not destroyed by further worsening in the situation.As part of starting a dialogue around barriers and solutions to ending poverty, the World Bank has launched a global online conversation: a "What Will it Take to End Poverty" campaign in the lead up to these meetings. We are crowd-sourcing ideas and comments through social media and video. It's a great way to drive a conversation around real, practical results.Because ultimately this is about results. I am asking our teams – "what can we do to fundamentally change the arc of history to end absolute poverty more quickly than it is currently predicted."It's our job to have a catalytic effect on poverty. The good news is that around the institution the World Bank Group, the answer has been a very strong yes, we can bend the arc of history. That's why we came to work at the World Bank – we want to fight poverty and we want to make a difference in history. It's been my life's work and I've worked in situations of great poverty and this organization is embracing this fundamental mission.I've been on the job for 104 days. While I'm excited by how much the Bank has changed around openness and results and accountability, I believe the Bank can go further. We need to be more nimble and focused on delivery. During these meetings I'll not only share my thoughts on areas of reform, I'll listen to the views of our stakeholders, and look for ways to enact effective reforms.Thank you. Show Less -
Transcript: Media Briefing on the World Development Report 2013: Jobs
MS. TUCK: Hello. This is the Washington Press Briefing on the World Development Report. I am on the line live at a press briefing. Can people hear me? &n... Show More + bsp; [Responses in affirmative.] MS. TUCK: I would ask media colleagues who are on the line to please "mute" your devices because we are about to begin this briefing. It is starting a little late. We have had some technological snafus, but we are going to get this briefing started. This is Merrell Tuck. I am the Senior Communications Officer, Development Economics. This is an embargoed briefing for the World Development Report 2013 on Jobs, and this Report is embargoed until 7 p.m. tonight Eastern Daylight Time, which is 11 p.m. GMT. I am very pleased today to introduce Mr. Kaushik Basu and Mr. Martin Rama. Mr. Basu is on his first day as Chief Economist of the World Bank and Senior Vice President for Development Economics. He has a distinguished background and came from being the Economic Advisor to the Government of India, and he is on leave from being a Professor of Economics and the C. Marx Professor of International Studies at Cornell. Mr. Rama, who is next to him, is Director of the WDR and has a long background in economics in Asia as well as an expertise in labor economics, social protection, and other topics. I am also pleased to note that there are several co-authors of the World Development Report, members of the World Development Report team, who have worked on various chapters, and I am sure that during the question and answer session, they may want to chime in with some specific answers if you have detailed questions. The full report is on our online Media Briefing Center, and some of our handouts are just outside the door. I know we have a number of reporters, hopefully, on the line at this point, and I'm sorry for the delay in getting everyone connected, but without further ado, given that our time is now a little squeezed, let me open it up first to Mr. Basu, who is going to give us a bit of the tour de raison and describe the origins of the Report and why we chose the subject, and then over to Mr. Rama, who can give you some of the main messages and some key findings from the Report, after which we'll have a question and answer session. Thank you very much. MR. BASU: Thank you very much, Merrell. Friends, welcome to the launch of the World Development Report 2013: Jobs. I feel very happy that the release is the first major World Bank event that I am engaged in. This is a topic which is very close to my heart.For those who do not know, I joined the Bank a couple of hours ago, so if you are looking for someone with short tenure, you can do much better than me for this. As Merrell mentioned, this is a pre--embargo launch. They sound like contradictory terms, but nevertheless, do remember that until the evening, there is an embargo on this. As you will hear from the Director of this World Development Report, Martin Rama, a friend from a long time ago and a topnotch economist, so the Report was in very good hands, the jobs challenging facing the world is urgent and multifaceted. It ranges from improving aspects of the work people do to supporting the relocation of people to better jobs and to creating more jobs. Youth bulges in some countries are bringing millions of new jobseekers into the marketplace--into the labor market. For example, South Asia's labor force grows by one million people every month. As we know from history, the demographic dividend can be a great opportunity, but it is also a challenge--and I should know this, because I was still two months ago the Chief Economic Advisor in India, so I was handling some of this problem which was coming, rushing, onto the marketplace every month, as was just mentioned. While we talk of the demographic dividend in some nations, in parts of Eastern Europe, shrinking populations and an aging work force present starkly contrasting challenges. The world is a varied place, and if making economic policy for a nation is hard, it is even more challenging from 1818 H Street--I know we are in the adjacent building right now--where the aim is to keep track of the whole world; the focus is really on the world, especially the entire developing and emerging world. This Report makes a compelling case for moving jobs center--stage. It delves into longstanding debates about whether growth alone is sufficient to raise living standards and put people out of poverty. It finds that growth generally leads to better jobs, but jobs themselves are a driver of development. As women access paid work, their place in the household and in society changes. New technical and managerial knowledge is acquired through jobs connected to world markets and global value chains. And jobs can give people a stake in society, fostering trust and civic engagement and reducing the risk of conflict. This Jobs WDR has a champion in the World Bank's President Jim Kim, who spoke eloquently last Sunday at the Clinton Global Initiative about the importance of joint public--private strategies to foster investment, job creation, and growth. My predecessor, Justin Lin, was instrumental in choosing jobs as this year's topic. He may have had a premonition that I would be taking on front him, given my interest, so I thank Justin for this choice. He rightly viewed jobs as inextricably linked to structural transformation. Justin was clear that it was time for the Bank to take a fresh look at jobs since the global landscape is changing so rapidly. For example, agriculture's share in global employment is falling steadily at the global level as the services sector grows and as more and more countries urbanize. Yet country contexts vary widely, and small farms and small firms matter for the poorest people in the world, and the private sector and micro enterprises are immensely important for expanding prosperity and reducing poverty; and governments play a very major role in facilitating this process. This Report illustrates how jobs serve as the linchpin connecting living standards, productivity, and social cohesion, all vital ingredients for achieving inclusive growth. Because countries differ in the job creation possibilities available to them at any particular point in time, jobs agendas have a certain element of country specificity. Martin can--and I hope Martin will--tell you about this just now as he speaks. The Report draws on over 800 surveys and censuses to delve into the role of jobs in driving development. And really, as a researcher, until recently--a research outside--the information that came from the data of these WDRs was always a major attraction to the WDR. I am hoping that this will spur research, spur greater data collection, and especially in labor and employment, we really need this. And I hope it will prompt Ministers at the next Annual Meetings in Tokyo to put the jobs challenge center--stage. Let me now hand over the microphone to Martin to tell you about the Report's main findings. Martin? MR. RAMA: Thank you, Kaushik, and thanks for the kind words. Let me try to summarize a few of the points that this Report tries to make, but let me start by saying that this is only the second time in the 34 years of the World Development Report series that it deals with jobs, and there is a good reason for it to be dealing with jobs. When Justin Lin, our previous Chief Economist, and former President Zoellick decided to go in the direction of a Report on Jobs, it was very clear that jobs were the main preoccupation of policymakers everywhere. There was the global crisis. There was the Arab Spring. So there were several developments that were giving a centrality of jobs. The first way to think of that centrality of jobs is in terms of numbers. The numbers are staggering--200 million people unemployed; 621 million, by our estimate, young people leaving school and not working. And if you look at the demographics and what is coming ahead, over 15 years, a total of 600 million additional jobs will have to be created. So the numbers are staggering; the number of jobs is the first thing that strikes. But numbers is only part of the story. In many developing countries, social safety nets are too modest for people to be out of work for too long, and in reality, most of the poor work. They work long hours. They work multiple jobs sometimes. It is just that do not manage to make ends meet. So it is not just number of jobs; it is also what people do. All this is in a context of enormous opportunity. Technology, globalization, outsourcing, and overall the migration of jobs are creating enormous opportunities, but those opportunities may or may not be exploited. As Kaushik pointed out, most people in developing countries work in very small units--in micro enterprises and on farms--and the success of these very small units matters not just for livelihood. It matters for productivity. When the dynamics of small firms are good, as they are in many industrial countries, you have many successes in terms of productivity and innovation coming out of these very small units--if you think of big success stories coming out of a garage [unclear 00:26:05]--I will not try to say names, so it doesn't sound like trying to advertise for anyone--that happens. And it has happened in developing countries. But one of the challenges of developing countries is that there is a lot of churning, and a lot of the large enterprises are born large, thanks to connections and thanks to state support. So the success of these small units is a challenge that goes beyond living standards and goes beyond productivity; it is part of what kind of society is being built. As we worked on this support with our team, as we held consultations in two dozen countries with businesspeople, policymakers, trade union leaders, it became increasingly clear that jobs are not just the outcome of growth, they were not a byproduct of growth, that development happened through jobs, and there are very important dimensions of jobs beyond the earnings or the monetary income they can provide.So that is how--as you look at the Overview that has been distributed, you will see that we organized the contributions of jobs along three lines--what jobs do for living standards, what jobs do for productivity, and what jobs do for social cohesion--so three dimensions of jobs. What we found was that many of the things we were caring about in development were in fact happening through jobs on closer inspection--poverty reduction, of course--most people who get out of poverty in developing countries get out of poverty through their work, the scope for great distribution is limited; gender equality--paying jobs can be transformational in terms of the role of women in society; urbanization--urbanization is about people working in cities in a way where knowledge spillovers happen, and people learn from each other, and people make each other more productive; global integration is learning from the rest of the world through working connected to markets; and even conflict--to a large extent, one can see associations between having a sense of opportunity, having ways for advancement, for peaceful advancement, as one of the big deterrents of conflict. But as Kaushik said, which of these jobs have the greatest payoff for development depends very much on the circumstances. And what the Report does is to consider a typology of jobs challenges--one that combines the level of development--that is the easiest thing--but also the resource endowments--countries that are resource--rich, countries that are isolated--the demographics--and we have the entire range, from countries with youth bulges to aging societies--and institutions--countries have different levels of strengthened institutions. Based on that, we built a typology of eight jobs challenges that draw from agrarian economies all the way to aging societies going through urbanizing countries, resource--rich countries, and so on and so forth, and tried to identify clearly what are the jobs that are more transformational in those countries. The leads us to a series of recommendations in terms of policies for jobs. And again, it is not just policies for the number of jobs; it is policies for the types of jobs that have these payoffs--jobs in cities, jobs for women, jobs for young people, depending on the context. This approach to policies is a three--layered approach. There is of course a level which is the fundamentals. There are things that are needed everywhere, regardless of the jobs challenge. They are necessary conditions. They may not be sufficient conditions--macroeconomic stability; an enabling business environment; human capita; and the rule of law. And by the rule of law, we want to be clear--it is not just the property rights; it is also the rights that go with work. So this is the fundamental layer. Then there is a layer that is labor policies. And of course, labor policies matter, but one of the conclusions of the Report is that they probably matter less than what the heated debates around labor policies around the world may suggest.What we found is that there are two extremes to be avoided. One extreme is of course the absolutely lack of interventions that leaves people without voice and without basic access to social protection. At the other end are the interventions that clog, that prevent the growth of employment in cities and in jobs connected to world markets. And in between there is a range where policy has to be. But that range varies a lot depending on the country, so one of the conclusions of the report is that there is not a single recipe or a single mode of labor interventions that matters--and when I say "labor interventions," that is the regulation, that is also the way that bargaining or representation is organized, it is insurance, and it is active labor policies like public works and training. Finally, perhaps the most interesting part in terms of policy is at the tip of this pyramid that has the fundamentals and then the middle layer of the labor policies, and that is to be able to set priorities so that there is job creation but there is also creation of those jobs with very high development payoff depending on the circumstances. And those may be very different in an agrarian economy or in an economy with high youth unemployment or in a formalizing country. Then, throughout the Report--and I will finish with this--throughout the Report, chapter after chapter, we end up by what we call a difficult question. So we use this framework to challenge somewhat the conventional wisdom on jobs. Just to give you a flavor of the questions, they are of the sort: Growth strategies or job strategies? Or "Skills or jobs; which comes first?" Or "Competing for jobs?" Or "Protecting workers or protecting jobs?" On each of them, there is conventional wisdom, and we find that there are very good reasons for the conventional wisdom, but there are also [unclear 00:32:18.] There are also circumstances in which we find that a nonconventional response may be warranted. So we hope these questions will be a teaser for readers, and when the embargo is lifted at 7 p.m., they are very easily accessible as self-standing pieces, four-page pieces. Let me stop there as an introduction to the Report. Thank you. MS. TUCK: Thank you very much, Martin. Now what I'd like to do is collect questions in batches. We might start here in the room and see if there are two or three questions here, and then we'll make a round in the next series of questions to see if people down the line want to ask something. I would also ask that when you ask your question, please signal to whom you would like to pose the question and your news outlet. Thanks, and we'll get started. Yes? Anyone else? QUESTION: Should I take the mike? MS. TUCK: Yes. I'm sorry. Yes, indeed, take the mike from its stand in the middle of the room, or you can just go to the middle of the room. So, one, two, and I guess Diana Gregg after that. QUESTION: I'll start. Sudeep Reddy with The Wall Street Journal. A question for Martin. You mentioned the skills issue. Do you have any sense of how much of the global jobs gap can be filled simply by higher aggregate demand and how much, on a relative basis, needs to be other changes such as improving skills and education and underlying infrastructure? MS. TUCK: Okay.Yes, sir, over here. QUESTION: Robert Schroeder, International Investor. I'd like to sneak two in here. One is-- MS. TUCK: I'm sorry. One question. We have at least 20 journalists on the line. QUESTION: Okay. As you project forward 15 years or more, are you taking into account, and can you give us any guidance in terms of how you see technology, robotics, also displacing workers? We see some great growth in some countries. Thank you. MS. TUCK: Thank you. Diana? QUESTION: Hi. I am Diana Gregg with BNA. For Mr. Rama. When you were talking about jobs that are transformational, and some are more than others in different settings, since I haven't had much time to look at the Report, I was wondering if you could just give a couple of examples of what you are talking about there. MS. TUCK: Okay, thanks.Why don't we start with these three questions, and then I'll open up the lines to see if folks who are remotely participating have questions. Martin, I think these were mostly for you.MR. RAMA: Thank you. Thank you very much. First, on the question of the role of skills and education, you also mentioned aggregate demand and infrastructure as examples. Let me start with the part on aggregate demand. We discussed some of it under macro policy, but keep in mind that this is a report about development, so it is more mid-term and long-term, and we don't go into much detail on the level of, say, budget deficits or monetary accommodation that is needed. But we do find on this difficult question on skills or jobs that, in general, we tend to have a reaction that what is needed when there is a problem of unemployment or mismatches is skills. And it is true that skills matter, and they matter especially in two circumstances. The basic level of skills without even getting started on jobs is very difficult. We see that, for instance, in the case of agrarian economies, where there has been a lot of progress in terms of the coverage of education but not in the educational attainment, and that gets in the way of really getting started. Skills are also very important further down the line when countries need to really move up the ladder. We see that in urbanizing countries that have been good at integrating themselves in the world economy but remain very dependent on one type of export--say, Bangladesh and garments, and how you move from 80 percent of exports in garments to doing something else. There, skills matter. But in the range in between, we find that jobs can be a driver of skills. They pull skills in the sense that the availability of employment opportunities encourages people to acquire more skills. They provide skills. There is quite a lot that is learned on the job. Experience counts on average for one--third year of education per year of experience. There are basic behaviors and norms, quality and reliability, that are learned through the job. So we tend to be a bit skeptical about the responses to major problems such as unemployment being just in training. Countries can sometimes have massive training programs. And the other issues you mentioned, like infrastructure and creating the conditions for employment generation, may be more important. On robotics and productivity, that is clearly something we address, and we look at what has happened with manufacturing in particular, where the demand for manufactured goods has been growing steadily, but the productivity in manufacturing has been growing so fast that, overall, over more than a decade, the number of jobs in manufacturing worldwide is stable, is basically stable. Of course, this is not to say that because of high productivity, there will be no jobs. People will be doing other things. But it raises the question of where those jobs will be. Especially when you have jobs that have high payoff beyond their own jobs because they have the kinds of spillovers in terms of productivity that matter, there is a potential in those cases to have situations of global competition for jobs--where will the jobs in manufacturing go? And that matters not only in thinking about industrial countries and developing countries. What we have seen in manufacturing is jobs migrating to East Asia. It will also happen now, in the next stage; as China's costs go up, by some estimates, some 85 million jobs in manufacturing may migrate out of China. And where will they go? Will they go to Sub-Saharan Africa? Will they go to South Asia? This combination of very rapid productivity gains, even with high demand and even with a growing global economy, may create these situations where people may be competing for some of these jobs. Examples of jobs that are transformational--let me just give three, one along each dimension: living standards, productivity, and social coherence. On living standards, there is quite a lot of microeconomic evidence, micro data--so, rich studies using individual data that we review--on which we base these assertions. But there is quite a lot of evidence of how, when women bring a higher share of household income, decisions at the household level change; investments in education and health in children change. So jobs are transformational in that respect. It is not just how much money comes to the household; it is how it enters the household. On the productivity dimension, there is quite a lot of evidence on how firms operating in the vicinity of foreign companies, which tend to have better technology and management skills, become more productive. So there are spillovers that come from jobs that have different levels of productivity to the local partners who learn from this, or sometimes learn just because workers learn on the job and then move to other companies. On the social cohesion side, there are interesting studies, for instance, one in Indonesia looking at people who had jobs or did not have jobs in 2000 and then again in 2007. And you see that people who were out of a job and gained a job become more engaged in their societies and more often members of associations, tend to trust more other people, while the opposite is true for people who lose their jobs. So, in each of these cases--and these are examples, and the Report covers nine ways in which jobs can be transformational and for which we have some good evidence--jobs can go beyond what they do for the person who holds the job and have a broader impact on society. MS. TUCK: Thank you, Martin. Now I'd like to invite some questions for people on the call. Does anybody have any questions, and if so, please identify yourself by your name and your news organization and to whom you want to ask a question. So let me open it up. QUESTION: Good morning, and good afternoon here in Paris. My name is Jean-Pierre Buris [ph.], and I am a journalist with Radio France International. My question is for Martin. I have not heard you talk about Sub-Saharan Africa, where the problem of growth without creation of jobs is a crucial one. What would you say, for instance, a government such as the Government of Mozambique, where the growth is around 8 or 9 percent a year but without creation of jobs? What do they have to do? MS. TUCK: Okay; good question. Let's see if there is another one from someone down the line. [Pause.] MS. TUCK: Anyone with a question on the line? [Pause.] MS. TUCK: Okay. If not, let's see if anybody in the room has another question. Yes, sir; if you could come to the mike. QUESTION: Hi. Howard Schneider with The Washington Post. My question is whether, in looking at this, you see any lessons or any conclusions to draw about some of the programs that have been pursued in the developed economies that use the sort of classic, government--funded stimulus programs. Are they really good for job creation in the long run? And secondly, vis-à-vis Europe, where you have already urbanized, already fairly productive developed economies seeming to be heading toward a situation of sustained high unemployment, what do they need to do to transform the job outlook? MS. TUCK: And Howard, who is your question for? QUESTION: Martin, I suppose, unless Basu-- MS. TUCK: Okay. Maybe they can both try to tackle this. And Dani, yes. QUESTION: Dani with Xinhua News Agency.Thanks for doing this. My question is for both of the experts. What causes are behind the high unemployment rate situation in many countries? To what extent can government fiscal and monetary policies help to reduce them? Are some employment structural ones difficult to tackle? Thank you. MS. TUCK: Okay, thanks. Maybe we can start with you, Kaushik, if that's okay, and then Martin will elaborate. Thanks. MR. BASU: Sure. Let me take on the question from Howard at The Washington Post. Government stimulus is, I think, extremely important right now, and it really relates to the question that Dani also asked. So, fiscal policy, monetary policy, to create greater demand is something unavoidable. At the same time--and I am actually just pulling in the two sets of questions--I believe that part of this problem that you are seeing is structural, but part of this is episodic to do with a crisis currently, a sovereign debt crisis in Europe, which is feeding to this. For the episodic part of it, yes, you cannot with monetary and fiscal policies, but as far as the structural part goes, I think we have to think in terms of longer-run movement of labor from one sector to another. Part of this happens on its own; there are mechanisms through which incentives get created, and workers move from one sector to another, but it may also need at the level of government incentives and skill development so that people can move on. And just to clarify what I am referring to, as this is a tricky and difficult point politically, as the world is coming together, the global labor market is really tending to be a common pool, which means that workers are coming under competition from segments of the labor force that earlier, they did not have to think about because it was just too difficult for what was located far away to work in the same pool, whereas now it is not difficult. And this may require industrialized country workers to develop kinds of skills which are at the higher end, where they move on to the space where there is greater challenge from the world, and they take that on better. So, yes, it has to be--I am just treating both of these questions together--you have to take on both fiscal and monetary policy on the one hand and structural changes to tackle this problem. MR. RAMA: Thanks, and let me add--start with the question from Fi [ph] on Sub-Saharan Africa and Mozambique. In fact, Mozambique is one of our case studies. For Egypt--cases in the typology of--just challenges, we chose one country in which we had local experts, we went into much more depth as to what was going on, and we used Mozambique as the example of an agrarian economy. I would want to start by clarifying the job creation issue, and these are countries where people work. So, it's not open unemployment, it's generally not the main issue. And when people talk about jobless growth, what they mean is that there is not enough creation of jobs that look like modern jobs, the kind of urban jobs, wage employment jobs. So, in that respect, there is a tension between--very clear in the case of Mozambique, between market growth, in general people working, most people are farmers and they are working, but not enough of the [unclear 0:45:03] will absorb--will create this dynamic that goes from people moving from rural areas to urban areas and the whole economy becoming more dynamic. In this kind of decision, what we see is a double challenge: One, because most people still live and work in agriculture is to increase agricultural productivity. There are issues related to land in agrarian and, in fact, it can be agreed that there are no examples of sustained poverty reduction that did not start with an increase in agricultural productivity. And of course, because the kind of modern agriculture is highly productive, but it takes some time to get there. So, in the short-term, one of the challenges is how to make smallholder farming more productive, which some countries have struggled with. If you take a success in terms of agrarian economy, it was Vietnam in the 1990s. Vietnam managed to accomplish phenomenal increase in agricultural productivity on smallholder farming. So, that's one part of the equation, but it's only one part of the equation. The other part is that you need to get dynamic cities going. You need to have cities connected to the world so that they can be places where people go because there is hope and not just because they despair and they don't know what to do. So, we see that as the policy responds in cases like many in Sub-Saharan Africa. The questions on lessons for developed economies, the report has in several places a framework which we believe is relevant for all countries even if the report itself focuses mainly on developing countries. And I want to give just two examples of--give you questions that are, we believe, valid. One is the question on the growth strategy or job strategy. There, what we use as an example to illustrate this is what Korea did in 2010. Korea had a situation that was arguably similar in many ways to what Spain was confronting, the sense of having a labor market that was extremely dual, with some people having jobs for life and some people being in short--term context. And with the global crisis coming, it became clear that the impact could be devastating.And so, Korea, which had abandoned jobs-related planning during the initial period after the East Asia crisis, adopted as its main strategic document towards 2020 a jobs strategy, and a jobs strategy involving policies across all ministries and across all sectors. So, this tension of when you go for growth and when you go for jobs and how you organize policies is something that is relevant everywhere. The other--give you a question which we see relevant is the one on protecting workers or protecting jobs. And there, the conventional wisdom and our normal response is that protecting workers is better, meaning, by "protecting workers" having safety nets, but allowing the reallocation of people because that's better for creative destruction and for growth. But there are times or circumstances when that conventional wisdom does not necessarily apply to those kinds of massive decoupling between job creation and job destruction, as has happened in this recession. Or there are times when viable jobs, due to a shock, are at stake and these are jobs that have an impact on other jobs, so the situations where you can have depressed regions or ghost towns because of the disappearance of jobs that are otherwise available. In both cases, we found good examples, and let me just use the first one, what Germany did in terms of--[unclear 0:48:40] policy in terms of providing support for firms to retain their workers on lower pay and lower hours was one way to address the tensions there. While the report is not on industrial countries, we think that it has some types of--can be useful. As for the question form Xinhua news, high unemployment rate may have many different sources, and who the unemployed are can also be very different. You have countries with the same unemployment rate but, for instance, with a composition of long-term unemployment that is very different. In developing countries, we have some countries with very unemployment rate, and in one way, what--the situation we have seen in many of their countries have been helping in countries with growth was remarkably successful and still unemployment rates we will have. The kind of policy response is very different depending on the type of unemployment one is having and the causes of unemployment. In countries with high youth unemployment, in our topology, we used Tunisia as our case study. But in general what we find is that it is not so much a problem of skills, it's not so much a problem of education, it's not so much a problem of mismatch. It's a problem of lack dynamism in the sectors that could absorb these young people, young people where there have been limited competition in areas related to the Internet and new technologies. And so, the response in those cases is very much related to having competition in public markets so the sectors that have the dynamism can absorb young people. One successful example of that was Slovenia. Slovenia had a very high youth unemployment rate, and through integration in the European Union and competition in public markets they accomplished that, but the answer will be very different if your problem is long--term unemployed who are at the older end of the workforce and cannot easily be re-equipped or retrained. So, there is no, I think--no easy fix for this type of unemployment. MS. TUCK: Thank you, Martin. And for those of you who access that report online, that Germany example is on Page 280. There is a box on Kurzarbeit. I'm not sure I pronounced it right. MR. RAMA: I'm not sure how to pronounce it, yet. MS. TUCK: Okay. Let's see if there are any other questions on the line, and then we'll invite maybe one or two more questions here in the room.Any other questions on the line? [Pause.] MS. TUCK: Doesn't seem to be. Okay, in the room here. Yes, sir, here in the... QUESTION: Hello. My name is Patrick Byrd [ph] with German newspaper Frankfurt Algemeine Zeitung. I have two short questions, if I may. One, if you're talking about international collaboration which might be deployed for bringing for the jobs worldwide, and I'm really wondering what should that because, until now, I would have thought that labor market policies and job creation is much more a national task instead of an international task. And the second question I have is, if you look at this tension between labor market standards in developing countries and these claims coming out of [unclear 0:52:00] in industrial countries that people are--yeah, if you look at the cheap product that people--that they have produced that will need lower wages and the bad labor market standards, do you see any need for industrialized or developed countries to put pressure on these developing countries to raise these standards, or is that detrimental to the economic development and to the labor market prospects in these developing countries. MS. TUCK: And who is your question for? Okay. Let's see. Any other questions? Okay. Sure. QUESTION: [Unclear], again, International Investor. When I add up the numbers that you first gave us, I come up with almost 1.5 billion people that are either unemployed, not looking, or are just without jobs and prospects for them. By our estimate, that means that robotics and technology could displace a couple hundred million more in addition. My point is, we're going to see an awful lot of people in a slow-growth global environment, still in this state 15 years from now. Are we going to see--there is one other difference: We see a world where travel--it's much easier for people to migrate to the jobs. You've already discussed this. So, the question is, are we going to see more anti-immigration legislation or cases spring up in an effort to protect labor within these nations? Are we going to see any more efforts to talk about population controls of some sort? MS. TUCK: Okay, thanks. Both very good questions. So, why don't I turn to you two and try and handle those. Thanks. MR. BASU: Thank you very much. You know, the scope for a global collaboration today is there in virtually every economic field. The need is there. The world is a very, very open place. In the context of labor, labor standards, one has to be careful that there are two aspects to labor standards. One is, by virtue of a country being poor, labor is going to be cheaper over there, because everyone is getting a lower income. About that, there is nothing much to be done. You don't want to place a minimum wage level which is so high for these countries that no one gets employed. On the other hand, there are practices which are acceptable practices by any global standards, those you do need global pressures and collective work to keep a certain level of standards. You know, one of the things that has been talked about and there is small literature--instead of thinking of a single standard for anything in pertaining to labor, a single standard will be meaningless because to a rich country like Germany, what will apply to Zimbabwe will be totally different. So, people have talked in terms of ratcheted labor standards. So, you have labor standards but it is ratcheted to the per capita income level of the country. So, there are innovative ways of thinking of that and, indeed, collaboration is something we should think about. And just touching on that, this is not just collaboration in terms of labor market policies, but even macroeconomic policies which were being talked about earlier. In today's world, one country creates money,that country, yes, stimulates that country somewhat, but it also stimulates other countries, because the borders are porous and money flows around. So, we need to collaborate on a range of policies, more widespread than I think most people realize, and that tends to globalization, I'll use that expression. MR. RAMA: And, in fact, I wanted to pick up exactly where Kaushik left off. We see three areas in the report for collaboration especially important, and the first one is exactly what Kaushik was referring to is, on rights--there has been a range of different attempts to improve compliance with rights. And by that, meaning not the level of income but the egregious violations of human rights. But some have been less effective than was hoped for. There is only so much that one can achieve through pressure on countries and their compliance related to work, like, for instance, linking trade with labor agreements work in some circumstances, but they also have run the risk of threatening the creation of jobs in these countries, and jobs are precisely what is transformational. So, there is a limit to what can be accomplished through job pressure. On the other hand, there are very good experiences of how partnerships that also increase productivity can succeed in improving compliance. There is one program and, in general, we have refrained from referring to any Bank Group programs in the report or to any specific initiative internationally, but let me refer to this one because it is not just World Bank, it is the IFC/ILO Better Work Program, which is a program where it's not just setting standards and putting monitoring mechanisms, it is also helping firms learn how to reach the managerial level that make it work for them. So, that's one area where there can be collaboration. Second area for collaboration is cross--border investments, and I'm not referring to portfolio investments but to productive investments. There has been quite a lot of liberalization on investments in manufacturing, but services is an area where there is a lot of potential to see progress in terms allocation--global reallocation that is, if well-managed, could be beneficial to everyone. But there is much more that could be attempted in the liberalization of the investment of services than has been tried in terms of investments in manufacturing. And there are good reasons for that, since services are complex sectors that also require regulations, opening up in finance brings the issues of supervision, opening up in services trade opens up issues, including those related to social impacts, as well as in terms of the effect on small shops. So, we see there an area where there is a prospect for working and having better regulations so that liberalization is indeed beneficial for all the parties and not just liberalization alone. And then, the third area is migration, and that also relates to your question. Migration has the impacts on both sending and receiving countries, and has the impact, again, if we think of living standards, productivity, social cohesion, has impacts across all three fronts. And there, one should not take for granted that they are all positive, they can be positive, but they can also be negative. But these impacts happened on both sending and recipient countries, and having migration policies just being decided on one side tends to be inefficient because the enforcement of the provisions for migration is more limited. So, there is scope--an area where we see scope for collaboration is in bilateral migration agreements where both parties have an interest in enforcing the terms of return migration, movement of one level of migration to the next, and so stakeholders on both sides can help with the enforcement. Will there be a backlash against migration? Well, to remember that, for now, migrants are 3 percent of the world population. So, we are not talking about large numbers. There are 200 million migrants, of which 90 million are migrant workers. It can be very large in some countries but overall is not such a big number when you compare it to the 620 million young people who are neither working nor selling, indeed, that work is--it's a relatively small number. But again, this is an area where global agreements are more difficult and a few conventions on migration and very few ratifications of those conventions, but perhaps bilateral agreements, Canada and Mexico have one, New Zealand has a Recognized Seasonal Employer agreement with the Pacific Islands, which are working in the sense that migration works for both sides. People go overseas, then send remittances, then in turn they go back to the countries with new business ideas and the flow of migration is enforced by both sides when one is in the interest of both sides. Thanks. MS. TUCK: Okay. Thank you. I don't know if there is maybe one final question. We're right at 11:30. Any other final question? We have organized a transcript for the briefing. We're supposed to get that by this afternoon and I would remind folks about the embargo, 7:00 p.m. tonight. And again, the full report is available on our website and we should have more copies of it by the end of this month, and also it's a treasure trove, I would say, of data. There's some interesting new labor statistics at the back of the report, and please let me know if you have any questions. The team working on the press materials would be happy to help you. So, without further ado, I'll close this embargoed meeting. Show Less -
World Bank Group President Jim Yong Kim Remarks at the Opening Plenary of the International AIDS Conference 2012
"Ending AIDS and Poverty"Your Excellencies and honored guests, ladies and gentlemen, colleagues and friends,As we look back on the history of this epidemic, it is hard to say that there is any o... Show More + ne moment when the tide began to turn. Because the truth is that we have been turning back the tide of AIDS, step by painful step, for 30 years.And at nearly every turn, it is the activists, and their communities, that have led the way.It was activists and communities who devised safer sex, promoted condom use, needle exchange and virtually all the behavioral prevention we use today.It was activists who transformed drug development and regulatory processes, and involved patients in clinical research, cutting drug approval times in half in the global north.It was activists in Durban in 2000 who began to push for access to antiretrovirals in the developing world and who kept pushing and are pushing still for them to be affordable and available to everyone who needs them, everywhere.And it was activists whose deep understanding of the communities most affected by AIDS has spurred a movement to promote the health and dignity of gay men, sex workers and drug users that has now reached every corner of the world.It was TASO in Uganda, ACT UP in the US, TAC in South Africa, Grupo Pela Vida in Brazil, the Lawyers Collective in India, the Thai Drug Users Network, and countless organizations like them that have woven together one of the most extraordinary movements the world has ever seen. Remember what ACT UP stands for: the AIDS Coalition to Unleash Power.This has been a movement that came together in anger, that thirsts for justice, that is fundamentally about unleashing the power of human solidarity, and that for 30 years has forged alliances to expand that solidarity and be ever more inclusive.A movement that has grown to include pioneering governments from Brazil to Botswana, UN agencies, visionary donors and donor countries, and groundbreaking NGO treatment programs; a movement that has led to efforts such as 3 by 5 and the creation of the Global Fund and PEPFAR.Thanks to this collective effort, we have seen remarkable gains in the fight. Prevalence has fallen steeply in many countries, new prevention strategies show great promise, and more than 8 million people are on treatment today. As we gather here in Washington, we look towards the end of AIDS as something that is actually within our reach, a vision that to me and many others here seems less idealistic, less outrageous, than 3 by 5 did, just a decade ago.Today marks the first time that a President of the World Bank Group has addressed the International AIDS Conference. I'm here because I know what this movement is capable of achieving. I'm here to bring you both a pledge and a challenge.I pledge that the World Bank will work tirelessly with all of you here to drive the AIDS fight forward until we win.And I challenge you to join me in harnessing the moral power and practical lessons that the AIDS movement has produced to speed progress against that other global scourge, poverty.As the leading global development institution, the World Bank is concerned with all aspects of development, all the dimensions that are united in the eight Millennium Development Goals. We know that development challenges are interdependent. And yet our approaches to these problems often remain fragmented, limiting our vision and our results. That's why the idea of bringing lessons from AIDS to poverty reduction is crucial. By breaking down siloes between these two efforts, we begin a process that will go much farther. Ultimately we'll multiply the flows of knowledge and experience across all development sectors, accelerating progress on education for all, maternal and child health, environmental sustainability, and so many of our other goals.Let me describe how the World Bank is applying its distinctive strengths to AIDS.The World Bank's mission is to build prosperity and eradicate poverty in countries around the world. The Bank supports countries with financing, but also with knowledge and analytic capacities that are often just as important. In 2000, under President Jim Wolfensohn, the World Bank worked with many of you here to put the first billion dollars on the table for AIDS. Today, in health, the World Bank's comparative advantage is in systems building. Our health sector strategy is focused on supporting countries to create health systems that deliver results for the poor and that are sustainable. We also help countries build social protection systems that can mitigate the impact of events like economic shocks and catastrophic illness, including AIDS, on families and communities.As an example of our health systems work, the World Bank is helping governments implement performance-based financing, which gives local health facilities financial rewards when they increase delivery of essential services and improve quality. In Burundi, after a performance-based financing model was introduced nationally to strengthen the AIDS response, the number of HIV-positive pregnant women receiving antiretrovirals for the prevention of mother-to-child transmission increased by 65 percent in just one year.We know that HIV is more than a medical problem. AIDS has devastating economic and social impacts on individuals, families and communities. That's why social protection is also a critical piece of a comprehensive AIDS response. Every year, worldwide, 150 million people are forced into poverty by increased health expenditures and lost income due to illness, including AIDS. To date, the Bank has helped 40 countries scale up social safety-net programs, including health insurance schemes, old age pensions and cash transfer programs that supplement the incomes of poor families. Our goal is for all countries to be able to implement basic social protection programs tailored to their specific needs.Success in the AIDS response depends on partnerships. On a very personal level, I am committed to strengthening the World Bank's multilateral alliances with UNAIDS and the Global Fund; our partnerships with UN technical agencies, including WHO and UNICEF; and our collaboration with PEPFAR and other bilaterals. Moreover, strong partnership with civil society that delivers results for the poor will be a signature of my presidency. We'll build on the lessons of the Bank's MAP initiative, which recognized that civil society voice is critical to make programs work for poor and vulnerable people.In 2008, the overall proportion of people in the developing world living on less than $1.25 per day was 22 percent, less than half of the 1990 figure. The Millennium Development Goal of halving the incidence of extreme poverty has been reached. But today 1.3 billion of the world's people still live in absolute poverty. This is intolerable. We can and must end absolute poverty in our lifetime. To do so, we'll need to share know-how across the boundaries of institutions and development fields. And we'll need to use that know-how to build systems that can sustainably meet human needs.The AIDS fight has shown the world how to turn the tide of a massive assault on human life and dignity. We have a responsibility to ensure that lessons from AIDS inform and improve our efforts to tackle other social goals, above all poverty eradication. In some places, this is already happening. Governments and their partners are applying AIDS knowledge and resources strategically to beat the epidemic and simultaneously drive a broader anti-poverty agenda. Rwanda has used AIDS money and technical expertise from the World Bank, the Global Fund and others to build up its widely admired health insurance system, the mutuelles, and to expand secondary and vocational education. In Rwanda, AIDS resources are contributing to the strategic investment in human capital that has helped drive the country's remarkable economic progress. From being an exception, this approach can become the rule. This will be a leap forward in our capacity to build systems and deliver results. As Rwanda shows, successful countries have tackled AIDS as a systems problem. They've responded to the epidemic by strengthening delivery systems for key social goods, and they've integrated those systems to address people's needs comprehensively.Building systems is what the World Bank does best. We have decades of experience making systems work for all, but especially the poor. I want the Bank to lead the world in joining systems knowledge with clear moral values to help countries solve their toughest problems.Two features of the AIDS fight with clear lessons for poverty work are openness and innovation. The countries that have achieved the greatest successes against AIDS have been open about their epidemics. They have shared information widely, challenged stigma, and encouraged public debate. They have refused secrecy and dispelled irrational fear. There are many lessons here for the way we fight poverty. As we at the World Bank continue to tackle corruption, increase transparency and freely share our data, we're taking these lessons from the AIDS fight ever more fully on board.Looking back over the last 30 years, we see that the AIDS response has generated continuous innovation. From the acceleration of drug approval protocols to task shifting within medical teams. From fixed-dose drug combinations to the hiring of accompagnateurs to deliver community-based services.We'll need more innovation in the years ahead to finish the fight against AIDS. As President of the World Bank, I want to infuse that same appetite for innovation into the struggle for inclusive economic development. I'm convinced that if the practical know-how and the spirit of the AIDS movement can be brought to the poverty fight, there is no limit to what we can achieve.On the front lines of the 3 by 5 initiative, I saw daily how HIV implementers were generating innovative solutions to practical problems: from supply chain management to human resources to creating space for community voice in program evaluation. But have we done enough to organize, analyze and apply this knowledge? Have we brought it to bear in every setting where it could be transformative? All of us here know that a difficult fight against HIV lies ahead. We have come to Washington because we are determined to win that fight. We see our task through the lens of solidarity that has inspired the most ambitious AIDS activism and that we all feel today in this room. From the start, as they fought this epidemic, the activist pioneers knew they had to tackle the structural forces of prejudice, social exclusion and economic injustice. Their ambition to end unjust human suffering was as vast as the suffering itself. All of us here today must be just as ambitious.The AIDS movement has rekindled values that show the kind of global development we're striving for: development grounded in solidarity, courage, respect for the dignity of all people, and an unrelenting demand for justice.If we unleash the power of these values, we can overcome any obstacle in the fight for economic and social justice. If we unleash the power of these values, we can leave to our children a world free of poverty and AIDS.We can end AIDS. We must end AIDS. The challenge we face is great. But as I look out at all of you today, I can actually see the end of AIDS. Thank you, let's make it happen. Show Less -
Transcript of Media Roundtable
MR. MILLS: Good afternoon, everyone. Thanks for joining us for this roundtable. My name is Richard Mills. I know many of you; welcome. ... Show More + I want to set up a couple ground rules to begin with. First of all, we're going to have this session embargoed until the end of the session, so that should keep all the--maybe some of the hurried typing down to a minimum. The other thing I would just ask is that you--when we call on you, just repeat, for the record of the transcript, your name and organization, and then we can go into questions. I handed out a statement and I will turn it over to President Kim. President Kim?MR. KIM: Well, thank you very much for coming and I want to welcome you here. I'm taking over at the World Bank at a pivotal moment, as we said, and we're very encouraged by some of the things that we saw over the last two weeks, what happened at the G20 meeting, the commitment of middle-income countries to continue lending to the IMF at levels that were very encouraging. Also, what happened this past Friday in moving toward a stronger financial and banking union in Europe was all very encouraging. Our mission here at the World Bank is to boost prosperity, especially in low- and middle-income countries, and to eradicate poverty. We have just an outstanding staff. I've been working in developing countries all my life and have known from the ground just how outstanding World Bank staff are. We are prepared to continue the dual mission of boosting prosperity in the world and eradicating poverty and to do so with great energy, especially in this very difficult time. And let me just stop there and ask for questions.MR. MILLS: Okay. Anyone who has any questions? Danny? DANNY XUFENG: Thank you. Danny Xufeng from China Xinhua News Agency. Thank you for all [unclear]. President Kim, today you are in a World Bank tie – a green tie – and you are the first non-Wall Street banker and non-Washington politician to run this agency. How would your background help you to continue modernizing this global agency in this multi-polar world, and [inaudible] your predecessor, will your Chief Economist will also be from a developing country? Secondly, to some observers, you are a good golf player. In your golf bag, you have a "putter" of global and medical experience. But how would you improve your [inaudible] in managing such a big agency as well as [inaudible] of tackling economic and trade issues? Thank you. DR. KIM: Wow. Just a few things. Let me just say that I bring two relevant experiences to the World Bank. First, I've been working in development all my life. I've actually had extensive experience with World Bank employees in the field tackling difficult problems. And so, I feel I share the passion for development and poverty alleviation with the World Bank staff. I come into the organization feeling very close to them in terms of why they came here. I've heard over and over again from World Bank staff that I've met over the past few months, we came into this institution because we have passion for development. I share that with them and I think that's important that the World Bank President has worked on the ground on the issues, many of the issues, that the World Bank tackles.Secondly, many people have noted that the World Bank's greatest contribution may be as a knowledge institution. We have a combination of experience on the ground, and that experience on the ground isn't just being in developing countries, it's actually investing, not only with governments, but in the private sector. So, the World Bank has people who have actually experienced doing projects, bringing resources to the ground. Secondly, the World Bank has enormous amounts of data and information. Let me just take a moment to thank my predecessor, Bob Zoellick. I mean, his openness initiative was revolutionary. It's leading the way for all multilateral organizations to be more open, and I welcome that. It's critically important. It's time to do that. So, we have more data than any other institution about development. Moreover, this is like a huge academic institution. There is a tremendous amount of research and analytical firepower in this organization. So, this combination, on-the-ground experience, data, and analytic capacity is unique to the World Bank. And so, having come to this job from a knowledge institution now helping to run a knowledge institution that has the capacity and has a history of providing critical information where it's needed, I feel that those things have prepared me. Now, as for your golf metaphor, I don't think that there's anybody except maybe Tiger Woods and a few others who do everything well, and the history of this institution is that people have brought to the institution certain experiences and expertise. Let me say that, in my--in the last few months, I have been just extremely impressed with economists, development experts, sociologists, others who are in this institution who bring a huge variety of expertise that will be very helpful as we go forward. So, I certainly don't bring absolutely everything--one of the tools that you might want. On the other hand, no one does, and I feel very confident in our staff, in our leadership, to be able to deal with all of the critical problems that we'll face. Thank you.MR. MILLS: Howard. MR. SCHNEIDER: Howard Schneider, Washington Post. Thank you for doing this. A couple things: First off, on this sort of nuts and bolts of transition, I wonder if you can sort of give us a sense of what you've been doing the last two weeks and specifically who you've been relying at U.S. Treasury, whether you're bringing folks from Treasury over with you to Bank staff. And secondly, you know, one of the things that when you look at President Zoellick's comments over the last year, it's clear he's been very, very concerned with conditions in Europe, and I'm wondering whether you have come to share his concern about that as it might affect the developing world, or whether you feel the Bank's mission really is more on sort of longer-term, systemic, development-type problems rather than the euro crisis.MR. KIM: So, a couple of things. The transition has been run by the President's office here, but also I've been working very closely with people in U.S. Treasury who were working with me during the campaign. So, this is an enormous amount of--this is a huge organization and so there's an enormous amount of information to digest. So, what I've been doing is meeting with almost every single one of the Vice Presidents. I've had multiple meetings with the Managing Directors, with the CFOs. So, over the past two months, what I've been doing mostly is meeting our leadership. So, I can tell you that I'm just extremely impressed with the leadership of the World Bank. Many of them have been in the organization for years and years and years. And again, what's been most exciting is that every single one of them have come here because of the mission. So, I've been reading lots and lots of documents in preparation for the G20. Of course, there were a tremendous number of documents, many of them prepared by World Bank staff, and I've been going through them. Now, in terms of our specific position, President Zoellick brought a series of extraordinary experiences and an expertise to the Bank and I bring, frankly, a different set. So, am I concerned about the euro zone crisis? Of course. I talked about it a little bit in the beginning. I am encouraged by what happened over the past two weeks, but we are monitoring the situation very carefully. The primary mission, I think, of the World Bank in this crisis is to make sure that low- and middle-income countries are protected. Since 2008, we have invested over $300 billion to support lower- and middle-income countries to weather the crisis. So, what are the things that we do? We make sure that children can stay in school, we make sure that health clinics stay open. We've done a lot of work on food security and not just in terms of providing food in times of crisis, but moving toward more sustainable approaches to agricultural development. So, the primary mission, of course, is to just ensure that global growth continues and that, in the process, we support countries to provide basic services that everyone needs. Often, what happens in crises is children get pulled out of school, health clinics close. We've done a lot to make sure those things do not happen. MR. SCHNEIDER: And anybody from Treasury coming over to your staff?MR. KIM: Yeah, well, we—Navjet Dhillon who was a former Bank employee and had worked with Jim Wolfensohn among others had been at Treasury for a while and, with his experience at the World Bank, he'll be joining me in my office.MR. MILLS: Okay, any other questions? Lesley? MS. WROUGHTON: Hello, Lesley Wroughton, from Reuters. I want to get back into the issue of we see today manufacturing in Europe going down, China going down. We've already seen effects on developing countries through trade finance and a tightening of Bank flows. When Mr. Zoellick came in, he immediately increased funding to countries and said that's the way to stop it. I was wondering how the Bank would be positioned currently under the finances to move quickly and to move with such big amounts to help countries if there is this extreme worsening of global conditions. We know that the World Bank's finances may be declining over the next few years. So, the question is, how do you raise resources like that? One of the issues has been raising finances through the World Bank actually offering its services to developed countries, i.e., Greece. I was wondering how your feeling is about that.MR. KIM: Let me say, we've been having lots of conversations about the financial strength of the World Bank, and what I've found is that the Bank is in a very strong position. We've had, over the last few years, a successful IDA replenishment, we've had a capital increase. Bob has done a great job in putting the Bank on very solid ground. Now, we feel prepared to tackle crises as they come forward. Now, of course, it all depends on the scale and the severity of the crisis, but the World Bank is in very sound financial footing. Now, in terms of our work in high-income countries, as a person who has been focused on how to tackle social problems in developing countries my entire life, I am very impressed with the quality of our staff and the range of insights we have on everything from fiscal policy, getting--understanding macroeconomic trends and getting fiscal policy right from country to country to health care to education, all the way down to our International Finance Corporation has been very effective in investing in the private sector in developing countries. So, all the way from fiscal policy down to investments in the private sector, I am very impressed with the expertise that we have of, could that be applicable and useful to high-income countries as well? I think so. Now, you have to understand that we only go into countries when we're asked, but I feel the kind of expertise we have could be relevant in many, many countries in the world, including high-income countries. MS. WROUGHTON: So, you're not ruling out if Greece or the EC asked you to, that you would move--you would go--you would happily help Greece.MR. KIM: Well, I've talked to our staff--and again, my job as a leader is to really understand our staff, our capabilities and what we can do. And my staff feel that they have relevant experience that could add value. And if that's the case, and if we were asked, I would be open to the possibility. IKKI YAMAKAWA: Ikki Yamakawa with Asahi Shimbun. So, [unclear 14:25] little country and the [unclear], emerging countries that are hoping to increase their involvement and contribution, both in power [unclear]. How are you going to [unclear]? And also, secondly, I want to ask you about, you know, [unclear] should come from [unclear] and also how--do you have any will to increase the transparency of the election process within five years of your term?MR. KIM: In terms of middle-income countries and the lower-income countries, you know we are very much involved in both, middle-income and lower-income countries. Our commitment to supporting the lower-income countries through IDA grants and loans and also with expertise. And, in fact and increasingly, the IFC has been making more and more private sector investments in the poorest countries. So our commitment to lower-income countries is unshakeable. Of course, it's a primary part of why we exist. But in middle-income countries, I think it's important to know that more than two-thirds of the people living on less than $2 a day live in middle-income countries. Our mission is about eradicating poverty, so we must remain engaged with middle-income countries. Moreover, in working with middle-income countries, we are learning again so much about how to tackle the most difficult problems, and so we will remain engaged in both, and I think there are very good examples of how we've had successful work in both. Let me just say something about the election. So I was very proud to be part of the first contested election in the history of the World Bank. Issues of share and voice in/and election, these are issues that I look forward to discussing with the Board and with the Governors. These are very important issues and ones that affect all member countries, and it's not for me to decide as President how this will happen. These are issues that will require full discussion, and I look forward to those. JEREMY TORDJMAN: Hi. I'm Jeremy Tordjman. Before leaving office, your predecessor, Mr. Zoellick cancelled a loan made to Bangladesh and I was wondering if you would think that is it an appropriate way to address some of the critics made to the WB especially about corruption.MR. KIM: I've been following the situation closely, and Mr. Zoellick and the senior staff have informed me fully about the decision. The Bank has a sterling record in fighting corruption. The Bank was the first to raise the issue of corruption in the 1990s and has a no-tolerance policy for corruption. The discussions with the government of Bangladesh started in September. Even toward the very end, there were extensions given so that there would be what we would think of as an appropriate response; and not seeing one, we cancelled the bridge project. Now, we're very concerned about the well-being of the poorest people in Bangladesh, but what I must stress is the Bank's position is that we do not tolerate corruption. JEREMY TORDJMAN: Do you think it was appropriate?MR. KIM: Yes. I do think it was appropriate.MR. MILLS: Any other questions? Yes, sir. KAZUHIRO HARUKI: Hi. My name is Kazuhiro Haruki, Kyodo News [unclear]. And Tokyo will host Annual Meetings in October [unclear 18:45]. How [unclear] Annual Meeting and what is your expectation for Japan [unclear]?MR. KIM: So, I'm very much looking forward to my visit to Japan. As you may know, I visited Japan during the campaign and had a wonderful meeting with the finance minister and other leaders there. I have--we're preparing for the meeting. I think it's going to be an important meeting at an important time. I know that Japan has been a very strong supporter of the World Bank from its inception, and we value Japan as a member country very, very much. I think it's important that my first meeting, in fact the first annual meeting, will be held outside the country. It's part of a tradition here at the World Bank, and I think it's an important one.MR. MILLS: Sandrine. SANDRINE RASTELLO: Sandrine Rastello with Bloomberg. So, besides Japan and that trip for the Annual Meetings [unclear], do you plan to get personally involved in certain projects like the IDA replenishment or do you have a planned visit to your [unclear]? And my second question there's been a lot of talk about the World Bank doing too many things and not finding, you know, what it is as an institution. Do you plan to refocus the Bank or do you plan to continue being involved in everything from the environment to education and [unclear 20:28]?MR. KIM: Let me say, I am very--I'm a practitioner, a development practitioner, and I have been for most of my adult life. So, I'm going to take great interest in a wide variety of projects that we work on, and I hope that I can help in the success of some of these projects. In terms of focus, one thing to remember is that we are very much a client-driven organization. In other words, we have to respond to the priorities and the aspirations of our member countries, and that [is] a critical piece of our work going forward. Now, having said that, I think it's also very important to have strategic discussions with not only inside the Bank among our staff but with the Board of Directors and the Governors. These are important questions about where the Bank should focus its energy, where the Bank brings the most value, and how we can organize our activities going forward. So, I think it's critical to have strategic discussions but also critical for us to be responsive to the aspirations of member countries.MR. MILLS: Yes, sir. MR. FERNANDEZ: [Unclear] Fernandez from the Spanish newswire EFE. I wanted to know your views about Latin America, the [unclear]. How can the World Bank help the region?MR. KIM: As you may know, I have worked for many years in Latin America. I've worked in Peru and Chiapas in Mexico. Also visited many, many countries and worked technically on health-related issues. So, I think it's remarkable that the resilience, as you said, during the economic crisis was remarkable and also very encouraging. I think that the support for the poorest countries, of course, will continue through IDA and other mechanisms. But I think it goes back to the issue of high-income countries and what our role might be in some of the high-income countries. There are many situations in which what our member countries want most of all is our technical expertise, and, you know, there are so many sources of capital these days in the world that we know that often that's not going to be our role but that our role will be to provide technical assistance.We have learned an enormous amount from countries like Mexico, for example. Mexico's experience with conditional cash transfers, the expansion of that program in Brazil. These are important lessons for many countries in the world. And so we will continue to engage deeply, of course, in Latin America, the poorest countries through IDA. And the middle-income and emerging countries, we both will provide technical assistance but also look forward to learning from them as they have weathered the last few years.MR. MILLS: Yes, sir. I think we'll take our last question. Okay. I'm Gwang-ik Jang of Maeil of South Korea. There was--you mentioned Korea's success story as a model of success with [unclear]. How does the experience of Korea's economy's success affect your ability to carry on the World Bank [unclear]?MR. KIM: Well, I think, on a very personal level, when I came to this country, many people thought that Korea was--and the word that was used was "a basket case"--impossible for Korea to develop. And the reasoning was--seemed fairly clear: no natural resources. Even--there was even talk of Korea having cultural deficits so that they couldn't develop. And so now, look what happened. What it gives me in tackling this new job is an unshakeable optimism that any country can go down the path of development, and so I bring that optimism with me every day to work. I spoke about it today at a meeting with staff. I think for those of us who are fortunate enough to work in an institution like the World Bank, every day we walk through the door and we read on the wall "Our dream is a world free of poverty," I think that it's critical for every single World Bank employee to bring with them every day the sense of optimism, that no country is a basket case, that we have to work with every single country to try to help them down the path of development, just as--that's been my experience, and I feel that deeply in my bones.MR. MILLS: Okay. We'll take one last question from Jeff.JEFF: Jeff from Financial Times. If I could pull up on a previous question [unclear 25:49] for a bit more. You said that the Bank now has a very strong financial capital position. Is the Bank in position to accelerate lending if, in fact, the global economy does go into a much deeper, prolonged downturn as some of the recent indicators are indicating. And if it is in that position, is that something that you will consider doing or are considering doing [unclear 26:09]?MR. KIM: So the financial position of the Bank, as I said, was very strong. It--you know, this is my first day and it's one of the things that we're going to be talking about. We feel that, especially in lower-income and middle-income countries, we are ready to respond to support those countries.And let me clarify an earlier comment when asked about Greece.We're not talking about the World Bank investing massive amounts of finances in higher-income countries. I think where we feel like we can add value is in the technical support around some of the structural issues that some countries are facing. And so for lower-income and middle-income countries, we're prepared; we're ready to support countries as needed, and of course, as I said, we are monitoring the situation very carefully, and we'll respond as countries come to us to ask for assistance.MR. MILLS: Very good. Thank you all very much. Show Less -
Keynote Address on Connecting to Climate Event at the Newseum, by Caroline Anstey, Managing Director, World Bank
Working with others we've launched an Open Data for Resilience Initiative, a global effort working in 25 countries. An example is haitidata.org, which makes risk assessment data produced followi... Show More + ng the 2010 Haiti earthquake available for anyone to download and use.Similarly, Open Data for the Horn of Africa now facilitates open access to geospatial information, data and knowledge sources about the ongoing response to the drought in the Horn of Africa.My point is simple: Farmers, fisher folk, and others around the world are using data and technology everyday to deal with increasing uncertainty brought on by climate change. In Nepal they are using PDAs – computers that fit into the palm of your hand - to collect data regarding changes in food security situations. In Chile, farmers can use low-cost mobiles to receive SMS messages about weather forecasts, market prices and even the latest cultivation practices.In India, fisher folk can use mobile phones to receive messages about weather forecasts, optimal fishing zones, and market prices. And in Laos, Cambodia and Vietnam, mobile phones are used to collect data for flood forecasting and forwarded to a central early warning system, with the information then sent out via traditional media.The Search for Solutions – Engaging and Empowering YouthSo that's the technology part of the transformational combo. Where do youth come in?You are the ones who can think out of the box. You are the ones who can take convoluted conference communiques and begin to make them real, not in conference rooms where agreements stumble or disappoint, but on the ground, and in local and virtual communities around the world.And your numbers are growing. In Africa alone, 70 percent of the population is under 30. And there are already more than 400 million cell phone users. That transformative combo of technology and youth is not tomorrow's world. It's today.Connect4Climate initiativeThe Connect4Climate initiative – also one of the sponsors of tonight's event – is using the power of partnerships, participation and social media to include the voices of local youth in the global climate change conversation.With a coalition of more than 140 partners and a Facebook community of over a quarter million, Connect4Climate is reaching out to young people – to listen, acknowledge, and respond to their ideas, to help amplify their voice. Across multiple social media channels, Connect4Climate reaches up to 6 million users each week.In the run-up to the UN Conference on Climate Change in Durban last December, Connect4Climate used a combination of social media and a photo and video competition to getAfrican youth aged 13 to 35 to tell their personal climate change stories through photos and videos.340 rural young people in Somalia were trained on climate change and its effects on agriculture, energy, forests, gender, health and water. They were given cameras to document how climate change has affected their lives and these photo stories depicting deforestation, drought, and health issues were entered in the C4C Photo/Video Competition.Youth from all 54 countries on the African continent participated – they want their voices – and their stories – heard. And we need to listen.ConclusionLadies and gentlemen, As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that can sustain or destroy our future.We know that economic development during the next two decades cannot mirror the past two: poverty reduction remains urgent, but growth and equity can be pursued without relying on policies and practices that foul the air, the water, and the land. The powerful combination of technology and people power can help us avoid the pitfalls of the past.Over the course of this evening you will hear from others on what they are doing to "swing into action"! It's an impressive catalogue. Enjoy! Show Less -
As Prepared for Delivery, IFC's 14th Annual Global Private Equity Conference
IntroductionIt's a great pleasure to join you today for IFC's 14th Annual Global Private Equity Conference in association with the Emerging Markets Private Equity Association, or EMPEA. The story... Show More + of this conference is emblematic of how the world economy has changed: Fourteen years ago, a small group met in the basement of IFC to discuss the prospect of private equity in developing countries. Today, there are more than 800 people here, from nearly 60 countries: institutional investors; public and pension funds; private investors; endowments and family offices; senior investment professionals; chief investment officers, and directors from leading fund managers around the world, as well as representatives from development institutions and government agencies. Plenary sessions and roundtable discussions cover a range of issues over three days – the global economic outlook and regulatory trends, of course – but also non-financial risks, infrastructure, SMEs, mezzanine…and intriguing markets beyond the BRICs to Turkey, Palestine, Africa, and frontier markets. The success of this conference is in large part because of the enormous potential of emerging markets: over the past five years, developing countries have provided two-thirds of global growth. This conference also reflects the terrific partnership between Lars Thunell and the Private Equity Funds group at IFC, and Sarah Alexander and her team at EMPEA. Together, they've made this conference one of the leading global forums for private equity. So I want to thank them for their hard work and their leadership. I also want to thank an impressive set of participants: sponsors; panelists; speakers –and all of you. Yet I want to add a special word of thanks for Lars. When I came to the Bank in July 2007, it was a time of trouble. Frankly, meeting Lars was like having a breath of fresh air: He was steady, sensible, constructive – clearly an excellent executive, committed to the private sector's role in development, and doing interesting things. Together, we came up with some innovative ventures both to help developing countries during tough times, and to move IFC even closer to the cutting edge of private sector development in these exciting markets. He always offered good counsel, fine judgment, common sense, and friendship – for which I'm grateful. Keeping the Focus on Growth and Structural ReformLast month, at the Spring Meetings of the World Bank Group and IMF shareholders, much of the focus was – understandably – on macroeconomic stability. This attention to the macroeconomic picture is necessary – but it's not sufficient. Extraordinary monetary policies buy time – but they don't solve the fundamental problems. As my friend, Deputy Prime Minister and Finance Minister Tharman of Singapore said at our Spring Meetings, investors will accept short-term costs if they perceive good returns over time. All countries – developed and developing – need to focus on the structural reforms – the microeconomic policies – that will drive future growth. Structural changes are essential to enhance productivity, competition, and innovation for developed and developing countries – whether it's so that Europe can restore its economic performance, or China can avoid the so-called "middle income trap" and meet its challenges in the coming decades. Structural reforms are important for the United States, too. In practical terms – and for investors like you – what does structural reform mean? It means strengthening the fundamentals of productive supply-side growth in all sectors – agriculture, manufacturing, services. It means investing in infrastructure – especially through public private partnerships. It means private sector development – the engine of innovation and job growth: markets; investment; small and medium-sized businesses; as well as focusing on jobs training and skills. It means expanding markets – through both the hardware and software of trade: regional integration; ports and infrastructure; lowering the costs of formal, informal, or logistics barriers. At the same time, structural reform means investing in green growth and energy efficiency – because "growing dirty, cleaning up later" is not a viable option. Environmental degradation cannot be the price for short-term growth. Structural reform also means investing in human capital: Efficient and affordable safety nets – because only 1 out of every 5 people in the poorest countries has any form of social protection;Basic financial services – because more than half the world's poor, almost 2.4 billion people, are "unbanked";Basic nutrition and health – because without these essentials, people cannot begin to achieve their potential; andQuality education, connected to training, which leads to better jobs, more innovation, and greater gains for all.Investing in people means tapping the energies and genius of all: young people, the elderly, and not least girls and women – an under-realized source of growth everywhere. Importance of PartnershipsYou can play an important role in making all this happen. Countries need private equity more than ever to push forward the structural agenda. But to be most effective, the right partnerships are critical – to seize opportunities, open up new markets, share market knowledge and learning. We've seen this at the World Bank Group with IFC's Asset Management Company, or AMC, which Lars and I created in 2010 to supplement IFC's traditional model of raising money in bond markets and then investing it. The idea was for the AMC to tap sovereign wealth funds, pension funds, and other institutional investors that are looking to increase their exposure to emerging markets, and that are interested in accessing IFC's transaction pipeline, investment approach, and track record of superior returns. Now ably led by Gavin Wilson and a fine team, the AMC considers investments in spaces where IFC-supported private equity fund managers are not active, either because of the size of the investment or the riskiness of the sector. As the AMC makes profitable returns for its institutional investors, these investors are likely to feel more comfortable investing in smaller private equity funds and frontier markets. The AMC now totals over $4 billion – almost $3 billion of which had little previous exposure to Africa and other less recognized emerging markets. Building on the success of its $1 billion African, Latin American, and Caribbean Fund, last year, the AMC established an African Capitalization Fund that invests in commercial banking institutions in northern and Sub-Saharan Africa. This Fund has already made investments in Ghana and Malawi. AMC offers a great model for a win-win partnership between capital, experience, and expertise. When I asked one pension fund manager what attracted him to AMC, he told me: We now know developed markets are risky, too; we see growth potential in developing markets – but we don't know where to invest. IFC does. And we can learn through this partnership. Opportunities: Doing Well and Doing GoodWe have seen the positive impact private equity can have. IFC has private equity investments of about $3 billion across 180 funds in emerging markets. We estimate that these investments alone have helped create about 300,000 new jobs over the last 10 years, many of them for women. We see much more potential for the future. Private equity also increases the wealth – the savings – of pension funds and other institutional investors who assist many millions of savers, small and big. Increasingly, institutional investors want their investment capital not only to do well, but to do good. Private equity can help companies grow, hire more workers, raise productivity. But at the same time, private equity can also be a powerful driver of change: raising standards; fostering growth; promoting new opportunities for businesses and individuals; helping to overcome poverty; bringing hope. Let me give you some examples. China Environment FundTsing Capital's China Environment Fund: Founded by Don Ye in 2000 to focus on clean tech investments, the Fund adopted a triple bottom line, balancing social, environmental, and financial returns. At first, portfolio companies were resistant to the Fund's focus and approach. After all, government regulations were weak. Investors would say, "We give you the money, and you give us a return. Why are you talking to us about welfare, child labor, the environment, and insurance?" Deal flow was slow for the first fund: it only raised $13 million from socially responsible investors. Now, Tsing Capital's investors are telling a different story. The company has become a market leader, generating three digit financial returns. The latest China Environmental Fund, in which IFC invested $20 million, had a target size of $350 million. What's the secret of Tsing Capital's success? Certainly persistence on the part of Don and his team. But they also chose the right partners. From the outset, Tsing Capital performed social and environmental risk screening on companies during due diligence before it invested. The company checked standards against national laws and regulations, but they also made thorough use of IFC's performance standards which provide guidance on how to identify – and avoid – risks and impacts. If Tsing Capital identified any excluded activity – potential deals were dropped. If they found risks, they were corrected. Tsing Capital worked hand-in-hand with companies to improve corporate governance and upgrade management capability and strategies. Their hard work has paid off. Today, Tsing Capital is raising environmental and social standards across the industry, and transmitting those standards into multiple start-up companies. It has twice been honored as a corporate citizen in China, and Don Ye has been recognized by Business Week as one of China's 40 most powerful people – alongside President Hu Jintao and Yao Ming of the Houston Rockets! It's a great success story. It shows how commercial concerns linked to environmental and social standards offer win-win opportunities. It demonstrates how private equity can be a powerful driver of growth and change. Pragati India FundOne of IFC's recent investments, the Pragati India Fund, offers another good example of doing well and doing good. The fund is a pioneering investment vehicle that will focus on economically under-developed states in India. These are areas where it has traditionally been a challenge to attract private investments – but where the changing political, social, and economic development dynamics offer new opportunities that are largely untapped. Sixty percent of Pragati's investments target the country's 8 poorest states. IFC is investing up to $20 million in the new fund. The idea is to help Pragati provide growth capital to start-ups outside of major urban centers – adapting successful business concepts to small- and medium-sized enterprises in low-income states and rural regions. In India, small- and medium-sized businesses typically receive only 5 percent of all private equity capital, forcing them to rely on high-cost informal borrowing. The Pragati Fund is designed to fill that funding gap and support the development of India's financial infrastructure. As a co-investor, IFC can help increase the impact of the project – bringing not only capital but management expertise, which can help strengthen operations as well as environmental and social governance. Just last month, Pragati India Fund made its first investment – in Jash Engineering Limited, a manufacturer of customized engineering goods for the water and waste water infrastructure sector. Jash is now expanding into manufacturing equipment for water treatment plants, and even generating clean power from residual water of the plants. The company is looking to move into municipalities across India. With India's government pushing for world class water treatment facilities, investing in a company like Jash offers real opportunities – to help these enterprises access finance, create jobs, promote inclusive growth, and contribute to cleaner, healthier water and energy for hundreds of thousands. Supporting the PoorestI hope more fund managers and investors will look for these types of opportunities – and look for them beyond BRICs and within frontier regions. IFC is increasingly shifting its focus in this direction. Since 2007, over half the funds supported by IFC have been in the poorest countries supported by the World Bank's International Development Association, or IDA. IFC's equity returns over the last 10 years in low-income countries, compared with IFC as a whole, provide a compelling case for investment. Africa has been IFC's top performing region over the last 10 years, with a real rate of return of 25 percent compared to 18 percent for IFC worldwide. Sub-Saharan Africa is also the region where IFC's investments in private equity funds have grown the most, and where we have more private equity partners – a total of 38 – than anywhere else. In FY11, IFC committed new investments in 5 funds in Africa, and so far in FY12 we've invested $70 million in 3 funds. We already have plans for 2 or 3 more funds this fiscal year – including 8 Miles Fund, a pan-African private equity fund backed by Bob Geldof. 8 Miles plans to make investments in growth areas across Africa such as agribusiness, consumer and retail health, telecommunications, banking and financial services. The target fund size is $450 million, with $15 to $40 million investments in 10 to 12 African companies with above-average potential for revenue growth and job creation. Investors partnering with IFC include the United Kingdom's CDC, the African Development Bank, and Vital Capital Fund. J.P. Morgan will provide fund administration services. Private equity is already changing the face of Africa – and funds such as 8 Miles recognize that there's huge potential to do more. The fund's name refers to the fact that, at their nearest points, Africa and Europe are only eight miles apart. For much of Africa, however, the distance is far greater. Countries dealing with fragility and a history of conflict are home to the world's poorest – the Bottom Billion, as Paul Collier pointed out in his 2007 book, though today, it's more on the order of 1.5 billion. In 2010, the World Bank focused on these countries in our World Development Report on Conflict, Development, and Security. One of the conclusions of that report was that private sector development is a key factor in infrastructure and logistics, local banking, service delivery, and job creation – to show early results as well as longer-term growth. Access to capital and finance is vital for putting these countries on the path to economic stability. But, of course, most fund managers aren't ready to provide the risk capital and strategic advice that private equity provides. That's why IFC conceived of SME Ventures, an initiative to support local private equity fund managers and raise equity and advisory services funds in low income – and particularly post-conflict – countries. Today, we're putting private equity to work is some of the most underdeveloped areas of the world. Take Central Africa – a region rich in minerals, but with a history of fragility and instability. Private equity groups have traditionally focused on larger investments in the extractive industries. Yet it's small- and medium-sized businesses that create the most jobs in any economy. So two years ago, IFC committed up to $12.5 million to the Central Africa SME Fund. Managed by XSML, a Dutch SME fund manager, and Cenainvest, its partner based in Cameroon, the fund aims to mobilize a total of$25 million from other development finance institutions and the private sector. With offices and a team on the ground in the Democratic Republic of the Congo and the Central African Republic, the fund's focus is on making investments and providing advisory services to the local business community, to help African entrepreneurs build sustainable businesses that create jobs and income. The funds' first investments in the DRC have been in a healthcare clinic, including new medical training for staff; a call center; and a food processing company for baby cereal, where the fund is also helping improve the company's financial management and developing audited financial statements. In the Central African Republic, the fund is preparing to invest in an internet service provider. The Central Africa SME Fund is also looking ahead. So, for example, it's conducting a market study on fresh fruits for a fruit producer in Kinshasa, and helping prepare a business plan and financial projections for a cassava mill run by smallholders. Through the SME Ventures initiative, IFC has also committed equity to funds for Liberia and Sierra Leone; Bangladesh; Nepal; and we are currently working on a fund for Bhutan. And just last month, IFC made its first private equity investment in Haiti. When Haiti was hit by a major earthquake in 2010, we knew that the Bank Group's support to help the country recover, rebuild, and break its dependence on aid must include bringing in the private sector. IFC has already committed five investments and significantly scaled up its advisory operations in Haiti. These projects are helping create 5,000 new jobs – as well as safeguard 5,000 existing jobs. Now, IFC is committing up to $10 million to the Leopard Capital Haiti Fund to support small and medium-sized businesses. With a team already on the ground in Port-au-Prince, the fund is raising $75 million in equity to invest in four main sectors: renewable energy; low- and medium-income housing; agribusiness; and hospitality. It's also raising $4 million in donor money to provide technical and managerial assistance to companies that were thriving before the earthquake, but now want to upgrade their operational capacity and grow. At the same time, this Haiti Fund will work with its portfolio companies to enhance corporate governance, and environmental and social standards and practices. It's an exciting new partnership for IFC. Our Private Equity Funds team has already catalyzed an additional $10 million from investors – and will continue to support the Leopard Capital team in raising more. We hope this will encourage more investors to invest in Haiti's potential. Importance of OpennessOver the past five years, I've seen this private equity conference grow in size, scale, and quality. I've also seen, from my discussion with our clients in developing countries around the world, just how important they consider the capital and expertise that private equity brings in helping their countries grow and raise standards. Yet the role of private equity has come under increasing scrutiny and political focus in the developed world – not least here in the United States. For some, the very term is synonymous with corporate raiders, asset strippers, and secretive back room deals. The private equity industry needs to respond to the demand for higher standards of openness, transparency, and integrity. Private Equity should be a major part of the new investment climate in emerging markets. It should increase overall investor confidence. I recognize that some investment professionals aren't used to being in the public eye. But you are now. And transparency is the best antidote to conspiracy theories. At the World Bank Group, we can see the transformative power of openness. Our new information and knowledge-sharing initiatives may turn out to be the most important legacy of my tenure at the Bank Group. Our Access to Information policy releases to the public vast numbers of documents about the Bank's projects, analytic and advisory activities, and proceedings of the Board. It's now viewed as the "gold standard" for financial institutions. Our Open Data initiative has unlocked our world-class knowledge and development data. We now provide free access to more than 7,000 indicators, including GDP data and development statistics, meaning that anyone – from a PhD student, to an NGO, to a farmer, or even a private equity investor – can download our data, analyze it, and come up with solutions. Our Mapping for Results website shares geo-spatial information on more than 2,500 Bank-funded projects. Now we are beginning to work with communities to map their own infrastructure – clinics, wells and schools. The next step is to allow people to use hand-held devices to let the Bank know, from wherever there are in the world, what is really going on with our projects and investments. These initiatives are making the World Bank Group more open, transparent, and accountable; helping us fight corruption and build better governance; and getting us ready for a new era of democratized development. The investment community can benefit from greater openness as well. ConclusionI have always enjoyed taking part in this conference. I have spoken at it every year during my time at the World Bank Group. I wanted to come here again, for the fifth time, because I am convinced that private equity investments can be one of the most powerful and important agents of change for developing countries: boosting local economies and creating jobs; improving governance and sustainability standards in private industry and capital markets; transforming thinking about growth; reducing poverty and creating hope. That Change agenda is the core of our mission at the World Bank Group. It's what we strive to do every day. It's why private equity – and this conference – is important to me. The success of this event demonstrates that I'm by no means alone in this conviction. So I want to thank you again for joining us today. I hope your time at this conference opens new insights and creates new partnerships for all of you – and for the World Bank Group. But most of all, I hope that it affirms your commitment to doing well and doing good – to using the power of private equity to support people in developing markets who want to create, build, and seize new opportunities. That can be a lasting legacy for all of us. Thank you. Show Less -
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 tak... Show More + e 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 -
Transcript of World Bank Group President Robert B. Zoellick's Press Conference in Beijing
Moderator: ... joining us for this news conference this morning with World Bank Group President Robert Zoellick. Also joining us today, as many of you already know, Klaus Rohland, our Country Director... Show More + for China. Mr Zoellick will begin with some brief opening remarks and then he'll be pleased to take your questions. If you haven't had a chance to silence your mobile devices, this would be a good time to do so. Let's get started. We'll turn it over to Mr Zoellick, please.Mr. Zoellick: Well, first I'd like to thank all of you for coming, and I apologise, I seem to be losing my voice a bit. I'd like to start by thanking the Government of China and the Chinese people for the hospitality extended to my colleagues and me during this visit. [Unclear]Moderator: Ladies and gentleman, we will resume our discussion here, please. Everyone has a chance to get settled, please.Mr. Zoellick: We'll wait for people to sit down [unclear].Well as you see this report has provoked some interesting debate about China and that's the point of any good research report. I also, before I go on, would like to thank Executive Vice Premier, Li Keqiang, and Vice Premier, Wang Qishan, for their meetings with me to discuss the Bank's co-operation with China and also this joint DRC World Bank report. I'd also like to thank Minister Xie Xuren and Minister Li Wei for yesterday's conference on this important work and the extensive co-operation of their staffs.I also want to thank Party Secretary, Wang Yang, who I met Sunday in Guangdong. I first visited Guangdong in 1980 when I lived in Hong Kong, so I enjoy visiting it because it gives me an opportunity to see the tremendous progress that China has made over the past 30 years. I last had the opportunity to meet Wang Yang in 2007 shortly after we both undertook our new posts, so the meeting enabled me to learn more about one of China's coastal provinces.Right after this session I'm heading to Inner Mongolia, a visit that will include conversations with Party Secretary Hu Chunhua, so I can learn more about the process of reform in interior parts.In Guangdong I was struck by the fact that many of the issues now facing Party Secretary Wang Yang [unclear] … very well with the very issues that were discussed in this China 2030 report.The joint work by China and the World Bank highlights that China's leaders are willing to ask some tough questions about the challenges ahead. I've been very impressed that China after 30 years of 10 per cent growth is willing to consider the structural changes discussed in this report.We hope this work will also be of use to other middle-income countries facing the so-called middle-income trap, so I was pleased yesterday that Trevor Manuel of South Africa and B K Chaturvedi, the Deputy Planning Minister of India, were able to join us.Much of the world economy is now focused on economic stabilisation measures, but [unclear] it would be useful for developing countries to also consider structural growth changes to advance productivity, innovation, technical change and to create jobs.Now realising Chinese vision for 2030 will demand difficult changes, reforms, to meet the challenges that lie ahead. These are decisions that only China can make. But we hope the report will help.I believe there is a momentum building behind reform in China. And I offer the World Bank Group's assistance on pilots and other projects to test ideas in the years ahead.The World Bank was China's first and largest international partner in helping to overcome poverty. Since my predecessor Robert McNamara first launched relations with China with Deng Xiaoping in 1980, the Bank has had a special partnership with China on economic analysis. I think that experience was one of the factors that led to this report.In 1985 there was a floating seminar for days down the Yangtze River that later produced a report in 1986 about the reform prospects. In 1992 there was an important conference in Dalian that led to the idea of China embracing the socialist market economy. So it's fitting to be here today with this report, now a joint production, that examines the past, the current and the future role for China to the year 2030.Since this is likely to be my last visit to Beijing as World Bank President, I also thank the Chinese leadership and officials for their very strong support of the Bank, and of me personally, during my tenure. We're very appreciative and we broke new ground in many areas.I also want to take this opportunity in public to thank our extraordinary World Bank Group staff here. And in particular, our excellent Country Director, Klaus Rohland; the head of our IFC team, [unclear] and the incomparable Elaine Sun who keeps all this running. They're superb professionals and I'm proud to have worked with them.I'm pleased to take your questions.Moderator: Okay. We'll open up for questions. Kindly, if you could, state your name and your organisation - and we'll take a question from the gentleman here, please. There's a microphone that's coming to you too.Question: I'm from China Economic Elite magazine. I would like to ask a few questions related to this China 2030 report that you have mentioned. The first one is, would you please comment on the importance of this report? Secondly, we have all seen the protester just now, so I'd like to ask, are there any sharp or controversial issues that was raised in this report and in what aspect would you please mention to us that you think has stimulated this kind of protest?Thirdly, I have also read some coverage on this report and I understand some of the suggestions made in the report relate to scaling back the size of state-owned enterprises and enterprises under the direct management of the Central Government. Otherwise it's going to pose some difficulties in - for future development of the Chinese economy. Why do you think so, in your view?Mr. Zoellick: Well, firstly the importance of the report will depend on what China does with it. It's important to remember that these are the decisions for China to take. But I'm encouraged that the ideas will be taken seriously. First, because as I've said, there has been a long history, over some 30 years, of Bank - Chinese cooperation on the analytics of reform. And it's been productive for China and we've learned things that are applicable elsewhere in the world. Second, we could see that the leadership embraced this report from the very first time I suggested it about 18 months ago. Third, while we've done a lot of cooperative work with China, this has really moved to a new level in the engagement we had with the DRC and the Ministry of Finance.What happens here in September when we presented a draft, and I think one of the reasons we took additional time for this report, was that the interim consultations that were taking place within China, I hope, will create the basis for building on the final recommendations. Deng Xiaoping said seek truth from facts and that's exactly what this report tries to do.You asked about controversies. Frankly, this isn't new to me, as I've been in public service for 30 years. I was a trade representative so I've dealt with demonstrations and worse. So I will ask for the translation of this gentleman's paper and will look at it, as well as other comments. At the Bank we're pretty comfortable with an open debate, we think that debate is a way to refine one's ideas.My only request is that people express their views in a way that allows discussion. They can probably do that on the web as well, since we have an open information policy. Indeed, one of the key ideas in this report is to be successful with changes of this nature, one has to involved public participation. I expect there are a number of controversial elements in this report. I don't need to list them all. I suspect that will come up in the course of debate over the coming years.Let's focus on the core question. China has been very successful over the past 30 years with one structural model for development. That model has focused on export-led and heavily investment-led growth. The 12th Five Year Plan recognises that needs to change to focus more on domestic demand and consumption. This report goes into detail, looking to the year 2030, of how one could make those changes.Now you talked about state-owned enterprises. I think many experts have the view that state-owned enterprises have benefited from very inexpensive financing, preferred positions in the market, and there have been very large retained earnings that have led to China savings, but haven't necessarily benefited all the Chinese people.So to reduce China's global savings rate and also benefit the Chinese people, if a lot of those dividends are sent back to provide social benefits for China's people, we'll have structural change and help support some of the social security systems. China has seen, in its own experience and the rest of the world has seen this, that competition creates more efficiency, as productivity; high productivity can sponsor higher wages. So the export sector, which has been highly competitive, already has some of these benefits but some of the service sector, which needs to adapt to benefit from reforms, needs the types of adjustments that would break up monopolistic - oligopolistic positions.I know it's a long report but I urge you to look at some of these sections because I think the descriptions of the benefits are well stated in the report. The last word. Will some of the vested interests that benefit from the current structure resist? I suspect they will. They do in the US and Europe and Japan. But the Chinese leadership's interest are that of all the Chinese people, not just specific groups.Moderator: Okay, we'll take another question, then. The lady in the front row in the grey, please. Here's a microphone.Question: Thank you, reporting from CCTV News. I have two questions. The first one would be you will leave this position as chief of the World Bank in June and what are you going to do [unclear]? Have you had any idea who would be your successor as the World Bank President? Second question is in 2001 you have negotiated China's entry into WTO as a Trade Representative. What do you think is China's legacy of this membership in this organisation? Thank you.Mr. Zoellick: On your first question, I don't have any plans yet for what I do when I leave. I want to focus 100% on my job until I finish on June 30, as is demonstrated by somewhat my broken physical state. And also I feel, as a responsibility to the organisation, that's the right way to handle it. And I announce my plans to leave so as to allow time for the process to take place to select a successor. Our Executive Board of Directors has set up a process by which nominations are to be done over the course of the next four weeks or so, and then the shareholders will make a decision on who the successor is. All I can say is I'm pleased to leave it an institution that is well capitalized, I think it's performed well and we've got some - an excellent team.Your question on China's WTO accession is a very good one and it fits this report. And I touched on this briefly in my remarks yesterday. What I saw is that Zhu Rongji and Jiang Zemin used the WTO accession process to push internal reforms in China in the course of the late 90s. The WTO membership then connected China into the rules-based trading system. That provided the foundation for the export-led and investment-led growth that has been so successful for the past 10 years. But if you look at the conditions in the international economy, I think we'd be unrealistic to expect that China would be able to rely on exports to the same degree going forward. So that's why this report talks about another generation of structural changes just like those that Zhu Rongji pushed through.But it also suggests that China as a growing player in the international economy could connect these internal changes with the cooperation in the international economic environment. I touched on some of these, for example, the investment policies, intellectual property rights protection, service competition, financial service sector reform. These offer win-win opportunities for internal reform and international accords. So there is a nice parallelism here.Moderator: Okay, let's take another question. The lady on the side, please. I'm afraid we're running out of time so the lady with your hand up right there, yes. [Unclear].Question: Thank you very much, from Bloomberg News. I just wanted to follow up, actually, on the questions of the previous journalist. Obviously while you've been here you've talked with Chinese policy makers. What's their feedback they've been giving to you about how they would like to see the next President of the World Bank, how they would like the process to go ahead, and who they would see as a good candidate?You talked about the WTO being a trigger for internal reform. What's going to be the trigger this time, there doesn't seem to be one? A lot of people who are China watchers are saying that reform has actually stalled over the last few years. [Unclear] being the head of SASAC in 2003 to manage the state owned enterprises, he said then they want state owned enterprises to pay dividends. That doesn't seem to really have made much progress, as is exemplified in your report. The other issue is interest rate reform again, they've been going about this for years and nothing has really happened. What's been holding it up? What do you think could be the catalyst – would it be another crisis or what do you see as being the catalyst? Thanks.Mr. Zoellick: Well, first on your first question. The Chinese, at various levels, have been very complimentary about their work with the Bank and our partnership, and I'm appreciative of that. It's been a key part of, not only our work with China but expanding China's role as a responsible stakeholder in the international economic system.Just to give you an example, when I was in Guangdong, we discussed the possibility of some of the Chinese lower value-added manufacturing, perhaps relocating to Africa, and what we could do to support that.My former colleague Ngozi Okonjo-Iweala - now the Minister of Finance heading the economic team in Nigeria - was in Guangdong right before me; trying to talk with the companies about this move. So, there are enormous possibilities to build on in the global development area.And as for China's preferences for successor rights, we'll let the Chinese comment on that.You make an excellent point about the different context for driving reform than in the period where one could use the WTO accession as a structural driver. But I think in these circumstances, the economic crisis and the drop-off of exports that you've seen to the US and Europe and elsewhere, has sharpened attention to the changes.As I mentioned, in addition to going to Beijing, I often try to go to the provinces. And when I talk to the Party Secretaries, I try to get their sense of the need for reform. That's one of the factors that leads me to believe that this process will have momentum.Like you, we look for other signs. For example, the People's Daily Editorial that reports from the People's Bank of China.And certainly in my conversations with the Chinese leaders, I think they not only say they want to move to reform, but they describe the challenges in a way that suggest they know it's needed.But having said that, I don't expect any big bang reforms. The history of China's development process –starting with Deng Xiaoping – is often to start in local areas with pilots and to test and then to widen the process.Keep in mind, this report is looking out to 2030 – that's a lot of years here. But I think it tries to outline the set of steps, and some sense of sequencing. We would be pleased to work with the Chinese as they explore how they want to proceed.They are very aware of the facts, the environmental costs, the urbanization process, the aging of the population, some of the issues of social disparity; and I think, they believe they need a new approach to be able to address those issues.The one other point I guess I would add is that, from some informal conversations with some of our Chinese colleagues, in the process of their discussing the grasp of the report with other ministries, I've gotten the sense that there's a hope that with the next generation that these will move forward.But nothing's foreordained, the devil's in the details and these are decisions for China to make.Moderator: Okay, we'll take one more question. Let's take the lady right at the front here please.Question: Good morning. I'm from China Radio International. I have a few questions about the report.Moderator: We'll take one, if we could please. Mr. Zoellick has a plane to catch...[Over speaking]Question: Okay…Mr. Zoellick: Give it your best shot.Question: I'll just ask one question – would you [inaudible] … How should the pension fund be expanded to cover the vastly growing elderly population, both urban and rural, without adding significant fiscal burden to the government. And [unclear] discussion about investing the pension funds into the Chinese stock markets?Mr. Zoellick: You'll see that in discussion in the social welfare issues and social production issues, there's a focus on flex security.That means to try – one thing it means – is to try to have some of the benefits delinked from enterprises or local associations, and connected to individuals.A number of developing countries have used savings systems and map saving systems so people can build up their pensions over time.This also relates back to the question about state owned enterprises.Part of China's high savings rates are the redeemed earnings of those state owned enterprises. So you need a revenue system that also provides the resources so people can build those pension plans. And some of those could come from dividends from the state owned enterprises.But I think the one other point that I want to emphasise, is that we talk throughout the report about having a fiscal system that supports the changes in China. This relates to your question but it relates to a number of other issues. For example, we all know there's been a lot of disputes in China over land. This is often because local governments have expenditure responsibilities but they don't have revenue sources, so they don't get revenue from the centre.So if you move towards a revenue system that matches resources with expenditure responsibilities, you avoid some of the tensions that have been built into the system and you can benefit for the average person in China.And this relates to a point that I want to share with you because it comes up with my discussions in the provinces but also in Beijing.The Chinese model of growth so far has relied on a mixture of state and market. And sometimes the borderlines between those are a little fuzzy. And that sometimes means the average Chinese citizen is dependent on the actions of local authorities about where that borderline is.This report emphasises something that I think is getting increasing recognition in China, is the rule of law, so there's clarity on those issues. And transparency and accountability.Now then you asked about where the pension fund should be invested and I won't get into that one. I have a hard enough time investing in my own pension fund.Moderator: Okay. We really do have to wrap it up at this point. I'd like to thank all of you for joining us and look forward to seeing you again. Thank you. Show Less -
World Bank President Zoellick's Opening Remarks at the High-Level Conference on: "Development for a Modern, Harmonious, and Creative Society: International Experiences and China's Strategic Choices"
IntroductionHonorable Ministers; ladies and gentlemen.It's a great pleasure to be here today to present the "China 2030 Report."The idea for this study was conceived eighteen months ago, when I met wi... Show More + th Executive Vice Premier Li Keqiang at the time of the 30th anniversary of the partnership between China and the World Bank.We discussed how we could deepen that partnership – how we could build on the knowledge and learning, the mutual respect and friendship developed over three decades between China and the Bank.Vice Premier Li endorsed a proposal that we work together on identifying and analyzing China's medium-term development challenges, looking forward to 2030. President Hu Jintao and Vice President Xi Jinping welcomed the proposal.So I'd like to thank Vice Premier Li for his unwavering commitment to this project.I'd also like to thank Minister Xie Xuren and Minister Li Wei for hosting today's conference, and bringing together this distinguished audience to discuss the work.In addition, I'd like to recognize Minister Zhang Yutai for his role in starting and guiding this study. And I'm grateful to Vice Minister Liu Shijin, who led the team at the Development Research Center of the State Council on our joint work. His leadership throughout this project has been exemplary.ContextThere could not be a better time to discuss China's remarkable development story as well as the challenges China faces going forward.Today's international economy reflects multiple poles of growth. Emerging markets – many in Asia – have been compensating for the stumbling performance of advanced economies. Over the past five years, developing economies have provided two-thirds of global growth.China is a vital part of this story.China's economic performance over the past thirty-two years has been exceptional: an average growth rate of 9.9 percent; over 600 million people lifted out of poverty. China has already achieved upper middle income status. If the country reaches $16,000 of income per person by 2030, up from today's approximately $5,000, then China will have an economy equivalent to adding 15 of today's South Koreas.These developments will have profound and lasting effects on the world – economically, socially, and politically.We should, however, be wary of straight-line trends. As China's leaders know, the country's current growth model is unsustainable.China has recognized the challenges of moving away from export- led growth and over-reliance on investment toward greater domestic demand and consumption.China also faces challenges that are special to its circumstances:A population that will grow old before it grows wealthy;Pressure on global supplies of energy, food, raw materials, and water;Environmental dangers;A labor force that in five years will have more retirees than entrants, and a concomitant need to boost productivity; andSocial risks of rising inequality.China will chart its own unique development path toward a modern and creative high-income society – one that can overcome these challenges.A successful China will not only continue to provide opportunities and improve lives for hundreds of millions of its citizens. It could offer an example to other countries – developing and developed – for how economic advancement need not be at the expense of social and environmental performance, or global responsibility.China can also seek to connect its reforms to building a stronger, more inter-connected and cooperative international economy.I respect the Chinese leadership for asking these questions, based on their recognition of a need for structural reform.Developed countries that are now absorbed with stabilization efforts would be wise to consider their own structural challenges to growth and innovation.This is not the time just for muddling through. It's time to get ahead of events and to adapt to major changes in the world and national economies.China's policymakers have identified what needs to be done. The 11th and 12th Five-Year Plans reflect the goals of change, with their focus on quality of growth, structural reforms to harness innovation and economic efficiency, and social inclusion to overcome the rural-urban divide and the income equality gap.Now China needs to translate these plans into action – to take "what" needs to be done and turn it into "how."The ReportSix months ago, we met at this very same venue to discuss an early draft of the "China 2030 Report." At that time, Chinese and international experts provided insightful and valuable suggestions on how to improve the draft. Minister Li Wei provided especially important guidance on how to make the report more useful to the Chinese leadership.The joint DRC-World Bank team has worked hard to address these comments and concerns, and to improve the structure, argumentation, and application of their research and analysis.I believe they have done an excellent job.The result is a report that does not offer simply a textbook solution, but is based on a recognition of the political economy challenges.The report is practical. In accordance with Minister Li Wei's advice, the report stops short of being overly prescriptive. It offers directions, recognizing that these ideas need further debate within China before the details of precise policies, laws, regulations, and guidelines can be drafted and then implemented.The report is realistic. Reforms are not easy – they often generate pushback. We have tried to identify obstacles to reforms, suggest sequencing and quick wins – steps that can make reforms easier to implement. We have tried to address short-term risks, but at the same time ideas on how to make reforms participatory, building in support throughout the society as well as feedback loops based on experience.This is also a report that can appeal to an international audience, especially other middle income countries that are in a position similar to that of China and face many of the same challenges. For that reason, I'm especially pleased that today's audience includes development experts from a wide range of countries, with diverse backgrounds.Finally, this is a report that raises difficult questions. It focuses on the central policy challenges that China, and other upper middle income countries, will need to confront:What should be the role of government in the economy of the future? What should be the roles of individuals, households, businesses, and civil society organizations? How can countries reconcile economic growth while protecting the environment and natural resources, and transition into green development?What do countries need to do to ensure that everyone has equality of opportunity, basic social protection, and long-term care for the aged, and that these services are affordable – for the government, businesses, and households?How can countries adjust to rapid urbanization?What does it take to develop a creative, open, and innovative economy that can compete globally with advanced countries?How can we learn from the recent global financial crisis and build fiscal and financial systems that are not just resilient but also just, transparent, and accessible to all?To address these questions, the report proposes a new development strategy for China over the next two decades.This strategy builds on China's considerable strengths – high savings, plentiful and increasingly skilled labor, large markets, a record of solving problems to keep growth on track, and the potential for further urbanization – while capitalizing on external opportunities, including globalization, the rapid growth of other emerging economies, and promising new technologies.The proposed reform program is based on six strategic pillars.First, redefine the roles of the state and the private sector, so that China can complete its transition to a market economy. Currently, China relies on a mix of market and nonmarket measures to shape incentives for producers and consumers, and there is a lack of clarity in distinguishing the roles of government, state enterprise, and the private sector. China needs to resolve these issues. Among specific reforms is the residency permit system – the hukou. Priority should be given to protect farmers' rights over agricultural land, expanding land registration, and rental rights. The Chinese economy of the future needs to rely more on markets and the private sector.Second, enhancing innovation and adopting an open society system with links to global R&D networks. These improvements will need to be linked to capital and entrepreneurial markets, and supported by strong rule of law and intellectual property rights enforcement.Third, promoting green development. China has a significant opportunity to transform its environmental challenges into green growth as a driver of development.Fourth, ensuring equality of opportunity and basic social protection for all. This means facilitating equal access to jobs, finance, quality social services, and portable social security – all with stronger capacity, transparency, and accountability.Fifth, strengthening the fiscal system and improving fiscal sustainability. This involves three key dimensions: ensuring that different levels of government have adequate financing to meet spending needs; mobilizing additional revenues; and reallocating spending toward social and environmental objectives.Sixth, ensuring that China, as an international stakeholder, continues its integration with global markets. China is already a key stakeholder in the world economy – though perhaps a one that is still assessing how to combine its development needs with its international responsibilities. Moving forward, China should be a key partner for global solutions in areas such as international development, open trade, global financial stability, open investment, energy and commodities, and the environment.The structural changes outlined in the "China 2030 Report" also offer opportunities for stronger and more constructive international ties.As the U.S. Trade Representative who completed China's accession to the WTO in 2001, just over ten years ago, I was impressed by the way Jiang Zemin and Zhu Rongji used that process of internationalization to drive internal reform. Then I observed how the next generation of leaders, businesspeople, and workers worked to benefit from both the reforms and the WTO system.Therefore, we should also aim to connect this generation of China's structural reforms to the changing international economic agenda – rebalancing growth, savings, and consumption; a more open and competitive service sector market, with greater international competition; technology development to boost productivity, with protection of intellectual investments and property; encouragement of global agricultural development, with attention to food security; wise and more efficient use of energy; open investment opportunities, in developing and developed economies alike; internationalization of major currencies, moving to open capital accounts and flexible exchange rates; and advancing global trade through new openings and expansion of opportunities in global supply chains.Today, much of the world is focused on policies for macroeconomic stabilization. They are necessary, but not sufficient.The world also needs reforms to drive growth, and growth will require structural changes to enhance productivity, competition, and innovation.Structural reforms in developed and developing economies can open new avenues for deeper cooperation and mutual benefit. Instead of being bogged down in traditional disputes – with their zero-sum outcomes – perhaps mutual structural reforms offer opportunities to develop joint strategies to overcome vested interests that pose obstacles to mutual growth.ConclusionI hope that the "China 2030 Report" will provide a useful reference for policymakers, and an invaluable opportunity for countries to share knowledge and experience – an opportunity, to borrow a phrase from China's father of modern development, Deng Xiaoping, to "learn truth from facts."But I also hope that this report is only the starting point. Our aim is to build on the research, analysis, cooperation, and partnership that we have gained over the past 18 months, so that this study can be the foundation for the development of institutions and policies, especially for fiscal expenditure, social protection, rule of law, and competition.One of the highlights of China's successful development experience has been its ability to start at the local level, test, and then scale up. Pilot projects can be incredibly useful learning tools. Small steps can often produce big things. The World Bank Group is ready to support China's efforts to take these next steps. One of the great benefits of this joint project has been the bonds that have developed over the course of preparing the report. Vikram Nehru, the leader of the World Bank team, has informed me that at the end of the day, both the Chinese and World Bank teams had truly become one joint team with common objectives and deep friendships.So I'd like to thank again the Chinese authorities and our Chinese counterparts again for being such outstanding partners. I hope we can continue to work together.Thank you, and I look forward to hearing your views. Show Less -
Robert Zoellick on China 2030 report: Transcript of Media Questions and Answers
Moderator: Morning ladies and gentlemen. Thanks for joining us. President Zoellick will be pleased to take your questions about the discussion you just heard in China 2030 report. I'd ask you to kindl... Show More + y silence your machines of various sorts, and we'll proceed with the questions. Over to you - let's take the first question please.Mr. Zoellick: As Carl said, since I presented an opening statement, and our time isn't too long, we'll just go straight to questions.Moderator: Okay, we'll take your questions please. Let's go to the gentleman from AP.Joe McDonald: I'm Joe McDonald from the Associated Press. Many elements of this report are sort of in line with the party's Five Year Plan, but the emphasis on the private sector element does seem to clash with some of the things the government is doing - [unclear] government-owned national [unclear] industry. I wonder if you can tell us, what is your assessment of the pace and direction of reform now, and how realistic do you think it is to say that the Chinese government will be able to adopt the things that you recommend and get government out of the economy?Mr. Zoellick: Well, implementation will be the test, but you've heard that was also a point made by some of the ministers from the DRC.I think what's impressive is that the leadership is even asking these questions about structural reform.This is a country that's grown about 10 percent a year over 30 years.The easiest thing to do would be to keep doing what one is doing.But what I am picking up from discussions, not only in Beijing but with provincial party secretaries, is the recognition that it's better to undertake structural reforms while the economy is growing well.I was discussing with one of our colleagues about Europe and the challenges that Spain and Italy have in making structural reforms as well as fiscal consolidation.We both observed that it is much harder to do that when there's zero growth.So I think the timing of this report is also important because you'll have a leadership transition in China.It's very important this is a joint report, so this just isn't an outsider coming in and giving a view, but it's been something that's been worked over extensively by Chinese and World Bank counterparts over a year and a half.And recognizing the way the Chinese system works, this report in draft stage has been consulted for extensively with lots of other ministers, and I think that's a good process, because it builds in buy-in.So you talk about the increasing role of the private sector. You've heard the Chinese officials explain why that was an important process to proceed with.But I've also seen at the provincial level that people recognize that local governments, for example, might have too much control, and therefore they stymie the types of initiative we're going to need in the future.But one last point. I understand that you haven't had a chance to see the full report yet. It will come out later in the day, but what you'll see is, this is a very rich agenda, and you've got some sense of the description. So, while private sector is part of it, there are a series of other elements that are important to see how they fit together.Moderator: Let's take the next question, if we could please. Let's have the gentleman there, please, yes.Yin Hang: I'm [unclear] some questions to ask the president [unclear]Moderator: We're taking one question if you could please.Yin Hang: China - you comment about Chinese influence of the economy growth in the past 30 years, and what are the most concern - most problem that we should most consider this year, because we think that we suffer from the world financial crisis and growth problems this year - this is very important. Most of the Chinese foreign exchange reserves have been [used] for the American national debt. Do you have any suggestions of how to - is there any better way to use the Chinese foreign exchange reserves, and about the trade problems between US and America.Mr. Zoellick: Rather than being a problem, China's growth over the past 30 years has been an incredible success story.It's removed some 600 million people out of poverty. And now China's an important pole of growth for developed and developing countries.So as I mentioned in my remarks during this terrible economic downturn, two thirds of the global growth has come from developing countries, and China had a very successful response to the crisis.But I think part of the wisdom of the Chinese officials we work with was to recognize you have to be careful of straight-line trends.As we started this report, I discussed with my Chinese colleagues the dangers of the so-called middle-income trap. Countries reach a certain level of income, their growth starts to slow down, productivity slows down.I'm always a little skeptical of long-term projections, but you'll see in the report, there's projections about what the growth would slow to absent changes over the course of the next 10 or 15 years.But one also has to take into account China's special circumstances.You have serious environmental issues. Urbanization is projected to go from about 50 percent to 70 percent. Within the next five years you'll have more people leaving the workforce than entering it. There's concerns about inequality and an urban-rural divide.Then, how China as a growing economy - as it grows larger, fits effectively in the global system.So those are some of the issues that the report seeks to address, but the devil will be in the details of implementation. But this is a good start.And as for the use of China's reserves, they can always buy World Bank of bonds. Because we're a AAA credit unlike some of those others.(laughter)Moderator: Let's go to the FT please.Jamil Anderlini: For the last couple of years you have been talking, since, I guess, this process began, talking a lot about turning point. You also noted from earlier today. But we didn't really hear the Chinese side today that we are at a turning point. In their discussions with you, do you think they use that language? And -do you think there is a recognition that this is the moment China really has to change? Rather than a Five Year Plan that sounds quite similar to the last Five Year Plan about the economic structural change over the long term. Is there are crisis assessment going on in China about that this is really necessary?Mr. Zoellick: I think the concept of turning point is used in the context of some of the challenges I've discussed and made in my opening remarks, because they're going to have to be addressed over time. I see it as more of an issue of stress points that will expand over time, rather than a crisis. I think this is true for economies other than China. Frankly, I think a lot of the developed economies would be well served by undertaking structural reform examination like China's undertaking. You know, much of the daily economic discussion and your reporting, understandably, focuses on stabilization of macroeconomic, fiscal and monetary policy. I think that is sometimes unfortunate because you have to look at the fundamental drivers of growth not just the macroeconomic issues. That's what this report seeks to address.Also, in the near term I personally believe that China's likely to have a soft landing. But for a country of this size, of this importance, with the challenges still ahead - a population that will grow old before it grows wealthy - I think it would be important if the next leadership team is able to proceed with the types of reforms discussed in this report. I think that is one reason why they were interested in having it done as a joint report.Will there be obstacles? Sure, there's obstacles in the US, in Europe and elsewhere. And I'll share this personal insight. What I've been actually struck by as we've gone into the final stages of this report, and from again, some of my discussions with provincial party secretaries, is there's a momentum behind reform in China. So I think you're going to see this in some form or another move ahead.Moderator: The gentleman from the Press Trust of India please?K.J.M. Varma: This is quite an exhaustive report. There are a lot of commonalities between the economies of the BRICs countries especially India, China and Brazil. Does it have any implications; can others too learn any lessons from this report?Mr. Zoellick: We definitely hope that there will be lessons here that will be applicable to other middle income countries.And the report process itself was designed that this report might be of use to others. So you've seen even in this meeting you had Trevor Manuel from South Africa, you had a deputy from the Indian Planning Commission.At the Bank, one of the people who helped supervise this report was Sri Mulyani Indrawati, the former Finance Minister of Indonesia. She and I talked extensively about how we might be able to use this with other emerging market countries. Having said that each circumstance is different - you have to customize for a country's special circumstances.But as I also mentioned in the answer to another question, I think it would be good for developed countries to be thinking about the structural reforms they need for growth too.Moderator: We have time for a final question. The lady from AFP I believe. Yes?Allison Jackson: I just have a question of people who were involved in preparing this report because you say that China is facing an economic crisis because of [unclear] State reforms involvement in various sectors. So I'm just wondering what you comment is on it? Is it that serious and what sort of time frame you're looking at? Just on you alluded in your speech to some assistance from some areas of government to the reforms in this report, both in this report, where [unclear]?Mr. Zoellick: Well the time frame is up to 2030, so I think you should put into context any of the sense of challenges in that they're challenges for medium and long term growth.I believe China will have a soft landing so I don't see an economic crisis today. If anything as I assess the world economy, as I'm often asked to do, I think China will likely be an ongoing source of growth. The potential crises I see are elsewhere.But I think a more accurate phrase is the one we discussed that was with Simon, about turning point.Over the next few years I think it will be important for China to start to address these issues. If you look at the report it isn't just a theoretical report. We talk about sequencing reform. We talk about building support - to get public support in the ongoing process. We talk about feedback loops.And as for your question about obstacles, I think any time you have an economy that has started to develop as China has, you'll get vested interests in the old models. As a former trade representative if I can say this existed in the United States too. So the traditional model that's based on export-led growth and heavily investment. This talks about moving towards greater domestic demand and consumption. Part of the idea is as you build new opportunities in some of these new areas, you'll build other groups that will be supportive of reform.One last point, which I touched on in my remarks, and maybe other participants will be less prone to raise this, but I'll share it with you. Sometimes in trade or international economic relations, this is the case with the US and China, Europe and China, the disputes have become somewhat of a zero sum traditional trade off. For creative officials in China as well as in other countries, this report actually offers some additional opportunities for win/win mutual gains.For example, look at the ideas here about opening up the service sector to build productivity and jobs. That could help international firms to be able to compete but also gain business in China. There'll be inward investment with China but increasingly there'll be Chinese investment outside in both developed and developing countries. So it might lead to better rules on international investment.As China's labor force starts to get smaller and yet there is an interesting increase in wage growth, you're going to need to have innovation and productivity increases. So you've heard some of the Chinese officials talk about stronger intellectual property rights protection and ways of supporting innovation and technology development. That's another potential win/win. I think you'll find the same in areas like energy and water efficiency.So what would be most exciting to me is that in addition to this report the US and others also start to undertake structural changes – that they use therefore such as strategic economic dialogue to engage on the mutual win wins here.Moderator: Okay, thank you very much, that's all the time we have this morning. You'll have another opportunity to ask Mr Zoellick questions tomorrow morning at 9.00am at the World Bank Office [inaudible]. The full report will be available at 4 o'clock today. So if you've read it all by tomorrow morning you can ask detailed questions by line. Thank you, okay. Show Less -
The Economist World Oceans Summit: "A New S-O-S: Save Our Seas"
"A New S-O-S: Save Our Seas"IntroductionLadies and gentlemen,Oceans are the lifeblood of our world.They flow over more than 70 percent of our planet, and hold about 97 percent of its water. They... Show More + absorb heat and carbon dioxide, generate oxygen, and shape the world's weather patterns. They provide about 15 percent of the animal protein for the world's population.The air that we breathe, the water we drink, the food we eat. Whether we live inland or on coastlines, each one of us relies on healthy oceans. So I'm particularly pleased to have this opportunity today to discuss the need for coordinated global action to restore the oceans to health.I'd like to thank The Economist for convening this Summit, and John Micklethwait for chairing today's session. And I'd especially like to thank all of you for your commitment to this issue.Addressing Oceans: Challenges and OpportunitiesOver centuries, we thought that oceans were so vast, so deep, that we could take from them whatever we chose, and could dump whatever we chose into them. Today, we know that isn't true. The world's oceans are in danger.Fish stocks are crashing from overexploitation. Rising pollution is flowing into the oceans from land, air, and rivers, choking plant and animal life. Ocean habitats are disappearing – some with alarming rapidity – as coastal cities boom. A changing climate has brought warmer oceans, higher sea levels, and ocean acidification.Oceans are the natural capital of all countries, developed and developing; all countries suffer from degradation of these ecosystems. There are close connections between land and water, human and ocean health, sustainable management and renewable benefits.Yet when we devalue our natural capital, it is often the poor who feel the greatest harm. Oceans provide a wealth of goods and services that make a tremendous contribution to overcoming poverty, creating opportunity, and spurring economic growth.Let's look at just one dimension of the oceans: fish and seafood.One billion people in developing countries depend upon fish and seafood for their primary source of protein. Over half a billion people in developing countries depend on fishing as a livelihood. Half are women.For developing countries, including many island and coastal nations, fish represent the single most traded food product, valued at $25 billion a year. For many Pacific Island countries, fish make up 80 percent of total exports.For some countries, the fishing trade is absolutely critical for their growth. In Sierra Leone, fisheries account for as much as 10 percent of GDP; for the Pacific Island nation of Kiribati, it's 53 percent. In Senegal, fishing creates about 600,000 jobs and employs 17 percent of the labor force.Fishing licenses can be a critical income source. In Guinea Bissau, the annual fishing license sold to the EU at one point represented close to 50 percent of government revenues. When catches shrink, or a country is unable to keep other countries from fishing its seas, license prices fall too.The living ocean is also home to millions of animal and plant species, important to maintaining ecosystem health – and to a large global industry in recreation and ecotourism. In the Seychelles, for example, a country consisting of 115 islands, tourism accounts for 25 percent of GDP. Coral reef tourism alone has an estimated economic value of more than $20 billion a year. More livelihoods stem from ocean research.Around the world, we estimate that about 350 million jobs are linked to the oceans through fishing, aquaculture, coastal and marine tourism, and research.Ocean ecosystems – mangroves, bogs, reefs, wetlands, and barrier islands – are becoming more important for protecting increasingly populous coastal areas against natural hazards. Some 275 million people live in coastal economies dependent on coral reefs, for example – and they are among the most vulnerable to climate change and extreme events.For hundreds of millions of people around the world, oceans are essential for providing food, jobs, livelihoods, and protection.Oceans are the home of an under-recognized and under-appreciated "blue economy." At a time when the world is looking for sources of growth, there is huge potential for "blue growth" – wisely preserving and investing in the value of ocean ecosystems to fight poverty and improve lives.But oceans aren't living up to their potential.Rebuilding Oceans: What Will It Take?Why not?There is already a wealth of valuable knowledge and experience about how to restore our oceans – as well as considerable resources devoted to the challenge.NGOs invest about $100 million a year in oceans. Organizations such as Conservation International, The Nature Conservancy, and the World Wildlife Fund have done a tremendous job in bringing the problems facing oceans to public attention, while also showing the way to innovative solutions with marine protected areas and projects within countries to deal with pollution or rebuilding fish stocks.The Global Environment Facility has invested as much as $600 million in healthy oceans, funding coastal and marine projects that are addressing issues ranging from pollution reduction to innovative approaches to conservation management.The UN group has worked for many years on oceans management – with agencies such as the FAO playing a crucial role in measuring the health of fish stocks, for example. The World Bank Group is investing $1.6 billion in coastal zone management, fisheries, and marine protected areas.NOAA and other national scientific bodies have advanced marine science and ocean planning.Many private companies are increasingly committed to establishing sustainable supplies of seafood.But the scale of the challenge is such that these singular efforts are simply not enough.We need a new S-O-S: Save Our Seas.To make our oceans healthy and productive again, we need greater cooperative and integrated action around the globe, so that our efforts add up to more than the sum of their parts.So today, I want to propose a new approach – an unprecedented Global Partnership for Oceans.This Partnership will bring together countries, scientific centers, NGOs, international organizations, foundations, and the private sector to pool knowledge, experience, expertise, and investment around a set of agreed upon goals.These goals can sharpen our focus, encourage common and reinforcing efforts, and compel us to measure performance. Together, we will build on the excellent work already being done to address the threats to oceans, identify workable solutions, and scale them. We can also mobilize financing where there are gaps.I've seen in other areas that the World Bank Group is fortunately positioned to catalyze and help organize such a global partnership effort. Our relationships with both client governments and all shareholder supporters – based on common interests in development, growth, and sharing experiences in solving problems – offers us a valuable entry point.We can coordinate financing and help with the global advocacy effort, using our own access to policymakers and ministers of finance, in particular, to highlight the oceans agenda, raise interest in investment, and communicate results.We will also provide new funding, as well as leverage our existing portfolios in fisheries, coastal zone management, marine protected areas, ports, urban development, agriculture, and community development, backed by our knowledge platform.We are asking as many organizations as possible to join this initiative. And I am delighted to announce that the response has been extremely positive.The World Bank already has a firm track record working on this topic with the Small Island Developing States, which face unique development issues, as well as large coastal countries such as Indonesia and India. Some of these countries have deep experience in protecting oceans. President Tong of Kiribati, for example, has been a leader in sustainable management of coral reefs and associated ecosystems. Brazil is doing innovative work with the private sector and civil society in scaling up marine protected areas. I expect these leaders and others to play key roles in the Partnership.We are also in discussions with Australia, Monaco, New Zealand, and Norway about working with us on the Partnership.Conservation International, the National Geographic Society, The Nature Conservancy, the International Union for Conservation of Nature, the World Wildlife Fund, and Rare Conservation are prepared to add their expertise, great capacity for innovation, and advocacy. Together, we're making strides on biodiversity, so we are excited to work with them to Save Our Seas.The Global Environment Facility, the Intergovernmental Oceanographic Commission of UNESCO, the UN Development Program, UN Environment Program, and Food and Agriculture Organization are committed to working with the Partnership.The Prince of Wales Charities and GRID-Arendal of Norway are interested in joining forces.Finally, but critical to our success, private sector actors – Darden Restaurants, the International Sustainable Seafood Foundation, the World Ocean Council, and the National Fisheries Institute – are engaged.We hope that this is only the beginning of the list of organizations and companies that will join this partnership – and will join in showing effectiveness to achieve results.First StepsAs a starting point, the Global Partnership for Oceans is committed to mobilizing at least $300 million in catalytic finance. These are funds that would be used for technical assistance to support key governance reforms that can create the necessary incentives for long-term investment in oceans, as well as to help operate marine protected areas, and monitor and communicate lessons learned. Working with governments, the scientific community, civil society organizations, and the private sector, we aim to leverage as much as $1.2 billion to support healthy and sustainable oceans. This would total $1.5 billion in new commitments over five years.Goodwill and even good partners are not enough.We need a common approach and a set of common goals.Last September, the World Bank convened a roundtable to share ideas and come up with solutions for how to bring oceans back to health. We brought together representatives from key countries, NGOs, and private sector players, and asked them "what will it take to restore the oceans?" The answers focused on three key areas:First, countries need help making better decisions about oceans. This change starts with understanding the full value of the ocean's wealth and ecosystem services – because, whatever the resource, it is impossible to evolve a plan to manage and grow the resource without knowing its value. Simply put, we cannot manage what we cannot measure. The Wealth Accounting and Valuation of Ecosystem Services initiative, or WAVES, is already helping developing countries to integrate the economic benefits that ecosystems such as forests, wetlands, and coral reefs provide into national accounting systems. We need to extend these tools to all ocean ecosystems.To make better decisions, countries also need to reform policies. Better policies and governance can create incentives – for both the public and private sectors – to reduce threats to ocean ecosystems, and to invest in long-term protection and management of critical coastal and ocean habitats. Taxes and subsidies, for example, need to be directed with an eye toward incentives and disincentives; certification processes can be simplified; regulatory institutions and national systems for enforcing rights-based fishing can be strengthened.Second, there are numerous areas where greater investment can make a real difference. When a coastline is managed, better decisions are made about development. When marine areas are protected, critical ecosystem services can recover and thrive, enhancing the ocean in neighboring spaces as well.The National Geographic has found that in the Solomon Islands and Kenya, when marine protected reserves were established, the income of local fishermen doubled in five to seven years. Public investments in infrastructure, research, and technology can reduce land-based pollution. We need to show the possible returns from these investments, make them, and continue to assess performance.Third, we need broader cooperation between the public and private sectors. One of the striking elements in all our consultations was that we heard almost exactly the same messages from private and public organizations. We've seen in other areas of development and conservation that building partnerships – sharing experience and ideas – with private and public parties to address problems in practical ways helps build a broader response from the ground – and water – up. With these areas of focus in mind, I'd like to propose targets for what we should achieve in the next ten years:We should rebuild at least half the world's fish stocks identified as depleted: About 85 percent of ocean fisheries are fully exploited, over-exploited, or depleted. This includes most of the stocks of the top ten fish species, or about 30 percent of the world's marine capture fisheries production. There's no room for further expansion – we need to start rebuilding.We should increase the annual net benefits of fisheries to between $20 and $30 billion. We estimate that global fisheries currently run a net economic loss of about $5 billion per year. We need to turn this around, by allocating and enforcing the rights of fisheries and reforming subsidies.We should more than double the area covered by marine protected areas. Currently, less than 2 percent of the ocean's surface is protected – compared to around 12 percent of land. Let's increase this to 5 percent We will need to work with governments and stakeholders to identify and establish sound marine protected areas where they can contribute direct economic benefits. The scale will depend on the context: for example, in some areas, we might work with communities to introduce small-scale protected areas on local coral reef systems, while in others we may work with national governments to identify and protect large areas as part of a wider strategy for the country's ocean ecosystems. We would build on the idea of supporting networks of marine protected areas, such as island chains in the Pacific. A number of these networks already exist, but have yet to be fully implemented. And we should increase sustainable aquaculture to provide two thirds of the world's fish. Today, that figure is about 50 percent, but there are serious concerns over disease management, feed use, and introduction of non-native species. We need to do much better, not only to help secure a reliable source of food, but also to take the pressure off of ocean fish stocks. This is an ambitious list. But these targets are achievable. They are founded on sound scientific assessment, extrapolated from World Bank project experience.There is much more to do. But meeting these goals will take significant steps toward reversing the dangerous, centuries-old deterioration of ocean and coastal ecosystems.This is a critical start.ConclusionEconomists now commonly reference our interdependent world, in which developed and developing countries, rich and poor, are linked – by economics, trade, migration, climate change. Mariners know we are also linked by oceans. But we've taken those oceans for granted. Our predecessors appreciated Neptune's bounty, respected Neptune's power, and were wary of Neptune's wrath.We should recall their wisdom, but add to it our insights from science, economics, and governance.Restoring our oceans to good health is an investment in all our future.We hope that today's event – and our new and expanded partnership – will help us to enlist supporters and donors who are ready to take on this challenge on a global scale. The World Bank will be convening a first meeting of the Global Partnership for Oceans in Washington, DC this April. I invite all of you to attend.Send out the S-O-S: We need to Save Our Seas.Thank you. Show Less -
World Bank Group President Robert B. Zoellick's Q&A Session at The Economist World Oceans Summit
MICKLETHWAIT: Thank you Bob. A somewhat churlish question, you might say, particularly from a man who's just said that he'll raise 1.5 billion for the oceans. What some people are bound to ask is, why... Show More + do we need a new partnership for the oceans? You've got the UN, you've got a variety of different groups already involved. Why this extra level?ZOELLICK: I think the good news is - I commented in my remarks early on - is that there have been tremendous contributions from a wide variety of players, but the facts don't lie. The statistics are we're not doing enough, we're not accomplishing enough and the oceans continue to get sick and die.So as we started this dialogue with partners - and I'll first acknowledge many of them had much more experience than I would've had in this area - but I've seen this in other fields of biodiversity. We started to find that there was a commonality - a recognition that in some case the knowledge and experience, for example, of setting up governance or rights-based fishing hadn't expanded to other areas. In some cases - and I've worked with governments all my life on this - people aren't aware that what they're developing in a coastal zone is one development project could have huge effects on the oceans. They may not know about the nitrogen that's going to supposedly help their agriculture fertilizer system but ends up polluting the oceans.So part of the role here is to be catalytic in trying to get a greater focus on financial resources, knowledge resources, and as is often the case when you bring in developing countries in this - and here particularly you've got a lot of small island states - and see that the net gain from some particular investments could be much larger, then what we've seen in areas as diverse as tigers to other areas of economic development, you have to measure it.You have to be - goodwill is not enough. So again, in the time that I've tried to add some focus to this, I've had a chance to meet - I know many of the people in the room - and there's some fascinating ideas out there. We just have to get them out and we have to drive them forward.MICKLETHWAIT: Do you think the data's sufficient? You just mentioned the numbers. We've had a number of people here make the comment that we know more about the far side of the moon than we do about the oceans. Is that a problem from your point of view?ZOELLICK: Well you've got people here who are more expert. From what I've been able to see, there is a lack of information but I remember talking - I think this was a conversation with Peter Seligmann of Conservation International – what is being developed quite quickly, and we've seen this in other areas, in terms of mapping oceans, mapping particular areas, but then seeing their interconnection could be hugely beneficial. This again is something I've seen in other areas of development. If we can work together to develop a knowledge platform and make it easier for all participants; private companies, island governments, large states; to be able to tap into that, again, I think we can maximize the individual investments.MICHKELWAIT: One thing which has run right the way through this conference is I suppose the idea of whether you can make more money out of the seas, with quite a lot of people worried about the devastation, the economic spoliation, I suppose, of the seas. Yet you very plainly are coming at it from the point of view that this is a route to economic growth. Can you just say a little bit more about that?ZOELLICK: Well, there's some analogies actually - energy efficiency. The first step is to stop doing dumb things. So you've got subsidies that are used for fisheries that are net negatives to the system, so when I was referring to the negative $5 billion loss, the fisheries [that we want] are trying to move to $20 billion to $30 billion a year gain. That's probably because money is misused.So then I was reading an account coming from some of the Prince of Wales charities where some fisheries, people have been able to see, once they crash, once they start to rebuild them, and as they start to develop either a rights-based system or others that are sometimes based on local populations, you can start to see the economic gain. So when you and I first studied economics or many people did, there was an issue called the global commons, and it's the issue about how things can be misused. Well this is the classic case of the global commons, and since it covers 71 percent of the Earth's surface, it's a pretty big one.MICKLETHWAIT: Would you think there's a particular thing to do with people from deep inland actually using the oceans but not actually knowing that they're causing problems there? It's very obvious, fisheries, they're involved. It's very obvious hotels, right on the outside on the coast. But people from deep inland who are actually causing problems within the oceans but they never actually carry the full cost of it.ZOELLICK: Well this is another one of those British-American tensions since you're from an island maritime nation and I'm from Illinois, which you'd probably consider to be a landlocked, Midwestern…MICKLETHWAIT: Very, very landlocked, yeah.ZOELLICK: But we do have the Great Lakes. But I think as you probably know, given your study of military history, a lot of the greatest admirals come from the Midwest.MICKLETHWAIT: There's a very, very [ill] joke…ZOELLICK: I think the reality is that there's a - part of this of course is that people are unaware of this. People are unaware of the dangers that I talked about. When you think about 85 percent of the fish stocks are either being severely depleted or close to that stage, this is a huge effect. The good news is, in a world where you see the interconnections with films and internet, I think people are much more alert to this. So part of the challenge with this - and this is again where I hope we can coalesce - people are barraged with information.There's challenges, as you and I were just talking about, of all types. But I think here if you bring together a series of communities, whether it be the governments, the scientific, the conservation communities, the development community, and focus on some core points and core things to achieve, I think you have a better chance of bringing others along. What I found in this area, but also other areas of development, that's been quite encouraging is I'm increasingly finding private companies that find that the governments themselves seem to be stuck.The private companies want to push the agenda but sometimes they're less familiar with how to build the governance structures. And so if we can get those interconnected, I think we can make progress. There's an idea I just alluded to in my remarks, and probably it'll come out in the course of the discussion, which I know that Kiribati has been a key leader in - but when you start to take the island chains and then you take their 200 mile economic zones, and then you can imagine creating a network of these, you could start to have a rather significant effect in creating a form of governance because it could start to affect how fisheries industries interact with those islands.But as was noted in one of the cases, I think is the case of Kiribati, while they start to have the governance system, they don't really have much of a coast guard. So you have the US Coast Guard sending some ships out as part of a training exercise. Those are problems with rather modest investment you can take a concept of governance, an economic issue connected to the law enforcers, some minimal resources, and then you start to leverage it over different players.At the same time, it'll be very important that the communities working on this work with those that are concerned about the freedom of the seas. So I think there's a potential here to be able to leverage a series of individual islands much more effectively than we're doing today.MICKLETHWAIT: Let me throw it open to the audience questions. There's a lady there.ZOELLICK: Could you give your name or who you…MICKLETHWAIT: Yes, that would be good.ALEXANDRA VAN: Hello, I'm Alexandra [Van]. I work with the World Future Council. That's a global forum that's working to protect the rights of future generations. We will be celebrating this year the world's best ocean and coastal policies with the future policy of water partnership at the global [unclear] facility, the Food and Agriculture Organization, the CBT. So Mr Zoellick, thank you very much for your presentation and congratulations for the new partnership. I want to build up on what you have said that there needs to be much more that needs to be done, we need to agree on common recommendations and having an action plan.So I would like to get back to your comments on marine protected areas because we had this morning very good discussions about the potential economic benefits also of marine protected areas. Now, in Nagoya, governments have agreed actually to have the target of 10 percent of marine protected areas, so I would just like to follow up with you if under this partnership you will be supporting the 10 percent goal that was [already] agreed by 193 countries. Thank you very much.ZOELLICK: Well, the goal that came up from the various groups here was 5 percent. They're more than doubling. Now, would I be delighted with 10 percent? Sure. But I was at Nagoya and I've been attending some of those conferences since Rio in '92, and I guess one of the distinctions I'll draw is the difference between what I've seen between when people put words on paper and even sort of put the gavel to say a nice concluding statement - and then what they actually achieve.What we've tried to do, whether it be climate change or biodiversity or in this area with oceans, is try to organize the different parties together - conservation, scientific, international organizations and others - and set realistic goals. My own sense from what I know, that I'm happy to defer to others, that doubling the 5 percent will be a significant effort to achieve.So if you can go to five to 10 percent - as we all noted, the land is 12 percent - I'm all for it. But let's take realistic milestones and try to get them done, and once we get that one done then you can go to the next one.MICKLETHWAIT: Another question. Two hands back there.PARTICIPANT: Thank you. My name's [unclear]. I am former Minister of Marine Affairs and Fisheries, Republic of Indonesia. Right now I'm working as Professor for [unclear]. I think you agree that despite the global effort of restoring ocean deterioration. But the fact is that the state of our ocean tends to be unsustainable, be it in terms of fishing, water pollution and habitat degradation. My conclusion is that why despite global efforts, ocean still unsustainable because up until now, we're only tackling the symptoms of the problems.We've never caught the real causes of the problems, and I think that the cause of the problem in our world is that the human demand on the carrying capacity exceeds the carrying capacity of the ocean in providing resources and [unclear] and we know the human demand is determined by two things: number one is the number of population, and number two is consumption rate of the people on our resources and [unclear] of humanity in terms of pollution.So I'm just wondering if I could suggest that to tackle the global problems, I think number one, we have to increase the carrying capacity of oceans on Earth, and number two is to align our human demand [unclear] carrying capacity. My question to you then…MICKLETHWAIT: I think you've gone on a very long time. Can you just give your question very rapidly?PARTICIPANT: Yeah, my question is, how to reduce or control human demand?MICKLETHWAIT: Thank you, that's a very good question. Essentially it's [Malthuse] of the seas.ZOELLICK: Well, this is an interesting issue that arises at the interstices of a lot of conservation and environmental issues and economic growth issues. The economist's answer would be price because that's what allocates scarce goods. I think what we've all identified here is we have a problem because of the commons and so the normal market economic mechanisms don't work because you really don't have in many areas the property rights or the ownership and so you've had people who will get short-term gains and not invest in the long term.So part of what we've been discussing is how through governance reforms, lessons about how you can create rights-based systems, but also sort of a recognition that various communities have to have their sensitivities taken into account, so in some areas, it's a question of who's going to get the fishing rights, whether it'll be local population. Then in any market-based system, you also have to have enforcement, and part of the big problem in this area is whatever rights and aspects haven't been enforced. So there's huge steps that can be taken in these areas.The reason I'm taking this approach is that what I've seen in other areas of development and environment, if you pose the two against each other, if you put growth against environment, I think you're going to spend a lot of time debating and there's going to be a lot of poor people who want to grow and develop and want their sources of protein. So maybe it's just my bias but I found whether it be carbon and climate change or others that you can find a lot of win-win, mutual solutions and you're likely to build a broader coalition and build more support.I think it's time that that be tried in the oceans area because we're starting to see the coalescence of different communities; science, island-based nations, coastal nations, people recognizing this. But the question is how do we interconnect these? And I think the start is set some basic goals and then share the information about what works and then try to finance it.MICKLETHWAIT: There's another question just beyond the white hand - white-shirted…JERRY KNICK: Mr Zoellick, my name's Jerry [Knick] and I actually owe you a debt of gratitude because three years ago, [unclear] programs, you provided some funding for us to develop a concept for developing sustainable fisheries as an industry-led activity [in Indonesia]. Three years later we've gone through the process of developing all the parts and pieces and we're about to start [unclear] and building the infrastructure that's part of the plan. Interestingly enough, the most difficult part of this process has been financing it. My experience has been that the financing institutions of the world [unclear] in this space [unclear] fisheries [unclear] they'll perceive the risk of being too high to get involved. So my question to you is how accessible is financing going to be for fisheries in transition part [unclear] overall [plan as] proposed?ZOELLICK: Two points. The first one is, I think what we have to recognize, that some of these areas we're talking about public goods. So the question is - and this is why we're starting out with this $300 million catalytic fund and we're looking to governments, some private sector participants and others, there'll be some investments that wouldn't be made on a basic market term.Second, however, as I've suggested, you could switch what are in some cases a lot of misapplied subsidy policies or also policies that might create incentives or disincentives with fees and licensing or taxes or other arrangements to try to create the right economic structure. What I've been encouraged by is you're finding more and more private sector players that look at the facts that we've seen and realize this can't go on and so they're interested in trying to invest in a rebuilding effort.The World Bank has a private sector arm, IFC, that is also going to be part of this, so as we work with partners to be able to try to get the governance in the market and the protected areas right to try to see how we might be able to catalyze further private sector investment in addition to the public sector side. On the public sector side again, we as an institution, as I mentioned already, have about $1.6 billion in this area. That is not money that we decide by ourselves. We have to do that with governments.So part of this goes back to getting the word out to the governments about how these are in their interest and then they can use the various financing mechanisms that we have, whether it be coastal zone or fisheries or marine protected areas, which we're involved with all of it. But then let me make the second point, 'cause it's something I want to emphasize about the World Bank's involvement - something I've tried to emphasize over the past four and a half years of my tenure. We're trying to work as a network player here.With a lot of the questions and the reason why this conference I think is particularly valuable, as others that have led to it, is we see ourselves in a catalytic role but certainly not one that knows all the answers. I know I've been with John at a couple of different functions where I've just been stunned by some of the insights that you have, not surprisingly, of people in marine biology, others that have devoted themselves.So what I do want to communicate with people, I'm glad our modest investment with you has started to pay off, but where we see ourselves as trying to be a support in a process is to use the networks that we have across different communities but frankly draw on the ideas of people in this room and others that are committed to it.MICKLETHWAIT: I'm very sorry. Unfortunately we have to come to an end there because Bob has to catch a plane. But I would like to thank him…ZOELLICK: Actually, to see the Finance Minister.MICKLETHWAIT: To see the Finance Minister to try and raise money for this great purpose. I would like to thank him very, very much for coming in and for making the time. It's been a heroic scheduling appointment to come here. It's a delight as usual to have you, and I will take you off and we will hand over to [Dominic Ziegler] up here. Thank you. Show Less -