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Remarks by IFC Country Manager for Ghana Ronke Ogunsulire at the Launch of the Africa Corporate Governance Program
Deputy Governor, Bank of Ghana, Mr. Millison Narh,Director General, Securities and Exchange Commission, Dr. Adu Anane AntwiAmbassador of Switzerland, His Excellency, Mr. Gerhard Brugger... Show More + Distinguished ladies and gentlemenGood morning and thank you for coming to this launch of this launch of the Africa Corporate Governance Program.We are pleased to be launching this program in Ghana, a priority country for us at the World Bank Group.We have ambitious plans here. We, that is, the International Finance Corporation, have invested close to $2.5 billion in the country,and have provided technical assistance in several areas to help the development of the private sector in Ghana. We want to do more, and this corporate governance program is one of the key activities we have been working on.We believe in Ghana's long-term path (we won't be deterred by short-term economic difficulties or regional concerns)And we are confident because of how we are able to work closely with government– the Ministry of Finance, Bank of Ghana and the Securities and Exchange CommissionAnd I take this opportunity to thank them.I would also like to thank the State Secretariat for Economic Affairs in Switzerland, (SECO), our partner in this program. SECO and IFC have a special partnership in Africa and Ghana is one of the focus countriesSECO is funding the program while IFC is implementing it.And it is represented by Ambasador Brugger. Thank you, your Excellency for this important partnership.Personally, I am thrilled to be involved in this particular program launchIn my past life in IFC as an investment officer, I saw first-hand the importance of corporate governance in Africa.I witnessed how instituting policies or mechanisms to control the running of the companies - often very simple ones - helped them become more efficient and profitable.For example, how putting in place independent board membersor even having a proper, well thought out succession plan in a family businesscan help avoid disasters before they occur.I worked with companies that became more competitive and therefore more attractive to investors, which lowered their capital costs.This in turn allowed them to perform better and contribute to the economy. Corporate governance is about improving performance. It's about creating/maintaining jobs and helping the economy grow in the long-run.It is essential for sustainable private sector developmentIt signals reliability, fairness, transparency and accountabilityWe therefore take it very seriously and IFCand I, as an African, am personally and very excited about it.So what will the Africa Corporate Governance Program do?It will help Ghanaian companies:Assess their businesses, operational structures and processes, and provide advice on how to improve them;Look at the make-up of their boards, the effectiveness, controls, and governance;Reporting mechanisms;Build their capacity through training;Work with family –owned businesses as well as others.The program will also work together with regulatory institutionsto help institute best practice in corporate governance laws, regulations, codes and listing requirements.All this using our global experience.The program will be led by Roman Zyla and Chinyere Almona.They can provide more details on the program.Thank you again for joining us and we look forward to working together. Show Less -
Speech by Colin Bruce at the Second ECOWAS/UEMOA/World Bank Group Tripartite Meeting
Esteemed Presidents of ECOWAS and UEMOA, Distinguished Commissioners and Directors, fellow colleagues of the World Bank Group (WBG) and partner institutions, ladies and gentlemen.On behalf of the WBG,... Show More + I would like to thank you for this opportunity to share some reflections on four topics: (a) progress since our first tripartite in Abidjan in June 2013 and lessons for our future collaboration; (b) the changing global and regional contexts to which we must respond; (c) possible priority areas in the next phase of our partnership; and (d) proposed next steps.Since we met in June 2013, we have made considerable progress in implementing our ambitious joint action plan in the six areas that we prioritized--Agriculture, Education, Trade and Trade Facilitation, Transport, Regional Investment Climate and Sahel. Quite rightly, agriculture was number one on our list because 60 percent of the population of West Africa and 80 percent of West Africa's poor still depends on the sector for their livelihood. The main goal of our efforts has been to increase productivity by raising the quality and improving the availability of agricultural inputs. Raising agricultural productivity would help to improve the growth elasticity of poverty reduction which is only -0.7 for Africa compared to -2.0 for developing countries as a whole. So we focused on policies for seeds, pesticides and fertilizers. As a result all the ECOWAS countries, with one exception, published regulations to improve quality and availability of seeds. We put in place electronic platforms with information on certified seeds and technologies, and began supporting ECOWAS in implementing a road MAP to transform the centers of specialization into regional centers of Excellence for Agriculture. We finalized the review of one study—on a Warehouse Receipt System and Commodity Exchange—and will shortly send to you two other studies on (a) Opening up the Markets for Input Trade in West Africa; and (b) Regional Food Staples. In addition, we provided technical assistance on Meat and Livestock Trade Facilitation which culminated in a conference in Ndjamena in December 2014.The acquisition of higher education is associated with higher earnings at the national level, for example, of 30 percent in Cameroon and Ghana, and 15 percent in Nigeria. This is the type of evidence we presented to the Board of the WBG when it approved the ambitious $150-million Africa Higher-Education Centers of Excellence (ACE) project in April 2014. The project will fund 19 university-based centers for advanced education in Benin, Burkina Faso, Cameroon, Ghana, The Gambia, Nigeria, Senegal, and Togo; support regional specialization among participating universities in mathematics, science, engineering and ICT; and strengthen their capacities to deliver quality training and applied research. In coming months we plan to add Cote d'Ivoire to the list of beneficiary countries, and are adapting and transferring the ACE approach to other parts of Africa.In trade and trade facilitation, we completed all agreed actions with UEMOA by December 2014, including developing modern Customs Union instruments and supporting implementation of the Bali Agreement. We are pleased with the joint work done to prepare to implement ECOWAS's Common External Tariff (CET) which became effective on January 1, 2015, and with the technical support provided for negotiating the Economic Partnership Agreement (EPA) with the European Union (EU).In transport, we continued to prioritize the Abidjan-Lagos corridor which handles more than 2/3 of the trade, transport and transit activities in West Africa and records traffic of about 47 million people every year. Our assistance targeted basic regional access and mobility of goods, through four main components—trade facilitation, improvement of road corridor's infrastructure, project management and coordination, HIV/AIDS programs and `corridor performance monitoring. We are pleased that by December 2014 the number of kilometers of roads rehabilitated had increased to 65km and port dwell times came down from around 18/21 days to 12/13 days.On investment climate, five African countries were among the top ten improvers globally in the 2015 Doing Business Rankings for 2013/14. Four of them—Benin, Togo, Côte d'Ivoire and Senegal—were from West Africa. Overall, Africa accounted for the largest number of doing business regulatory reforms—75 of the 230 worldwide. And reforms are continuing. In November 2014, Presidents Ouedraogo and Soumare launched a new EU-funded project to: (i) remove regional barriers to cross-border investments; (ii) promote more transparent and sustainable investment incentives regimes; and (iii) reduce investor uncertainty by addressing unpredictable transfer pricing rules. The historic trip in November 2013 by leaders of the United Nations, WBG, African Union Commission, African Development Bank and EU was a significant milestone in fulfilling our commitment to the Sahel. The visit renewed attention to the peace and security needed to boost economic growth and lift people out of devastating poverty. During the visit, WBG President pledged $1.5 billion in new regional investments over the next two years, nearly four times our commitment during previous periods. This amount was additional and complementary to our funding through country programs. By December 2014, our Board had approved close to $800 million of priority projects in areas such as cross-border energy, social safety nets, and health services and economic opportunities for women and girls. MIGA provided $585 million in political risk guarantees in May 2014 for the Banda Gas to Power Project while the EU pledged additional support of about $7 billion over seven years. This commendable progress, on multiple fronts, is a tribute to all of you—Presidents, Commissioners, Directors, Managers, and Technical Specialists. Without your drive, commitment and willingness to collaborate, none of this would have been possible! I would also like to acknowledge the effectiveness of the Coordinating Country Director-model in this sub-region, where one Country Director steers the agenda and other Country Directors lead in particular sectors.Notwithstanding these many positive developments, our journey together is only just beginning, and there is much to learn from our successes as well as our shortcomings. These shortcomings include: (a) the absence of significant strides in air transport; (b) substantial increases in the dwell time at one major port and in the number of road blocks in some areas; and (c) an almost doubling of the time to cross a few borders along the Abidjan-Lagos corridor. This is compelling evidence and a sobering reminder that modernizing transport in West Africa, as in other parts of the world, requires coordinated policy and regulatory reforms and enforcement, and not just investments in bricks and mortar.Energy remains a top priority but we must pursue areas where our partnership can add value, perhaps in the push on policies, regulation and interconnections that facilitate energy trade. The renewed interest in railways across the continent is one that we share but this agenda requires significantly more technical analysis, financial resources, and demonstrated political will to make difficult choices. As such, we have to be pragmatic, prioritize what is feasible and remain open to other possibilities as and when conditions for progress are in place.With regard to the Sahel, we must embrace the leadership of the Group of Five frontier states and stand ready to support their development priorities.We did not anticipate the Ebola crisis and the response at all levels was slower than it should have been, including by the WBG and the rest of the international community. The crisis also unmasked serious weaknesses in regional infectious disease prevention and surveillance systems. We are strongly committed to working with you and the rest of the development community to prevent and more effectively attack any such future threat. In that regard, we are currently helping the Nigerian Government to contain the recent resurgence of the Avian Influenza.Since we met in June 2013, the world and the sub-region have continued to change and we should use our discussion today to decide how the priorities of our collaboration should change in response. For several years, buoyant commodity prices (and abundant capital inflows) generated powerful tailwinds that helped support growth in the sub-region and across Africa. Those tailwinds have now transformed into headwinds: Oil prices have fallen by over 50% in the last four months, reflecting both supply and demand factors. The prices for many metals and minerals have been falling at a more moderate pace, but also for a longer period.The Ebola Virus Disease epidemic that began in a forest area of Guinea in December 2013 quickly spread to Liberia and Sierra Leone. Since then, more than 22,000 probable, suspected or confirmed cases, and over 8,800 deaths, have been reported across the three countries. In addition to the huge costs in terms of lives, human suffering and anxiety, the latest estimates suggest that the three countries may lose as much as US$ 1.6 billion - or 12% of their combined GDP - in forgone output growth in 2015. Across Africa, conventional and large-scale conflict events and civil wars have been receding in scale and intensity. However, in some parts like Central-West Africa, a new generation of threats is emerging—drug trafficking, maritime piracy, and armed insurgents like Boko Haram in Nigeria and the Tuareg and Arab uprisings in Mali. Driven by exclusion, ideology and extremism, some of these threats don't only terrorize communities, villages, women and girls, but they also challenge the authority and existence of nation states as we know them. Meanwhile, instability has increased in Libya and reportedly, this has exacerbated the supply of illegal weapons, compounded the plight of returnees and given further impetus to migration of vulnerable groups across borders. In essence, the region is facing a number of endogenous and exogenous security shocks. Given what is at stake, defeat is not an option.We must also be mindful of the reality that in 2015, the citizens of at least a dozen African countries, including four in West Africa, will go to the polls to elect their national political leaders. Some of the polls are expected to be hotly contested and turbulent, while others are predicted to bring little change. We hope, of course, that none is marred by violence on any scale.These developments aren't all of equal importance but together, they represent serious additional risks to the sub region. ECOWAS and UEMOA have important roles to play in helping to mitigate and in some cases, eliminate these risks. At the same time, there are some opportunities, particularly for oil importing countries, which we hope ECOWAS and UEMOA will help them to seize.While broad sectoral reforms must continue and build on the progress already made, we should explore a few priorities that could significantly diversify and transform the sub-region, and reduce major threats. To introduce the discussions, we would like to propose the following five priorities: (i) Deepening our joint efforts in agriculture, (ii) Supporting the implementation of the CET; (iii) Assisting in establishing an effective Abidjan-Lagos Transport Authority and making the air transport market more efficient; (iv) Sustaining the Region's efforts to fully eradicate the EBOLA virus and prevent the spread of other infectious diseases; and (v) Creating cross-border conditions for communities to create mutually beneficial economic opportunities and prevent conflict. This would not mean stopping other activities completely but rather focusing our joint efforts on fewer main themes over the next year. A key priority should be to accelerate reforms that simulate more diversified, inclusive and sustainable economic growth by unleashing the potential for private investments. There are some low hanging fruit from already adopted policy reforms but now the emphasis must shift to rigorous implementation. This applies particularly to policy reforms for seeds, pesticides and fertilizers. Access to adequate fertilizers and modern seeds could easily increase the yields of food staples by two or three fold in the region. ECOWAS and UEMOA should continue to work with member states on other measures like eliminating de jure and de facto barriers to intra-regional trade. This should be combined with a push to help countries develop national social safety nets that reduce the pressures for export bans and other inefficient measures aimed at improving food security. Since all countries may not be ready to move forward at the same time and pace, ECOWAS and UEMOA should also consider advancing reforms based on the principle of variable geometry. We will provide technical support for the implementation of the CET and EPA—arguably the most significant developments in trade policy in over a decade. There is, as yet, no consensus on key issues such as: (i) the revenue loss arising from the EPA and whether such losses have been adequately reflected in the compensatory package accompanying the EPA; and (ii) the impact of both the CET and EPA on domestic industries, jobs, consumers and poverty. The World Bank Group analysis for Nigeria and initial results for Ghana and Senegal showed that the EPA would benefit most manufacturing firms through lower costs for inputs and capital equipment. Most firms for which a negative impact might materialize are currently making above average profits, and the effect of the EPA would be to reduce them by a small amount. However, initial findings on the CET reform also seem to indicate that impacts from the added protection of the CET (on what are essentially core consumption products) will affect the poorest more than other segments of the population. Impacts also vary significantly by country. Ministers have requested that as implementation of the CET and EPA proceeds, the WBG should provide continued assistance in the form of country-specific and regional analysis and dialogue. We will do so. Improving the performance of the transportation system within the sub-region would boost competitiveness and productivity, and help maximize the benefits of the CET and EPA. We welcome the formal decision last March at the 44th Summit of ECOWAS Heads of State and Government in Yamoussoukro to establish the ECOWAS Abidjan-Lagos corridor authority to construct and manage the six-lane highway, and establish a corridor management authority with supra-national status. We also welcome the commitment of the signatories to contribute $50m for preparatory activities under the project. There is considerable global experience in effectively structuring and managing corridor authorities, and we strongly believe that such an effective body can significantly transform West Africa. We stand ready to share international experience, mobilize financial resources, and support complementary institutional, policy and regulatory reforms to help realize this transformational impact.We are encouraged by the decision by Heads of State at the African Union Summit two weeks ago to establish a Single African Air Transport Market for African airlines by January 1, 2017. We welcome the decision by Egypt, Ethiopia, Kenya, Nigeria and South Africa to open their respective air transport markets immediately and without conditions. These are steps in the right direction but more will have to be done. West Africa's 24 million passengers/year aviation market is unbalanced and characterized by low intra-regional volumes. More than 60 percent of West Africa's 24 million passenger traffic takes place in Nigeria; only three other countries have total demand in excess of 1 million pax/year (Ghana, Cape Verde and Senegal). Domestic traffic flows represents nearly half of total demand with 88% of them generated in Nigeria. Traffic rights with West African countries are still managed and governed by Bilateral Service Agreements which are often too constraining and protective of national carriers. As a result, air transport in West Africa is substantially more expensive than in other parts of the world, less reliable and imposes high burden on passengers and the economy as a whole. Liberalization of the air space will help, and a low hanging fruit would be the multilateral application of the Yamoussoukro Decision. There is also a need for regional agreement on the maximum level of taxes and on air transport infrastructure charges to foster higher demand and financial solvency for airlines. We call on ECOWAS and UEMOA to seize the opportunity to lead the sub-region in an initiative that would develop air transportation services that are at least comparable to those in Eastern and Southern Africa. We stand ready to assist you in preparing A Policy Paper on West Africa Air Transport and in providing technical support for: (i) benchmarking the system; (ii) consulting stakeholders in the industry; and (iii) reviewing aviation charges; with a view to presenting a concrete proposal to the Heads of State and Government at their next Summit.A more connected sub-region also needs to have better capacity to deal with infectious diseases, while supporting post-Ebola recovery in the three directly affected countries. I commend and encourage the efforts by ECOWAS and its member states to share experiences and in particular, learn from those countries that quickly contained the disease. Up to now, the World Bank Group has mobilized nearly US$1 billion in financing for the countries hardest hit by the Ebola crisis. This amount is comprised of US$518 million from the International Development Association (IDA) for the epidemic response, and at least US$450 million from the International Finance Corporation to enable trade, investment, and employment in Guinea, Liberia, and Sierra Leone. IDA also created the multi-donor fund for Ebola recovery last fall, called the Ebola Recovery and Reconstruction Trust Fund (ERRTF). The ERRTF complements other Bank financial instruments in getting children back to school; establishing more secure and accurate payment systems for health workers; helping farmers acquire seeds for planting; and providing resources to upgrade rural roads, for example. We are now prepared to invest up to $300 million in building up regional health systems, including strengthening networks of laboratories for early diagnosis and facilities for treatment.Finally, a more connected sub-region needs to be a more secure sub-region to fully benefit from regional integration. We should use effective diplomacy to build strong coalitions across the political, security and development communities to help shift the current dynamic in the sub region toward more peace, stability and shared prosperity. At the recent AU Summit, African leaders agreed to send 7,500 troops to help fight the Boko Haram insurgency in north-east Nigeria, with support from the international community including the United Nations. Since May 2013, the World Bank Group has combined efforts with the United Nations and other partners in bold development diplomacy to address the regional drivers of some of the most intractable conflicts in Africa, and the poverty, extremism and local and global threats they generate. The Sahel initiative mentioned earlier was the second of the three undertaken so far. We are prepared to explore the scope for a fourth such regional initiative around Central-West Africa if there is political commitment at the regional and national levels to do so.We look forward to a fruitful discussion today that will identify a few transformational priorities, work programs, timelines and division of responsibilities. In doing so, we want to build on the model that has worked since June 2013 with minor tweaks that reflect lessons from our shared experience. We hope to discuss the highlights of our deliberations with President Mahama, the Chairman of ECOWAS, and propose to him some items for consideration at the next ECOWAS Heads of State Meeting.Our Directors, Managers and technical experts are ready to share responsibility with their counterparts to work on deliverables within agreed timelines.We would like to propose that during our Spring Meetings (the week of April, 12, 2015), we meet with Mr. Diop, Regional Vice President, to take stock of progress and further build momentum. We also hope that Mr. Diop, would be invited to participate in the next ECOWAS Heads of State Summit to help advance our agreed agenda.Colin Bruce is a Regional Integration Director in the World Bank's Africa Region Show Less -
Statement by World Bank Group President Jim Yong Kim At Joint Press Conference on Ebola with Ghanaian Vice President H.E. Kwesi Bekoe Amissah-Arthur
Good afternoon everyone. Thank you for coming. I'm very happy to be back in Accra. My last visit was almost exactly a decade ago, when I was working at the World Health Organization. Today, I have met... Show More + with senior government officials, including Vice President Kwesi Bekoe Amissah-Arthur, and I will meet with the UN team based in Accra – UNMEER -- that is coordinating the Ebola response. I want to especially thank the government of Ghana for taking such an important role in the response to this outbreak – by being the host of UNMEER and by setting up a humanitarian air bridge into Guinea, Liberia, and Sierra Leone. History will record the importance of what Ghana has done – that it has kept open an important link to the three countries at a time when many countries around the world have closed their borders.Today, I have an important announcement linked to the Ebola crisis. The World Bank Group will be making an additional $100 million dollars available to fill a critical gap in the Ebola response – funding to speed up deployment of foreign health workers to Guinea, Liberia, and Sierra Leone.With this latest grant, the World Bank Group's funding for the Ebola fight over the last three months is now more than $500 million dollars.In recent weeks, the international response to Ebola crisis has improved significantly. We have had some good news recently out of Liberia, involving a drop in recorded cases, although we should watch this very closely as this epidemic has had a history of surge in numbers of cases. As for the overall response, several major gaps remain and one of the largest is mobilizing enough international health teams to the three countries in order to contain the epidemic. The health workers are needed to treat and care for patients, boost local health capacity, manage Ebola treatment centers, and resume essential health services for non-Ebola conditions.Current estimates by the United Nations indicate that the three countries need about 5,000 foreign health workers to fight Ebola, who in the coming months will rotate through very difficult assignments in the expanding Ebola treatment centers, community-based care, burial teams, and laboratory services.I have just spent the last three days in the Horn of Africa, where I heard some especially encouraging news about Africa's response to the Ebola outbreak. First, African Union Commission Chairperson Dr. Nkosazana Dlamini Zuma committed to help deploy 2,000 trained health workers from African countries to the affected nations. I commend Dr. Zuma and the Africa Union for taking a leadership role in setting a firm target to bring health workers from the continent to Guinea, Liberia, and Sierra Leone. And second, I heard from Kenya President Uhuru Kenyatta that 600 health workers in his country have volunteered to work in the affected areas. Many more African countries also are ready to send health workers to the frontlines of this epidemic. This kind of solidarity from Africa is what will beat this outbreak. We now need to take such important pledges such as Dr. Zuma's and turn them into action. We need to find a way to manage and train health workers for their rapid deployment to the affected areas. We need to work with the affected countries, UNMEER, and the WHO to use our $100 million dollars to help create a surge of trained health workers that we see so rarely – we saw it in the successful campaign to eradicate smallpox; we have seen it around the world in the efforts to eradicate polio; we saw it to a degree in the response to other outbreaks such as SARS and H1N1. But this surge is more complicated than any before it. This surge needs to be equal to the challenge of Ebola, and to do that it needs dedicated health workers from around the world. They are heroes, and they will meet this challenge, which is unlike any I have ever seen.I have no doubt that we can do this. We have no choice. We must contain this outbreak now.Thank you very much. I'd now like Anthony Banbury, who Special Representative to the Secretary-General and Head of the UNMEER here in Ghana, to say a few words and then I'll be happy to take your questions. Show Less -
Transcript of World Bank Group President Jim Yong Kim's Opening Press Conference at the IMF-World Bank Spring Meetings 2014
MR. DONNELLY: Hi, everyone. Good morning.Thank you for coming.My name is John Donnelly. I am Communications Advisor to World Bank Group President Jim Yong Kim.As you know, this will ... Show More + be an on-the-record briefing. We'll start with Dr. Kim's statement, and then we'll take questions from you.Thank you.DR. KIM: Good morning, everybody. Can you hear?I'd like to welcome you to the 2014 Spring Meetings of the World Bank Group and the International Monetary Fund. We are very happy to have all of you here.We live in a time of great contrasts, when fewer than 100 people control as much of the world's wealth as the poorest 3.5 billion combined. But we also live in a time when many developing countries have the strongest growth rates in the world, which each year helps millions of people lift themselves out of extreme poverty.Our economists estimate that roughly one billion people around the world live in extreme poverty today in 2014. This is down from an estimated 1.2 billion people in 2010.This difficult-to-grasp number is falling steadily and surely, but reaching our twin goals of ending extreme poverty by 2030 and boosting shared prosperity won't be easy. Developing countries will have to grow at a pace stronger than any time in the past 20 years. To end extreme poverty by 2030, the vast rolls of the poorest--those earning less than $1.25 a day--will have to decrease by 50 million people each year. Think about that number. To reach our goal, one million people each week will have to lift themselves out of poverty--that is each week for the next 16 years.And we strongly believe that this can happen.Economic growth has been vital for reducing extreme poverty and improving the lives of many poor people. But if this mass migration of people moving from poverty to prosperity is really to gather strength, we need growth that is inclusive, creates jobs, and assists the poor directly.Growth of course remains critically important--responsible for three-quarters of the reduction in poverty numbers today. So when we look at the global economy today, growth in high-income countries is accelerating and in developing countries is growing as well, although less briskly than before.Short-term risks to the global economy have eased. Increasingly, our worries are focused on the medium term. Our concern is that the pace of reform could be slowing in this post-crisis period. The focus must return urgently to the structural reform agenda. Even a small setback can result in leaving millions of families in destitution rather than escaping poverty.Today we are releasing a report called "Prosperity for All" which clearly makes the point that tackling poverty requires understanding where the greatest number of poor live. But it also shows that we must concentrate where hardship is most pervasive. Many smaller countries have far higher shares of their people living below the extreme poverty line. In 16 countries, more than half the population is living in extreme poverty.Reducing poverty in these places is as important as making progress in countries where the absolute number of poor people is much bigger.We also must ensure that economic growth in the years ahead is sustainable and takes us off the destructive path of climate change. Climate change can reverse hard-won development gains and could stop our end poverty efforts completely. We can't end poverty unless we take serious steps to protect our planet.In Tokyo 18 months ago, we promised to become a solutions Bank. A year ago in this same room, we announced our goal to end poverty by 2030 and boost shared prosperity. Six months ago, we announced our World Bank Group strategy for our twin goals. To implement this strategy, we needed to become fit for purpose and secure additional finance.Starting in July, we will be working differently. We will have global communities of experts in all major areas of development whose work will be aligned to our goals and put us on the path to become a true solutions Bank.Our focus will be on providing the best services possible in countries by keeping a strong presence in country offices and by providing global solutions to local problems.There is good news in finance as well. Over the next decade, our annual capacity is expected to grow from $45 to $50 billion a year now to more than $70 billion a year. This is possible thanks to a record IDA replenishment, our cost savings, our financial strength, and clients willing to pay more for our knowledge and services.We are now more and more fit for purpose. This allows us to make a huge contribution to the global efforts to end extreme poverty in a generation. I am optimistic that countries and their partners will take it on, seize this opportunity and erase this stain of extreme poverty from our collective moral conscience once and for all.Thank you very much, and I'll be happy to take your questions.MR. DONNELLY: Thank you.Please identify yourself and your outlet.The woman in the red, back there.QUESTION: Thank you.Dr. Kim, my name is Sandra from China Business News.I have a question on China's urbanization studies, the most recent report, the joint report by the World Bank and China's State Council. What are some of the key findings we have since last year's Annual Meeting?My second question is when we talk about urbanization, a lot of Chinese people think about that there will be more and bigger buildings being built; so, how can China implement urbanization without causing overheating in the housing market?Thank you.DR. KIM: Thank you very much.The China Urbanization Report was one that was requested directly by Premier Li Keqiang, actually, before he became Premier, and it follows on the study that we did several years ago, China 2030.What we have learned from this report is that when the Chinese Government takes seriously the process of writing a report, the outcome is usually one in which the findings in the report are taken very seriously. If you look at China 2030, that was the first time that a paper written jointly by the World Bank and the Chinese Development Research Council said things like China will have to move its growth strategy away from investment in exports and more toward consumption and services; and competition for state-owned enterprises will be important. It was the first time that was said.What we see now is that the reform agenda continues, and despite lower growth rates, we see a tremendous resolve to continue down that path of reform.So, in shaping the Urbanization Study, we knew that whatever we wrote and whatever was in that document, the government would take very seriously and begin to move; and importantly, they have already begun to move.So there are fundamental issues like, for example, the hukou system, which you know well, where you can only receive services where you were born. So what happens is that when people move to the cities, they can't receive services.But what the report showed was that if you reform that system and provide services in the cities, you can actually increase economic growth--so, in other words, a reform of something that people have been calling for for a while will actually improve growth.The other things that are in the report are things like land rights. Reforms clearly will help not only the process of urbanization but farmers. So the things that are in the report may have been thought of as revolutionary even four or five years ago, but what we know is that once the government takes these kinds of reports seriously and works with us, that these are reforms that are very likely to happen.The other thing in the report is that there are already tremendous innovations in China in the building of cleaner, more livable cities. That's the goal. I think one of the reasons why Premier Li asked us to do this study--asked me directly, actually, to do the study--was that there is a very deep concern about pollution in the cities, for example, and there are a lot of strategies in that paper that suggest how to build cities that will be much cleaner over time.So, on the one hand, I think we have in that report tackled many of the most important issues that China is facing. I think there is a clear path to reform.Two, I think it is going to work, because I think the Chinese Government will take it seriously.And the third and probably the most exciting thing about this report is we think it will actually help other countries thinking about how to build cleaner, more livable cities in their particular context.MR. DONNELLY: Next question.Ian?QUESTION: Ian Talley, Wall Street Journal.I am wondering if you can elaborate, or tell us how concerned you are about the potential for escalation of sanctions in Ukraine over Russia.DR. KIM: Well, as you know, Ian, we are not a political organization, and we are forbidden to be directly involved in political matters. But we have been working very closely with the Ukraine, and we watch carefully as I think talks are continuing, and our role right now is to maintain very strong relationship with both the Ukraine and Russia.So, in Ukraine, we have put together a $3.5 billion package, about $1.5 billion of which will be provided in direct budget support. We are working very closely with the IMF and are extremely encouraged by the negotiations and work that the IMF is doing on the ground, and we suspect that the $1.5 billion that we will put directly into budget support, part of that will be linked to the IMF's financial stabilization package, a very early infusion of cash to stabilize the economy. But then, afterward, the rest of it, the rest of the $2 billion, will be focused on infrastructure projects, will be focused on direct support especially for the poorest, health and social welfare-type programs.So we are right there, working with the Ukraine and hoping to help it down its path and get past this crisis period.At the same time, we maintain a very good relationship with the Russian Government. We are concerned about the impact of the Ukrainian crisis on growth. If the impact is relatively mild, and if the crisis is relatively short, still we have reduced our growth expectations down to about 1.2 percent--1.3 percent, excuse me--1.3 percent for the year, which is about half of what our previous estimation was.On the other hand, if the crisis goes longer and has a deeper impact, we feel that the Russian economy could contract as much as 1.8 percent this year.So this is a very serious issue for Russia, a very serious issue for its growth prospects, so we simply urge all of the parties to continue with negotiations and find a peaceful means of moving forward.MR. DONNELLY: Okay. Down here.QUESTION: Hi. My name is George Wiafe, from Ghana.What should emerging markets like Ghana be doing, looking at the effect of U.S. tapering? Already our currency has gone down by a little over 18 percent; growth is likely to suffer as well. What should we be doing so that whatever happens in the U.S., the shock is minimized on a country like Ghana?DR. KIM: Well, there is no single piece of advice that I can give, but if you step back and look at developing countries overall and ask a fairly straightforward question--that, once the announcement of taper happened in May, what percentage of developing country economies' currency depreciated, and which ones actually went up--it turns out that about 62 percent of developing country economies' currencies actually appreciated in that period of time.So the impact was not the same across all the developing world, and what we see is that countries that have greater imbalances, greater weaknesses--for example, countries with high current account balances, countries with high debt ratios that were not well-managed, countries that had high levels of debt in external currencies--these countries had the biggest problem with depreciation in currency.So the advice to Ghana, as to most of the world, is to get the fundamentals right; really think about debt management, really think about your current account balances, build back your fiscal buffers, enact fiscal policies that are prudent and appropriate, look at your public sector spending so that it is more focused and effective.Those are pretty similar stories throughout the developing world, and it seems that the market is picking on countries with these weaknesses in a very focused way; so the more that countries focus on their weaknesses, the better-off they will be.Now, our hope is that the taper will be gradual, and right now, indications seem to be that everyone intends, including the U.S. Federal Reserve, to make this as gradual as possible. Right now, the inflow of capital makes up about 4.6 percent of developing country budgets, 4.6 percent of GDP of developing countries. What we hope to see is, if there is a gradual tapering, that that number will go from about 4.6 percent of GDP to 4 percent of GDP by 2016. If that happens in a gradual fashion, which we hope it does, the growth in the first world economies--the growth in the U.S. economy especially but the growth in Europe and Japan as well--should offset that decrease in capital flow so that developing country economies can continue to do well.Overall, the story of developing economy growth is still a very, very positive story that, over the last six years since the beginning of the crisis, still, the growth number are better than anyone had expected. Developing country growth was what kept global growth up especially during the most difficult years. And I think that part of the optimism--cautious optimism, if you will--is the fact that now that the U.S. is growing, Europe is growing, and Japan is growing, the emerging market economies have gone through some turbulence, but they seem to also be on a very good path.For example, at the end of January, there was a little blip, and there was a relative outflow of capital from the emerging markets, but that actually reversed and recovered by March.So, even though there are these little blips, we think that the outlook for emerging market economies is still very good. So the message is really get back to fundamentals, tackle the basics, and if you've got the fundamentals--if the fundamentals are in good shape--then the market will recognize that and punish Ghana less.MR. DONNELLY: Here, in the front.QUESTION: Hi. Alex Brummer, from the London Daily Mail.There has been quite a debate about the 0.7 percent of GDP which should be devoted to foreign aid at a time of great austerity in some of the advanced countries, and people wonder whether it is time to abolish which was rather an artificial number which was fixed upon in the 1950's, and instead of focusing on the quantity of aid to focus much more on the quality of aid and whether we ought to remove that 0.7 percent target.DR. KIM: Thanks, Alex.Let me just say for your readers that I think that Prime Minister Cameron's and Finance Minister Osborne's decision to continue with the 0.7 commitment was extremely courageous and extremely welcome.We work very closely with DFID, and DFID has continued to grow in both stature and reach, and their support has been critical both to us and to the countries that they impact directly.Right now, all of foreign assistance--the entire package of official development assistance--is about $125 billion, compared to the needs, which are so much greater than that. So, Africa alone has $100 billion a year in infrastructure needs; the BRICS countries are talking about a $4.5 trillion infrastructure deficit over the next five years.So, just in the area of infrastructure, there is no way that official development assistance can ever meet those needs. What that means is that every dollar of official development assistance is needed, and every dollar of official development assistance has to be used in a way that will bring in other players into the game.I think the big story for economic development in the years ahead is that we will never be able to accomplish goals like ending extreme poverty unless the public and private sectors work much more closely together.So, if you look at those kinds of infrastructure needs, for example, in the BRICS countries, we are working very hard to make sure that every dollar of our lending is focused in some way on building a foundation for private sector companies to get involved. I think we have a very interesting situation right now where there is a lot of money more or less sitting on the sideline--trillions of dollars that are yielding very low returns--and at the same time, there are multiple, we feel, very bankable, projects in the developing world that could yield much better returns for this capital.The task, then, is for us as a public multilateral organization to structure those deals so that not only does the infrastructure get built but that investors receive a return. That is really going to be the story of the future.So the 0.7 is critical, and if we can keep that up, that's really where--we are going to have to really use that money to again build the foundation so that the development of the future, which will be much more public-private, can really take off.So, let me just--and please quote me on this--let me register my own great thanks not only to Prime Minister Cameron and his government but to the people of the United Kingdom. I know there is a hot debate, but I want them to know that their generosity is having a huge, huge impact out in the world, and DFID is very much focused also on this idea that the development of the future is going to have to be multifaceted and is going to have to really think about how these dollars really get us to the big, transformative outcomes that we know are possible.MR. DONNELLY: Okay.The woman in the far back.QUESTION: Dahlia Conicoven [phonetic] for AP Kuwait TV.The major risks facing the global economy with respect to the Middle East--have any specific steps to help the staggering economies there been discussed?Thank you.DR. KIM: As we look across the Middle East, we have to be mindful of noting and applauding the successes where they happen. With the advent of the national dialogue in Yemen, I think we were very encouraged to see that happening in a country that is facing so many difficulties.I recently met with the Prime Minister of Tunisia, and the passage of a Constitution in Tunisia, I think, is a source of great hope. As a result of the really impressive work that that government has been doing, we have increased our lending to $1.2 billion a year. That compares to a rate of about $300 million a year before the Tunisian Spring and $600 million a year afterward. So we are doubling our lending to Tunisia.We continue to marvel at the generosity of the governments and the people of Lebanon and Jordan continuing to accept refugees from Syria despite enormous hardship.So our strategy is focused on helping those governments especially, and we are working in many, many of the countries in the Middle East, but we are especially focused on helping those governments that have shown a very strong commitment to reform, and we are also focused on helping as much as possible the countries that have done so much to bear the burden of the crisis in Syria.So we continue to be very active. We are looking for solutions wherever we can. The development of the private sector and the creation of jobs is critical. Tunisia still faces a problem of having a very high percentage--over 50 percent--of college graduates being unemployed. We need to figure out how to spur growth in the private sector so that jobs can be created.MR. DONNELLY: In the far back, the person who has had his hand up the whole time.QUESTION: Hello. My name is Ahmed Karki [phonetic] from Egypt, and my question is about the country.Kindly can you comment on the World Bank's programs in Egypt now in the light of transition and the upcoming presidential elections?DR. KIM: We have had a very extensive program in Egypt, and much of it has been focused on helping to provide basic services.There was a time when we had stopped our disbursements, but we have continued them, and we watch with great concern as the political situation unfolds, but the vast majority of our work is focused on helping the poorest, on helping to provide basic services. And we want to continue to do that. We are very happy that we are able to continue disbursement, but we are following the political situation very carefully, and we hope it goes to a good resolution, perhaps even something closer to what Tunisia has been able to do.Anyway, the point is that because so many of our programs are focused on providing basic services, we will continue as much as possible.MR. DONNELLY: The woman right here, two in.QUESTION: Good morning[Interpreted from Spanish]: May I speak in Spanish?In Paraguay, the statistics from the government have reduced the level of poverty four points over the last few years and 10 percent in terms of extreme poverty. What would you recommend to the government, and what should the people do who have emerged from extreme poverty, and how will the World Bank continue to support Paraguay specifically?DR. KIM: It's a great question, and it is one that many countries in Latin America face.So, for example, in larger countries like Brazil and Mexico, there has been great success through so-called conditional cash transfer programs, Bolsa Familia in Brazil and Oportunidades in Mexico. They have been very effective in lifting especially families, women and children, out of poverty.But then, the next great question is how can those programs then lead to these women and these families entering into the formal labor market. So the big issue is job creation. And it is the same, I think, throughout Latin America.We work very closely with Paraguay, so issues ranging from making sure that the quality of public spending is as high as it can be, and then also doing what needs to be done to create a business environment where, again, the private sector can grow, and those jobs can be created.Our report from two years ago, the World Development Report, pointed out that in developing countries, over 90 percent of all jobs are created in the private sector, and we have been especially focused on helping small and medium enterprises grow, locally-owned small and medium enterprises grow and create jobs.So that is really the issue. It is an urgent issue all over the world, job creation, but when you have success in reducing inequality and lifting people out of poverty, you have to really focus on making sure that they can have the good jobs that everyone desires.MR. DONNELLY: We have just four more minutes, so we'll take one, possibly two, quick questions.In the far back, please.QUESTION: Thank you.Philip Inman from The Guardian in London.Could you explain why the Bank is increasing fees for its expert advice to countries when those countries, I assume, can ill afford to pay?The other is can you answer the criticism from the Bretton Woods Project that the Bank has wasted billions of dollars on paying financial intermediaries?DR. KIM: We have increased fees for a very specific group of countries. One of the things that has been part of our change process that has been very important is that without a capital increase, we have been able to increase our capacity to lend more than at any time in history. So, in other words, this past change in the financial situation of the World Bank Group as a whole is the largest increase in history, and we have done it without a capital increase.The way that was done was that because of demand, Brazil, China, India, Indonesia and Mexico have all asked for us to increase what is called our single borrower limit. We had a limit as to how much any single country could borrow, but we were able to increase that limit for those five countries by $2.5 billion.So the increase in fees is an increase over--in other words, all the money that will be loaned that is above the single borrower limit, we have increased the fees by 50 basis points.In terms of direct advice that we are giving, especially to the poorest countries, that has not been increased. And of course, our IDA, which is the concessional loans for the poorest countries, are zero interest with a 40-year maturity, essentially. That has not changed. And for some countries, especially the very, very poorest, we still provide grants.So the fees have only changed for a very small percentage of countries, and we are very grateful, because they had to approve that in our Board, and as you can imagine, that was not an easy conversation. But we take this as a vote of confidence that despite the increased cost, these countries are ready and willing to pay it because they like what they get from the World Bank Group.In terms of financial intermediaries, it has been one of the strategies that the IFC has used in terms of making access to finance a reality. So I can tell you that the vast majority of the financial intermediaries we invest in are local banks, and this is our way of making financing available for even the poorest households and businesses.We are continuing to think about ways that we can improve access to finance, so just to give you an example, in China, in India, we have invested in financial institutions that are making loans available to even extremely poor urban dwellers. I visited an apartment building in one of the cities in Uttar Pradesh, the poorest State in India. An apartment complex had been built because of financing made available by one of our financial intermediaries.In Chengdu in China, one of our financial intermediaries had built a branch of a local bank that was specifically tailored to women to ensure that women had greater access to financial services.So the problem of poor people in poor places getting access to finance is a huge problem, and it is one of the problems we have to tackle if we want to end poverty and boost shared prosperity. So this is the mechanism that we have been using.If there are problems with particular financial intermediaries, I want to know about it. And when there have been problems, I have been very clear with my own staff--there are going to be problems; there are going to be problems that arise, and when they do arise, we have to face it directly and make amends as needed and continue to go forward, because this problem of lack of access to capital at that level is a major one, and we are trying to solve that problem.MR. DONNELLY: Okay. We have one minute--quick question, quick answer.Right here.QUESTION: Thank you.I am [unclear] with Norway Business Daily.I was wondering if you could say a few words on climate change, since the IPCCC is releasing its final report this weekend. UN's Climate Chief, Christina Figueres, has said that up to three-fourths of all [unclear] resources should remain in the ground if we are to meet the 2-degree Celsius target. How would that affect the developing nations?DR. KIM: Well, I have been very clear on the importance of climate change. I have been very clear also on the need for a very clear, robust, practical plan to tackle it. At the World Bank Group, we are focusing on five main areas.The first and most important one and the one that is the most controversial is establishing a price on carbon, and we continue to work with many different groups on this. There are some very promising programs. There is a carbon trading scheme in China that is taking off. We continue to work with countries and regions that are trying to build those kinds of carbon trading programs, but it is difficult.Another very clear issue is that we have got to help countries remove fuel subsidies. We share that very strong conviction with the IMF. It is both a drag on public budgets, and it is also very bad for the environment but also, politically, very difficult to get rid of.We also are also focused on making long-term financing available for renewable energy--again, with China, building cleaner and more livable cities. That is a fourth area that is critically important.And we think we can make tremendous improvements in agriculture that both increase productivity and put more carbon into the ground.You know, we are quickly coming to the point where we are not going to be able to keep global warming below 2 degrees Celsius, and warming to 2 degrees Celsius is going to have major implications. Things that we have pointed out are that 40 percent of the arable land in Africa will be gone at 2 degrees Celsius; Bangkok could very well be underwater at 2 degrees Celsius.So this is really serious business, and I think the most important thing for us now is to find ways forward, tackling things like--everybody wants to live in cleaner cities, everybody wants more productive agriculture, everybody wants to be able to have access to finance for renewable energy; these are things that we can all agree on. Other things, like fuel subsidies and carbon taxes, are much more difficult, but we have to tackle them anyway.So we are being very practical, very focused. We are looking at our entire portfolio to make sure that we are doing everything we can to battle climate change. But this is just one of those things where--I think the psychologists call it "cognitive dissonance" --we have talked ourselves out of taking it seriously, but in 10 years, in 15 years, when battles break out because of lack of access to water and food, we are all going to be sitting there, thinking: Gosh, why didn't we do more back then?One of the things that I am trying to do, really, thinking about my own children, is to not have any regrets in 10 years; to do as much as we can today so that when that moment comes, we will at least be able to look back and say we did everything we could.But I am extremely concerned about it. I don't think the world is taking it seriously enough yet.MR. DONNELLY: Thank you very much. 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Speech by World Bank Group President Jim Yong Kim at the Government of Japan-World Bank Conference on Universal Health Coverage
Translated from Japanese: Thank you, Mr. Shibusawa, for that kind introduction, and for the excellent work of JCIE.)Translated from Japanese: I would like to extend my heartfelt thanks to Minister Aso... Show More + , Professor Takemi, and the Government of Japan for hosting us, and for the continuing strong partnership between Japan and the World Bank Group.Translated from Japanese: I also would like to thank all of the honorable ministers from Ethiopia, Ghana, Myanmar, Senegal, and Vietnam who are here with us today. Thank you for your time and for your commitment to universal health coverage.It is very appropriate that we are meeting in Japan on the topic of universal health coverage. When it comes to universal health coverage, Japan has led the world by example.Japan achieved universal health coverage 52 years ago in 1961—17 years before the global community gathered in Alma-Ata to call for "health for all" and "development in the spirit of social justice." The Kishi and Ikeda reforms that led to universal coverage promoted social solidarity and helped unleash Japan's rapid economic growth and shared prosperity.Japan is not only a leader in achieving universal health coverage for its own citizens, but Japan is also a leader in extending this commitment to universal health to poor people around the globe. Through its leadership of G8 summits and its various roles on the global stage, Japan has helped mobilize substantial global health and development assistance that has saved countless lives and advanced the health and well-being of millions. Today, there is a large and growing movement in developing countries to undertake the necessary comprehensive health reforms to achieve universal coverage. To reflect this reality, the goal of universal health coverage should be firmly embedded in the emerging post-2015 global development agenda.The quest for universal coverage is not only a demand for better health – it's a demand for equity.At the World Bank Group, achieving universal health coverage and equity in health are central to reaching the global goals to end extreme poverty by 2030 and boost shared prosperity.My colleagues and I at the Bank Group are deeply committed to helping countries realize their aspirations for universal coverage. Our aims are clear: First, everyone should have access to affordable, quality health services. Our commitment is universal, but during the next 755 days until the MDG deadline in December 2015, we are putting a special focus on expanding access to vital services for poor women and children. We are helping the poorest countries scale up results-based financing programs that are already producing dramatic improvements in maternal and child health in countries from Afghanistan to Zimbabwe. Second, no one should be forced into poverty, or be kept in poverty, to pay for the health care they need. Every year an estimated 100 million people – that's more than a quarter of a million people every day – face poverty as a result of out-of-pocket health care costs. So we must pay special attention to affordability for the poorest 40 percent of the population in every developing country.Third, all countries must harness investments in other sectors beyond health that provide the essential foundations for a healthy society. Achieving universal health coverage requires solutions beyond the health sector – including targeted efforts in areas such as education, social protection, roads, transport, water and sanitation, public finance, and information technology. For example, we know that one of the most successful interventions to improve child health has involved putting money in the hands of poor mothers via conditional cash transfers. Air quality improvements, as well as tobacco taxation and road safety policies can play a critical role in turning the tide on the alarming increase in chronic conditions and injuries we see today in so many developing countries. Helping countries advance universal health coverage is a strategic priority across the World Bank Group. Through our Bank loans and technical assistance, we are partnering with middle-income countries to design and implement tough health sector reforms and contain costs, while at the same time expanding and sustaining coverage. Through IDA, our fund for the poorest countries, we are supporting the next generation of countries to lay the foundations for universal health coverage. Japan's continuing strong support for IDA in our current replenishment round will be critical if we are to scale up our efforts over the next three years. And through the International Finance Corporation, our private sector arm, we are helping both middle- and low-income countries harness the resources and innovation of the private sector, working in concert with the public sector. The private sector represents a large, and in many cases, growing share of the health care market in developing countries--so the private sector must be integrated into universal health coverage reform efforts.While there is no single pathway for countries to achieve universal health coverage, all countries can learn from one another's experiences as they chart and calibrate their own paths. Why, for example, are some countries able to achieve better maternal and child health outcomes than others with the same level of resources? How have some countries managed a rapid expansion in coverage? What are the best ways for governments to engage private sector partners while ensuring equity and quality?As a global health community, we need to document, evaluate, and share lessons across countries, to save lives, reduce spiraling health care costs, and demonstrate value for the money. That's why at the World Bank Group we are placing a priority on what we are calling the science of delivery. We are gathering data and evidence on what works and what doesn't. We are beginning to systematically capture this knowledge and then we will make sure that these lessons from experiences around the world can be applied to local situations. This is where our Japan-World Bank Group Partnership Program on universal health coverage and this conference play such an important role, yielding a wealth of practical lessons from country experiences. Today, I am pleased to announce that with our Japanese partners we are releasing a synthesis of case study findings from 11 countries that have achieved, or are committed to achieving, universal health coverage.These 11 countries are diverse – geographically, culturally, and economically. But all of these countries are demonstrating how these programs can improve the health and welfare of their citizens and promote inclusive and sustainable economic growth.The good news is that many low- and middle-income countries are introducing fundamental reforms and achieving remarkable progress. So what are the main lessons from these 11 countries? Here are five:One, strong national and local political leadership and long-term commitment are required to achieve and sustain universal health coverage; Two, short-term wins are critical to secure public support for reforms as in the case of Turkey where hospitals were outlawed from retaining patients unable to pay for care; Three, economic growth, by itself, is insufficient to ensure equitable coverage—so countries must enact policies that redistribute resources and reduce disparities in access to affordable, quality care;Four, strengthening the quality and availability of health services depends not only on highly skilled professionals but also on community and mid-level workers who constitute the backbone of primary health care. And finally, five, countries need to invest in a robust and resilient primary care system to improve access and manage health care costs.Not surprisingly, all of these cases also demonstrate that as countries move toward universal coverage, they will confront competing demands and continuing trade-offs. Countries face choices that can either enhance or erode coverage. The countries which have been most successful in expanding coverage have been in a mode of continuous learning – from what is happening both inside and outside their borders – and adapting their approaches based on the best available knowledge and evidence.A promising message from these case studies is that even low-income countries with low levels of health coverage can still aim for universal health coverage. Countries can start by building their institutional capacity, learn from the experiences of other countries, and adapt innovative approaches that can catalyze the expansion of coverage.These are the cross-cutting lessons. Now let's take a closer look at a few of these countries:In Turkey, an economic crisis in the early 2000s prompted major government reforms and laid the groundwork for the 2003 Turkey Health Transformation Program. Turkey cleaned up government deficits and created leaner and more efficient state bureaucracies—and also opened doors for reform in the health sector by breaking old interest group politics. Outcomes are impressive: Today, more than 95 percent of the Turkish population is covered by formal health insurance. The Program now provides a high level of financial protection and equity while ensuring high and rising levels of patient satisfaction. Furthermore, infant mortality rates have declined from 28.5 per 1,000 live births in 2003 to 10.1 per 1,000 live births in 2010, and the maternal mortality ratio fell from 61 deaths per 100,000 live births in 2000 to 16.4 deaths per 100,000 live births in 2010. Turkey's example proves that financial constraints—even a major financial crisis—can catalyze the expansion of coverage. The Bank Group has been pleased to partner with the Turkish government to support this effort. Thailand has focused on strengthening its health workforce, with the Thai Network of Rural Doctors leading the push for reforms. In addition to increasing the number of doctors and nurses, the government raised basic salaries and introduced incentives to attract and retain health workers. As a result of the health workforce scale-up and other factors, popular utilization of essential health services has improved. Since the Universal Coverage Scheme was introduced there has been a declining trend in the incidence of catastrophic health expenditures, defined as out-of-pocket payments for health care exceeding 10 percent of total household consumption expenditure. The incidence dropped from 6.8 percent in 1996 to 2.8 percent in 2008 among the poorest people in the program. The impact on province-specific incidence of impoverishment has been even more impressive: in the poorest rural northeast region of Thailand, the number of impoverished households dropped from 3.4 percent in 1996 to less than 1.3 percent in 2006-2009. Ethiopia launched its Health Extension Program in 2003 to promote universal coverage of primary care. The program delivers 16 clearly defined packages of health services for free. At the center of the program is the network of health extension workers – all women, 10th grade high school graduates recruited from their communities, trained for one year and redeployed back into their communities. More than 35,000 health extension workers have been trained and deployed thus far, and their services are now in high demand from other sectors as well – such as adult literacy or sharing of sustainable agriculture techniques. The challenge is to continue to enhance the skills and performance of these frontline workers and to protect their time to ensure they can provide communities with the quality health services they need. The latest Ethiopia Demographic and Health Survey data show that between 2005 and 2010, child mortality fell from 123 per thousand to 88 per thousand, a 28 percent decline. Over the same time period, Ethiopia also reports impressive reductions in both stunting among children and anemia among women; and contraceptive use nearly doubled, contributing to a reduction in total fertility rate. And in Peru, the government is leveraging its sovereign wealth funds to jumpstart ambitious reforms aimed at realizing universal health coverage. The Bank Group is partnering with the Ministry of Health to develop a national set of indicators that will allow them to measure, monitor, and evaluate the expansion of coverage, and take into account the epidemiological transition that the country is facing. These examples show that all countries face challenges implementing complex health systems reforms to achieve universal health coverage. That's why we need global mechanisms through which countries can gain access to the latest experimental knowledge of what works and what doesn't, and why. We need to understand how successful examples can be taken from abroad and implemented locally. This points to the importance of having a joint learning platform and network in which policymakers, practitioners, and development partners can engage on the practical, how-to issues of universal coverage reforms, and put knowledge into practice with hands-on problem solving. The World Bank Group is moving toward a Global Practice as a platform for supporting countries in achieving these goals. This also underscores the vital importance of measurement. Although priorities, strategies, and implementation plans will differ from one country to another, all countries need to make their universal health coverage policies and programs accountable and measurable, so they can track progress and adjust as they go.But in order for countries to continue learning from one another, and to benchmark progress, the world needs a measurement framework that can provide a common, and comparable, set of metrics.That's why at this conference, the World Bank and WHO are releasing a joint framework for monitoring progress toward universal health coverage with two targets, one for financial protection and one for service delivery. For financial protection, the proposed target is by 2020 to reduce by half the number of people who are impoverished due to out-of-pocket health care expenses. By 2030, no one should fall into poverty because of out-of-pocket health care expenses. This is no small feat: this would mean moving from 100 million people impoverished every year now to 50 million by 2020 and then to zero by 2030.For service delivery, the proposed target is equally ambitious. Today, just 40 percent of the poor in developing countries have access to basic health services such as delivering babies in a safe environment and vaccinating children. We propose that by 2030 we will double that proportion to 80 percent coverage. In addition, by 2030, 80 percent of the poor will also have access to many other essential health services such as treatment for high blood pressure, diabetes, mental health and injuries. In the next three months, WHO and the World Bank will consult with partners to work out the details of tracking these targets.Yes, these targets are bold - but we need bold targets to close the gap on universal coverage. Simply put, targets drive action. Without the ambitious 3 by 5 target for HIV, I do not believe that today that we would have 10 million people and counting on antiretroviral treatment.So as we consult, let's also commit to moving this forward. Let's not make the perfect the enemy of the good. Countries' futures -- and many people's lives -- are at stake.Translated from Japanese: In closing, I want to again recognize our hosts, the Government and people of Japan, for their continuing commitment to UHC. Translated from Japanese: We must do whatever we can so that every country in the world can benefit from the experience of Japan. Some 30 developing countries are implementing programs to achieve UHC, and many more are considering doing so.Like our Japanese partners, my colleagues and I at the World Bank Group stand ready to help developing countries advance on the path to universal health coverage. And while this will not be easy, the lessons and experiences we are sharing today show that it is possible for all countries to realize this goal.It has been 20 years since the landmark 1993 World Development Report, which led to a generation of investments that produced dramatic achievements in global health. It's time to finish the job in this generation. Let us all leave Tokyo with a renewed commitment to ensure that everyone in the world will have access to affordable quality care so they may lead healthy, productive lives -- lives of dignity, equity and opportunitiesThank you very much. Show Less -
Transcript: Empowering Young Africans to Live Their Dreams - Remarks by World Bank Group President Jim Yong Kim
DR. KIM: Thank you, I apologize for being noisy, your Excellency President Kikwete, but I promise you it will be brief noise and may I suggest that as one strategy put your earphone in and turn to the... Show More + Japanese channel. Maybe you speak Japanese, I shouldn't be presumptuous. Thank you very much and I appreciate very much the problem of getting so much different advice so from so many different places when you have such clear and practical problems to tackle. So let me just try to share some specific lessons that we've learned in the African context of that [unclear]. This might not be obvious but the problem in Africa is not unemployment per se, it's low productivity. I have worked in poor countries all of my life and if there's one thing that I know is that poor people work. They are employed. They can't afford not to work but what they do to survive is one thing; whether it's productive or even more importantly, part of the formal sector is really the question. About 60 to 70 percent of Africans work on small family farms and household enterprises and unless we do something most of the two million youth entering the labor force every year will continue to do informal sector work that yields small outputs and low returns. While formal sector jobs are growing fast, 10 percent growth in Ghana, Tanzania and Uganda, informal unfortunately is still the norm for so much of Africa and will remain so for a while. So the most important thing is we need to find pathways to productivity in whatever type of work that youth undertake, especially. As we've seen in East Asian countries that have reaped a demographic dividend, investing in young people has boosted productivity across entire economies. The World Bank Group will continue to support a very broad agenda to help address the youth unemployment challenge in a holistic and sustainable way. We've helped get millions of children into school but our concern now is quality primary education. As wonderfully productive and helpful and important as the Millennium Development Goals have been we feel that especially in primary education we focus so much on getting kids into seats in schools, we haven't really focused enough on what they're learning. The really good news, especially I think the good news for Africa, is that there are lots of wonderful insights and new technologies that could provide the opportunity in primary, secondary and even in tertiary education for Africa to leap generations of bad practice and get kids in school learning. It's not necessarily a laptop or an iPad in people's hands, it's not the hardware but it's the wonderful new software that we found that allows teachers to spend more time providing individual attention. So this is one of the issues that is very important to us at the World Bank Group and it will continue to work on. There is the potential of an absolute revolution in primary education, secondary education, job training and tertiary education that frankly many of the high income countries are not utilizing in their own school systems. There's a chance for Africa to leapfrog and do it better and we're completely committed to work with you on that front. We're helping young people in Cote d'Ivoire, in Nigeria access better training opportunities in the informal sector but we're also helping youth in Togo develop entrepreneurial skills. These are the kinds of interventions that come from both the public and the private sector that we think can have a transformative impact. Ninety percent of all jobs in our jobs report are created in the private sector. So part of the task of youth employment is looking at the business environment. Many of you know we publish a Doing Business report, and I just want to be clear. What the Doing Business report attempts to do is very straightforward and very clear every year. It is how easy is it for small and medium enterprises to register and to work and to be effective in any particular country. There have been many criticisms of the Doing Business report and any report, any survey can get better, and we commit to continuing to get better. But we have to recognize that because 90 percent of all jobs are created in the private sector, creating an environment for the private sector to flourish is a direct program aimed at increasing employment opportunities for young people. So we also are completely committed to working with all African countries and improving their business environment in a way that leads to good jobs, to decent work as I would otherwise say. We believe that that's very important, so good jobs that are in full sector that give people a sense of hope, a sense of the future, is critical. Our mission at the World Bank Group is to end poverty, extreme poverty by 2030 and boost shared prosperity. We know that the absolute key to achieving those targets is to unlock the potential of African youth and we will remain ever committed to that mission. Thank you.[Applause]Question about World Development Report on jobs and also the previous one on gender:DR. KIM: We think the Jobs Report is very much, we think, completely linked to the previous report that we put on gender equality. So if you look at the issue of gender, in so many ways investing in girls, investing in women, means investing in the economy, investing in growth, investing in jobs. For example, the data is overwhelming that investing in girls' education is one of the best investments that any country can make.But let's go further. Once the girls graduate from high school, ensuring that they have access to financial services. There are still billions of people in the world that don't have a bank account, and if you look at the situation in Sub-Saharan Africa where access to cell phones has grown so quickly, faster than any other society, what we know is that there are all kinds of wonderful new innovations that would allow women to have access to financial services over the phone.There's no reason that we can't scale up access to financial services, and of course the next step is access to capital. And we know that when you give women even access to small amounts of capital that they can be drivers of economic growth in ways that are really quite astounding. So in every way, we believe that the youth employment agenda, the jobs agenda, and the gender equality agenda are intricately linked. 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 -
World Bank Group President Dr. Jim Yong Kim at Brookings Institution
Global Development at a Pivotal Time: A Conversation with World Bank President Dr. Jim Yong KimMR. TALBOTT: My name is Strobe Talbott and it is my great pleasure to welcome you here to Brookings... Show More + this afternoon for a conversation with the new President of the World Bank Group.Whenever we have a distinguished visitor here to Brookings, in particular--and particularly if it's somebody who is coming here for the first time, we're always careful to check with his protocol people on exactly how the distinguished visitor wants to be addressed, whether we use "Doctor" or "Honorable," whatever, and the word came back "Jim."[Laughter.]MR. TALBOTT: So, welcome, Jim. It's really great to have you here. A couple of your successors, your most immediate successors, were frequent visitors here, particularly Bob Zoellick as recently as just a couple of weeks ago as he offered some reflections on his way out of the office that you now occupy.And Bob's predecessor, Jim Wolfensohn, was, for many, many years an outstanding trustee of this institution and made it possible for us to broaden and deepen our own work on development, and it's great to see on your team Navtej Dhillon who is an alumnus of this organization.Navtej, great to have you back here, as well.Jim is going to give us a sense as he takes on this extraordinarily important and challenging job of his priorities and his overview of the challenges ahead.I think everybody here knows quite a bit about his career, his dedication to improving health and development around the world, among other things as the cofounder of Partners in Health and also as a former Director of the World Health Organization's HIV/AIDS Department.And I think you also all know that, immediately before taking on this assignment, he was the very highly regarded President of Dartmouth, a post that he held for three years.Our order of the program is very, very simple. Jim is going to offer some remarks from the lectern here and then he is going to enter into a conversation with Kemal Dervis, who is our Vice President and Director of Global Economy and Development here at Brookings, a former head administrator of the United Nations Development Program and a former senior official of the World Bank.So, these two gentlemen have covered a lot of the same ground in their careers. They will do in an introductory conversation between the two of them and then open it up to all of you.So, Jim, the microphone is yours, and thank you again for being with us.[Applause.]DR. KIM: Thank you. It's such a pleasure to be here, Strobe, but when you said that my successors have been here, as the man who knows everything about Washington, I thought, "Oh, my God, what does he know that I don't know." I still have five years, Strobe.Thank you for the kind introduction and I just want to share with you a few words before we jump into the discussion.Kemal, I'm so pleased to be with you today. You're one of the heroes of the World Bank. And in many ways, the Brookings Institution, and the Global Economy and Development Program that you head is a showcase for evidence-based policy research, an approach that's critical for the World Bank today.As many of you know, I'm in my third week at the World Bank, and I'm still learning about this great institution. So, let me use this opportunity to share my early reflections in the role of the World Bank in global development today. I want to start by making two points. First, the last decade has been very good for many, though not all, developing countries. Progress has not come easily. It was borne out of hard work, learning from success and failures, bold reforms, and strong partnerships. This decade of achievement definitely inspires optimism for the next phase of our development work. My second point is that while we should be proud of the progress of the last decade, we must acknowledge that 1.3 billion people still live on less than $1.25 a day. This is a stain on our collective conscience. Aggressively attacking poverty is both a moral and an economic imperative. The next phase of global development will require us to address critical challenges, if we are to make progress. As a global institution with 188 member countries, the World Bank must play a pivotal role in brokering solutions to achieve a world free of poverty. But in order to succeed, the Bank must also evolve and become better. Let me elaborate.For the last decade or so, remarkable things have been happening in the developing world. Since 2000, nearly 30 developing countries have grown by 6 percent or more a year. We've never seen this kind of rapid and sustained development across so many countries. High-income economies also grew about 1.6 percent, and so we witnessed both growth and convergence. Developing countries are now the engine driving the global economy, accounting for around two-thirds of global growth. We can fairly say that the concept of a "Development Decade" that eluded us for 50 years was finally achieved.This story of transformational change is not just a story about emerging economies like India and China. It is broad-based, and extends to countries that are land-locked like Rwanda, a country that I visited many times, that are small like Laos and large like India; that don't have natural resources, like Ethiopia; and it extends even to countries that were once mired in conflict, like Mozambique.This story of transformational change is also about new gains in the fight against poverty. There are millions of people who are no longer poor; there are many more families who are sending their children to school; and there are many more communities that have electricity, water and access to health care. The rate of decline in child mortality in Africa is double what it was a decade ago. The overall percentage of the population in the developing world living on less than $1.25 a day was 22 percent in 2008--half the 1990 figure. The Millennium Development Goal of halving the 1990 incidence of extreme poverty has been achieved.The lesson of the last decade is that progress is possible for everyone. Nothing is pre-determined. Having come to the U.S. from a country that was once described as a "basket case," I know in my gut that we have to take great care never to again attach that label to any country again.Although a tremendous amount of work remains to be done as I take the helm of the World Bank, I carry with me an unshakable optimism that all countries can boost prosperity and eradicate poverty. There are many differences across countries but there are some common elements to countries that have grown continuously. They have stable governments that pursue prudent economic policies, provide essential infrastructure and services, and take a long-term perspective. They use the opportunities provided by global markets and they have a dynamic and competitive private sector.Through its lending, knowledge, and expertise, the World Bank has been an important partner in supporting these countries in their success.I have met with hundreds of staff over the last three weeks and I have discovered so many examples of where the Bank has been at its best. It partnered with China to undertake land-terracing to enable small farmers to grow more and earn more, which today is being piloted on the hillsides of Rwanda. It's been working with governments to improve the management and transparency of public finances so that taxpayer money is better spent. The Bank is helping countries share experiences across continents. With the Bank's facilitation of knowledge development and transfer, Turkey's economic transition is inspiring reformers in North Africa and the Middle East. India's IT services are emulated in many African countries. Brazil is offering its knowledge in agriculture to African countries.All across the developing world, the International Finance Corporation, our private sector arm, together with MIGA, the Multilateral Investment Guarantee Association [Agency], are leading the way in proposing innovative approaches to leveraging private sector investment in areas such as agriculture, manufacturing, and clean energy.But just as these countries have shown success or failure is not pre-determined, we also know that future progress is not pre-ordained. A great deal remains to be done in order to accelerate our fight against global poverty and I see four major challenges:The first is protecting development gains against global economic risks;Secondly, we need to broaden development to countries that are being left out especially the so-called fragile and conflict states;The third is that we have to ensure that growth is sustainable;And the fourth is demanding that growth is inclusive.In our interconnected world, we know that crises in one region or in one sector can affect all countries. For instance, even if the crisis in the euro area is contained, it could still reduce growth in most of the world's regions by as much as 1.5 percent. A major crisis in Europe could reduce GDP in developing countries by 4 percent or more, enough to trigger a deep recession everywhere. Such events threaten many of the recent achievements in the fight against poverty.To put it starkly, what's happening in Europe today affects the fisherman in Senegal and the software programmer in India. Therefore, it is urgent that European countries take all necessary measures to restore stability. I am encouraged by the recent steps taken towards fiscal and banking union as well as the additional resources made available by some G-20 countries to the IMF. The World Bank is ready to help developing countries protect growth, jobs, and the poor. Thanks to the generous IDA replenishment and capital increase, the Bank has adequate resources to increase lending and investments and to share unparalleled technical expertise. We can work with our clients to make rapid disbursements to maintain growth-enhancing investments. We can help countries improve the quality of their fiscal spending. IFC's financing is providing credit to small and medium enterprises and businesses as well for trade finance. IFC is also supporting subsidiaries of Western European and other banks in emerging markets to enhance liquidity and credit.We can help countries in building cost-effective safety nets that can protect people against shocks. What I learned by working in communities around the world is that the poorest are the most vulnerable to sinking even deeper into poverty. When illness afflicts a breadwinner, it compromises the future of the whole family. I have seen this happen so many times in my own work. Three out of five vulnerable people lack safety nets in developing countries, and four out of five in the poorest countries. Safety nets must be available on a continuous basis to increase resilience against shocks such as ill health or financial crisis, and building them requires political will. The good news is that effective safety nets need not be costly. Flagship Mexican and Brazilian programs cost only around 0.5 percent of GDP, much less than what other countries spend on untargeted and less effective programs or fuel subsidies. The World Bank has worked with governments to expand safety nets in 40 countries, and our goal is to ensure that every developing country has an effective and sustainable safety net. Second, beyond the current volatility, there are regions and countries with repeated cycles of conflict and instability that are being left behind. One-and-a-half billion people live in areas affected by fragility and conflict. No low-income fragile or conflict-affected country is on track to achieve even a single Millennium Development Goal. These countries need a World Bank that is far more responsive than it is today, and capable of delivering the right financial and technical support at the right time. Take Afghanistan, where the World Bank has partnered with the government to establish the National Solidarity Program. It is pioneering an approach where local councils are taking the lead in projects aimed at rural reconstruction and poverty reduction. To date, the program has benefited over 20 million people, and it is active in 28,000 villages across all provinces of Afghanistan. This is the kind of successful engagement that the Bank must spread to other fragile states.Third, even in successful countries, the next stage of development will call for further structural changes in order to sustain growth. Middle-income countries have to diversify their sources of energy. They have to modernize their economic structures and government programs. They have to create quality jobs to match the growing expectations of their citizens. These countries have an increasing number of options for development financing, but many continue to look to the World Bank for its lending, expertise, and knowledge. In particular, they need a more flexible partner to help them address deficits in infrastructure and institutions. Finally, growth and development have to be inclusive, ensuring that their benefits are broadly shared. Even as an unprecedented number of people in the developing world are ascending into the middle class, segments of the poorest populations are being left behind, and other segments of the middle class are at risk of falling back into poverty. As young people in Egypt and Tunisia have reminded us, even in middle-income countries, development gains have been uneven and incomplete. Demands for respect of individual rights, the rule of law, and the administration of justice go hand in hand with inclusive development, requiring institutions to be more open and accountable. That's why the World Bank is broadening its partnerships. Informed by the lessons of the Arab Spring, the Bank is creating a Global Partnership for Social Accountability. It is providing seed money from IBRD income and leveraging resources from foundations and bilateral donors. This would be the first time the World Bank is allocating specific resources from its income to support a partnership with civil society. We will try to do at the Bank what the most successful countries did during the last decade. We will work tirelessly, we will continue to learn what works and what does not, and we will carry out bold reforms when they are needed; and more than that, we will hold ourselves accountable to the people we serve so that we are judged by our results, not just our intentions. I started my remarks with the achievements of the last decade. I want to conclude with the promise of the next. Developed countries have made significant contributions through aid. They must continue this engagement, given their stake in a strong and dynamic global economy. Emerging economies must increase their contributions, commensurate with their growing economic weight. The world has unprecedented resources, knowledge, and experience to push forward the development agenda. I hope that the coming decade is defined by a great convergence. Where we reduce poverty to levels we might never have imagined; where more people join the global middle class, enjoying better living conditions and greater opportunities; and where the world commits to the critical task of leaving a healthier planet to the next generation. The time is now, the task is urgent. I look forward to the conversation.Thank you.DR. DERVIS: Thank you very much, Jim. When Strobe told me you were coming after your phone call--I think he was in Asia, in China, and you had a phone call and you said you would be willing to come as early as mid-July. So, thank you very, very much.DR. KIM: It's my pleasure.DR. DERVIS: It is a very important moment in the world economy. The changes have accelerated, the crisis was heavy in the advanced countries but, as you said, it also has affected the developing countries. It is a world economy and you're coming to lead one of the, I think, greatest institutions in the world, which I had the privilege to serve for quite a while.And yet, one always needs priorities. One can't do everything at once. When you look at the world today and at the World Bank, do you already see some priorities? Are you going to launch a process maybe to help you define them? What first?DR. KIM: Well, Strobe, I want to make it clear, I've been here for now two weeks and two days.DR. DERVIS: That's right.DR. KIM: Right? Three days. And what I've begun to do is to really try to take the temperature of the organization. So, I've been visiting a lot of the departments. Just this morning, I visited the Middle East and North Africa Department, and what I've been discovering about the institution is really encouraging. First, you walk in the door of the World Bank and it says on the wall "Our dream is a world free of poverty." Now, I was so moved by that slogan on the wall that I actually had some ties made with that slogan on the tie, and the reason is because I think we need to remind ourselves that this notion that the work of the World Bank is to boost prosperity and eradicate poverty. Those are our--the most compelling values and missions that you could ever imagine. So, we have a great mission statement. We know what we're doing in the largest sense and it's really critical.And so, as I've walked around the Bank, I've been asking some pretty specific questions, and the question I asked is "When do you remember the World Bank being at its very best?" And I've heard some fantastic stories. Of course, I want to hear more about the story of Bosnia as some of you may have read in Sebastian Mallaby's book that when you were in Bosnia you actually--the plane landed and it kept rolling and then you ran out of the plane into the country. Now, that's dedication, Kemal.And people tell us about those times when the Bank moved quickly, really effective. Kyrgyzstan is an example, right after the conflict. The Bank was in there very quickly, were the first to engage.So, throughout the institution, people have very strong memories of when the Bank was at its very best. And so, I think one of the most important questions for us is what do we need to do at the World Bank to ensure that we're at our best every day for every country in e very situation.So, there are some things that we need to do to look inside the Bank, but of course, we're living in a world where we have an ongoing crisis. And so, on an almost daily basis, we're having conversations about what we can do to understand the impact of the European crisis, especially on developing countries.So, we're having conversations about what are the specific transmission channels through which the European crisis is going to have an effect on the different countries, and we're looking at everything from trade to remittances to commodity exports and the impact on the different regions and different countries, and we're having really wonderful conversations and we're often at a large table talking about lessons from one Region that might be applied in another Region. Our experts in so many different fields are coming and talking about financial instruments that might be used to mitigate risk. And so, we're having this conversation every day.And so, we have to be ready to respond to the crisis in whatever form it takes.So, the mission is great. We can do so much more if we build a World Bank that can be at its best all the time, and of course we've got to be aware of the current economic situation.DR. DERVIS: With your permission, I'll come back to Europe in a little while, because I think it's quite important and interesting and I have a question that I really am burning to ask.But before that, when we say the World Bank, most people say it's one institution, but in fact it's a group of institutions: There is IDA with concessional money and grant money for the poorest countries; there is IBRD, which is actually a profitable bank doing long-term lending to middle-income and lower middle-income countries. "Profitable" in the sense that while it lends at a very small margin, it covers its costs, and I'm sure you're going to bring this message to Congress and other parliaments around the world.DR. KIM: Absolutely.DR. DERVIS: And there is, of course, the IFC, the private sector branch, which is highly successful. There are other parts, the MIGA and so on. And as you said in your speech, the old kind of distinction between the poor and the rich, the poor countries, the rich countries is kind of fading away, and yet poverty remains a huge challenge.How do you look at this diversity? Is it the strength of the World Bank but maybe can it also lead to loss of focus? There are all these different constituencies out there.DR. KIM: Right, right. Well, you know, we have 188 member countries, so the diversity starts right there. So, in Board meetings in discussion with our Executive Directors and representatives from those countries, there are very divergent views on the direction the Bank should go, but that's the whole point of multilateralism.The point of multilateralism is that we sit in a room together and then we try to find ways forward that make sense to 188 member countries. And there are always dissenters, but I think that that discussion is one of the most important pieces. I'm a believer in multilateralism and I've worked in the UN system before, and I think that the ability to do great work in a multilateral context is critical for the world, so let me start with that.I've spent a lot of time now talking to different people and different parts of the organization and, again, as I walk the halls, there is an intense desire to integrate across the institution.So, if you look at IDA, IBRD, IFC, MIGA, ICSID, these are the five entities that exist, but the way I look at it is that, in any given country, when we go to a country, we should be able to sit down and say to them, as a Group, "We can help you do--an understanding of your role in the current macroeconomic context. We can help you with fiscal policy. We can help you with health care education, social protection programs. We can help you with infrastructure. Oh, and by the way, we can also help you think about, for example, which cluster you should invest in in the private sector."The fact that we can do all of those things gives us, I think, an enormous relevance to countries all over the world, and the issue that now we're taking up day-in and day-out is, how can we integrate more?Just this morning, I was hearing, "We are at our best when we collaborate across sectors and divisions and even Regions. That's when we're at our best."And you know how that works, Kemal. When there's an emergency situation, you get on the phone and you call all your best people and they come and we have had transformational impact in certain countries.Now, is there a way for us to be able to do that all the time across all the five entities? Let me just say that I'm encouraged by the willingness and the desire of World Bank staff to move in that direction. Now, the implementation is going to be complicated, but that's precisely what we have to do. We have to be the institution that integrates across all our different areas and provides enormous value to our member countries.We talk a lot about knowledge, the Bank is a knowledge institution. There are many more Ph.Ds. at the World Bank than there were at the Ivy League institution I was president of before I came here, right?So, for me, it's just stunning the combination of direct, on-the-ground experience. I mean, in coming in, meeting all these people who have been trying to solve problems in developing countries for 30 years has been just the most exhilarating experience. It's what I've been doing. So, it's really felt like I've met just an incredible group of people with a rich set of experiences.At the same time, over 66 years, we have data. In fact, we have so much data that some of it is on onion skin paper sitting in salt mines in Pennsylvania, right?Bob Zoellick, among his many legacies is going to be the fact that he's opened up the institution to make that data available to everyone, and that's fantastic. It's really important.But then, we also have this analytic capacity. So, on-the-ground experience, lots of data, tremendous analytic capacity. I just don't think that that kind of combination is matched anywhere in the world. So, for me, that means we have an even greater responsibility to be our best selves every single day.DR. DERVIS: Yeah, the capacity is really, as you say, is enormous.DR. KIM: Is enormous, yeah.DR. DERVIS: And on internal data, we're trying to learn from you here at Brookings, but today is a breakthrough moment. I'm doing a little advertisement also for us, but we have the data visualization project with poverty data, demographics, income, and all that accessible now on the website for everybody to see, but we're learning a lot from how the World Bank has done that.Now, you mentioned this diversity and you've been a leader in social policy and social analysis and health. You led a very important part of the United Nations. What are the common features you see, because everything is different? I mean, macroeconomics, finance, health, transportation, energy, but there are common features in policy which I'm sure you've encountered in your career. What would you stress among these common features?DR. KIM: So, one of the things that has now affected every discipline, including economics, if I might say, is this notion that we can create an evidence base around--and measure things that we never thought we could measure before.We talk a lot about evidence-based medicine. Evidence-based medicine, of course, is everywhere, but it's only about 30 years old. I mean, I remember when I started medical school in 1982 that it was just the beginning of talking about, "We can generate evidence around the things that we do," and it's not any longer the experienced clinician who's saying to you, "Well, we do this because that's what we do."This is now a revolution that's happening everywhere. I mean, as you know, the randomized evaluations and data collection methods have expanded but, more generally, I think that there's a commitment to evidence everywhere.The other thing that I think is critical is that we have to now focus on actually delivering results on the ground. That's everywhere, right? So, the ability to collect more evidence has really focused on results on the ground.And one of the things that I was working on before I came to the World Bank was that I thought that there could be a science of how to actually deliver results in the social sector, and would say many times that the thing about working in the social sector is that so often we have been very tolerant of poor execution. Great idea, put some money to it, but we haven't really focused on the science of execution. And so, at the Bank, there are so many people who are really great implementers. We haven't don't enough, I don't think, in terms of capturing that experience and knowledge about how to actually make something work on the ground, systematizing, and then spreading it to everybody. So, there is a common sense, and let me just use health care as an example, the notion that if you have good research, good tools, put it in the hands of trustworthy individuals, and you're done, as opposed to thinking, what is that you really need to do to make sure that you deliver value at the end of the day. It's something that I hear a lot inside the Bank from our staff. We really want to turn the focus of the Bank more toward what are the specific outcomes and results that we're achieving on the ground and how can we set up a system so that that is what you're rewarded for, actually delivering the results on the ground.And I think there's a science to it. I think we have systems engineers at the Bank who are very good at thinking about how to make things happen like that. So, everyone is focused on results on the ground, delivery, what is the science of delivery, what is the science of execution. How can we look at the things around which we have our greatest, highest aspirations, health, education, social welfare, environmental sustainability? And how can we be much more focused on actually being effective at delivering on the ground. I think there is--I use the word "science" aspirationally, of course, but I think there is a science there, and I think economics is critical to it, I think systems engineering, I think some of the management disciplines can be helpful to us. And so, the very same problems we're seeing in global health, which is, how do we take the money that we now have and make sure that it has a longer lasting impact and that actually build systems, I think that's true throughout the work that we do at the Bank.DR. DERVIS: I think those are very important points and the systems approach in so many areas is so effective. The days when the just money output is what counted are gone—DR. KIM: I think they're gone. That's exactly right.DR. DERVIS: We've seen in economic history you can spend a lot of money and have very little impact, or you can spend less money and have more impact. Now, I'm going to go to the lessons learned and the cross-fertilization between developing countries and I think that that's very important. Korea is one of the big success stories and many countries want to learn from it. But now something else has come up which is very exciting but politically quite challenging. I've been working on Europe quite a bit lately and fiscal policy, spending less, getting more government revenue is one part of the picture, but if that's all that we can offer to get the crisis countries over their difficulties, it's not going to be possible. They need growth, they need supply-side response, they need new ways of doing things, and I mean, I'm of course a little bit biased, but the Bank has a lot of that knowledge and we've seen the IMF in many ways over the last five years becoming for the first time a truly global institution.DR. KIM: Sure, yeah.DR. DERVIS: Maybe in some ways, not the same way, perhaps, but in some ways the challenge is there also for the Bank. I can think of countries such as Spain or Greece that would greatly benefit from the knowledge of the Bank, from the experience of Korea, from the experience of other countries such as, you mentioned, Brazil and Mexico, but it's politically, of course, a challenging task in a sense. DR. KIM: Sure. One of the things we know--so, as we look around at the different Regions and the different countries, we know that Latin America weathered the financial crisis fairly well, and if you look at the reasons, I mean, this is not--may people may have their different opinions, but as we look at it, we think, "Well, what did they do?" They opened up their economies. They developed regionally in a very effective way. They developed social protection programs like Progresso and Oportunidades, Bolsa Familia in Brazil. They reduced income inequality. So, there's a lot of things that they did that seemed to have prepared them to weather the financial crisis. Let me give you another example that--and again, these are, how can we learn from the developing countries, middle-income countries, in thinking about responding to the current crisis? So, take a look at Korea--and I'll just give you one example that was very close to my heart--when the crisis of the late '90s hit, one of the most astounding things to me was that Koreans started going into their jewelry boxes and they took out gold. They gave away rings and there were places where Korean citizens could just put their gold, and that added up to a billion dollars. So, it might not have been the cash that turned the situation around, but the issue was solidarity. The issue was a very fundamental solidarity. The Korean people, everyday people, were saying "We want to contribute to the recovery," and they did that.Now, it strikes me that solidarity is a major question in the crisis today. So, I think the world has changed. I think there are many lessons from the developing countries that can be useful anywhere. I mean, I'd love to hear more about Turkey. Again, Turkey--our work in Turkey with you--is one of the times when our staff remember we were at our best.DR. DERVIS: Thank you very much. Well, I think there are lessons and there are big successes. Sometimes there are also mistakes and failures one can learn from, but as I look at the very severe situation in Southern Europe with unemployment in some countries above 20 percent, youth unemployment, 40 percent. You can't fix this just with macroeconomic tools. You need the sectoral knowledge and who has the best sectoral knowledge globally? It is really the World Bank. So, I hope the world community will find a way to access that and to help overcome this crisis which, as you said, is affecting the whole world.So, we're now going to open it up to the floor. I will propose, if it's okay with you take three questions at a time--DR. KIM: Sure, sure.DR. DERVIS: --so that we gain a little bit of time and then you can answer--sometimes questions overlap. You can answer in the most efficient way. Yes, we'll start with here. Please do identify yourself.DR. KIM: And use a microphone.DR. DERVIS: And use the microphone, yes.QUESTION: Thank you very much. I'm from JICA, Japan International Cooperation Agency, Keijiro Nakazawa.I thank you very much first of all for your comprehensive remarks and very interesting discussion with Kemal, and I'm also glad that you kindly met our new President, Dr. Tanaka, quite soon, and I'm looking forward to seeing you there, as well.My question is your view about the role of government in development. In this country, it is always discussed whether the government is a problem or the solution, or at least part of the solution, and in the developing world, there is a discussion between, like, the Washington consensus, there also is, like, a Beijing consensus, even though the definition of the Beijing consensus is different among various experts, I believe. I wonder--but given the experiences in Korea or other--for tigers in Asia or ASEAN countries or even including Japan, I think there might be a big role that government can play, although the market is a kind of driving force of the economic development.So, I just would like to know your view about the role of government and how you rely on the developing partner countries governments for pursuing the World Bank development assistance.DR. DERVIS: Thank you very much. We'll take two more questions. Yes.QUESTION: Hello, I'm Nilmini Rubin, I'm with the Information Technology Industry Council and I previously worked for Senator Lugar on the staff of the Senate Foreign Relations Committee and campaign for transparency and anticorruption reform as related to the development banks and I was intrigued by your comments about social accountability. I was wondering if you could tell us more about your goals for that and what you envision the structure to look like and how you expect the social accountability arm to interact with the private sector and civil society?DR. DERVIS: And one--Antwon [ph].QUESTION: Antwon Zanakman [ph] a former World Bank and IFC staff member and I've been investing in emerging markets. I have a question on the social safety net that you mentioned very prominently, I think, as a theme. What is the evidence that it has buffered crises and is there also evidence that it sometimes has delayed the response or the recovery?DR. DERVIS: All right. We'll take these three, each one of them a big subject in itself.DR. KIM: Yes, yes, yes.So, in terms of the role of government, I think one of the things, again, that I'm learning as I walk the halls of the World Bank is that I hear repeated again and again, there is no one-size-fits-all solution, and I think the Bank at one point has been criticized for taking that position.So, in terms of the role of government, I think every country is a little bit different, and I think there's no question that there is a role for government, even in setting up an environment where private sector investment can be enhanced. But I think the most important answer to your question is that the Bank now prides itself on taking every country on its own terms and not making any across-the-board guidance or recommendations about the role of governments or markets. I mean, this is very important that everyone understand. The Bank is different now and it's evolved--I would say it's evolved as much or more than any institution I've ever seen in terms of the way it works in individual countries.In terms of social accountability, this is very new and I don't know very many details about the particular social accountability program that I mention, but it's one that Sanjay Pradhan in the World Bank Institute is heading up, and it is really significant in the sense that, for a long time civil society organizations were outside the door at the World Bank meetings, and Jim Wolfensohn, one of his great legacies, is that he brought them inside the door.And now, I think this sets us up for a partnership with civil society organizations that is just much more advanced than I think every before.And of course, the intension is that our engagement with civil society will increase over time.In terms of the evidence of social safety nets, I actually don't know, and if you do, I'd love to hear--I don't know, either. I don't know, either. But I can tell you this: In walking through today the Middle East and North Africa Unit of the World Bank, there are pictures all over the unit that are from the Arab Spring, and they are very beautiful, poignant pictures about what happened. And so, the notion that that would happen in the states that it happened is something that we couldn't have imagined.Now, I worked in Peru, and I worked in Peru right after some of the shocks, and I was there witnessing just enormous social movements. There was one in particular called the Comedores Populares, the popular soup kitchens. And so, in Peru, it's sort of been a part of the fabric, the social fabric, for a long time, but no one would have guessed--no one would have guessed--that it would have happened in those countries, but it did. I think it sends a message to everybody, that if you don't focus on inclusion, if you don't have these safety nets that will protect people from, for example, a catastrophic illness that just sends an entire extended family into poverty--if you don't have these social safety nets, if you are at risk, that is the message that everyone has gotten, whether there has been some sort of specific study, I'm just not aware of it, but inside the Bank, I can tell you that the lessons of the Arab Spring have been very strongly taken, and it suggests to us that one of the things that we can do to add value in just about any country is to do an assessment of the public sector expenditures that one is engaged in and to say, "Well, you know, actually, you're not getting much value from, for example, fuel subsidies, but there are other"--like these conditional cash transfer programs, that can have an enormous value. And so, that's what the Bank has to do.We are not going to come in and dictate to any particular country what you should do, but what we can do is to say, "Boy, there's a lot of evidence that this form of social protection is going to give you much more value than this other form of what you might think is social protection.DR. DERVIS: Yes.QUESTION: Thank you for coming here. There are a good number of people from the Bank who are working now in Brookings. So, these are [unclear]. I spent 20 years in the Bank. We all love the Bank.Now, you just spoke about the social part of the Bank, the need to base Bank policy on evidence. The Bank has a longstanding problem, has an eminent DEC, which is economic research, has no department, no unit specialized in doing systematic social research and producing the evidence for social policies for basic policies and program on evidence.Second issue which concerns many of us is one of your predecessors, Jim Wolfensohn--also Jim--spent two terms to build many things at the Bank, one of which was a central Vice Presidency for Environmental and Social Sustainability Development, which was in charge with crafting Bank policies, safeguard policies to which you just referred. Well, it happens that the immediate successor to Jim abolished one Vice Presidency from the 25 the Bank had because there were too many and he found to abolish exactly the Vice Presidency focusing on social policies, elaborating the social policy of the Bank and the environmental policies.So, at this time that staff was moved for instance in information, there's a good job there, but there's operational work, and interpreter has no nerve center to develop further and update the Bank's social policies and the environmental policies which are the big demand. Do you have any intention to [unclear]?DR. DERVIS: Okay. Thank you. Yes.QUESTION: I'm Lawrence McDonald from the Center for Global Development. Thank you very much for your remarks and congratulations on becoming President of the Bank. My question concerns the scope for the World Bank to become more active and effective in addressing problems of global public goods. Many of the problems that confront poor people in developing countries are problems with the global commons. Climate is just the most obvious, but collapse of fisheries, emerging diseases, and yet the Bank's primary instrument of course continues to be country loans.Do you see an opportunity to seek a mandate to become more active addressing global public goods problems and would that require a new instrument or do you already have the instruments that you need? Thank you.DR. DERVIS: All right. There's one gentleman there. Yes.QUESTION: Thank you. My name is Desi Esaronai [ph] and I work with the Institute for Development Policy. It's a CSO based in Pristina, Kosovo and my question to Dr. Kim--it's a great pleasure, actually, to be here and listen to you. Congratulations on the post. My question has to do with the role at the World Bank you see should be taken in terms of developing energy projects worldwide.Now, I'm sure you're very well aware of the social environmental costs that relates to many energy projects around the world, and the reason why I'm putting these questions forth right now is because the World Bank is, at this stage, considering a project in my country, in Kosovo, to invest in lignite and build a new lignite-based power plant and we have, as a civil society organizations in Kosovo, we try to be as loud as we could that that probably is a bad idea because of all the social and environmental and also economic reasons, as well, and we have worked with many people who have also worked in the World Bank and just recently left the World Bank and one of them is Dr. Daniel Kammen of UC Berkeley, who was a chief renewable and energy efficiency technician there and who now publicly is also calling the World Bank to drop the idea of still investing in lignite in the third world country which Kosovo is and it's getting the IDA money for this project now. The project hasn't been yet done. I don't want to be very specific because I know it's just your 17th day in your office and you probably don't all the aspects related to it but I would really appreciate to know what path do you see the World Bank should take in terms of investing in the energy in the future and do you see that it should that it still be investing in lignite in a country such as Kosovo? Thank you.DR. DERVIS: All right.DR. KIM: Easy ones.So, I'm not really familiar with what you're talking about, which department was eliminated, but we have a very active--in fact, the largest group, VP, Vice Presidential Unit in the Bank is the Sustainable Development Network. It's headed by a wonderful professional named Rachel Kyte who came to first the IFC from environmentally focused NGOs. So, there is quite a bit of research going on. We have a huge investment in our Sustainable Development Network and that will certainly continue.In terms of the global public goods, again, on my 17th day, we're having these conversations. I'm not sure exactly whether we need new instruments or not but I can just tell you this: We just had a presentation to the Board on the Rio+20 meetings and Rachel and our Sustainable Development Group were very involved in that meeting. And interestingly, many of the most interesting discussions happened really outside of the main meeting with CSOs and NGOs, and I think really in--as part of a shift that's been occurring over time, the World Bank was right in the middle of those discussions. And so, our commitment to global public goods is very strong.Now, the social accountability arm, the instrument that we're just building, is increasing our ability to work directly with civil society organizations. Are we going to do more of that in order to be able to really have a broader impact on global public goods? I certainly hope so.My understanding of global public goods has been from my global health background. Tuberculosis crosses borders, the epidemics that cross borders, and you absolutely need global mechanisms to deal with those problems.I think our Governors, the Board and the Governors, expect the World Bank to play a very large role in climate change issues and other environmental issues and trying to make contributions around global public goods. We'll simply have to figure out over time the best mechanisms to do that. The commitment to it is there. The notion that we need to reach beyond the traditional mechanisms, work with civil society organizations, get outside of the standard ways that we've been doing business before, I think we're already there.In terms of Kosovo, well, you can imagine these are very difficult questions, and we--energy is a critical part of boosting prosperity and eradicating poverty. We talk about this all the time with relation to Africa. We know that we want more private sector investments in Africa to create the kind of jobs that are needed in Africa, but if you don't have access to power, it's impossible for that kind of development to happen.So, there are differing views within the World Bank Board. There are differing views about this tradeoff between our need to keep the environment clean and poor countries' need for energy.So, I would simply say, this is part of my new job in my new experience in trying to deal in a multilateral organization where people have very different views. One group will say, "We must protect the environment." The other group will say, "But wait a minute, you also use coal." And they say this to the wealthy countries: "You also use coal and you fuel your development on the basis of coal. We simply want to provide power to our hospitals. We want to provide lights for the schools. We want to provide energy so that the private sector can develop. We need to do that."Now, our standards on clean energy are very high. Our efforts to develop clean energy projects is also as high as it can be, but we're dealing in a complicated world where you have these competing demands for energy for development versus our desperate need to keep the environment clean.Look, I've been trained in science, and I think I'm actually the first one trained in science to be President of the World Bank, and so I have to tell you that the data that I'm seeing about changes that are happening today that we didn't think would happen for three or four years, the impact of a one-degree rise in the temperature of the oceans that we didn't think would happen until we got to two to three degrees' rise in the temperature of the oceans, this is extremely disturbing to me, and I think we have to put the science of climate change in front of all of our member countries. And I guarantee you that I will do that. But having said that, you should also know that there is a need for energy to lift people out of poverty and boost prosperity. And so, we're going to be constantly having to balance those needs and those interests, and that's part of my job.DR. DERVIS: Okay. We'll take quick--but please, because we're running out of time--quick three questions. First one here, yes.QUESTION: Thanks very much. I'm Garret Mitchell and I write The Mitchell Report and I want to ask a question that's slightly off subject, not about the work of the Bank itself but because I notice you're also an anthropologist, about its culture.About 10 years ago, I happened upon to a book called the Springboard Story, by Stephen Denning, which talked about the use of springboard stories to create knowledge management system at the World Bank. And so, my question is twofold:One, is the knowledge management system at the World Bank alive and well and an operating part of your mission delivery process?And second, does the concept of the springboard story play a role currently and into the future of the Bank communicating its mission and delivering on that mission?DR. DERVIS: Yes, gentleman all the way in the back there. Succinct please? Okay.QUESTION: Okay. Thank you, Dr. Kim. My name is Deng Wi with China Review News Agency. What role do you expect for China to play in the World Bank and the international financial system and do you support to further increase the voting share and more say for China and also other emerging countries? Thank you.DR. DERVIS: Thank you. All right, well, I'm going to try to create some balance. Yes, to you--sorry. Maybe very quickly we'll allow you to be the last, okay? But yes, the lady there. Right. The gentleman at the back was trying very hard for a long time. So, I can't pass him by.QUESTION: Hi, my name is Katie Malouf with Oxfam International, and I was interested in what you were saying about inclusive growth being one of the four challenges that we all face in global development. And I wanted to know to what extent do you see investments in public education and health systems as being central to realizing inclusive growth? And also what do you think is the most important contribution the World Bank can make to achieving universal access to basic health services in developing countries?DR. DERVIS: Thank you. And the last question now. Yes?QUESTION: Thank you very much. My name is Juan Irino [ph]. I come from Latin America, Division of the Voice of America. So you have talked about how open of the markets--opening the markets has been very useful in Latin America. I want to, you know--in the last months we have seen how some countries are now going in the opposite direction, closing the markets again. I want to know if you see that as a challenge and also how do you see the role of Latin America in the future years? How is the World Bank going to act, if you have any ideas so far? Thank you very much.DR. DERVIS: Thank you.DR. KIM: Okay. So I don't know the Springboard story but I will get that book and read it. So I would say knowledge management is among the most important things that the World Bank can do, and there have been many efforts to try to do that.I mean, first of all, one of the things we're trying to do is to measure the impact of our knowledge work. Now, again, 10 years ago you'd say that's impossible to do, but actually we're making progress in understanding how to measure the impact of our knowledge. But knowledge management is critical.And so now we're asking ourselves questions like: Well, so how should we get all of the best of the knowledge inside the Bank to every place that we need to be and do it quickly and effectively?I think technology gives us some opportunities, but I think there's also a lot of new insights in how matrix organizations and systems can work more effectively together. So I would just say this is at the very top of my priority list. You know, I'm also the first Bank president to ever have run a knowledge institution before. So I would come to this job with a lot of ideas about how to manage knowledge, about how to make it effective and be present where we need it. But the key to doing that is to have a lot of great people who actually have knowledge, and the good news is we have plenty of those. So now it's really a management task more than, you know, overhauling our staff. We have great staff.In terms of China, China has an extremely critical role to play in the World Bank going forward, as not only as a recipient of loans but as a contributor. China has also been making contributions to the World Bank.In terms of share, this is a very difficult and complicated issue and it's one that our Governors are going to take on again going forward. So, in this particular case of whether or not we're going to adjust shares, as you can imagine, this is a highly lively debate that happens within our Board and among the Governors, and I look forward to participating in that discussion going forward. But, you know, I'm not sure which direction it will go. There are many different ways that it can go. There are many different ways to have that conversation. There are many different way of understanding what share really means. And I think, you know, after two-and-a-half weeks, I don't have strongly formed views about it and I look forward to the conversation.In terms of health and education, you know, both of those areas are critical, and there are two areas of expertise that again are areas that I've worked on in the past. Let me talk specifically about universal access to health care.So next week, we have 45,000 people coming for the International AIDS Society meeting. There have been enormous investments in HIV. But if you go back and look at the stuff that I was saying in 2003 and 2002, when we first started seeing those investments, what I said over and over again is the investment in HIV is our opportunity to really invest in systems. The critical thing about investing in HIV treatment was that for the first time we invested in chronic treatment, lifelong treatment for a disease in the poorest countries in the world. That forces you to put systems together. So I think the debate--I mean the discussion--the discussion is moving in a great direction. What the HIV people are now saying is: Well, what about MDGs 4 and 5? What about, you know, childhood mortality and maternal mortality? What are we going to do to tackle those particular problems? And I think the most important thing is related to what I said earlier: We have to understand this as a systems and delivery problem and not as a disease problem. The aspects of this problem that need to be handled by highly trained physicians are actually quite narrow. The real problems are setting up the delivery systems that can not only protect people from the diseases of today but from the diseases of tomorrow, and there's enough money out there in the world that we can begin moving in that direction. That's how I would like to see the World Bank engage. We are really good at thinking about systems. We are really good at managing processes at a country level, and we're also really good at thinking about how to set up systems that deliver.So wouldn't it be great if we could take all this investment in global health and in every single country build systems? At Partners in Health, the organization I worked with before, every country we've gone into--and Rwanda is a good example--we've gone in and said we're going to take this money for HIV treatment and turn it into primary health care systems. And I think the evidence is overwhelming that it's both doable and cost effective.And the other thing that we've seen that we didn't expect was that once we built those systems, the economy sprouted up around those health care systems and actually contributed to the economic growth of those countries.So, one, health and education are critical to economic development in my view. I think the evidence is very good for that.But also I think the Bank has a very unique and wonderful contribution to make which is to say, "Hey, folks, these really aren't medical problems. They're partly medical problems but the big chunk of it that we can help you with is what's going to give you the long-lasting impact, protect you from future disease outbreaks, and also help to build your economy.And Latin America. So I'm not quite sure I understood the question. Again, let me just say that for the World Bank, again the mantra that's repeated over and over in the halls of the World Bank: There's no one-size-fits-all solution.And in terms of learning the lessons of Latin America, I think that the one of the really remarkable aspects of programs like Bolsa Familiar and Oportunidades is it's that the lessons are being learned everywhere.So, one of my favorite stories is the fact that Michael Bloomberg, the Mayor of New York City, actually flew down to Mexico and was with Julio Frank [ph] at that time, trying to understand how Oportunidades was working and built a program in New York City called Opportunities New York with the notion that these conditional cash transfer programs could have an impact even in places like New York City.So let me just say that the approach to Latin America, both as a place where we still lend money but also as a fountain of innovation that can be useful in all other parts of the world, this is something that we already recognize. You know, the model of social protection that has been pioneered in Latin America now, we're taking to many other parts of the world, and I think that's just the future. You know, I think we have to realize that it may be that it's in the most financially constrained areas where the greatest social innovations can occur, that it's under the pressure of those financial constraints that you really see the great innovations, and we have to be open to it.You know, there's a health care program in Camden, New Jersey run by Jeff Brenner [ph] that's using a community health worker model that we started in Haiti 25 years ago because they know it's--not only is it cost effective but you get better health outcomes in Camden, New Jersey when you use community health workers. I think that's the new world. Lessons are going to come from everywhere. It's not rich countries imparting their lessons on poor countries. The lessons are going in every direction.DR. DERVIS: Thank you so much. There's no way to summarize, and that's not my role anyway, but I have to say that you give us an amazing combination of confidence and optimism, which is so important in a leader, a wide array of knowledge--and the questions were not easy--and, you know, familiarity with so many areas where the Bank is active. I think many of us also felt the enthusiasm you have for the Bank staff and for the people--the women and the men--who are going to work with you, and I think that's key because that, after all, is the strongest resource of the World Bank.DR. KIM: Absolutely. Absolutely.DR. DERVIS: So, I'm very deeply grateful on behalf of this whole audience and on behalf of Brookings, President Talbott--really that you came here and talked to us. I think it's your first talk outside the Bank. We'll be restrained. We won't kind of invite you immediately again, but I really hope that maybe a year or 18 months from now or maybe in Aspen next summer, after one year of experience and, you know, we can have some follow up.We're very grateful. We wish you all the best, and really I think our hearts with you.Please, the audience, remain seated while Strobe will accompany Jim, but let's first thank you.[Applause.][End recorded session.] 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 -
Transcript of World Bank Group President Jim Yong Kim's Remarks upon Arrival at the Bank
DR. KIM: Good morning, everyone.I'm honored today to assume the presidency of the World Bank Group. I do so at a pivotal moment for the global economy.I want to start by thanking my predecessor, Rober... Show More + t Zoellick. Bob has done a fantastic job over the last five years, and he has left me with a very strong institution.I spent most of my adult life working in some of the poorest communities in the world. And in my work, what I've learned is that the World Bank is the most important development institution in the world. I'm both humbled and inspired to take over today as President.You know, over the last few months, I've had the privilege of talking with many, many World Bank employees, and what I've found is that not only is it the most important global development institution in the world, but it's a movement. People here in Washington, and in more than a hundred country offices all over the world, are passionate about the twin aims of boosting prosperity and eradicating poverty. I'm very excited to get going, and I want to say to everyone here today that we will continue to do our work at the World Bank with innovation, with analytic rigor, and with great passion, working in partnership with governments, with civil society organizations, with the private sector and, most importantly, with the people living in poverty we aspire to serve.Thank you very much. I can't wait to get started. 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 -
Globalization: Made in the Americas
Introduction Thank you for the honor of your invitation to commemorate the 30th Anniversary of the Inter-American Dialogue. The origins of this Dialogue stretch back to a discussion between ... Show More + Peter Bell and Abe Lowenthal on a park bench. Peter and Abe were disturbed by the breakdown in inter-American exchanges during the Falklands/Malvinas war, and by the lack of ties with the rising democrats of Latin America. So they discussed bringing together leaders from across the hemisphere to set a new inter-American agenda. The Dialogue held its first ad hoc conference in late 1982. Today, 30 years later, Latin America's very success offers the opportunity to remake that Hemispheric partnership around new pillars:A revived free trade policy that will aid structural reforms for growth in all our countries;An energy transformation, ending the Hemisphere's energy dependency; A new diplomacy infused with private sector pragmatism to solve public problems;Shared security; andThe first Democratic Hemisphere. For the United States, this new agenda could enable us to rely on a great, home-grown asset – Hispanic-Americans – as the vanguard of U.S. connectivity in a new Western Hemispheric economy. This Dialogue can – and I believe will – help drive this change: to create a "Globalization: Made in the Americas." Under Peter Hakim's and now Michael Shifter's energetic leadership, the Inter-American Dialogue has become the leading U.S. center for policy analysis, exchange, and communication in the Western Hemisphere. The idea at the heart of the Dialogue remains very much the same as that which emerged from the conversation on the park bench: that through dialogue and shared vision, interested citizens across the hemisphere together can plant the seeds of new policy ideas and practical proposals for progress in the Americas. So tonight, let's put that idea to work. A Different Vantage Point Just two months ago, the leaders of the Western Hemisphere met in Cartagena for the Summit of the Americas. Colombia was an excellent host, and the Summit showcased the country's many hard-won achievements. But the news reports were, frankly, disappointing. Aside from the behavior of some Secret Service agents, the coverage focused on disagreements about Cuba and drugs. Some even suggested this would be the last Summit of the Americas. The agenda seemed stuck in a time warp. So when Carla Hills asked if I could join you this evening, I thought the best way to celebrate the Dialogue's Anniversary was to offer new possibilities for the Americas in a fast-changing global economy. My vantage point on our hemisphere is different from many U.S. contributors to the Dialogue. I am not a specialist in Latin America. Like many of my U.S. foreign and security policy colleagues, much of my energy has been concentrated on the issues of Europe and the Asia-Pacific, the Middle East and Southwest Asia. Yet because of my economic background, Latin America and Canada have loomed larger on my global map. In the 1980s and early 90s, working with Secretary of Treasury and State James Baker, we were immersed in issues of Latin American debt and reforms for growth, the Canadian and North American FTAs, and Central American security and democracy. In 2001, as U.S. Trade Representative, we were fortunate to build on that experience, negotiating FTAs with Chile, Colombia, Peru, Panama, the five countries of Central America and the Dominican Republic. Together with NAFTA, these FTAs cover 54 percent of the economy of our hemisphere, not including the United States, offering an underutilized web of free traders that could support deeper integration in the Americas – even hemispheric free trade and democracy. Five years as President of the World Bank Group has added to this perspective. Why am I stressing this global outlook on Latin America? Because, while working on the issues of our region, I have urged my Latin counterparts to look globally, too. Instead, for too many years, the dialogue within our hemisphere seemed constrained by a North-South framework. The United States loomed large – whether as a hegemon, source of support, market, model, danger, or even frustrating land of inattention. On development, debt, investment, competition, and trade, Latin Americans need to see the wider horizon – especially to benchmark with East Asia. And beyond East Asia, Latin America has a new role to play in building multiple engines of growth with other emerging markets. It is time to break out of that North-South construct. Consider Canada's experience in combining regional integration with global reach: of course, Canada's FTA with the United States in 1988 deepened the two countries' economic integration – but in addition, the competitive adjustment driven by that accord made Canadian business more competitive globally. A new hemispheric partnership requires leaving old habits, old mindsets, and old models of dependency behind. That partnership will necessitate a new mix of partners, public and private. That partnership should be the next challenge for the Summit of the Americas and this Dialogue. Latin America's Record of Gains Latin America's recent record of gains now puts it in a position to remake the Hemispheric partnership. The numbers tell the story. Between 2003 and 2010, the income of the average Latin American increased by more than 30 percent. A silent revolution in macro-financial policy has strengthened the economic immune system of many countries. We saw the payoff after the fall of Lehman Brothers: Sound policies in Latin America enabled expansions to offset the downturn without the aftershocks that now threaten Europe. About 73 million Latin Americans have been lifted out of poverty since 2003. Today, almost a third of the region's population is considered middle class. Latin America is breaking a pattern of persistent inequality, including through an increase in women's involvement in the economy, particularly from poor families. Colombia and Peru have buttressed this trend by boosting opportunities for people of African and indigenous origin, seeking to overcome divisions that populists have exploited. Mexico and Brazil have led in developing well-targeted conditional cash transfer programs that have revolutionized public assistance. These programs couple income grants for poor families with incentives for health check-ups and keeping children in school. Mexico's Oportunidades program has probably done more for women's health than anything in the country's history. These are safety net programs that appeal to a fiscal conservative: They cost only about half a percent of GDP. The World Bank has helped export this model to 40 other countries, ranging from Pakistan to the Philippines. Latin America is "going global." As the global trade negotiations have stalled, leading Latin American free traders have tried to keep up the momentum. Mexico has FTAs with 59 countries; Chile with 43. Colombia offers a leading example of how a democracy can combine security, development, and good governance to overcome narco-traffickers, kidnappers, and terrorists. Peru demonstrates how sound economic policy and political commitment across administrations can reverse years of stagnation. Brazil's influence is expanding – through its companies, agricultural and mining experience, development work, peacekeeping in Haiti, and interest in Africa. Brazil's leaders of the left have also turned a page in history by sticking with democracy. Rising leaders of the left in other Latin American countries have seen the benefits for the poor of Brazil's example, compared to authoritarians who tear down institutions to consolidate personal or party power. Looking Ahead So what's ahead for Latin America? Latin America's per capita income is still only at 30 percent of the U.S. level. To climb higher, Latin American economies will need to leap beyond the so-called middle income trap. Many developing economies make early rapid gains. But then productivity and growth tend to slow. This is a global challenge. In 1960, the World Bank ranked 101 economies as middle income; by 2008, almost half a century later, only 13 had made it to high income levels – and one was Greece. Many Latin American countries will need to translate the commodity boom into broader, more diversified economies. This region has lived through roller-coaster booms and busts before. Higher productivity is the antidote to the middle income trap. Since the 1980s, Latin America has underinvested in infrastructure – electricity, roads, bridges, ports, transport – and maintaining and operating these services. Currently, Latin America spends 2 to 3 percent of GDP on infrastructure, less than half the rate of investment in East Asia. Public-private infrastructure partnerships not only offer a source of financing, but also better design, maintenance, and operations to deliver high-quality services on time. Colombia has experimented with PPPs in urban water supply and sanitation. Mexico's new Highway Concession Program has mobilized PPP projects of around $11 billion, expanding the country's major toll roads network by some 25 percent. Latin America has to anticipate its human capital needs. The region is aging rapidly: today, about 11 percent of Brazil's working age-population are seniors; by 2050, it will be nearly half. Latin America also needs to improve the results of its investments in education. By age 15, the learning achievement of the average Latin American student lags two years behind his or her developed country counterparts. Latin America is recognizing that gender equality is smart economics. Today, women in Latin America outnumber men in schools and universities. Working age women represent roughly 40 percent of the entire labor force in the region. To continue to grow, the region will need more competition and innovation in the service sector. Competitive services increase productivity. They supply the 'software' of integration: transport, where delays and losses can impose significant costs; information technology, because accurate data and effective communication is vital; financial services, to create a supportive business environment; and logistics systems, which are a driver of business competitiveness. A New Agenda What do these challenges mean for a new hemispheric partnership? What should have been the news coming out of Cartagena? Let me offer five ideas. First, the Western Hemisphere needs to revive an activist free trade and economic reform policy, globally and regionally. We need fresh approaches. The United States will be cutting agricultural subsidies, especially given high prices, and eliminating protection for ethanol. Why not deploy these to prod others? Service sector liberalization can boost productivity, open new businesses, create new jobs, and cut the "Latin cost" that many countries impose on their own businesses. Why not deploy this economic need to revive a mutual interest in negotiation? A strong self-interest can drive this renewed call for liberalization. Latin American economies still need much investment and more robust capital markets – especially in local currencies – that can help Latin American entrepreneurs and family-owned businesses to expand. Infrastructure investments require capital goods and services, as Panama's 21st Century Canal project is demonstrating. Why not dismantle barriers to lower the cost of infrastructure expansion? Better logistics make economies more competitive. The World Bank's 2012 Logistics Performance Index estimated that Latin American logistics costs are between 16 and 26 percent of GDP – that's two to four times the average in Europe or East Asia. The World Bank has helped Colombia and Peru to implement a "single window" approach to customs clearance and border management. In Brazil and Peru, the Bank has worked with international freight forwarders to connect rural, remote villages and small businesses to export through national postal services; in the first six months, more than 300 small firms in Peru became exporters, most for the first time. Even as the WTO works toward a Trade Facilitation agreement, the Americas could develop an accord that points the way. Brazilian officials are focused on exchange rates. Yet to really boost growth the target should be productivity. Better infrastructure can help, and so can more efficient and effective public services. The World Bank Group has launched a deeper partnership with the Governors of the Northeastern states of Brazil to overcome these impediments. Over time, however, the United States and its free trade partners should be working with Brazil to rebuild the case for a hemispheric initiative to realize the benefits of trade liberalization and economic reforms. It takes two to tango, and this agenda requires changes on the part of the United States, too. The United States is no longer leading the open trade agenda, as it relies increasingly on defensive measures. The United States has its own high costs of trade – antiquated ports and laws to protect special interests. The United States should work with its current free trade partners in the Americas to deepen ties of development, reform, and investment. The current architecture of US FTAs in the hemisphere offers a solid legal framework, but it needs to evolve into a home for an ongoing dialogue – across countries and with business, academic, civil society, and environmental communities – to see what else can be done to lower costs and barriers and create opportunities. The United States and its partners could explore progressive integration across the FTAs, for example by expanding provisions to cumulate inputs among partners while qualifying for free trade. The United States needs to make its hemispheric FTA network dynamic, linked to business and investment policies, and improved governance. A new concept of an FTA network in the Americas could also support inclusive and sustainable development as the foundation for open societies and borders. Second, innovation in the energy sector, led by the United States, could transform energy security for North America, the Hemisphere, and the world. In 2008, imports supplied 70 percent of US oil demand. By 2020, PFC Energy estimates that imports could be down to 40 percent of US oil demand – or even 20 percent if Canadian oil is counted as part of the home market. If natural gas for Canada and the United States is added, U.S. net energy imports from the rest of the world could drop to five percent of U.S. demand. That's an amazing game-changer in energy. If Mexico opens PEMEX to real outside investment, the outlook is even brighter. With the discovery of the giant deep offshore PRESAL oil and gas fields, Brazil can play a major role in supplying oil and gas in the region. Yet there is a need to connect these energy supplies – through infrastructure – with countries in Central America and the Caribbean that have suffered from high prices and limited access. Increased efficiency and alternative sources could help the energy poor, too. It's long past time for a hemispheric energy policy – blending consideration of inclusive growth, the environment, and indigenous communities' interests. Third, this new Hemispheric partnership needs to break old patterns of diplomacy. There are now vibrant private sectors all across the hemisphere. The challenges of overcoming the middle income trap and structural reforms to boost productivity need private sector advice and solutions. All across the developing world, the World Bank is encountering a new pragmatism about involving the private sector in areas that used to be public monopolies: infrastructure; education; healthcare; skills training; delivery of public social services. Advanced economies such as the United States should be taking note, too. Yet government-business dialogues can be stilted showcases. The Summit of the Americas – and perhaps the Dialogue – should review which approaches work better and why. With some guidance, businesses can better connect possibilities with policies. Governments can commit to responses, commitments, openness, and results. Fourth, the new Hemispheric agenda should help all 35 countries overcome security threats to growth and opportunity. The fragile governments of Central America are at risk of being overwhelmed by crime and violence linked to drug trafficking, organized crime, gangs, and firepower. Spain, which has roughly the same population as Central America, has about 400 murders per year; in 2010, Central America had over 18,000. The region pays a heavy economic price for this insecurity – as much as 8 percent of GDP. The basic legitimacy of governments and institutions is fraying: About half of Central Americans say a military coup could be justified when crime levels are high. Experiences from Medellin and Rio de Janeiro have shown that the best way to attack criminal insecurity is through an integrated approach: combining stepped-up policing, prevention, and community investments. Quick turnarounds are possible. Strong regional cooperation is indispensable. The United States has an unfortunate pattern of ignoring dangers in Central America until they explode. This time U.S. diplomacy should work with Mexico, Colombia, and Panama to develop a coherent strategy – not band-aids. As in Colombia, the Central American private sector must also be part of the solution. And the United States should also take responsibility for the drug habits of its public that fuel demand for narcotics from the south. Fragility in the Caribbean is another soft spot. But small economies can be competitive in many sectors. Accelerating integration in the Caribbean can share services, add to resilience, and boost economic prospects. Latin America should also be looking toward a greater role in global security – through practical steps, not the old G-77 policies of the past. My friend and former colleague, Bernie Aronson has proposed, for example, that Brazil could lead by voluntarily ending its uranium enrichment program and then calling on other nations – including Iran – to follow its example. If Brazil wants to help shape the 21st Century, leadership in preventing the spread of nuclear weapons – with an idea and action – would send a powerful signal. Fifth, the debate over Cuba at Cartagena sounded like hollow echoes from another era. Look ahead, not back. Chavez's days are numbered. If his subsidies to Cuba and Nicaragua are cut, those regimes will be in trouble. The democrats of Latin America – left, center, and right – should be preparing. The calls for democracy – for an end to intimidating thugs, human rights, fair elections, and rule of law – should come from all its capitals. There will soon be an opportunity to make the Western Hemisphere the first Democratic Hemisphere. Not a place of coups, caudillos, and cocaine -- but of democracy, development, and dignity. This transformation will not be achieved by the Calvo doctrine. By divisive populists. By corruption. By acquiescence. By silence. You know well that if Latins leave the work to Washington and Ottawa, the opponents of liberty and human rights will play the cards of gringoism and neo-imperialism. Trump them. Conclusion For the United States, a new partnership in the Western Hemisphere offers opportunities for renewal at home, too. All the debates about macroeconomic issues – fiscal and monetary policies – as important as they are, risk inattention to microeconomic incentives, structural reforms in the United States. Energy. Infrastructure. Education. Human capital. Competition. Environment. Innovation. The United States also needs to clear away old rigidities on these new fundamentals. The United States also needs to draw on the energies, intelligence, and drive of all its citizens. As my friend Luis Alberto Moreno of the Inter-American Development Bank has pointed out, the 50 million strong Hispanic community in the United States is a growing market, source of entrepreneurship, and resource for a Hemispheric economic strategy. At over $1 trillion, the purchasing power of Latinos in the United States is larger than the economies of every Latin American country except Brazil. According to the U.S. Census Bureau, there are between two and three million Hispanic-owned businesses in the United States. Many are small. But they create jobs, earn revenues, and pay taxes. As Latin America grows, the Hispanic businesses in the United States offer an incredible asset. Hispanics in the United States could be in the vanguard of a new Western Hemispheric economy. Small and medium-sized Hispanic-American businesses will need help to expand their entrepreneurialism – information about markets, financing, and risk management services. To be most effective, this assistance should be decentralized – perhaps drawing on local chambers of commerce in cities and states where most Hispanic businesses can be found. The Small Business Administration, OPIC, Ex-Im Bank, the Inter-American Development Bank, and the World Bank could then deploy their resources to help. The world economy is still struggling to recover from the worst blows since the 1930s. Europe is a danger zone. U.S. leadership remains vital to get through the storm, to reach a new world economy of multiple poles of growth. This is why the news coming out of the Cartagena Summit was disappointing. This is not a time for drift, for old North-South debates, for retreat behind borders, old mindsets, or out-dated dependencies. This is a time for the New World to again inspire novel thinking – about development, growth, structural reforms, rule of law and human rights, democracy, and security. This Dialogue should aim high: To have the Western Hemisphere shape this next era of globalization – so that future historians will title the next chapter, not "The Passing of the New World," but "Globalization: Made in the Americas." Show Less -
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 -