Serbia

WASHINGTON, May 16, 2013 – Seventeen years from now, half the global stock of capital, totaling $158 trillion (in 2010 dollars), will reside in the developing world, compared to less than one-third to... Show More + day, with countries in East Asia and Latin America accounting for the largest shares of this stock, says the latest edition of the World Bank’s Global Development Horizons (GDH) report, which explores patterns of investment, saving and capital flows as they are likely to evolve over the next two decades.Developing countries’ share in global investment is projected to triple by 2030 to three-fifths, from one-fifth in 2000, says the report, titled ‘Capital for the Future: Saving and Investment in an Interdependent World’. With world population set to rise from 7 billion in 2010 to 8.5 billion 2030 and rapid aging in the advanced countries, demographic changes will profoundly influence these structural shifts.“GDH is one of the finest efforts at peering into the distant future. It does this by marshaling an amazing amount of statistical information,” said Kaushik Basu, the World Bank’s Senior Vice President and Chief Economist. “We know from the experience of countries as diverse as South Korea, Indonesia, Brazil, Turkey and South Africa the pivotal role investment plays in driving long-term growth. In less than a generation, global investment will be dominated by the developing countries. And among the developing countries, China and India are expected to be the largest investors, with the two countries together accounting for 38 percent of the global gross investment in 2030. All this will change the landscape of the global economy, and GDH analyzes how.”Productivity catch-up, increasing integration into global markets, sound macroeconomic policies, and improved education and health are helping speed growth and create massive investment opportunities, which, in turn, are spurring a shift in global economic weight to developing countries. A further boost is being provided by the youth bulge. With developing countries on course to add more than 1.4 billion people to their combined population between now and 2030, the full benefit of the demographic dividend has yet to be reaped, particularly in the relatively younger regions of Sub-Saharan Africa and South Asia.The good news is that, unlike in the past, developing countries will likely have the resources needed to finance these massive future investments for infrastructure and services, including in education and health care. Strong saving rates in developing countries are expected to peak at 34 percent of national income in 2014 and will average 32 percent annually until 2030. In aggregate terms, the developing world will account for 62-64 percent of global saving of $25-27 trillion by 2030, up from 45 percent in 2010.“Despite strong saving levels to finance their massive investment needs in the future, developing countries will need to significantly improve their currently limited participation in international financial markets if they are to reap the benefits of the tectonic shifts taking place,” said Hans Timmer, Director of the Bank’s Development Prospects Group.GDH paints two scenarios, based on the speed of convergence between the developed and developing worlds in per capita income levels, and the pace of structural transformations (such as financial development and improvements in institutional quality) in the two groups. Scenario one entails a gradual convergence between the developed and developing world while a much more rapid scenario is envisioned in the second.The gradual and rapid scenarios predict average world economic growth of 2.6 percent and 3 percent per year, respectively, during the next two decades; the developing world’s growth will average an annual rate of 4.8 percent in the gradual convergence scenario and 5.5 percent in the rapid one.In both scenarios, developing countries’ employment in services will account for more than 60 percent of their total employment by 2030 and they will account for more than 50 percent of global trade. This shift will occur alongside demographic changes that will increase demand for infrastructural services. Indeed, the report estimates the developing world’s infrastructure financing needs at $14.6 trillion between now and 2030.The report also points to aging populations in East Asia, Eastern Europe and Central Asia, which will see the largest reductions in saving rates. Demographic change will test the sustainability of public finances and complex policy challenges will arise from efforts to reduce the burden of health care and pensions without imposing severe hardships on the old. In contrast, Sub-Saharan Africa, with its relatively young and rapidly growing population as well as robust economic growth, will be the only region not experiencing a decline in its saving rate.In absolute terms, however, saving will continue to be dominated by Asia and the Middle East. In the gradual convergence scenario, in 2030, China will save far more than any other developing country -- $9 trillion in 2010 dollars -- with India a distant second with $1.7 trillion, surpassing the levels of Japan and the United States in the 2020s.As a result, under the gradual convergence scenario, China will account for 30 percent of global investment in 2030, with Brazil, India and Russia together accounting for another 13 percent. In terms of volumes, investment in the developing world will reach $15 trillion (in 2010 dollars), versus $10 trillion in high-income economies. China and India will account for almost half of all global manufacturing investment.“GDH clearly highlights the increasing role developing countries will play in the global economy. This is undoubtedly a significant achievement. However, even if wealth will be more evenly distributed across countries, this does not mean that, within countries, everyone will equally benefit,” said Maurizio Bussolo, Lead Economist and lead author of the report.The report finds that the least educated groups in a country have low or no saving, suggesting an inability to improve their earning capacity and, for the poorest, to escape a poverty trap.“Policy makers in developing countries have a central role to play in boosting private saving through policies that raise human capital, especially for the poor,” concluded Bussolo.Regional Highlights:East Asia and the Pacific will see its saving rate fall and its investment rate will drop by even more, though they will still be high by international standards. Despite these lower rates, the region’s shares of global investment and saving will rise through 2030 due to robust economic growth. The region is experiencing a big demographic dividend, with fewer than 4 non-working age people for every 10 working age people, the lowest dependency ratio in the world. This dividend will end after reaching its peak in 2015. Labor force growth will slow, and by 2040 the region may have one of the highest dependency ratios of all developing regions (with more than 5.5 non-working age people for every 10 working age people). China, a big regional driver, is expected to continue to run substantial current account surpluses, due to large declines in its investment rate as it transitions to a lower level of public involvement in investment. Eastern Europe and Central Asia is the furthest along in its demographic transition, and will be the only developing region to reach zero population growth by 2030. Aging is expected to moderate economic growth in the region, and also has the potential to bring down the saving rate more than any developing region, apart from East Asia. The region’s saving rate may decline more than its investment rate, in which case countries in the region will have to finance investment by attracting more capital flows. The region will also face significant fiscal pressure from aging. Turkey, for example, would see its public pension spending increase by more than 50 percent by 2030 under the current pension scheme. Several other countries in the region will also face large increases in pension and health care expenditures.Latin America and the Caribbean, a historically low-saving region, may become the lowest-saving region by 2030. Although demographics will play a positive role, as dependency ratios are projected to fall through 2025, financial market development (which reduces precautionary saving) and a moderation in economic growth will play a counterbalancing role. Similarly, the rising and then falling impact of demography on labor force growth means that the investment rate is expected to rise in the short run, and then gradually fall. However, the relationship between inequality and saving in the region suggests an alternative scenario. As in other regions, poorer households tend to save much less; thus, improvements in earning capacity, rising incomes, and reduced inequality have the potential not only to boost national saving but, more importantly, to break poverty traps perpetuated by low saving by poor households.The Middle East and North Africa has significant scope for financial market development, which has the potential to sustain investment but also, along with aging, to reduce saving. Thus, current account surpluses may also decline moderately up to 2030, depending on the pace of financial market development. The region is in a relatively early phase of its demographic transition: characterized by a still fast growing population and labor force, but also a rising share of elderly. Changes in household structure may also impact saving patterns, with a transition from intergenerational households and family-based old age support to smaller households and greater reliance on asset income in old age. The region has the lowest use of formal financial institutions for saving by low-income households, and scope for financial markets to play a significantly greater role in household saving.South Asia will remain one of the highest saving and highest investing regions until 2030. However, with the scope for rapid economic growth and financial development, results for saving, investment, and capital flows will vary significantly: in a scenario of more rapid economic growth and financial market development, high investment rates will be sustained while saving falls significantly, implying large current account deficits. South Asia is a young region, and by about 2035 is likely to have the highest ratio of working- to nonworking-age people of any region in the world. The general shift in investment away from agriculture towards manufacturing and service sectors is likely to be especially pronounced in South Asia, with the region’s share of total investment in manufacturing expected to nearly double, and investment in the service sector to increase by more than 8 percentage points, to over two-thirds of total investment.Sub-Saharan Africa’s investment rate will be steady due to robust labor force growth. It will be the only region to not see a decrease in its saving rate in a scenario of moderate financial market development, since aging will not be a significant factor. In a scenario of faster growth, poorer African countries will experience deeper financial market development, and foreign investors will become increasingly willing to finance investment in the region. Sub-Saharan Africa is currently the youngest of all regions, with the highest dependency ratio. This ratio will steadily decrease throughout the time horizon of this report and beyond, bringing a long lasting demographic dividend. The region will have the greatest infrastructure investment needs over the next two decades (relative to GDP). At the same time, there will likely be a shift in infrastructure investment financing toward greater participation by the private sector, and substantial increases in private capital inflows, particularly from other developing regions  Show Less -

The World Bank Group’s mission to help free the world of poverty has been translated into two clearly articulated goals. The first goal is a moral imperative to end extreme poverty for the 1.2 billion... Show More + people who continue to live with hunger and destitution.Along with lingering poverty, groups of people are fall behind in some developing countries that enjoyed strong economic growth over the past decade – in many cases with widening inequality as a result. The second goal established by the World Bank Group is therefore to promote shared prosperity.Jaime Saavedra-Chanduvi, the Bank’s Director for Poverty Reduction and Equity, explains why the institution decided to focus on shared prosperity, and how this will guide its work in coming years.What does the term “shared prosperity” mean for the Bank?The shared prosperity goal captures two key elements, economic growth and equity, and it will seek to foster income growth among the bottom 40 percent of a country’s population. Without sustained economic growth, poor people are unlikely to increase their living standards.  But growth is not enough by itself. Improvement in the Shared Prosperity Indicator requires growth to be inclusive of the less well- off. Why is the Bank focusing on shared prosperity at this time?We know that economic growth is sometimes accompanied by greater inequality and social exclusion. Our focus on shared prosperity reflects the fact that many countries are seeking rapid and sustained increases in living standards for all of their citizens, not just the privileged few. While ending extreme poverty by 2030 is a clear target and priority, our mission is not just about the poorest developing countries. We care about poor people wherever they are.Our focus on shared prosperity reflects the fact that many countries are seeking rapid and sustained increases in living standards for all of their citizens, not just the privileged few.Does the shared prosperity goal imply reducing inequality by redistributing wealth?No. We need to focus first on growing, as fast as possible, the welfare of the less well off. But we’re not suggesting that countries redistribute an economic pie of a certain size, or to take from the rich and give to the poor.Rather, we’re saying that if a country can grow the size of its pie, while at the same time share it in ways that boost the income of the bottom 40 percent of its population, then it is moving toward shared prosperity. So the goal combines the notions of rising prosperity and equity.We’ll be tracking growth in incomes of the bottom 40 percent, and due to the fact that that this will be done alongside national income growth monitoring (which countries already do), countries will see directly how the less well-off are faring.We do not use as an indicator of the shared prosperity goal the growth of the bottom 40 percent relative to the average growth rate, because there are periods in the development process when incomes of the poor are rising fast, and that is a good outcome even if there is some increase in inequality. But we also recognize that steady increases in inequality are not socially and politically sustainable over long periods.It’s a fact that no country has transitioned from middle to high-income status with high levels of inequality. A persistent rise in inequality (or being stuck at high levels of inequality) will ultimately limit income growth of the less well-off and, eventually, limit economic growth itself.How can the new Shared Prosperity Indicator measure progress over time?Tracking the incomes of the bottom 40 percent of a nation’s population is a departure from how economists have traditionally measured progress – by focusing mainly on growth in the gross domestic product (GDP) per capita.The assumption in the past was that a growing GDP would trickle down to the poor – well, now we know that’s not always the case. The Shared Prosperity Indicator will instead take the direct route of measuring income growth of those we are concerned about: the less-well off.What will it take for a country to achieve shared prosperity?The path to shared prosperity for a country will depend on both context and time.  There are many pathways to shared prosperity, and they often complement one another. Plus, different societies assign specific roles to the government, firms, civil society and citizens in general.  Let me mention a few examples.First, prosperity can be broad-based if growth generates jobs and economic opportunities for all segments of the population. The private sector is typically the main engine job creation, but the government plays a critical role by implementing policies and regulations that promote a favorable environment to maintain high investment rates, and by investing in labor skills needed to build a modern and dynamic workforce.However, the pattern of growth has to be such that it generates income opportunities for the poor. So the poverty impact of natural resources-based growth that does not pull the rest of the economy will be very different than growth sustained by agricultural productivity increases, for example.Second, there is a need for a healthy and stable “social contract” in every country that commits to investments that improve and equalize opportunities for all citizens.For children and youth, for example, this would mean providing universal access to early childhood development, health, nutrition, education and basic infrastructure. For women in many societies, it would mean dismantling barriers to their participation in economic, social, and political life.A social contract would also commit to investments in safety nets that protect the poor and vulnerable against deprivation and shocks. And it should offer mechanisms that support the government’s commitments – most importantly, a tax system that creates incentives for economic growth and fairness.Are countries interested in implementing social contracts to promote greater and more equal access to opportunities?All countries have different histories and needs and no one solution will fit all. Progress toward equitable access to opportunities for all citizens requires long-term vision, willingness to build solid institutions, social change and strong political will.The Bank can help shape programs and policies that meet our shared prosperity goal. We will continue to work closely with our partners and client countries to develop solutions that fit their specific needs.  Show Less -

WASHINGTON, April 26, 2013 — The World Bank’s Board of Executive Directors today approved a total of US$100 million to help Serbia improve road infrastructure and road safety.  Better national ro... Show More + ads will enhance Serbia’s competitiveness and provide people with easier and safer access to jobs, markets, and social services.   The new Road Rehabilitation and Safety Project will contribute to the financing of periodic maintenance and rehabilitation works, partial pavement widening, works concerning traffic signalization improvement and structure renewal, as well ancillary road connections for 35 – 40 sections, totaling 800 – 810 km in length. In addition, it will provide signage, traffic calming measures, and road furniture for an additional 1,000 km of national roads, further raising the safety of Serbian roads.  The project is also designed in a way to incentivize the implementation of maintenance management reforms. The project financed by the World Bank is part of a larger effort by the international financial institutions, including the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) to help Serbia implement a National Road Network Rehabilitation Program (NRNRP) to improve the quality and safety on priority national roads, thus improving connectivity of the entire road network.  The first phase of NRNRP supported by the three IFIs will cover about 1,100 km.  Show Less -

Development Committee calls for “robust” replenishment of IDA, the World Bank’s Fund for the PoorestWASHINGTON, April 20, 2013 – The Development Committee on Saturday endorsed the World Bank Group’s g... Show More + oal to end extreme poverty within a generation as “ambitious”, saying that this endeavor by the Bank was a “historic opportunity” to make a difference. The Committee equally confirmed the Group’s vision to promote shared prosperity and added these goals must be achieved without jeopardizing the environment, magnifying economic debt or excluding vulnerable people.World Bank Group President Jim Yong Kim, who pushed this twin-pronged approach in his speech two weeks ago, welcomed the Committee’s support.“I have no doubt that the world can end extreme poverty within a generation. But it’s not a given and we cannot do it alone. It requires focus, innovation and commitments from everyone. This endorsement is an important step. If we succeed, together, we would have accomplished an historic milestone,” Kim said.The 25-member Development Committee, which meets twice a year during the World Bank/IMF spring and annual meetings, said in its Communiqué that reducing the percentage of people living on less than $1.25 a day to 3 percent by 2030 will require strong growth across the developing world, and translation of growth into poverty reduction to an extent not seen before in many low income countries. It will also require overcoming institutional and governance challenges, and investing in infrastructure and in agricultural productivity.“Ministers  unequivocally supported Dr. Kim’s vision and stated that we can count on the World Bank Group as a partner in the endeavor of ending extreme poverty and boosting shared prosperity,” said Marek Belka, the Chairman of the Development Committee. “Dr. Kim renewed our zeal for the Bank Group's core mission of a world free of poverty. There is a historic opportunity at our reach to make critical progress.” The Communiqué also called on the Bank Group to pay special attention to countries and regions with the highest incidence of poverty and to Fragile and Conflict-Affected Situations (FCS), as well as to the particular challenges facing small states.A new analysis of extreme poverty released by the World Bank earlier this week showed that there are still 1.2 billion people living in extreme poverty (21 percent of the developing world population in 2010) and despite recent impressive progress, Sub-Saharan Africa still accounts for more than one-third of the world’s extreme poor.The Communiqué also stressed that the goal of shared prosperity -- fostering income growth of the bottom 40 percent of the population in every country – will not be achieved without addressing inequality. Investments that create opportunities for all citizens and promote gender equality are an important end in their own right, as well as being integral to creating sustained economic growth. Shared prosperity also means focusing on those who, although not currently poor, are vulnerable to falling into poverty.The Committee also gave its vote of confidence for the International Development Association (IDA) – the Bank’s fund for the poorest – as a critical tool to carry out the Bank’s mission, and called for a robust IDA17 replenishment with strong participation from all members. It welcomed IDA17’s overarching theme of maximizing development impact, including by further leveraging synergies with the Group’s private sector arm, the International Finance Corporation (IFC) and its political risk insurance agency, Multilateral Investment Guarantee Agency (MIGA). Furthermore, the Committee recognized IDA17’s focus on inclusive growth, gender equality, FCS, and climate resilience, including disaster risk management.The role of the private sector to promote growth and job creation in achieving the goals was also noted in the Communiqué. With a proper enabling environment, adequate infrastructure, and policies that promote competition, entrepreneurship and job creation, the private sector can support shared prosperity and offer real opportunities to all citizens, especially women and young adults, it said.   Show Less -

2030.This is it. This is the global target to end poverty.Thank you for coming and I just want you to know that less than an hour ago, for the first time in history, we have committed to setting a tar... Show More + get to end poverty. We are no longer dreaming of a world free of poverty. We have set an expiration date for extreme poverty. With commitment, cooperation, and the vision of leaders from around the world, we have great faith that we can make it happen. This will be hard work. The target of 2030 is closer than you think – just 17 years away. We will bring the urgency of the task to the world every year by reporting on our progress, country by country, on the rate of extreme poverty around the world as well as the changes in the income of the bottom 40 percent in each country, the people who are vulnerable to slipping back into poverty in the event of losing a job or suffering a health crisis. We will learn every year where we are making progress and where we are not.I also very much welcome the Development Committee’s call for a robust replenishment of our fund for the poorest – IDA – with strong participation from all members.These Spring Meetings – my first as World Bank Group President – had several other major highlights. One was the uplifting presence and participation of UN Secretary-General Ban Ki-moon, who joined me for several high-level meetings and events and who most importantly underscored the great importance of the UN system and the World Bank Group working hand in hand to end poverty. We can be much more effective and efficient if we combine forces to address political, security and economic development issues at the same time. This is our promise to the world.A second key issue at these Meetings was the attention paid to climate change. As I talked about in several meetings, we need a plan that is equal to the challenge of a disastrously warming planet. A third important part of these meetings was the focus on the need for countries to invest more in health and education. Without providing universal access to education, without improving education systems so that all children not only attend school but learn in school, and without building health care systems that truly provide quality care to all people, countries will miss the opportunity to make the critical investments in human capital that will determine their competitive position in the global economy. Investment in people, especially in health and education, is the right thing to do, both from a moral and a strategic perspective. Thank you very much. Show Less -

While poverty has declined rapidly over the past three decades, humanity continues to face urgent and complex challenges.More than 1 billion people still live in deep poverty, a state of affairs that ... Show More + is morally unacceptable given the resources and technology we have available today. At the same time, rising inequality and social exclusion seems to accompany rising prosperity in many countries.Under these circumstances, the World Bank's overarching mission of a world free of poverty is as relevant today as it has ever been.So the Bank has established ambitious, but achievable goals to galvanize international and national efforts to end extreme poverty globally within a generation and to promote "shared prosperity," a sustainable increase in the well-being of the poorer segments of society.This second goal reflects the fact that all countries aspire to a better living standard for all of their citizens, not only for the already-privileged.To end extreme poverty, the Bank's goal is to decrease the percentage of people living with less than $1.25 a day to no more than 3 percent by 2030.To promote shared prosperity, the goal is to promote income growth of the bottom 40 percent of the population in each country. Learn more about the World Bank's new goals here. Show Less -

WASHINGTON, April 19, 2013 ― Most economies in the Europe and Central Asia (ECA) region grew in 2012, with an average growth rate of 2.5 percent, and are expected to grow in 2013 at a slightly higher ... Show More + rate of about 2.9 percent, World Bank officials said at a press briefing during the World Bank/IMF Spring Meetings 2013. Recovery in ECA will continue to be the slowest compared to other regions in the world, and will be multi-speed, with the western part of the region growing at a much slower pace than the eastern part. Protracted recession and slow growth recovery further aggravate the persistent unemployment in some parts of the region, which in turn has long-term implications for the region’s competitiveness and social inclusion."Since the crisis, we see a multi-speed recovery in the region," said Philippe Le Houérou, World Bank Vice-President for the Europe and Central Asia region. "As a rule of thumb, the closer the countries are to the Euro area, and in particular to Southern Europe, the stronger they feel the impact, as their economies rely more on the Euro area as an export market and the main source of banking flows, foreign direct investments and workers’ remittances."An uncertain environment and continued recession in the Euro area pose challenges to the ECA region through three channels: finance, trade, and workers’ remittances. Central and Eastern Europe (CEE)i and the Western Balkansii, which have the closest links to the Euro area, are considerably lagging behind Turkey and the Commonwealth of Independent States (CIS)iii.According to World Bank projections for 2013, countries of the CIS are expected to grow at about 3.5 percent and Turkey at about 4 percent, while in CEE and the Western Balkans growth will remain anemic at 1.2 percent, which is only slightly higher than 0.9 percent growth in 2012.This multi-speed growth is reflected in fiscal and financial trends in the region.Budget deficits have been shrinking (from 5.5 percent of GDP in 2008 to an average of 3.4 percent in 2012 in CEE; and from an average of 4.5 percent of GDP in 2008 to an average surplus of 0.3 percent in 2012 in the CIS), but the measures to bring about this fiscal adjustment have become increasingly difficult. Some of these adjustments became possible thanks to improved efficiency and better targeting of the social protection expenditures, which also helped prevent an increase in poverty in most countries.Since the crisis, public debt levels have risen in most parts of the region, except for Turkey. Average public debt for CEE and the Western Balkans has increased from 28.3 percent in 2008 to 45.5 percent in 2012. Public debt is at potentially risky levels in several countries of the region (Hungary – 76 percent, Albania – 62 percent, Poland – 56 percent, Serbia – 54 percent, Croatia and Slovenia – 53 percent), and poses a heavy burden on public finances.The financial sector in CEE and the Western Balkans has been weakened by deleveraging and growing non-performing loans (NPLs). Deleveraging accelerated again in 2012 after some slowdown in 2011, especially in countries such as Estonia, Hungary, Slovenia, Croatia, Latvia, and Serbia. NPLs decreased in CIS countries and Turkey, but continued to grow in the Western Balkans, Bulgaria, and Romania. In these conditions, credit issuance to the private sector has continued to decline in the Baltics and has stagnated in the rest of Central Europe, the Western Balkans, Turkey, and also in Belarus and Ukraine.Unemployment and job creationJob creation has been sluggish in the post-crisis recovery of the region. Unemployment remains stubbornly high in CEE and keeps rising in the Western Balkans, while slightly decreasing in the CIS and Turkey. Youth unemployment is of particular concern, as well as long-term unemployment, when people are unemployed for longer than 12 months.Reducing unemployment is an urgent challenge for the ECA region and requires a mix of policy measures both in the short and long term. An upcoming World Bank report on jobs in the ECA region provides an analysis of the situation and makes policy recommendations to strengthen job creation.The report establishes that employment creation in the ECA region was slow even before the crisis (2000-2007) when the region grew faster than other emerging economies. The report finds evidence that the countries that reformed early and have integrated into global markets, the so-called ‘advanced modernizers’, have been more successful in achieving greater employment creation than ‘late modernizers’, which have implemented reforms slowly or unevenly."Reforms pay off in the form of stronger and sustained job creation in the private sector and higher ability to translate entrepreneurship potential into successful creation of new businesses, but they do so with a lag," said Yvonne Tsikata, World Bank Sector Director for Poverty Reduction and Economic Management in Europe and Central Asia. She added that "Initially, economic restructuring means that jobs are both created and destroyed. As countries further integrate into the global economy, restructure enterprises, improve conditions for doing business, and modernize labor markets, job creation outpaces job destruction and this then translates into higher aggregate employment".Ana Revenga, World Bank Sector Director for Human Development in the Europe and Central Asia region said that "Faster job creation will require changes in the social contract between workers, enterprises and governments. The policy agenda must focus on removing obstacles to entrepreneurship, helping education and training systems adapt better to fast-changing labor markets, facilitating labor mobility, and making pensions, social benefits, and labor regulations compatible with longer and more productive working lives. The right combination of specific policies will vary across countries, but the ultimate result is the same: more rapid creation of productive jobs."To create jobs in ECA, the Bank recommends actions in three main policy areas:Resuming sustained growth: by ensuring macro fundamentals for economic recovery and regaining the pre-crisis reform momentum.Enabling private sector-led job creation: by eliminating impediments to business expansion and entrepreneurship.Preparing workers for new jobs: by helping workers acquire skills for the modern workplace and making formal work pay by removing disincentives and barriers to work._____________________________i The Central and Eastern Europe (CEE) sub-region includes Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic, Slovenia, and Romania.ii The Western Balkans sub-region includes Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia.iii The Commonwealth of Independent States (CIS) sub-region includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Show Less -

RICHARD MILLS:  Well, thank you all for coming to the meetings of the World Bank and IMF.  President Kim will give a short opening statement, and then we will be happy to take your questions... Show More + .If I could please remind everyone if their cellphones and pagers could be off.  And also please identify yourself and your news organization when you're called on.President Kim.DR. KIM:  Thank you very much.Thank you for coming to the press conference which opens the 2013 Spring Meetings of the World Bank Group and the IMF.First, let me express my deep condolences to family and friends of people who died or were wounded in the attack in Boston earlier this week, a city which I have spent much of my adult life in as both a student and a professor.Just a couple of weeks ago, I outlined an ambitious agenda for the global community that called for a two pronged approach for a world free of poverty.  The first is virtually ending extreme poverty by 2030.  The second is promoting shared prosperity by fostering income growth of the bottom 40 percent of the population in every country.  And for that second goal, we also mean sharing prosperity across generations, and that calls for bold action on climate change.I have no doubt that the world could end extreme poverty within a generation, but this will be much harder than most people realize.  It is far from a given.  It will take ingenuity, focus, commitment, and visionary leaders.  But if we succeed, we will have accomplished one of humankind's most historic accomplishments.Let's take a look at the situation in the world today.  More than four years after the start of the financial crisis, high income countries continue to struggle with high unemployment, weak growth, and economic fragility.  The good news is that, taken as a whole, Developing Countries are doing relatively well, with growth expected to reach about 5.5 percent this year.  This should strengthen to just under 6 percent by 2015.  Indeed, Developing Countries are accounting for more than half of global growth.But too often we lose sight of the fact that this overall story hides a wide range of outcomes across countries.  In Africa, about a quarter of the countries grew at 7 percent or higher last year, and a number of them are among the fastest growing in the world.  In East Asia and the Pacific, output is expanding rapidly amid fears of overheating and asset bubbles.But growth in several major middle income countries including Brazil, India, Russia, and Turkey, has slowed, in part, because of unresolved bottlenecks in these economies.Elsewhere in the developing world, recovery has been more elusive.  This diversity of experience among Developing Countries means that there is no one size fits all prescription for policy, and external developments can no longer be seen as the principal source of problems.  Now more than ever, solutions need to be found in domestic macroeconomic and structural policies that address distinct conditions in individual countries.If we are to end extreme poverty within a generation, we'll need at least three things to happen: First, the high growth rate in the developing world over the past 15 years must accelerate.Second, growth has to translate into poverty reduction and job creation and it must be inclusive to curb inequality.And, third, we must avert or mitigate potential shocks such as climate disasters or new food, fuel, and financial crises.In particular, doing better on growth means doing more of the kinds of reforms that have underpinned the strong Developing Country growth for past 15 years.  That means eliminating bottlenecks;  additional investment in infrastructure; and, to ensure that the poor participate in the benefits of growth, much greater investments in education and healthcare.As we move ahead, we must also address climate change with the plan that matches the scope of the problem.  Climate change is not just an environmental challenge.  It is a fundamental threat to economic development.  Unless the world takes bold action now, a disastrously warming planet threatens to put prosperity out of reach of millions and roll back decades of development and poverty reduction.At the World Bank Group, we are stepping up our mitigation, adaptation, and disaster risk management work.  Some 130 countries have asked the World Bank for assistance in climate related work.Also, as we move towards these poverty goals, we must be far more effective in fragile and conflict affected states.  We now hope to shift more funding towards fragile States under our concessionary lending fund, the International Development Association, or IDA.  If we hope to meet our goals of ending poverty and boosting shared prosperity, we must be successful in fragile states.  Next month, UN Secretary General Ban Ki moon and I will travel to the Great Lakes region of Africa.  I believe that the combined efforts of the United Nations and the World Bank Group on the political and security fronts can make a major difference in moving fragile states out of fragility.Thank you, I will now take your questions.RICHARD MILLS:  Yes.QUESTION:  Thank you very much, and good morning, everyone.  Ang Ting [ph.] from China Business News.I have two questions:  First, as we know, BRICS and countries have reached a deal to establish a BRICS Development Bank that will rival the Western-backed institutions such as the IMF and the World Bank.  So, what do you think of the prospect of this BRICS Bank and its future relationship with the World Bank and the IMF?And the second question is:  What do you think of China's weaker than expected GDP growth and also its increasing inequality issue?Thank you very much.DR. KIM:  Thank you.  Thank you very much.You know, I visited all of the BRICS countries, and in each of them there are huge needs for infrastructure in the short term, medium term, and long term.  So, for example, just in India, one country, the Prime Minister and the Minister of Finance said to me that over the next five years they have a $1 trillion infrastructure deficit.  About half of it, they think, can be met with public resources, but then half of it will also have to be met through private sources.  So, every single one of the BRICS countries has an enormous infrastructure deficit that simply can't be met by a single institution, certainly not the World Bank in and of itself.So, for us, the BRICS Bank is quite a natural extension of the need for more investment in infrastructure, and so we would welcome it.  We work with many development banks, but I would point out that the World Bank has been around for 66 years.  We have 66 years of experience in building infrastructure.  We have knowledge that cuts across all that have been developed to working with all 188 member countries.  And so our sense is that whatever other banks are built, one, there is plenty of infrastructure that needs to go around, and our sense is that they would want to take advantage of the knowledge that we have.I think everyone was disappointed at the lower projections in China, but we've worked with China on a 2030 report that looks very specifically at the strategy going forward, and our own sense is that the Chinese leadership is laser focused on doing those things that will build the foundations of their future growth.  Moreover, when I visited China, the very specific thing that they asked me about was to work with them on urbanization.  It's a huge issue.  So, my own sense is that the Chinese Government is looking forward in a way that will be very helpful for them in not just looking at short term changes.  I mean, these numbers go up and down all the time.  The key for China is to think about how their growth is going to be shaped in the future, and some of the commitments they've made, having a more consumption oriented growth, looking at how they're organizing their cities so that they're both cleaner and more efficient.  These are the kinds of things that every country has to do, not just sit around and react to the short term fluctuations in growth figures, for example, but think about the medium term and long term and make those kinds of investments that are necessary to ensure growth going forward.RICHARD MILLS:  Yes.  Right here in the second row.QUESTION:  Larry Elliott of The Guardian.You said that 130 countries had asked the Bank for help with climate change and you've stepped up work on mitigation and adaptation.  How much money has the Bank actually allocated so far to these 130 countries itself for climate change work?DR. KIM:  So, our work on climate change, we're doing lots of things.  The first thing, Larry, is that, as you know, we're trying to come up with a plan that is equal to the problem. And that plan has to be huge.  It has to really tackle issues like carbon markets and a stable price on carbon.This is a difficult issue.  There is no way that the Bank could do that on its own.  It requires a lot of agreement across the board.  And there are other issues like fossil fuel subsidies which we know we have to remove, but they are incredibly difficult politically.So, for example, in just one area, we spent $9 billion on agriculture last year, and what we are trying to do is ensure that every single project we do is focused on what we call "Climate smart agriculture," and that is ensuring that we do things like help to recover degraded lands, help to increase yields by bringing in varieties of crops that quite literally have longer roots and take more carbon and put it back into the earth.Sustainable energy for all.  We're focused on trying to find a way of providing energy for Africa, for example, that will use sustainable sources of energy.  And just in our own portfolio of energy, we've gone from 22 percent focused on renewable energy sources or sustainable energy in 2007 to double that number.  We're closer to 50 percent in 2013 in terms of the proportion of our portfolio.So, we're making large investments in areas like sustainable energy, agriculture -- looking, for example, at how to build clean cities.  Those are things that we do all the time and we're doing everything that we can to be more climate smart in every one of those activities.And we're also trying to contribute to these larger debates about stable price on carbon and fossil fuel subsidies.So, it's hard to give you an exact number, but it's many, many billions of dollars that we're putting into things like sustainable energy, climate smart agriculture, and clean cities.RICHARD MILLS:  First row.QUESTION:  Good morning.  My name is Gina [unclear] from Peru.I wanted to ask you about America; South America, specifically.  We have high levels of poverty, and if you can say something about your vision about Peru.DR. KIM:  Yes.  Peru is a country that I know very well.  I have worked there quite intensively since the early 1990s, and I have to say that the achievements in the Peruvian economy have been very impressive.  I know that one of the concerns is, for example, to make sure that people who are living in the selva, in the jungle and the highlands are able to participate in the economic growth that Peru has experienced.  I've, of course, met with and know President Humala very well, and I know that the Government is committed to improving the quality of services that go to the poorest of Peru.Now, because of natural resources and a growing economy, there have been many people in Peru who have done very, very well.  And for Peru, we think that our twin goals of ending poverty and building shared prosperity are especially appropriate.  And what we're going to be working with Peru to do is to try to improve the delivery of services, especially health, education, social protection, to marginalized populations, people living in the slums, people living in the jungle, people living in the highland regions.So, it's a middle income country, it's been doing very well, but there is still much to do, and we look forward to working closely with the Peruvian Government in the future.  In fact, I will be visiting there this summer.RICHARD MILLS:  Yes, to the gentleman in the back.QUESTION:  Hi, my name is Jeremy Tordjman and I work with AFP.I would like to follow up on the first question.  I wanted to know, don't you fear that the World Bank could be outpaced by institutional countries that impose less conditions than the World Bank Group before granting loans?And secondly, are you worried about the side effects of the monetary policies on some Emerging Countries?Thank you very much.DR. KIM:  So, in visiting every single one the BRICS countries, I did not experience even slightly a diminishing of demand for our services.You know, it's true that the BRICS countries, many of them are extremely well financed and have money, but they continue to come to us for very specific reasons.  For example, the Chinese came to us and asked us to help with urbanization.  In other words, they appreciate that we have been involved in building cities for 66 years, and I think there's still no question that the quality of our experience, the quality of our knowledge, the  our ability to help them actually deliver on their promises to their people is what keeps them coming back to the World Bank Group.We have very specific comparative advantages.  Knowledge is one of them.Another huge comparative advantage that we have is that we work across sectors.  The World Bank Group is made up of IDA/IBRD for the public sector, but we also have IFC, the International Finance Corporation, that works in the private sector, and it's become a third of our business; it's grown tremendously.  And the figure I mentioned about India earlier, that half of the investment in infrastructure has to come from the private sector, we can work across sectors  public, private  and even provide political guarantees through the Multilateral Investment Guarantee Agency that no other organization we know of could do.So, I really have no doubt in my own mind about our continued relevance for a very long time.  In fact, that's precisely the news that I'm getting back from every single one of the BRICS countries.  There is an increasing request for our involvement, not a decreasing sense of demand for our environment  of our services.What's the second question?  What was your second question? QUESTION:  Policies.And follow up on the first one, what about the conditionality?DR. KIM:  You know, the conditionality, we think that our safeguards, we think that our close, close attention to whether corruption is happening or not, we think that our attention to the quality of the design of the project is a great asset, and this is exactly what's happening.  It's not  there are many other groups who are making investments and making loans in Developing Countries  we know that  and rather than them trying to run away from us, what we see is quite the opposite.  They're coming to us and asking to work with us, asking us to do parallel investments because they know that if we're involved, we're going to pay attention to things like whether people are being displaced; whether women are involved in projects; what kind of environmental impact these projects might have.We see the safeguards, we see our careful attention to detail, we see our attention to corruption as assets.  As more organizations, countries, funds go out and begin lending in Developing Countries, my own sense is that they're beginning to understand the value of this kind of careful approach that has been developed over decades of working in these countries.RICHARD MILLS:  Yes, right back in the center section.  Thank you.QUESTION:  Thank you.  [unclear] of the China Business Network.Dr. Kim, a question on China's urbanization.  What is the status of the cooperation between the World Bank and the Chinese Government, China's organization?  And you were in China last year.  What is your assessment on the Chinese urbanization development, and what is your policy, and why?Thanks.DR. KIM:  So, when I met with Premier Li Keqiang, he had been so happy with the cooperation that had led to the China 2030 Report that he immediately asked to do another one.  And I said to him, "Well, we're very happy to do this; this is an important issue.  We think that China's experience in urbanization actually can be very helpful to many other countries, and so we wanted to develop a report that not only will be helpful for China but for other countries in the world, and I suggested it might take two or three years, and the Premier Li said, "We want it in nine months."So, we're actually going to have an interim report ready in the summer, in June or July, and then we will have a report later in the year.  But we have a huge team working on it, which is our own urban development specialists  urban development specialists from around the world, and also many Chinese urban development specialists.My understanding is that there are many innovations that happened in China, but because China is such a large country and things are happening so quickly, China hasn't had time to take stock of all the things that are working, the innovations that have worked, and moreover things that haven't worked so well.  And what we're bringing to the table is our experience in urbanization across the world.You know, I was just in New Delhi, and it's quite remarkable that all of the buses and even the little motorcycles that carry people around are run on natural gas.  In New York City, Mayor Bloomberg had said that they were going to reduce their carbon footprint by 30 percent by 2030.  They're going to achieve that goal by 2017.So, we come into this project very hopeful that cleaner cities can be built and that tremendous progress can be made.  We will have something ready, and our hope is that not only shape what China does as an organization but could have a very positive impact in the entire world.RICHARD MILLS:  Yes, to the gentlemen right in the front.QUESTION:  Andre Huey from Radio 98.9 in St. Kitts and Nevis in the Caribbean.The Caribbean economies, and Caribbean countries are quite particular in that they are small economies are on small countries.  They're fragmented because they're islands.  What is the status in terms of poverty levels in the Caribbean in general and what are some of the concerns that we should have in the region?DR. KIM:  Well, there are  let me start by saying that every single country in the world is facing the issue of understanding the extent of their public expenditures, making sure their public expenditures are having the impact they are intended to have, and then making tough decisions to cut back or reapportion their public expenditures.Also, every country in the world is facing the issue of trying to then also make the kinds of investments that will provide the foundation for the growth of the future.One of the countries we're especially focused on right now is Jamaica, and as I'm sure you know well, we've just come to an agreement about a program with the IMF for Jamaica.  Jamaica has an especially tough situation to face.  Their debt to GDP ratio is very high, and they're facing some very difficult decisions that they simply have to make.So, our own sense is that we need to do everything we can to make sure that Caribbean countries, especially Jamaica, have all the support they need from us, technically and otherwise, to make these difficult decisions about expenditures, and then not wait for growth to recover in high income countries but start making the investments that they need to make in the areas that will provide the foundations for growth.  They've got to invest in infrastructure, they've got to continue to invest in health, education, and social protection programs, and they've got to improve their business environment so that businesses can grow and jobs can be created.These are difficult decisions for everybody, and especially difficult in Jamaica, but we were happy to come up with an agreement, and we're going to be paying close attention to do everything we can to ensure that Jamaica is successful.RICHARD MILLS:  Yes, to the gentleman right here.  Could you wait for the microphone, please.QUESTION:  [Unclear] Tunisia.Mr. President, what do you think about the economic and social situation in the Arab Spring countries, especially in Tunisia and Egypt?DR. KIM:  We were all, of course, inspired by what happened in your country, in Tunisia; and, as you know, I visited Tunisia not too long ago.Once again, let me reiterate, Tunisia has many of the same problems that every other country is having.  It's an especially difficult situation in Tunisia because for so many years there was very little trust in the Government.  The Government and the political leaders were very involved in the private sector, so there was very little trust that the rules were fair or that it was worth investing in the private sector.There are other problems, for example, like the fact that I learned that in Tunisia the highest rates of unemployment are among college educated young people.So, there is a lot of work to be done.  We are as committed as we could be to providing the kind of technical support and financing that's needed in order to get Tunisia and other countries through the next stages.We're following Egypt very carefully.  We're in extensive talks with them about supporting various projects.  Egypt has a special problem in the sense that their subsidies make up 8 percent of GDP.  And so we feel that one of the things that Egypt could do in the process of working with us, with the IMF and the World Bank Group, is to really look at whether they could cut back on some these, especially fuel subsidies.  I don't think we want to touch the food subsidies, but specifically work on removing some of those fuel subsidies so they could use that money for doing other things that would truly make Egypt more inclusive, and again lay the foundation for growth in the medium and long term.The Arab countries all have their unique challenges.  We were very happy that we could host a pledging conference for Yemen, for example, that yielded many more  a lot more pledges than we had expected even going in.  But, of course, the challenges in Yemen are immense.The point that I want to make, though, in thinking about the Arab Spring countries is that working in this so called "fragile countries"  and these countries are very fragile right now because of all of the upheaval; this is our specialty at the World Bank Group  we want to be sure that we are as effective as we possibly can be in working in those kinds of countries.As I mentioned, the Secretary General and I are going to the Great Lakes region.  We'll be going to the Sahel together.  I just returned from Afghanistan and visited Tunisia earlier on.The World Bank very specifically, especially through IDA, our fund for the poorest countries, is committed to staying the course, to remain committed to the Arab Spring countries, to countries of the Great Lakes region, to the Sahel, everywhere where there is fragility, our commitment is to stay there and continue to work on these problems, no matter how complicated they are.And the challenges in the Middle East are, indeed, extremely complicated, different from country to country.  Our commitment is to stay with these countries and continue to help them sort through the problems one by one.RICHARD MILLS:  Okay.  I think we have time for one more question.We go to you, yes, please.QUESTION:  Good morning.  I'm Angela Morales from The Economist in Mexico.I want to know what you think about the Mexican momentum reform and if you recall  DR. KIM:  Mexican... QUESTION:  Momentum of reforms.  And push up our economy or GDP.DR. KIM:  Well, Mexico, of course, is one of the most important economies in the Americas, an important trading partner for the U.S., and we were very encouraged to see how quickly Mexico responded from the economic crisis, and you would think that it would be especially severe in Mexico because of their close integration with the U.S. economy.I had a good relationship with the previous government and have also a very good relationship with this government, and we think that Mexico is doing so many of the right things in ensuring growth in the medium and the long term.Moreover, Mexico has been a leader, for example, in addressing climate change, and so their attention to the environment in Mexico, the focus that Finance Minister Videgaray [ph.] has on inclusion we think is extremely encouraging.The Mexican experience with Progresa and Oportunidades, the conditional cash transfer programs, along with the Brazilian experience, has been the model for the entire world.  We think that message is very important.  Mexico has been ahead of the game in terms of focusing on inclusion, on what we would call "shared prosperity," and our view is that that focus over many years, and also their very prudent macroeconomic approach, is going to lead to solid growth for Mexico going forward, and we're going to do everything we can to be supportive and a good partner to Mexico along that path.RICHARD MILLS:  Thank you very much.   Show Less -

Hi everyone. Thank you for coming to the press conference, which opens the 2013 Spring Meetings of the World Bank Group and IMF. First, let me again express my deep condolences of the family and frien... Show More + ds of people who died or were wounded in the attack in Boston earlier this week.Just a couple of weeks ago, I outlined an ambitious agenda for the global community that called for a two-pronged approach for a world free of poverty.The first is virtually ending extreme poverty by 2030. The second is promoting shared prosperity by fostering income growth of the bottom 40 percent of the population in every country. And for that second goal, we also mean sharing prosperity across generations, and that calls for bold action on climate change.I have no doubt that the world can end extreme poverty within a generation, but this will be much harder than most people realize. It is far from a given. It will take ingenuity, focus, commitment, and visionary leaders. But if we succeed, we will have accomplished one of humankind’s most historic accomplishments.Let’s take a look at the situation in the world today.  More than four years after the start of the financial crisis, high-income countries continue to struggle with high unemployment, weak growth and economic fragility.The good news is that taken as a whole developing countries are doing relatively well, with growth expected to reach about 5.5  percent this year. That should strengthen to just under 6 percent by 2015. Indeed, developing countries are accounting for more than half of global growth.But too often we lose sight of the fact that this overall story hides a wide range of outcomes across countries. In Africa, about a quarter of the countries grew at 7 percent or higher last year and a number of them are among the fastest growing in the world. In East Asia and the Pacific, output is expanding rapidly amid fears of overheating and asset bubbles. But growth in several major middle-income countries, including Brazil, India, Russia, and Turkey, has slowed in part because of unresolved bottlenecks in these economies.Elsewhere in the developing world, recovery has been more elusive.  This diversity of experience among developing countries means that there is no “one-size fits all” prescription for policy, and external developments can no longer be seen as the principal source of problems. Now more than ever, solutions need to be found in domestic macroeconomic and structural policies that address the distinct conditions in individual countries.If we are to end extreme poverty within a generation, we’ll need at least three things to happen. First, the high growth rate in the developing world over the past 15 years must accelerate.  Second, growth has to translate into poverty reduction and job creation and it must be inclusive and curb inequality. And third, we must avert or mitigate potential shocks, such as climate disasters or new food, fuel, or financial crises.In particular, doing better on growth means doing even more of the kinds of reforms that have underpinned the strong developing-country growth of the past 15 years. That means eliminating bottlenecks; additional investment in infrastructure; and, to ensure that the poor participate in the benefits of growth, much greater investments in education and health care.As we move ahead, we must address climate change with a plan that matches the scope of the problem. Climate change is not just an environmental challenge. It is a fundamental threat to economic development. Unless the world takes bold action now, a disastrously warming planet threatens to put prosperity out of reach of millions and roll back decades of development and poverty reduction.At the World Bank Group, we are stepping up our mitigation, adaptation, and disaster risk management work. Some 130 countries have asked the World Bank for assistance in climate-related work.Also, as we move toward these poverty goals, we also must be far more effective in fragile and conflict affected states. We now hope to shift more funding toward fragile states under our concessionary lending fund, the International Development Association, or IDA. If we hope to meet our goals of ending poverty and boosting shared prosperity, we must be successful in fragile states. Next month, UN Secretary-General Ban Ki-moon and I will travel to the Great Lakes region of Africa. I believe that the combined efforts of the United Nations and the World Bank Group on political, security and development fronts can make a major difference in moving fragile states out of fragility.Thank you. I’ll now take your questions. Show Less -

MS. WROUGHTON:  Are we set to go?  Can everybody hear me?Jim, can everybody hear you?DR. KIM:  Yes, I think so.MS. WROUGHTON:  All right, good.Hi.  I am Lesley Wroughton. ... Show More + ; I am a correspondent for Reuters based in Washington.  I have been covering the Bank and the Fund for 10 years, and this seemed like a good time to be able to sit here and have a conversation with Jim Yong Kim and Kaushik Basu to talk about the new vision that Jim is going to be sketching out during the IMF Meetings and for Kaushik to help explain a lot of the technicalities of where this is going.And with that, we also want you to know that they are--there is availability for questions, and if you raise your hand, somebody will come up and give you a card, and you can write it down, and then, probably the last 20 minutes, we will give to questions and maybe a little longer if you want to.We are going to start off with Kaushik explaining exactly what--Jim, you have declared that extreme poverty can be wiped out within a generation.  We are going to ask Kaushik to lay the foundation for us and explain to us what -- how you see this.MR. BASU:  You know, Jim had thought that we ought to define the broad mission of the World Bank.  A big organization like this will be doing a thousand things, but we are organized around a couple of important mission ideas, broad targets and indicators.That discussion was going on, I jumped into it midstream when I took up my job, and subsequently, with a lot of consultation and discussion, we feel we should be organized around two broad ideas.  And again, I stress that there are many other things which fall under the broad umbrella of these two which are important to us; but what are these two?First of all, pretty much in keeping with what the World Bank has done for a long time, which is that you try to take on chronic, absolute poverty head-on.  The discussion there was should we continue with the poverty line which we have used for quite some time, which is $1.25 per person per day.  At one level, that seems just far too low, $1.25 per day, and it is a bit of an embarrassment of this world that when we just look around immediately at people with whom you are interacting, you feel who will be below that line.  But if you look at the numbers, you realize that close to one-fifth of the world still lives below that line.So we thought, yes, the time will come, the time should come quickly, when we move that line up and begin to focus on a broader segment, but there is still a big distance to go.So with that line, we had to set ourselves a target, what we would work towards and we are -- 2030; the end of absolute, chronic poverty is what we are looking at.  Now, "end" does not mean that you manage to bring it down to zero.  There will be pockets of difficulty; there will be frictional poverty.  Frictional poverty is as painful as poverty in any other form.  But the strategy of how you battle with that begins to change.So it is going to be a tough call going to less than 3 percent of the world population below that line by 2030, but that is what we are doing to do.  That is number one.Number two is actually quite a new venture for the World Bank, and I am actually personally also very delighted that we have gone that way.  It is togive shape to the notion of shared prosperity.  And with a lot of debate and discussion, we decided that one good way to capture it is to look at the growth rate of the income--average income--of people at the bottom 40 percent of each country, how they are growing, focus on that.So this combines lots of things.  It is a very simple indicator, but it combines lots of things.First of all, it is looking at growth.  We want the countries to do well, to have greater growth, but we are saying that the focus of that growth should be on the bottom segment.  So, let everyone go, but let us focus especially on the bottom segment.One way of thinking about this is a bit of an ode to central banks and the Fed.  It is a kind of operational twist, not in the financial world but in the real world.  Let the country grow the way you want it to grow, but twist that where the growth occurs more; let it occur at the bottom end more.  So it is a kind of inclusive growth, and this engages us, actually, in some ways with the entire world.  With some countries, we won't have much to do but make the numbers available, because they have already done well on that.  With some countries, we will have to get down to work with these targets—so these targets, indicators.But basically, we are then reaching out to the poor, the relatively poor, wherever they are.  And I think in today's world, for us to be more effective in the poorest countries, we need to be engaged in even the better-off countries, and this notion of shared prosperity takes us down that road.Let me stop with that.MS. WROUGHTON:  Thank you, Kaushik.Jim, you have been President of the World Bank for 10 months.  I have covered the Bank since Jim Wolfensohn's time, and I have heard a lot about reducing poverty.  Nobody has mentioned eradicating poverty, and that is pretty ambitious.What has led you to follow this course of saying to yourself it is possible now, this is the opportunity, and we can do it within a generation?DR. KIM:  Well, I asked that question very directly before Kaushik joined us to Martin Ravallion, who is one of the greatest scholars of poverty in the world, who was acting as head of our Development Research Group.  I asked Martin:  Is it possible to end poverty, and what would that mean; and how long do you think it will take; and what would it mean to set a target that would be ambitious and change the way we do our work?So Martin and his team got to work on it, and they came up with this notion that in 17 years, we could get poverty to below 3 percent.  That was extremely exciting to me, and I asked, well, Martin, how difficult is this going to be?And he said this is going to be extremely difficult.  Developing countries have to continue to grow.  High-income countries have to get back to historical levels of growth.  There are so many things that have to go into place.  We have to be sure that climate change does not destroy all the advances that we have made so far and make lifting people out of poverty so difficult.So it felt like a clear goal, a simple goal, one that would force us to change the way we do our work, one that could galvanize the community.  And part of it is just that I have had a lot of experience with setting targets, and if you ask any person who has ever tried to run a complex organization or even build a social movement, unless you have a clear target with a clear end date, people often don't change the way they do their work.Everyone can agree that poverty is bad.  And you can agree that poverty is bad, but if there is no urgency in actually getting somewhere, you don't change the way people work.So, for me, I thought that having a clear mission--it is written on our wall, right outside, those of you who have walked in:  "Our Dream is a World Free of Poverty."  I guess what we are saying as a group--and this was a group decision; we all took part in it--what we are saying is that it is time to stop dreaming, and it is time to make it happen, and we are going to do it within a generation.Now, let me tell you how I think this is going to work.  Some people might say:  But you are focusing so much on income; aren't there other aspects of development?And our answer would be:  Absolutely.  Of course there are.So here is how it is going to work.  In any given country--and we just did this; our Country Strategy for India was just presented to the Board with specifically in mind how is this going to contribute to ending poverty and building shared prosperity.  It is not a uni-linear focus just on income, because in order to lift people out of poverty and build shared prosperity, there are so many potential things that we need to do.We know that investing in human capital is critical; health, education, social protection.  You need to do those things not only for the growth of today but for the growth in the medium term and the long term.  This is what I have spent my whole life doing.  There is no way that we are going to take our focus off the investments in human capital that are critical.You have toprovide energy for people.  Energy is critical in order for businesses to form, for jobs to be created.  We have got to tackle issues like agriculture, which is of course linked to food security, but it is also linked to climate change.  Agriculture is one of the few things that can actually take carbon in the air and put it back into the ground.So, in saying that we want to end poverty and boost shared prosperity, what we are saying is in every country in which we work, we want our teams to be clear about how their work in that country lines up with those two goals.Now, of all the things that can be done in a particular country, we want our teams to focus on the areas around which we can be most impactful.  It is going to be different in different places.  In some places, it is going to be focused on agriculture and food security; in other places, it is going to be focused on energy and health and education.  There is going to be a mix.  We are not going to be able to do everything in every country, but we are going to focus on the areas where we can have greatest impact.Finally, we have to be clear about the comparative advantage of the World Bank Group.  We have more global, more experiential knowledge and data than I think many other organizations, but most importantly, we have teams that work in the public sector, we have teams that work in the private sector, we have teams that provide guarantees--political guarantees--for work in developing countries.We think that working across the entire World Bank Group is going to be a very special area of our comparative advantage.  So, two goals, very much income-focused, but if you just look at the shared prosperity target, what we have been very clear about is that shared prosperity is not just with the current generation.  By "shared prosperity," we really mean sharing prosperity intergenerationally, which of course brings us to the issue of climate change.I think it is a mistake to think about climate change as a long-term threat.  Just ask people who are living in the island countries; ask the people who are living in the Philippines.  It is a threat today.  So, for us, ending poverty is clear; boosting shared prosperity is new, but what is also new about it is the notion that we want to share prosperity with future generations as well.MS. WROUGHTON:  Jim, you are not saying that what the World Bank has been doing along now has been a waste of time--DR. KIM:  Of course not.MS. WROUGHTON:  --and that that has not been effective.  What you are saying here is that times have changed, and you need to reflect on that and really hone in on those areas.How can you see the World Bank then changing or re-focusing to look at these new challenges?DR. KIM:  Well, I think it is going to happen especially at the country level.What we have found is that for the India team, it has been a very useful exercise to say, so, okay, what does that mean for us?  So, for example, a higher proportion of investment in India will go to the poorer States.I was just in Uttar Pradesh.  This is a state in India with more than 200 million people in which 8 percent of the people living in absolute poverty in the world live.  We have to be successful in Uttar Pradesh if we are to have any hope of reaching this target of ending poverty.So what it has done--you know, I have come to this organization, and one of the great things is that this place is full of people who are passionate about ending poverty.  That is what I have found.  This is why we have the target.I have walked every single unit in Headquarters.  I visit with the field staff every time I travel, and what they are telling me is that they could have done lots of other work, but they are here because they are passionate about poverty.  So we have that goal--we have that sense of clarity.  And for years, they have been doing fantastic work.But saying to everybody that our goals are ending poverty and boosting shared prosperity is forcing them to think a little bit differently about how to shape their programs; what are the most impactful ways for us to do it.What can happen in big organizations like this is that there are a lot of people who come to us with a lot of great ideas, and we receive funding to tackle this idea or that idea or another idea, and it is difficult for us to say no--we are going to do this, and we are not going to do all these other things.  That has been very difficult.  But with these two clear goals, I think what we hope to do is empower our teams to say:  We have a mission, and this is the mission.  We are clear about it.  So we are not going to do all of these things because it is not our comparative advantage, and it is not as impactful.  We are going to focus on these issues.It is building on years and years of work inside the World Bank but just giving them a focus.MS. WROUGHTON:  Do you have a sense right now--and by the way, don't forget to put the questions on--put your hand up, and somebody will come and get them, so we can get those.Jim, we know what works--or, you know what works, and you have seen it happen on the ground in Haiti and these countries that you have worked in.  But you said it the other day,  that perhaps the pickings have been on the low side, and now you need to reach a little higher, where it is more difficult to get.How do you get to that, especially at a time when aid and donors are not coughing up as much and are more reluctant and specifically have more demands on what goes on with the money?DR. KIM:  I would put it this way, Lesley.  You know, there is no question that this is a difficult time for official development assistance, but I was just in India, and both the Prime Minister and the Minister of Finance said to me:  We, in the next five years, have a $1 trillion infrastructure deficit.So if we are thinking just in terms of aid flows, there is no way that aid flows could even match the Indian need for infrastructure over the next five years.  So you could take all of official development assistance, and it would not meet India's needs.So there is no question that we have to rely on sources from within the countries.  And the Indian leaders told me directly that 53 percent is going to come from public resources, 47 percent has to come from private resources.So, for us, I think the fact that we work in the private sector, the fact that we have been very successful at bringing other private sector sources of funds--everything from sovereign wealth funds to private equity companies.  When our IFC goes into a project, they feel much better about going in because IFC has decades of experience understanding the nature of risk and reward in developing countries.So our vision for this is that ODA is critical--ODA is absolutely critical--and it is ever more critical because we have to be absolutely clear about those things that we should fund with official development assistance.  Official development assistance is relatively unfettered.  We are not going to reach the goal unless we make full use of all the different sources that could help us toward our path.So, in this particular case, we have to think beyond what we have been thinking about before, and in the post-2015 agenda, I think we all understand that private sector participation in infrastructure development, in ports, in roads, in communication technology, is going to be a critical part of actually reaching those goals.  And we feel fortunate in that we are already working in that space.MS. WROUGHTON:  Kaushik, poverty has a different face in different places in the world.  What you see as poor in one place looks different in another.  Can you tell us and explain to us a little bit more how that differs, and what are your new numbers?  I know it is embargoed, but you have new numbers coming out.  Can you give us a little sense of how the world is changing that way?Could you also describe as you go what the rise of these emerging economies is doing--are they actually reducing poverty?  Are they bringing prosperity to the poorer, to the uneducated?  What are they doing to change the lives of people?MR. BASU:  Lesley, yes.Poverty does look different from one place to another--not altogether different, because they share this one common thing that they are below an abysmally low line.  But that line--income itself is very multidimensional.  People don't realize that income is something with which you are trying to buy health, trying to buy education, clothing, et cetera.  And different countries have different profiles of prices for these.  So there can be one country where you are doing relatively better on health, but you are still poor; in another country, you are doing relatively better on education but still poor.  So poverty can look very different when you go out and see that.Having said that, we have drawn a line where we are taking the view that no matter how you view this, it is unacceptable in the world today that people should live below that line.The global profile is roughly like this.  The bulk of it is actually South Asia; India, a large country, a country that began growing, really, in 1994--India's rapid growth started from there--poverty started falling with the growth, but it is still there in large numbers.But take large emerging economies, and you will find a lot of poverty there, from Nigeria, Congo, Indonesia--it is there.  China--a large country, but poverty started declining very rapidly from about 1978, so it is down quite a bit, it is down.Here, one question arises, Lesley, and one reason why the 3 percent target is actually a very hard target is that if we were just focused on that global number, unmindful of anything else, and you would take on the biggest countries, take on India, take on Indonesia, Nigeria, Pakistan, Bangladesh, you will get very close to that target, and you will probably make the target with these countries.But as Jim was saying, there are many other things beneath these couple of numbers, and we are also very, very conscious that it is chronic, absolute poverty that we are after.  So if there is a country where poverty remains at 80 percent, even if the world is below 3 percent, a small country with such big poverty is a blot on our achievement.So we are going to target even the smaller countries so that that comes down.  And I will give you one number which is quite interesting.If you do business as usual, just attend to growth the way it is occurring, if we make that 3 percent target, we will still have 17 countries with more than 30 percent of their population below the poverty line if it is business as usual--which means we cannot do business as usual.  And that is the reminder that this target drives home, that you have to change the way you go about; growth is important, but growth is not everything.  And we have lots of examples from history--countries growing well where the poverty comes on very rapidly.  China is an example of that, but there are other countries where growth has not been accompanied by poverty declining rapidly.So we need action apart from just saying go for growth--that is important--but you also need complementary action with that.MS. WROUGHTON:  So, when you look at the figures, you look at some of the biggest dents being made in poverty are countries like Tajikistan and Ethiopia, believe it or not, and Nigeria is really struggling to do this.Jim, how do you then advise the government?  What differences do you think the World Bank can make in trying to show--we were both in South Africa recently, where the government explained to you how difficult it is to narrow this inequality that it is dealing with.  What kinds of things does the World Bank have to change to be able to convince these countries and/or help them really get to the difficult stages?DR. KIM:  Well, I'd really like to hear Kaushik's view on this, but let's just take those two countries.First, Nigeria.  Right now, Nigeria has only one-fifth of the energy they need.  So, how can we possibly think about Nigeria making rapid progress if they only have 20 percent of the energy they need?So one of the things we are working on is trying to find public and private initiatives to dramatically expand access to energy, because right now, electricity is also very expensive.  While it is only 20 percent of the need, it is also very expensive.  And we have an opportunity, we think, to meet the entire energy need while also, at the same time, decreasing the cost of energy.So there are very specific, straightforward things that Nigeria has identified, and that we agree with them that we have got to move on.In South Africa when I visited, the request was very specific.  What they were saying was:  We have good policies--we even have money--and we have achieved a lot of things, but one specific request was that we have 98 percent of our kids in school, but we are not sure they are learning anything.So, for them, they really put it to us as an implementation/delivery/execution problem.  So we set up a Knowledge Hub there, and we are specifically going to try to help them focus, for example, on how to make sure the kids are learning--because you can have 98 percent of kids in school, but if they aren't learning, the parents know that, and they start pulling them out of school.So we have to be ready to really respond to specific countries given their local context and given what their priorities are.I don't know that--it is always useful for us to provide data and provide our own assessment of needs, but in many of the countries that I have visited, they actually really understand pretty clearly what they need, and it is just a matter of getting there—how do you actually deliver.  And of course, we have talked a lot about trying to be the organization that helps people actually deliver, but I can't tell you how often that is what is said to me--we have great ideas, you have given us great ideas, we even have some funding; we just can't make it happen.And we want to be the organization that really helps countries make it happen.MS. WROUGHTON:  Kaushik, what makes some countries more successful at this than others?  Is it political, is it resources--what is it?MR. BASU:  Lesley, in coming to that, let me just touch on the example of South Africa, since this has been talked about.South Africa is an amazing country because it really combines the developed country with a developing poor country within the same geographical boundaries in a way that maybe no other country does.  And it also has a burden of history in the apartheid period that it carries.So, if you look at its living patterns, the townships--when I went to South Africa, the first day I spent, actually in a township.  It is segregation not by law anymore but by the burden of history--that housing is cheaper over there, people opt to live there, but the jobs are not there.The unemployment figures are abysmal.  For the black unemployment, for instance, youth unemployment can be 50 percent in these areas.  So jobs is something that you have to focus on in a big way.You mentioned Tajikistan, and I will also point to something interesting.  In Tajikistan, poverty fell very, very rapidly.  A large part of it is remittance money.  That is absolutely fine.  India used to rely a lot on remittance money in the early 1990s and late 1980s, really a huge amount.  Tajikistan does that.  It is the country with the biggest inflow--relative inflow--of money which is remittances.  But that means you have a huge dependence on other countries.  A little bit of jolt in a rich country, your remittance is going to go down, so again, you need to diversify, you need to have employment within the country.And if you look at patterns and what is it--a question that allows you to attend to this--look at China.  I think China was doing two things.  From 1978 onward in particular, you can see that.  The growth is very rapid, but over and above that, there is a lot of very well-directed policy.  That was there, actually, for a very long time.  In health, education, emphasis begins to come at an earlier stage, where you don't leave it and say "When I become better-off, I do that."  Actually, if you look at Sri Lanka over a long period, interventions in these sectors began taking place even if it was pretty poor--which is a reminder that because you are poor, you cannot say:  Let me first grow, and then I am going to attend to health and education.You can and you should do that, and that is where the World Bank can come in with technical expertise, with money where it is needed, and really be a very, very major partner in this very important effort.MS. WROUGHTON:  Jim, I wanted to ask you, because your target comes at a time when the UN is looking at its own post-2015 MDGs--how does this fit in with what the UN is doing?  Is it to work together in parallel with it, or is it to try to set something a little bit more ambitious since you guys are at the forefront of it?DR. KIM:  Well, I think one of the really exciting things about the last 10 months is that we are really working on a path where the World Bank Group and the United Nations are going to be working very closely together.One of the things that the Secretary-General and I have been saying to each other is that the intention from the beginning of the multilateral system in the 1940s was that the UN and the Bretton Woods Institutions would work hand-in-glove together.So, on everything, including the Post-2015 Agenda, we are working very closely together, and there is very strong support in the UN System for this particular target.I think there is a lot of modeling going on, and people are sort of saying if left to its own devices, where would poverty be; and we hear 7 percent, 8 percent, something like that.  In that sense, I think there is very clear agreement that if we don't do anything, poverty reduction will start slowing down.So the title of this series, "Bending the Arc of Poverty"--that is really what we are trying to do.  As the curve starts flattening out because so many of the low-hanging fruit have already been picked, we want to bend that curve back so that it continues to go down.  That's the whole idea.The UN is completely on board.  And moreover, we are taking very seriously this notion that in the most difficult areas--another thing--and Kaushik said it clearly, but I just want to make clear--that if we reach 3 percent, and there are places, fragile and conflict-affected states, that have 60 percent poverty, we will consider our efforts an utter failure.  In other words, we need --want to be sure that everyone is participating in this movement.So, at the end of May, the Secretary-General and I will be traveling together to the Great Lakes Region--a place where of course there have been tremendous problems with poverty, the Democratic Republic of Congo--so we will be going to that region together.  And the whole idea is that in places like that, if we can find political security and economic solutions simultaneously, how much more effective could we be?So the spirit of what we are doing is we are trying to say:  Look, let's make the multilateral system work as it has always been intended.  The UN and the international financial institutions should work hand-in-glove, and we should come up with a set of post-2015 targets that are measurable, that are clear, that are ambitious, that have a financing plan--that is critical.  That is one of the roles that we are going to play.I mentioned earlier the importance of the private sector.  There are people who still doubt very much the importance of the role of the private sector in things like development goals.  But I have to say that if you look at ODA, and you look at the needs in the world, the embrace of the private sector is a question of how ambitious you are for the poorest.  If you are really ambitious for the poorest people, if you really want to hit these targets, you have no choice.  You have got to start thinking about how we can use private sector finance, how we can work together and build public-private partnerships that will truly have the transformative impact.So we were just in Madrid with all the heads of the UN agencies, and we agreed on a bold effort around the last thousand days of this set of MDGs, and we also agreed that we are going to have bold targets with a financing plan for post-2015, and I think--we will see what the process is, but support among the UN for this target was very strong.MS. WROUGHTON:  I am going to get to the questions now, but I really have one pressing one that I have been thinking about for several years now, and that is looking at the rise of people who have come out of the $1.25, who have just moved over the $2--and I think this is the 40 percent you are talking about, right, the bottom 40 percent--but these people who are living between.  Some people say there are a lot more of these people who are not classified as extremely poor.  They are just above the $2--they are between $2 and $4, maybe $2 and $10.00.  They are easily hit by shocks, and they are a growing number.  They are starting to pay taxes.  They want more services.  Forty percent, apparently--this is what economists tell me--40 percent of the people in the Arab Spring uprising were in this $2 to $10 group.How much more difficult is it to tackle those problems within that group than it is for the $1.25?MR. BASU:  In some ways, it is more difficult, but let me clarify here that people who live below the $1.25 are in some ways people who have already been hit by the shock, so they are there.  So we should not get confused about the priorities.  People who are already that poor--that has to be our first line of attention.  Then, indeed, there is a vulnerable group, and we want to take precaution that they do not fall in there, but that precaution must not override the concern for those who have already fallen.With this group--that is what I was touching on earlier--if you have some diversification of sources of income, so if one part of the global economy gets a shock, you don't get jolted and go below the poverty line.  So you need diversification, you need income coming from multiple sources.  If a country is relying on only one thing, and as long as you keep your fingers crossed, that one thing works, you are fine, but if that gets a jolt, you go below the line--there, you need to work on the structure of the economy, which gives a sort of cushion to these people.I want to elaborate on one thing that Jim said, and that is a concrete example--the role of the private sector--and this actually pertains, in fact, to the category that you are talking about.  Take, for instance, food for the poor.  If you try to do it entirely by the state--you collect the food from the farmer, carry it, then take it to the doorstep of the poor and give it over, there will be pilferage and there will be leakage.But there is one way of doing it where you need the state, where you need multilateral organizations--empower the poor; give them buying power.  Then, don't bother to carry the food over, because there is profit to be made in carrying food over.  It sounds horrible, but that is what trade is.Once you have empowered the poor, there is profit to be made in that transaction, so the private players will come in.  So it is an intelligent way of directing the power of the private sector to where we want that power to go. That is what we want to do.  So you don't stop them from doing it but change the incentives in the system so they are going to reach out to the ends that reach our ends which we are writing down.MS. WROUGHTON:  Well, as you see from the huge growth in private sector interest in Africa and elsewhere, those are the people that they are targeting; right?So, we have some questions from the audience and from online.  Jim or Kaushik, you are going to have to decide.Here is one from Gabrielle in the UK that has come from online.  "What is the World Bank doing to ensure shared prosperity in developing countries where equality structures are not in effect"--or are not effective.[Pause.]MR. BASU:  Should I have a--DR. KIM:  You are the Chief Economist, sir.[Laughter.]MR. BASU:  This is one question where I would have preferred to give it to Jim.[Laughter.]MR. BASU:  These structures of inequality are very deeply embedded, so it is not easy.  But we have taken the first step in writing this down as something that we are looking at and paying attention to.In fact, I have been asked in small groups:  "What will you do?"  To that, my first response is that, you know, we are drawing attention to this problem.  These numbers will now be available.  And here, we will have to work with countries.There are many countries, if you read their manifesto, the manifesto will say that inclusive growth is what we want.  So we have to then work with them there given their structure on how you can attend to this.  And some countries will come back and tell us:  Look, our top end is growing very well, and it is going to trickle down.And we have to lean on them gently and say that that is the kind of thing that we are doing.  We are asking you not to do so.  Wait on the trickle-down, but take direct policy measures.I will give you one or two examples.You know, investment in health and education--every often, when we talk of investment, we are thinking of machinery, we are thinking of factors.  Those are extremely important; they enable a country to grow.  But if you invest in human capital, which is both education and health, you are empowering people to earn more, and that is needed for the bottom segment.  The rich can buy their own health, buy their own education.  If you pay attention to these being provided and the state stepping in and enabling this, you are going to help the bottom segment, and that begins to come up, and the inequality gets dented.  But on this, there is a lot of variation from country to country, and we will have to be engaged in working this out.DR. KIM:  Let me put it this way. You know, I talk with ministers of finance and heads of state all the time, and we are asked these questions about equality, we are asked these questions especially about gender equality, and this has been my response.  You know, there may be scholars out there who are arguing that massive inequality is good for growth, and therefore, it is okay.  But then, there are also lots of studies--and Kaushik has taught me a lot about them--that suggest that in fact massive inequality builds instability into the society.  I think that is one of the lessons of the Arab Spring.So we are very evidence-based here at the World Bank, but when there are divergent opinions, I think you have to take a position.  Our position is clear--that if you grow, and you are not including young people, and you are not including the poorest, you are not including women, you are building instability into your society, so you have got to think about how the poorest and the most marginalized participate.  That is our position.  They may find others who have a different position, but that is our position.On gender equality, I was in a country, and I was told in that particular country:  Well, you know, gender equality is an okay idea, but in fact, it is different because of our culture.  Inger Andersen, one of our VPs, was with me at that time.And here is what I said.  I said, you know, when I was born in Korea in 1959, I bet the situation of women was worse than the situation of women in this country in 1959.  But there is still a long way to go in Korea, but look at what they did.  Despite Confucian culture, women became part of the workforce.  Despite Confucian culture, there were laws that were changed that gave women many more rights.  And just recently, they elected a woman as President of South Korea.I don't think that Koreans necessarily believe--I know they don't believe--that they have discarded Confucian culture.  I am an anthropologist.  Please don't tell me that your culture prevents you from moving toward gender equality.So we are taking a position on it, and you can argue that respect for culture is important.  I am an anthropologist.  I have great respect for culture.  I do not buy, though, that people will tell me, in terms of our relationship with them, in terms of our efforts to help them,  that we should not insist on gender equality because of culture.  We are taking a position.  I don't buy it, all right?[Applause.]DR. KIM:  So we don't--look, I am a doctor, but the one thing the World Bank does not do is give prescriptions.  We don't do that.  But we will deeply, deeply engage in these kinds of discussions with places that may be more reluctant, and we will say there is evidence--the evidence for gender equality and for the importance of women in economic growth is overwhelming; it is overwhelming--but even if you want to argue with us, we want you to know that we have a position on these issues.MS. WROUGHTON:  Jim, this raises a touchy subject for the World Bank.  So are you prepared to say "No" to projects if you don't think the evidence is there that they do not affect or really raise the bottom 40 percent and the poorest?DR. KIM:  We have to apply these lenses now, going forward especially, to everything that we do.  Now, there is a delicate balance that we have to make between ensuring that the countries are leading, and at the same time, we have to feel confident that what we are doing is evidence-based and leading us toward these two areas.You know, right now, there is a lot of development financing coming from many different sources in the world, and the needs are so enormous that we know that if you took all the development assistance, both public and private, together, it is not nearly enough to meet all the needs.  So we want people to know that we have a view at the World Bank Group, and we are very happy to work with all of our member countries, including high-income countries, but while we are not prescriptive, and we are going to listen carefully to you, we think the evidence leads us to a particular approach around certain issues that we believe in and that we want to pursue.MS. WROUGHTON:  A question from the room is:  "What do you consider the Bank's biggest failures in reducing poverty over the past decade?"DR. KIM:  Well, let me start by saying that I think none of us are happy about our record in fragile and conflict-affected states. You know, it is difficult--it is very difficult work in these kinds of situations--but I feel that going forward, we have to make this an area of our specialty.  I think we want to be the go-to organization in working in fragile and conflict-affected states.  I think it is great that we are doing it in collaboration with the UN System.  We are going to be working very closely with other bilateral donors.  But you know,  I just think we have not been very successful in lifting fragile states out of fragility, and we have to make that one of our sub-goals, that in ending poverty and boosting shared prosperity, one of our areas of focus has to be the fragile states.MS. WROUGHTON:  Again, it is a difficult place to work, isn't it--DR. KIM:  Absolutely.MS. WROUGHTON:  --because there is political uncertainty.  I interviewed MIGA recently, who said that they had created a guarantee fund so they could move in at an early stage with investors.  That is quite a touchy thing.  A lot of these countries go back to war quite quickly, soon.MR. BASU:  In fact, I should tell you on two of the points that just came up on fragile and conflict states--I don't know if Jim remembers that when I first met him in connection with this job, I told him about my interest in this.  I said I don't quite know the line that the World Bank is taking, but countries where others don't go, I would love the World Bank to go there.And it really just fills me with great joy to see that that is the direction in which the World Bank is going.The other point I do want to make about gender equality and culture.  This was way before I met Jim, and I have written it, so you can check it out.  I said that although I am an economist, I am a "closet" anthropologist.As an economist, you have to be careful when you say that.[Laughter.]DR. KIM:  It's okay now.  You can come out of the closet now; it's okay.[Laughter.]MR. BASU:  And really, I just totally second this, that you have to respect cultures, but gender equality is extremely important, and the two are completely compatible.  An anthropologist says that, and a "closet" anthropologist says that.[Laughter.]MS. WROUGHTON:  Another question from the room:  "To what extent have member countries bought into the idea of the proposed twin goals?  Is there a consensus on this vision?"  And since we are just two days before the IMF and World Bank Meetings, how are you going to sell this to your member countries?DR. KIM:  It's a great question, Lesley.The primary purpose of the Development Committee is going to be to really look at these two goals.You know, we have a resident Board, and part of my priorities for the first 10 months was to really get to know our Executive Directors.  So these goals have been deeply, deeply vetted and discussed with our Executive Directors, and we have, I think, very strong support from our Board.  Now we are going to the Governors to finance it in terms of development assistance.  And we hope that they will be embraced.  I think there will be a lot of questions.  I think there will be a lot of questions about how they are going to work and how they are going to work inside the World Bank Group and the impact on the rest of the world.  But so far, we have heard a lot of very positive feedback, and now we will see how the Meetings go.MS. WROUGHTON:  Good.Jake from the U.S. online is asking:  "Will climate change make an end to poverty impossible?"DR. KIM:  If we don't take very quick action, we really think it could.  There is no question about it.You know, I am trained as a physician, I am trained in science, and I thought I was keeping up with the climate change literature, but it seems to be getting worse with every month.  Things that we thought would only happen at 2 degrees Celsius are happening now at less than one degree Celsius.So I was shocked to learn that if we are to have any hope of keeping global warning below 2 degrees Celsius, the peak carbon emission year has to be 2016.  We are nowhere near reaching that.So what we are saying is that climate change is not another topic, separate from our work.  What we are making clear is think of all the things that we do here in the World Bank Group that touch on climate change--energy, agriculture.  We are very involved in the building of cities, building roads, building information and communication technology.So what we are doing is saying that in everything we do, we have to look at through the lens of climate change.  There are some complicated issues.  There are difficult issues.On the one hand, we have to be sure that the poorest countries have energy.  They need energy in order to grow and lift their people out of poverty.  We cannot put the burden of climate change on the poor countries because they will tell us, and they tell us all the time, they are not the ones who got us into this situation.So we have to balance the need for energy with the climate change work, but think of all the things we do.  For example, there is an exciting, inspiring vision of Africa having all the energy it needs while at the same time keeping it clean.  We can do it.  It is going to be tough, it is going to be tricky, but we have to set ourselves that as a goal.  With the Secretary-General, we started this initiative called "Sustainable Energy for All," and we could actually reach that target in Africa--clean energy for the entire continent.  What an achievement that would be.If you look at agriculture, we are deeply involved in agriculture, but new developments in approaches to what we call "climate-smart" agriculture--reclaiming degraded lands, older varieties of wheat that have much deeper roots, new technologies that may even be able to fix nitrogen and put it back into the ground--there are so many exciting things we can do to improve yields and tackle food security, while at the same time putting carbon back into the ground.We need to make sure that everything we do is focused on scaling up those kinds of approaches.The Chinese Government just asked us to work with them on urbanization.  I had the amazing experience of driving behind buses in Delhi and seeing no black smoke--because they all run on natural gas.We think that there are tremendous advances already that if we apply them everywhere that we work in the building of clean cities, just the World Bank focusing on those three things can have a huge impact.Now, there are much more difficult things, but they have got to be on the agenda.  We have to have a stable price on carbon, and we need agreements to get there, but we are going to keep pounding on the table and saying we’ve got to find a way to establish a stable price on carbon.And the other really difficult one, of course, is fuel subsidies.  Fuel subsidies amount to at least $600 billion a year.  What could we do with that $600 billion a year to invest in the poorest, invest in health, education and social protection?It is a difficult problem for everybody.  Every government would like to reclaim the money they spend on fuel subsidies knowing that they are mostly regressive, knowing that they also pollute the air, and then use that money for other things--but politically, it is difficult.What can we do as a World Bank Group--what can we do as a world--to help them get through that political difficulty and actually remove those fuel subsidies?So what we are saying is that, yes, the agreements are important, but right now, today, there are specific things we can do to really tackle the climate change issue, and we are committed to doing it.MS. WROUGHTON:  Jim, a lot of people would say, well, we can't get the rich and the developing countries to agree in Kyoto; how is it going to be for the World Bank to get around this issue?It is political, isn't it--DR. KIM:  Yes, it is political--MS. WROUGHTON:  --and the question is we pay as well.DR. KIM:  Right.  But the point is what we are trying to say to the world is that you cannot wait for the political process to resolve to take immediate aggressive action today.  There are so many things that we can do right now that we have got to move forward.Here is what I think has been going on.  Every time there is a severe or an extreme weather event, the world kind of looks at us, people like the World Bank and people like the environmental groups--they kind of look at us and say:  Okay, what's the plan?And so far, we have been saying things like wait for the political process, or recycle--all very small-bore things.I think what happens is that they look at us, and we just give them problems--we don't give them a big, major plan --  things we can do right now--and they turn away and go back into denial.So what we are saying is that the next time they look at us, the next time something major happens, we have to say:  Yes, there is a plan.  Some of it requires political action, but there is so much that we can do right now, on a large scale, to have an impact.I think it will change the way the world sees the prospects for moving toward a workable plan to battle climate change.MS. WROUGHTON:  But many people will say that there should not be a separate plan, that it should be just part of a bigger development--when you are going into a Country Strategy, you shouldn't say, oh, this is for climate change, that it should just be one thing.DR. KIM:  Right, and that is exactly what we are saying.  Sustainable energy--clean energy for Africa; clean energy for as many countries in which it is at all possible.We are building cities right now.  We are building them--we are building them in sometimes sprawling, uncontrolled ways.  Why not do it in a way that is climate-smart?We are facing the problem of agriculture right now.  Why not do it in a way that is climate-smart from the beginning?So we are trying to move away from that completely and say build it into everything we do so that we have an impact today.MS. WROUGHTON:  There is a question here on Kosovo that actually goes into IDA replenishment--and I think this probably has to be our last question from the group--and it has to do with:  "As the Bank works to convince governments to put money into IDA to support climate change and the gender agenda, there are IDA prospects where the Bank will invest in coal, such as Kosovo's power project.  How can you connect the conflicting prospects such as these, especially in the project, when Kosovo wastes so much energy today?"I think it comes to the whole issue of do you continue to invest in these projects when you are talking of a cleaner environment and more development impact.  Do you still support those projects?DR. KIM:  The issue for us in Kosovo is that their need for energy is so severe that it is not a question of whether everyone can have three refrigerators and multiple flat-screen TVs.  We are talking about people who could potentially freeze to death.So we are trying to look for any--any possibility at all--of avoiding investing in coal.  We understand that coal is the dirtiest fuel.  We want to do everything we can not to do it.  But at the end of the day, if we are the last resort, and people are saying to us this is a fundamental humanitarian issue--people are going to freeze to death if they don't have energy--if we were to get involved in the coal project in Kosovo, we could make it more efficient and cleaner.Now, I am telling you that for me, the climate change issue is very personal.  If we go on the very worst curve of carbon emission, when my 4-year-old son is my age, he is going to be living in a world that is unrecognizable to us today.  So it is very personal for me.On the other hand, there is so much carbon being put into the air right now from coal-burning plants in Washington, D.C.--the electricity we enjoy today is most likely brought to us through a coal-burning power plant--I don't think it is fair to tell the people of Kosovo that while the rich countries continue to burn coal, you are going to have to freeze to death because it is against our political ideology to support you.  I can't do that.  I can't do that.  We will look for everything we can possibly do to avoid that, but look, poor people should not pay the price with their lives for mistakes that we have been making in the developed world for a very long time.MS. WROUGHTON:  I am going to ask one of my own questions, and then I am going to give you the last five minutes to wrap this up.The one question that everybody is looking at when you see new donors coming into the world--China, Russia--there are reports today that China, Russia and India are going to give Egypt some money--these are the new faces of donors, and where the World Bank is not going to go, they might want to go, and they will take it.How do you work with these groups, or how do you make sure that the sustainable development that you are after is not usurped by groups that have the money and that don't, frankly, perhaps care about what that impact is going to be?DR. KIM:  Well, right now, there is a lot of talk about new instruments, new banks, and new sources of funding.  Let me just go back to one piece of data that I gave you earlier, which is that India has a $1 trillion infrastructure deficit over the next five years.So this notion that we need new sources of financing to meet these infrastructure deficits is clear; it is just a fact.So we look forward to working with everybody.  We work with all the different organizations--as I said, we work with the UN, we work with the other multilateral development banks--because there is more than enough work to go around for everybody.  You know, fighting for turf when 1.2 billion people are living on less than $1.25 a day is just ridiculous.  And for the poor people in the world, believe me, they understand just how ridiculous that is.So we are just simply not going to engage in turf battles, and we are simply going to say, look, the World Bank has been doing this for 66 years.  We know a thing or two about everything from health, education and social protection to building roads to providing long-term financing for investments in countries that not many people are investing in.  We know a lot about macroeconomic policies.  We know a lot about that, and we are ready to work with any of them because--you know what--we are so serious, we are so serious about ending poverty, that we understand that we are not going to be able to do it alone and that everyone is welcome.Now, what we are also seeing is that when certain actors get in trouble in some of these countries because they don't have safeguards, because they don't do the kinds of analysis that we can do, that they are now coming to us saying can we do things together, can we invest in parallel.Lots of that is happening already.  We think even more of it will happen in the future.MS. WROUGHTON:  Kaushik, can you eradicate poverty?[Laughter.]MS. WROUGHTON:  Some people say that they will always be poor, and this is--DR. KIM:  "Eradication" is really not the right word.  I am an infectious disease specialist, so "eradication" means just getting rid of it from the face of the Earth, and we have only done that with one disease ever, and that is smallpox.That is why we talk about ending poverty and getting it to a level where the fight will change.MR. BASU:  That's exactly right.  Poverty, in any large, chronic sense, can go and should go.  But there will be people who--if there is a sudden crisis or a sudden conflict, some people fall below that line.  But as long as it is these little pockets, you come in with emergency measures and try to attend to it.It is like there will be an occasional fire that will happen with your best precautions that will happen, but you can attend to that.  The whole strategic change--that is what we are after, and that is just very, very doable.And Lesley, I am also touching on these new countries coming into play that you are raising.  I think at one level, we worry about a difference of viewpoint of a dramatic sort coming onto the world stage, but that is not the case.  As countries integrate--China, India, Russia, as you say--the concerns are very similar, and I think that once they are on the world stage, you will find a very similar voice.  And yes, there may be some change that we will have to do to accommodate, but as long as it is with the broad same concerns of the world--and I like to believe, having lived in different places and worked, that fundamentally, when you scrape off the surface, they are very similar concerns that human beings carry across the world.So I think that with these new players coming in, the broad objectives that we are going after will remain intact.MS. WROUGHTON:  Jim, I'm going to give you the last five minutes.  You have a message to put out there ahead of the meetings.DR. KIM:  I think that today, we have a lot of civil society organizations, we have bloggers and the press here in the room.  My predecessor, Bob Zoellick, started something that is really quite revolutionary--the notion of an "open Bank," "Open Data."  And we just want to extend that, and we encourage you to engage with us deeply--be critical, hold us to account.  We are very, very serious about ending poverty and boosting shared prosperity.  And we are going to make mistakes, and I have told my team inside the World Bank Group that if you are trying to be bold and ambitious and tackle difficult problems, go ahead, and just know that if we make mistakes, the most important thing is that we learn from the mistakes.So you are going to uncover mistakes that we make.  Please do, and please let us know about them.  And we will do everything we can to correct them, to learn from them, and to keep moving forward.  But we are not going to be paralyzed by the possibility that we will make mistakes going forward.  We need you to engage with us; we need you to be here with us; we need you to hold us to account because we share the mission.  The mission is that there are way too many people in the world living in poverty, there are way too many people in the world living in vulnerability between the $2 and $10 a day range.We are serious about it.  We are committed to it.  It is what I have been doing all of my adult life.And finally, I welcome you all to the 2013 Spring Meetings.Thank you. [Applause.]MS. WROUGHTON:  Thank you very much, Jim.  Show Less -