A severe pandemic would harm health, economies, and communities in all countries, but especially in poor and fragile states. Pandemic prevention requires robust public health systems (veterinary and human) that collaborate to stop contagion promptly.
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Dean Harvey, thank you for that warm welcome and, President Frederick, thank you for the kind introduction. And thank you to the students, staff and faculty for being excellent hosts. To the best of o... Show More +ur knowledge, this is the first time that a president of the World Bank Group has addressed the Howard community. I am grateful to everyone here who made this opportunity possible.In preparing for this speech, we did some research on Howard’s history. I was impressed with what we found. I am honored to be at an institution once led by James Nabrit, one of the leading constitutional and civil rights lawyers of his generation; and I am humbled to be at a place that helped shape the thinking of Pauli Murray, a courageous feminist trailblazer and thinker. Over varied and highly accomplished careers, both Nabrit and Murray worked to make the world a more just place. At the Bank, we are driven by the same aspiration.Over the last two years, I have led an effort at the World Bank Group to reorganize the institution to accomplish our twin goals: end extreme poverty by 2030; and boost shared prosperity among the poorest 40 percent in developing countries.The first goal is ambitious, and it reflects the tremendous progress we’ve made over the last quarter century in the fight against poverty. In 1990, 36 percent of the world’s population, or 1.9 billion people, earned less than $1.25 a day. By next year, our economists estimate that that rate will have declined to 12 percent – a two-thirds reduction in 25 years. This means that, by next year, one billion fewer people will be living in extreme poverty than in 1990. That’s major progress. However, helping the next billion escape poverty will be far more difficult. We have much work to do, especially in sub-Saharan Africa, where an estimated 450 million people wake up in poverty each day.The second goal – boosting shared prosperity – is what I want to talk with you about today. We are working to ensure that the growth of the global economy will improve the lives of all members of society, not only a fortunate few. To accomplish this, the World Bank Group aims to achieve specific income-related and social goals: We want to raise the income of the lowest 40 percent of earners in developing countries, and improve their access to life’s essentials, including food, shelter, health care, education and jobs.Let me put this in perspective: For the first time in the history of the World Bank Group, we have set a goal that aims to reduce global inequality. As the spread of the Ebola virus in West Africa shows, the importance of this objective could not be more clear. The battle against the virus is a fight on many fronts – human lives and health foremost among them. But it is also a fight against inequality. The knowledge and infrastructure to treat the sick and contain the virus exists in high and middle income counties. However, over many years, we have failed to make these things accessible to low-income people in Guinea, Liberia and Sierra Leone. So now, thousands of people in these countries are dying because, in the lottery of birth, they were born in the wrong place. If we do not stop Ebola now, the infection will continue to spread to other countries and even continents – just yesterday the Centers for Disease Control confirmed the first case of Ebola in the United States. This pandemic shows the deadly cost of unequal access to basic services and the consequences of our failure to fix this problem.As I will discuss later in my remarks, the World Bank Group and others have begun to take steps to get resources into the right place. Our actions have arisen directly from our decision to make boosting shared prosperity part of the Bank’s primary mission.When a visitor enters our Pennsylvania Avenue headquarters, one of the first things she sees is an inscription on the wall that reads as follows: “Our dream is a world free of poverty.” While achieving this goal through development is a complex undertaking, two things are essential. First, we must help low-income countries grow their economies. In the last four years alone, high rates of growth in China and India have meant that 232 million people no longer live in poverty. Second, low-income people who live in low-income countries must share in the gains from that growth. Shared prosperity is part of the Bank’s headline goals simply because it is required to end poverty.Boosting shared prosperity is also important in the pursuit of justice. Oxfam International, the poverty fighting organization, recently reported that the world’s richest 85 people have as much combined wealth as the poorest 3.6 billion. Think about that: A group far smaller than the number of people in this room possesses more wealth than half the world’s population. With so many people in sub-Saharan Africa, as well as Asia, and Latin America, living in extreme poverty, this state of affairs is a stain on our collective conscience. Protecting an individual’s ability to reap financial reward for hard work and success is extremely important. It creates motivation; it drives innovation; and it permits people to help others. At the same time, what does it mean that so much of the world’s enormous wealth has accrued to so few?As an economic system, global market capitalism has produced affluence and innovation. These are very good things. However, an economic system’s legitimacy is also tied to its ability to make two things accessible to all: the riches it generates and the social benefits that arise from that wealth. Unfortunately, national income gains from growth tend not to be shared among a population in anything close to equal measure. In his 2014 best seller Capital in the Twenty-First Century, French economist Thomas Piketty showed that, in developed economies, these gains generally flow at substantially higher rates to owners than to workers. Ultimately, we want to ensure the global economic system’s gains are distributed in a fashion that creates opportunity and respects human dignity.So what does it look like to boost shared prosperity? As I explained earlier, one important metric is the relative income level of the poorest 40 percent of a national population. During the 2000s, these earners enjoyed more rapid income growth rates than the general population in 52 out of 78 low-income countries. But our mixed progress in achieving the United Nations’ Millennium Development Goals shows that the general well-being of households in the bottom 40 percent remains much lower than in higher-income households. In other words, even though their incomes grew faster, low-income households did not reap the same social benefits as the more affluent, including access to food, clean water and sanitation.Fundamentally, increasing individual incomes, while important, is only part of the equation for boosting shared prosperity. We also need economic growth to deliver benefits that create more just societies. So, in addition to changes in income, boosting shared prosperity focuses on improving gender equity and low income people’s access to food, shelter, clean water, sanitation health care, education and jobs.How can the World Bank Group do this? One essential mechanism is our more than $60 billion dollar annual portfolio of financial support to build public institutions and to catalyze a vibrant private sector. By creating knowledge-based global practice groups, our reorganization has developed another critical tool – something we’ve been calling the science of delivery. In order to solve the world’s most difficult development problems, we must ask ourselves two questions. The first is whether the solution is equal to the challenge. In other words, do we understand the problem and does our answer solve it? The second is whether someone, either in or outside the Bank, has found ways to deliver the solution. If so, can we capture it, apply it, and scale it up in other contexts? Our global practices are focused on answering these critical questions.Boosting shared prosperity is the World Bank Group’s way of tackling the challenge of inequality. Identifying ways to deliver the solution requires at least two steps. First, we need to improve our understanding of how economic growth at the national level has an impact on the development of individual households. So we need to collect better and more precise data from low-income countries.Second, when we provide project-based financial and technical assistance, we must continue to evaluate these initiatives’ impact on low-income people’s earnings. Take building roads. In Bangladesh, we helped build and fix three thousand kilometers of roads. Then we studied whether these improvements made a difference. We found that in just six years’ time, the average household income in the areas of these projects grew 74 percent. This was largely because the roads connected communities to markets. We also looked at areas that had not received these upgrades. There, average household incomes declined 23 percent. These kinds of assessments show what does and doesn’t work when it comes to boosting shared prosperity.Our experience tells us that four strategies are also integral to accomplishing this goal: building human capital; constructing well-designed and implemented social safety nets; offering incentives for the private sector to create good jobs; and implementing fiscally and environmentally sustainable policies to pursue these ends. Projects that share these attributes will receive priority access to the Bank’s financial and technical assistance.The science of delivery has also helped guide our response to the Ebola epidemic. The virus is spreading out of control in Guinea, Liberia and Sierra Leone. Thousands of people are dead. Likely well over ten thousand people have become infected. And both of these numbers are climbing rapidly. As a consequence, our ability to boost shared prosperity in West Africa – and potentially the entire continent – may be quickly disappearing.Under the Bank’s best case scenario, Ebola will cause the loss of hundreds of millions of dollars in economic growth in the affected countries. This is a critically serious matter. These states are emerging from years of civil war and strife, both of which contributed to their low levels of per capita income. Growth is therefore essential to easing the horrible conditions in which millions of their citizens live. If the pandemic continues to jump to other countries, the growth lost could climb into the tens of billions of dollars or higher. So, unless we stop the infection’s spread now, there will be little prosperity to share, to say nothing of the number of people who will be unable to partake in what remains.The world’s response to date has been inadequate. I’m a doctor trained in infectious diseases and have treated poor and marginalized people in Haiti, Peru, and Lesotho, among other places. We treated people suffering from complex diseases such as multi-drug resistant tuberculosis and HIV. So it has been painful to see us replay old failures from previous epidemics.At the turn of the century, HIV had infected an estimated 24 million people in Africa. While effective treatments for the virus existed for rich people, low-income people on the continent did not have access to them because of a failure of imagination and low aspirations for the poor. Some global health experts believed that providing effective HIV treatment to low-income communities was too difficult and would cost too much. Yet today, more than 10 million poor people worldwide are being treated for HIV.We have made similar mistakes when it comes to combatting Ebola in West Africa, even though we received repeated warnings from governments of the affected countries, Médecins Sans Frontières and others. So now, we’re playing catch up.To determine how we could contribute to a coordinated response, the World Bank Group identified infectious disease experts who have on the ground experience implementing complex containment and treatment protocols in low-income countries. We then sent them to Guinea and Liberia. Based on what they saw, they have told us that, if we make an enormous surge now, we can treat the sick and contain the virus. The infrastructure we need is not that difficult to build and we have protocols to limit the infection’s spread. Most importantly, they have told us that further delay will make an effective response exponentially more difficult.We’re now moving quickly to do our part. The World Bank Group has transferred $105 million dollars in emergency funding to Guinea, Liberia, and Sierra Leone – more money to date than any other organization. This ensures their governments have cash to purchase equipment and services essential to fighting Ebola. Overall, we have committed $400 million dollars to support treatment and containment. And we have devoted our considerable analytical resources to show that acting now will save hundreds of millions if not tens of billions of dollars.Other parts of the coordinated global response are also taking place. In the last few weeks, we have seen significant action from President Obama and the United States; the British and French governments are also stepping up their efforts.Still, because of the epidemic’s scope and rapid growth, more progress is needed. If the CDC’s worst case scenario comes true, and 1.4 million people are infected, the virus’s impact will be truly global. Concerned citizens need to demand immediate deployments of capital and human resources to the affected countries. Otherwise, thousands more will die needless deaths and an economic catastrophe may take place.The World Bank Group is now fully engaged in fighting Ebola to prevent this outcome; we are also involved because we are committed to promoting equality. Indeed, we aspire to live this value every day in our own workplace. Our employees are citizens of over one hundred countries and speak well over one hundred languages. I am proud of the institution’s openness to differences in no small part because I know what the alternative looks like. After emigrating from Korea as a child, I grew up in a small town in Iowa. I understand what it’s like to be an outsider, and occasionally experienced the pain of racial and ethnic prejudice. At the Bank, exclusion and bias are not tolerated.Over time, we have made progress in expanding diversity among World Bank Group employees, but we can do better. For years, for instance, we have fallen short in recruiting African Americans to our ranks. That is changing. We have asked some of the most thoughtful national leaders on diversity to help us build a broad and sustained outreach to highly qualified African American candidates. We will set concrete targets to encourage senior managers to hire more diverse staff. I expect to see the results of our work this coming year.Howard University is also helping this efforts. The university and the World Bank Group are in discussions to create internships for doctoral candidates in economics to work with our Development Economics Vice President’s office. These internships would create the opportunity for Howard graduate students to immerse themselves in development policies and programs affecting countries around the world. I also invite all Howard graduates to apply for our expanded analyst and Young Professional programs, which are excellent ways to launch careers at the institution.I hope that these steps and my presence here encourage many of you to prepare your resumes. Twenty-nine Howard graduates currently work at the Bank. We are always looking for the best and the brightest, and we have found many of them right here.In 1957, the trustees of Howard University awarded Martin Luther King Jr. and Jackie Robinson honorary Doctor of Laws degrees. Mr. Robinson had just retired from Major League Baseball and was 38 years-old; Dr. King was just 28 years-old. Six years later, during the March on Washington, he stood before the Lincoln Memorial and gave his famous “I have a Dream Speech.” Five years after that, he was shot and killed.Dr. King was one of my heroes. When I was growing up, my mother, a philosopher, used to read his speeches to me. I think about him today because of his bond with Howard and his embrace, years ago, of what have become the World Bank Group’s twin goals.Four days before his death, Dr. King gave one of his final sermons. Standing only a few miles from here at Washington’s National Cathedral, he called poverty a “monstrous octopus” that “spreads its nagging, prehensile tentacles into hamlets and villages all over our world.” He said that he had seen it in Latin America, Africa and Asia, in addition to Mississippi, New Jersey and New York. He spoke of the challenge “to rid our nation and the world of poverty.”Dr. King told the audience that, “in a few weeks,” he planned to join others in a new March on Washington. He called it a “Poor People’s Campaign” to “demand that the government address itself to the problem of poverty.” He explained that, in this mission, wealth was not wrong, but part of the solution. He said that America’s capacity as “the richest nation in the world” gave it the “opportunity to help bridge the gulf between the haves and the have-nots.” He also explicitly linked justice to economic development. In words that resonate with all of us here, he said, [and I quote]:“If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.”The World Bank Group’s two main goals stand in lockstep with the agenda Dr. King laid out in those days before his death, now 56 years ago. Boosting shared prosperity will be achieved by raising incomes, creating jobs, educating children, and providing all with access to food, water, shelter and health care. By doing so, we will grow our collective wealth and nurture our humanity. To paraphrase Dr. King, we will bend the arc of history toward justice.Please join this mission. Help make YOUR generation the generation that ends extreme poverty and reduces inequality all over the world.Thank you very much. Show Less -
Thank you very much, Deputy Secretary General, Excellencies, President Condé of Guinea and, online, President Johnson Sirleaf from Liberia, President Koroma of Sierra Leone, ladies and gentlemen.I spo... Show More +ke to all three of the leaders yesterday, I spoke to friends and colleagues who just returned from the region, and I first want to thank all of the three leaders for their courage and determination in the face of this epidemic. But I just want to also give you a bit of my sense, as an infectious disease doctor, of what I see as the seriousness of this epidemic.I have spent most of my adult life fighting very, very complicated, difficult epidemics, like drug-resistant tuberculosis in some of the poorest countries in the world. I have been involved in the treatment of HIV, again in some of the poorest countries in the world. But I have never seen anything close to the challenge that we’re facing.The speed, complexity and the magnitude of the response that is required is unlike anything we’ve seen before.Now, I want to point out that for the first two years of my tenure at the World Bank Group, I spent a lot of it talking about the great success story of Africa. Even in the midst of the financial crisis, the African countries were growing at a rate of over five percent. Now, this was due to the extremely hard work and great leadership in the continent. But the entire global community has a huge stake in this success, because we know that debt forgiveness and investments in treatments for HIV, malaria, for example, have also contributed to the outstanding performance, and I just want to say that all of this is at risk.If the scenarios that have been provided to us by the United States Center for Disease Control come true, and we have over a million cases, we are talking about nothing less than the potential meltdown of this continent.Now, we have to not shirk away from a response that will be equal to the challenge. And what I mean is very specific.I want to thank in this regard the Secretary-General, the newly formed UN mission, the World Health Organization and Margaret Chan’s leadership, the United States, the United Kingdom. I especially want to mention Médecins Sans Frontières, who have been sounding the cry for a very long time and have developed, for example, methods of preventing the spread of infection that are both creative and effective.But here’s what we now face. We have to scale up our ground game and get effective prevention and treatment to every village, every community.Now, just yesterday, I had lunch, sitting next to President Goodluck Jonathan of Nigeria. I congratulated him for a very effective response on one cross-border case that they experienced. But I was later to learn that this required thousands of people. This required thousands of home visits to do the contact tracing. And what I suggested to President Jonathan is that if we don’t get this under control in these three countries, that tens of thousands could cross the border. He told me that this would almost shut them down.Let me be very clear – we can stop this epidemic. But we cannot shape our interventions based on what we think might be possible. Our interventions have to be shaped on what it will take to actually stop the epidemic.It is going to require a massive scale up of health workers. It is going to require a massive scale up in the equipment that is available. We’re going to have to think about implementing very complex interventions in the specific cities and even villages in order to get this under control.Let me repeat – we need to act now.We approved, nine days ago, $105 million and we disbursed that already in nine days. And any of you who worked at the World Bank knows that that is almost a miracle.I just went back to the Board and I asked them to nearly double our commitment, so we will now be committing $400 million to the response. And I told the Board that the potential implications of this for the entire continent of Africa are so severe that we will simply have to do whatever it takes to mount the response.We are facing a crisis that we all have to contribute to. And the one thing that would be a mistake is to settle for a response that we are comfortable with, but that won’t stop the disease.I thank everyone for what they’ve done to date. We will be back, and I am certain that we will be back asking for more support. But with the potential of tens of billions of dollars of losses, we know every day will count, and we count on our solidarity with these three countries. Thank you. Show Less -
JEFFREY LECKSTEIN: We are delighted to welcome the World Bank and The George Institute today for this special event. On behalf of Bloomberg L.P, I would like to extend a warm welcome to President Kim ... Show More +who is in Sydney today ahead of his attendance at the G20 meeting [unclear]. I will now hand you over to the event moderator, Professor Vlado Perkovic, Executive Director of The George Institute for Global Health. Thank you.VLADO PERKOVIC: Thank you very much. President Kim, distinguished guests, my name is Vlado Perkovic and it's my great honor to welcome you here today for this conversation with World Bank Group President, Jim Yong Kim.Before we begin, I'd like to acknowledge the traditional custodians of the land on which we meet and gather, the people of the Eora Nation, and pay my respects to their elders, past and present.We would also like to acknowledge the magnificent facilities and the kind generosities of Bloomberg L.P. for supporting this event on the eve of the G20.President Kim, thank you very much for joining us. We're greatly honored by you coming to talk to us today. As the president of the World Bank, you're at the very cutting edge of some of the toughest developments and economic challenges facing the world. You lead a global organization that takes you to virtually every country in the world, and you have insights at a depth that's unusual, that we look forward to hearing a bit about today.We don't have much time so we might get straight into some questions, if that's all right. Firstly, you're here of course to attend the G20 Finance Minister meeting in Cairns. We've heard a lot about the growth agenda of the G20, but I'm sure we'd be keen to hear your take on the global economy today and the economic climate within which the G20 is operating.DR. KIM: Well, first of all it's great to be here. It's actually my first visit to Australia, so I'm very thrilled to be here. You know, it’s another disappointing year. At one point our growth projections were as high as 3.2 per cent globally, and now they're around 2.7 per cent. So if you look across the world, the United States is doing well. Growth seems to be continuing, and most of the numbers - employment numbers, et cetera - look pretty good.There are still lots of concerns in Europe, and I don't think we know the outcome of the Scottish referendum yet today. But you know, there is some good news. The southern European countries seem to be stabilizing, but still there are lots of challenges. I think there's concerns about deflation and there is a lot of uncertainty. Some of the uncertainty in Europe of course is related to the crisis in the Ukraine and Russia. And so far the impact of that crisis has been on the lower end of what our expectations are. But if it gets worse, if the tensions get worse, the impact could be much, much greater.The Japanese have been making tremendous efforts to get back on the path of growth. Prime Minister Abe has shot his first two arrows and is attempting to shoot the third arrow, but we're still not sure. We're not sure if that third arrow in fact will land, and Japanese growth will get to where everyone is hoping. So there's still a lot of uncertainty. A lot of middle-income countries, Brazil is slowing down. China seems to be stable at about seven and a half per cent, and the good news in China is that while growth in China is still quite a bit lower than what they were used to, 10 per cent growth rates year-on-year, the leaders still seem to be very focused on the reforms.So a disappointing year, but not a disastrous year. In that context, we're very grateful to the Australian leaders for bringing the focus to growth. At this meeting what we're going to do is sit down and say, okay, if we want two per cent growth in the world, here are all the things that all the G20 members have to do to get there. So that's what we'll talk about. We'll talk about whether - what the G20 members are doing and their specific efforts. I think right now if you put all the efforts on the table, the IMF and OECD have suggested that we're at about 1.6 per cent growth.So there's still more work to do, but I think the G20 has proven to be very useful to be a forum where we know that everyone's going to be held accountable. You have to come and you have to say what you're actually going to do. We're looking forward to hearing what the countries will bring to the table tomorrow.VLADO PERKOVIC: So the World Bank is a development institution, and its goal is to end extreme poverty around the world. What's your message to the G20? Do you think that growth will fix the poverty problem?DR. KIM: Growth, if it leads to the creation of good jobs, especially for poor people, especially for women, especially for marginalised people, can have a huge impact on poverty. The most extraordinary experience in lifting people out of poverty was China, and probably two-thirds, maybe even a little more than two-thirds of the success in lifting people out of poverty was just purely due to the growth of the economy. But it's not enough. We have two goals at the World Bank Group. One is to end extreme poverty by 2030. But for the first time we're focusing on what we're calling shared prosperity. In other words we're tracking the income growth of the bottom 40 per cent of the developing countries. This is the first time we've really looked at this question of inequality.I don’t think there's a single leader who doesn't want to have more inclusive growth, a prosperity that's shared by more people. I think everybody - every leader I've ever talked to tells me all the time, we want to grow the economy, but we want to do it in a way that more people can participate. So there are all kinds of things that the governments can do, and the message that we'll send is investments in people are really important: health care, education, social protection programs. But also there are things that you can do even through your budgeting process, for example, that will lead toward greater gender equality.So we're going to be constantly bringing up this notion of shared prosperity. And our role then is to bring to the table real experiences where governments have been able to shape the growth path, so that it was in fact more inclusive. We believe that in everything you do, even when you think about how and where to build the road - building roads is really important, especially in developing countries. But if you can build roads that then give farmers, especially poor farmers, greater access to markets, then not only are you investing in essential infrastructure, but you're investing in essential infrastructure in a way that is bringing more people into the economy.So that will always be our message. And I'm sure that we'll be having a lot of discussions about those issues around [inclusivity] and equity this time as well.VLADO PERKOVIC: So you've mentioned healthcare, which is of course the focus of the George Institute's activities. The biggest story at the moment is the Ebola crisis in Africa. A few weeks ago you wrote in The Washington Post that the Ebola crisis comes less from the virus itself and more from the deadly and misinformed biases that have led to a disastrously inadequate response. Strong words. It's a few weeks on now. How would you characterize the response today? Have we made any progress such that we're now equal to the challenge?DR. KIM: I think the progress, even in the last few days, has been tremendous. The US commitment was extremely welcome, and I think it's going to be very helpful. Just as I was getting on the plane to come here, I was on a phone call with the Secretary General and many of the leaders of the UN agencies, and we talked about really pushing the envelope, meaning that there will be missions now. So in other words, the Secretary General is handling Ebola as if it were sort of an outbreak of war, where instead of sending peacekeeping troupes, we're going to send in people who are going to be battling Ebola.I think the notion that it's going to go to the Security Council, that it's really a security threat, is also very helpful. We found that during the AIDS - the early part of the AIDS epidemic when we were just beginning to think about treatment that really helped, the Security Council taking on AIDS. But you know, I think that at some point we're going to look back and have to ask this question: why did we wait so long? Right now the focus has to be on getting the implementation, getting the people on board, getting the equipment, getting the drugs.You know, part of it was that I think people felt that being able to do management of electrolytes, being able to do intravenous hydration, that this was just too difficult. It was very frustrating for me because I've spent most of my adult life trying to convince people that you can do very complicated things. We've been able to do things like drug-resistant TB treatment and HIV treatment. And we have - in my own career and with Partners in Health, our role has been to say no, it's not too complicated. In fact you can do this very effectively using community health workers and nurses. So I was a little surprised that that's again what we had to do. We had to make the case that we've got to increase the complexity of our intervention, and if we do, we can really decrease the mortality rate.At the World Bank Group they started asking some questions: what is going to be the impact of the Ebola crisis? What's going to be the impact economically? When we looked at SARS and H1N1, what we found is that 80 to 90 per cent of the economic impact was not because of people who were sick with the virus. It was because of what we call the aversion behavior as a result of fear around the virus. So in Liberia, Sierra Leone and Guinea as well, that's what we expect.If we get treatment facilities in place, if we get infection control procedures in place that will cover the entire population, it almost doesn't matter how many people are infected. What matters is if our ability to treat and prevent is equal to the number of people who are there. If we get that in place then what's going to happen is that people are not going to run away from authority anymore. People are going to be much more likely to go back to the fields, go back to the mines, get back to work.Then if we can get that to the point where the number of cases is not overrunning our ability to respond, then I think we can really eliminate almost 80 to 90 per cent of the economic impact. But that means we have to move really quickly. I've been on the phone with teams in the field. What does this mean? It means we've got to get things like oral rehydration to everybody. We've got to get intravenous IV hydration to just about everywhere, even in the villages. We've got to be able to monitor electrolytes.If we do that, we have no idea what the survival rate is. The Ebola virus has never run into a modern, first world healthcare system. It's never happened. Our own sense is that if you get those pretty fundamental basic things in place, that we can have a very high survival rate. If you have a high survival rate, if you're preventing new infections and you have enough in place for everyone, then the whole narrative around this disease changes. We have a very small window to get that done. Our hope is that with all the efforts now, that we can do it in the next four to six months. If we don't do it in the next four to six months and it spreads to 15 countries and 22 countries, the impact could be absolutely incredible.VLADO PERKOVIC: A scary concept to think about. The human toll of Ebola is obviously absolutely terrible in the mortality and morbidity rates. What about the economic costs? What's your best estimate of the economic costs of Ebola?DR. KIM: Just for 2014 to the end of the year, the three countries, Liberia, Sierra Leone and Guinea will lose about $360 million of their GDP, which is a significant amount because they're small economies. But if you look at future impacts, if you look at 2015, if we get all the response in place so that we're preventing and we're treating everybody in those three countries, then the loss of GDP in 2015 is going to be around $90 million. But if we don’t get those in place, the loss of GDP is going to be over $800 million. It's a tenfold increase in the economic impact depending on how quickly we get those services in place. Again our hope is that we do it.If we don't get those services in place and we start seeing outbreaks in neighboring countries, in Nigeria and Ghana and Senegal, then the numbers could get very high, well into the many, many millions of dollars. The great news is that there's this single intervention, getting treatment and prevention services in place, is the effective response to the contagion related to the virus, and it's also the effective response to the contagion related to the fear and aversion behavior that happens if that treatment is not in place.This is pretty simple. This is not about finding a new drug. It's very simple. You detect the cases. You prevent the infections. This is not through some sort of space-age intervention. Any hospital in Australia could prevent the spread of Ebola as a matter of routine. Its universal precautions. Most of the hospitals in developed countries utilize universal precautions. If everyone used universal precautions, there would be no threat of Ebola.So we just - the frustrating thing for me is that people who don't have experience doing clinical interventions in really poor settings, they walk in there wanting to be heroic and they see how complicated it is and they walk out saying it's not possible. That's what we have to stop. We have to stop having amateurs go in and say it's not possible because we know it is possible. Right now, the good news is the US Government, the World Health Organization, the UN, physicians whom I've worked with for years who have experience with these complex health interventions are working very closely together and are very close to coming out with a consensus approach that will bring all that complexity to the field. VLADO PERKOVIC: Africa seems a very long distance away from Australia, Ebola is a global issue that we need to deal with. So maybe can I get you to comment on the role Australia should be playing, and countries like Australia, in addressing the challenges imposed by Ebola. DR. KIM: Well, I think it would be great if every country could see this as their own problem. One of the big, I think, reasons for the long delay is that people kept thinking of Ebola as an African problem or a Liberian problem. This is just - if we do that - for example if an influenza pandemic breaks out or if bird flu or if some form of coronavirus which was the virus that was responsible for SARS, I hope that we would react differently. Everyone has to understand that Ebola is not something that's just limited to one region or an African problem; it's a human problem.I think that there's going to be a call for more money, we're going to need more money, more health personnel. I think it would be great for every country in the world to participate in some way. Even more important though is that every country in the world, especially the developed countries, have to sit back and say okay, so how can we do this differently next time, because we're not going to have this kind of time if it's an influenza outbreak or if it's a much more quickly-moving airborne epidemic. I think that we have to admit that there's a long way to go for us to be ready for a severe outbreak like that that can just move across the globe much, much more quickly.VLADO PERKOVIC: So moving to perhaps non-communicable diseases, just to change focus a little bit, and you're the first doctor and the first development professional to lead the World Bank Group. You talked earlier about the fact that most disease - the burden around Ebola could be addressed by simple health precautions. Of course, that's true for most non-communicable diseases at the moment as well. We have the challenge of providing care to those people who need it. What do you see as the biggest challenges in building a protocol for health systems around the world, particularly in countries, in our region here in the Asia Pacific area where the need is so great?Jim Yong Kim: I think first of all the most important thing is we have to really shift the way we think about investments in health care. Twenty years ago when the World Bank and IMF were approaching their 50th anniversary I was part of a group that was protesting against the World Bank, it was called 50 years is enough and we made the argument that the World Bank should close its doors on its 50th anniversary. Our critique was mostly because we felt that the World Bank and IMF were not really focusing on things like health care. As a medical doctor working in global health, investments in health are almost an afterthought. In a recent study that Larry Summers led, that was in The Lancet , showed that from 2000 to 2011, fully 24 per cent of the growth, economic growth, in developing countries was the result of better health outcomes. So now I think there's a real understanding that investing in health is part of your economic growth strategy. Now that we know that, then the question is then how do you do it? What do you invest in first; what do you invest in next? Every single country I visited, every single country I visited, they have - every single country in the world as far as I'm concerned - I have not seen one yet that's an exception - every single country has a problem with their health care system in some fundamental way. So the poor countries have trouble just getting basic services, Sierra Leone and Liberia as an example of that. If you go to the middle-income countries they almost all have the same problem, which is very high-tech very expensive care in the cities and then difficulty getting services to the outer regions. Then in - because in the cities they're trying to really copy the health care systems of the developed countries and they're very sophisticated urban dwellers, you can see what health care is like in the most advanced centres and that's what they want. Then of course also in developed countries the costs are skyrocketing and in the United States where we spend 17 per cent of the US GDP on health care, the estimate is that between 30 per cent and 50 per cent of all health care expenditures are not only not helpful but harmful. This is a huge and difficult problem. So at the World Bank Group we're now becoming very serious about helping every developing country, or any country in fact that asks us, to help improve their health care system. Getting the basic services in place is really important. But making really tough decisions about how much you're going to spend on PET scanners and MRI machines for middle-income countries and how you're going to make sure that rural health care is actually in place. My own experience over the last 25 years is that we have not really taken seriously what I've been calling the science of health care delivery. The delivery part is the real rocket science. Basic science of course has advanced; there's a lot more to do. Clinical science has also advanced; there's still a lot more to do, but we've done almost nothing in figuring out how to build the systems that will actually work. So that's one of the things that we're really going to focus on and especially in the poorest countries. But I think the Ebola example has taught us that we are not prepared and especially in the poorest countries to deal with these pandemics. VLADO PERKOVIC: We've got a few minutes for some questions from the floor. There are a couple of microphones. I'll ask you to raise your hands and perhaps introduce yourself and tell us where you're from before you ask your question. BRIAN DOOLAN: Thank you very much. Thank you President Kim. My name is Brian Doolan; I'm from an organization called the Fred Hollows Foundation. We focus on avoidable blindness. Your approach, your background in health is a fantastic background here to hold your current position. I'm wondering about the question of cost effectiveness of interventions. Some years ago the World Bank released a report which illustrated cataracts. The intervention around cataracts is one of the most cost effective health interventions. We recently worked with the George Institute to look at the cost impact, or the cost effectiveness of eye health interventions in Vietnam. In fact, PricewaterhouseCoopers in Australia here recently released a report showing the return on investment for investing in eye health was a return of four to one conservatively estimated. So I guess my question is where does cost effectiveness fit into the analysis that you bring when you're going to be advising countries as to where they spend their increasingly scarce health dollar? How does an organization like ours, which has a growing body of literature showing cost effectiveness around avoidable blindness, get that into the mainstream of the global public health debate?DR. KIM: Well, looking at cost effectiveness I think is important. But I would say that we still are not very good at using those kinds of studies to help shape health care systems. There was NICE, the National Institute for Clinical Effectiveness in the UK that tried to really look at different interventions and then make some decisions about which ones the National Health Service would pay for and which ones they wouldn't pay for. That is inherently a very difficult exercise, especially in developed countries. Let's take the example of eye health and let's take specifically the example of cataracts. I think one of the greatest medical institutions in the world is the Aravind Eye Institute. So I keep asking, so if - just to get a sense of the scale, Aravind does about 300,000 cataract surgeries a year and the UK health care system does about 600,000. That’s double. And the cost in the UK in a nationalized system to do 600,000 cataract surgeries is $2 billion. The cost of Aravind to do 300 is half of that, is $17 million, and they're using a lot of that, as you well know, to pay for the cataract surgeries of very poor patients. So Aravind has figured out very specific things about how often you have to sterilize the entire - the operating suite and how quickly you can do things. So I think Aravind has shown us that if you apply a very rigorous approach to doing certain things like cataract surgery, you can bring the cost down so that it's cost effective almost anywhere. The most interesting experience is that I went to China and there was a private sector group that was using the Aravind approach to clinical treatment of cataracts but then had borrowed from Japan, the kaizen, the continuous quality improvement model of running their business end.. What they were able to do was based strictly on getting the public sector payments - these are payments that are coming from the Chinese Government, they were able to cut costs by 35 per cent, provide extremely high quality care, provide free care to the poor patients who couldn't afford any kind of care, and still make money. So what I would say is that I think that the Aravind model shows us that we should be able to provide cataract surgeries just about anywhere. The cost effectiveness is not a static thing because you can look at cost effectiveness based on the US system or you can look at cost effectiveness based on the Aravind system and the numbers are completely different. What we're doing as the World Bank Group is we've reorganized ourselves so that our health care group is now going all over the world. We brought everybody that works on health care together into one group, and they're looking all over the world to try and find the greatest innovations that can lower the price and improve the outcome of all the different interventions that we take on board and I agree with you, I think eye care is a very important one. So cost effectiveness is important but you can't do that analysis outside the context of knowing what and how well the price can go by looking for innovation everywhere. VLADO PERKOVIC: Any more questions here at the front? CLAIRE SPOORS: Hi. Thanks very much. I'm Claire Spoors from Oxfam. We very much welcome the World Bank's analysis that inequality is actually impeding growth along with other eminent bodies. In the St Petersburg Communique there was a discussion of the need for inclusive growth but in the communiques by the finance ministers since then that term has been dropped. I'm just wondering how much the issue of inequality and the need for inclusive growth is actually being discussed? Will we see that back in the language being used? Also, how do you feel about developing countries being able to engage in the tax reform that's being led by the OECD and the G20 considering those low-income countries were not part of those groups? Thanks. DR. KIM: I'm not sure what the language is. The language that's coming out of this G20 is the language that will come out eventually from the G20 leaders meet. I'm not sure what it will actually say, but I can tell you that just about every country that I visit is concerned about inequality and it's huge. I talk about Thomas Piketty's book all the time. It was a best-selling book in the United States and it was this dense 700-page tome that almost everyone bought and almost nobody read. I think it's an indication of just how much people are thinking about the problem of inequality. The Occupy Wall Street movement, there's so many different movements that are addressing this question. This is why we've put shared prosperity at the very top of our agenda. So I can assure you that we'll talk about it. I have to say Oxfam, the work that you've done, I can't tell you how many times I've heard the quotation that 85 people in the world control as much resources as the bottom half of the global population. Things like this are helpful. What our role though is that in everything we do, we have to put on the table approaches to building roads, building bridges, building health care systems, in how countries put their budgets together. We have to constantly be putting on the table options for making investments that will be more inclusive rather than less. We know that there are really, really good examples. Examples that you never would expect that would have an impact on inequality. For example, Austria has built into their budgeting ways of improving gender equality.What we're trying to do - we call it the science of delivery. What we're trying to do is capture those examples where countries have done really innovative things to move toward greater equality and in putting this in front of governments. At the end of the day the governments have to decide but my sense is that we're not going backwards and I'll tell you why. When I went to one of the poorer areas of Uttar Pradesh in India, I saw poor women in these towns on their smartphones watching videos. Some of them were Korean soap operas. The point is that people everywhere know how people everywhere else live and it's going to be more and more like that. So I think the demand for participation in the global economy's just going to get higher. As that happens, we feel, at the World Bank Group, we feel that it is our load to do everything we can to diffuse knowledge about things that are working and try to build in more fairness, more equity, more inclusion into global market capitalism. One of the interesting things about [Deakin's] book is that he writes in the book on page 20 that the two forces that have traditionally led the world toward convergence have been the diffusion of knowledge and investment in the productivity and skills of people. Well that's what we want. We want to be at the centre of that and to try to drive the world toward greater inclusion. VLADO PERKOVIC: A question over this side.MICHELE RUMSEY: Hello, Michele Rumsey from the WHO Collaborating Centre at the University of Technology, Sydney. I just wondered really - I'm very excited to hear you talk about delivery and a focus for World Bank on delivery of health care. One of the groups that we work with in the health workforce is nurses and midwives. I feel they've been the poor relation really in a lot of our discussions over the years and yet we single-handedly know that if we increase the education of midwives and increase the capacity of nursing midwifery, it would single-handedly improve the maternal and child's health rate from 75 countries that are still struggling. Just really wondering if you could give a comment on your thoughts around nursing, midwifery, health workforce generally. Thank you.DR. KIM: One of the things that we're really stressing in the Ebola response is that numerous precautions, monitoring of electrolytes, providing intravenous therapy and keeping people alive because these are self-limited infections if you can just keep people alive. All of this can be done by health workers supervised by nurses and this is how we've done the most complicated treatments: HIV treatment, drug-resistant TB treatment, in all of our community-based responses have been done mostly by nurses. What we've found is that nurses do much better at treating these kinds of complicated diseases because they're much more willing to follow protocols and doctors feel like they need to make it up. (laughter) This has been proven again and again and again that the more you can get health care focused on protocols that people will follow, the better the outcomes are. I think that there's no question that the solution to the problem of access to health care is what we've called task shifting, that the things that the doctors do in some health systems should be moved to nurses. Nurses should take a very much stronger leadership role, especially in developing country healthcare systems and that utilizing community health workers is both a great employment program and also is tremendously helpful in improving outcomes. Because it's not - what we realize, for example in tuberculosis care, that having a health worker actually observe treatment, watch people take their pills, was the most important thing in improving outcomes. And HIV as well - what we found was that doing the same thing, having people from the community help you take your medicines every day was the most important thing in improving outcomes. So in a time when people desperately need jobs, these are great jobs. Nurses can be central to the kind of leadership we need to really extend health care, the kind of health care that will really make people healthier.I work very closely with a gentleman named Michael Porter at Harvard Business School and he's trying to introduce the notion of value. Value is just simply health outcomes over dollars spent. What happens is we get so focused on one aspect of the value chain, the intervention, the treatment, the diagnosis, but actually better health is a value chain that includes many, many things. One of the things which I do is in HIV care. What are all the things you need to do to actually have a healthy person living with HIV at the end of the day? Most programs were not focusing on compliance, on actually people taking their medicines. So we made the argument that if you invest more to health workers in ensuring that people are taking their medicines, you actually make the overall value of your treatment much, much higher. I feel very strongly that we've ignored far too long the role of nurse midwives and nurses in global health. I agree with you in maternal mortality and in terms of childhood mortality and infant mortality. Nurses are really at the core. VLADO PERKOVIC: We've got time for one last questionLUCY HOBGOOD-BROWN: Hello, I'm Lucy Hobgood-Brown and I work with - in the Democratic Republic of Congo. I've been getting appeals every day from Congolese healthcare workers in the very area where Ebola has struck asking if there's any way that Australia or the United States can do anything to redirect some of the aid and people power towards the Ebola crisis there. It's been quite a challenge to do that and I wondered if you had any suggestions on how we might alert people that the Ebola crisis is not just in West Africa.DR. KIM: I think you should keep saying it. You should keep saying it every day. Right now we don't have an agreed-to consensus on what the clinical intervention will be. So MSF has done an incredibly heroic job and they have gotten their death rates down as low as 20 per cent but their intervention, they do exactly one laboratory test which is the [unclear] and they do really one intervention which is oral rehydration. So for example, if you're in an MSF clinic and you're vomiting, it's very hard to take oral rehydration. So if you added to the fantastically effective and heroic MSF response, if you added IV hydration management of electrolytes, blood draws that would follow any number of studies, if you could do that then we think you could get the survival rates up very high. What you need to do then is to have WHO say this is the clinical response. So in every hospital this is what's going to happen. In the rural areas you start with this and this but quickly move to get everything else in place.Once they have that - those of you – there’s a lot of health people here, tuberculosis therapy was completely random and every doctor treated TB differently until we had DOTS. So we need a kind of DOTS for Ebola and once that's in place then we need to get it in place in all the countries in the surrounding areas. I worry a lot about DRC because once you're in DRC and it starts spreading and if there's no access to good care, then anyone with a fever, the smart thing to do is to run away from authority and go somewhere else where you think you might get care. So If DRC gets involved and there's an outbreak in DRC, then all of a sudden East Africa's involved. So we have to move. And I guarantee you people are thinking hard about what's happening in those countries. But the first step is to convince the world that we have an approach that is up to the task clinically, that we can prevent the infections, that everyone agrees that this is the intervention, WHO puts their stamp of approval on it and then we go. I think at that point we have to make sure that every single country in the region has access to that level and that quality of service. VLADO PERKOVIC: Before we finish up, maybe just one last locally relevant question. There's a lot of discussion at the moment here in Australia about the potential value of the Medical Research Future Fund. Could you share your thoughts on that?DR. KIM: I understand that there are some complicated politics here…[Laughter]DR. KIM:…which I won't comment on but I'll say if you look at the history of investment in medical research in the United States, it didn't really happen to a great extent until about 1950. Many people think there's focus on basic science goes all the way back to the early 1900s. It's just not true. Most of medical education was not based on basic science. Then in the 1950s and '60s basic science started to grow but it was really President Clinton in the early '90s that made the huge investments in [unclear]. If you look at the investments that were made in the national institutes of health in the United States and then look at what it led to in terms of the creation of jobs, economic growth, opportunity for scientists to then move their findings into industry and then really literally grow the economy. It was one of the best investments that we've ever made. So in a completely generic way, completely separate from whatever the local politics are, I think that Australia is a country that if it did invest more in medical research, it'd have a huge impac on the world. And that investment could turn around and especially in the medium to long term have a very positive impact on economic growth in Australia. That's been the experience in the United States and so I think it's - I don't think I'd say the same thing for the Central African Republic. It's probably not the top priority for them but for Australia, I think that there are great institutions of higher education here. In my previous life, we had a very strong relationship with Bond University. And there are great universities here, there are great researchers. I think that it's quite reasonable to think about investment in medical research as part of your investment in the future economic growth of the nation. VLADO PERKOVIC: Thank you very much. Show Less -
MODERATOR: Why don't you ask questions, and just identify from where you're from.QUESTION: [Unclear] Sue Lannin from the ABC. Why did you ask, why did the world wait so long to respond to Ebola? Are y... Show More +ou disappointed it's taken so long?DR. KIM: Well what we've learned is that this Ebola crisis today is unlike anything we’ve seen before. Every single Ebola outbreak before has been in rural areas and we've been able to move in and very quickly bring it under control. So already more people have died as a result of this Ebola outbreak than all the Ebola outbreaks in history combined. Also, the infections are growing at a very alarming rate and they're now - we now hear that the number of people infected with Ebola is doubling every three weeks.Now again, the good news is that if we get the kind of comprehensive response that I was talking about earlier, we make sure that we can prevent all of these new - any new infection; make sure that every single person has access to good quality care that includes intravenous hydration, management of electrolytes. If we can do that, then we can really stop it right now.Now again, the thing I worry most about is if we don't have a response that's adequate and really able to cover everybody, then this could get much, much worse. So this has surprised everyone. None of us thought that Ebola could look like it's looking right now. But again, we have a window of opportunity. We can stop this thing in its tracks, but everybody has to move right now.QUESTION: How long do you estimate is this window of opportunity?DR. KIM: Well you know we feel like in order to avoid the worst effects, in the next four to six months we really have to bring it under control.QUESTION: Countries that have given money, do you think that they should send personnel as well?DR. KIM: Well I think that the countries that are sending personnel, we're very grateful. The one - the most important thing though is that the World Health Organization has to come out with a standardized approach to providing care, and they're doing it right now. In fact, I was just on the phone in an airport lounge with the chief of the cabinet of the World Health Organization and we were talking back and forth about what the elements and what it's going to look like. I think within the next week you'll have a very clear algorithmic approach to responding and once you have that and we put in place the things we need to train anybody, I think that more personnel will be welcome.Now the problem though is it can't be done helter skelter. It has to be done in an organized way. Everyone has to learn what the procedures are. Everyone has to learn about how to prevent the spread of infection. Then at that point, then I think it could work very, very well. We're focusing though on making sure that health workers in Liberia, Guinea, Sierra Leone from those countries have all the training and tools that they need. That's really the first priority.QUESTION: Between Ebola and geopolitics, what do you think is the greatest risk to the G20's growth target going ahead and what do countries need to do most urgently?DR. KIM: Well you know, there's - I would say there's no one thing. So Ebola, if we don't get it under control, if the response falls apart, then it really could be a risk for the entire world. Certainly it will be a risk for West Africa if we don't get it under control. Now again, the good news is, we have all the tools to get it under control so I'm optimistic that we'll do that.The biggest risk to economic growth, there are several. There are lots of downside risks. Especially the developing countries are very concerned about the removal of the unconventional monetary policies of the United States. And that looks like it's going to start happening sometime in the middle of next year, but Janet Yellen has been very clear with communicating well ahead of time, and what we're saying is that especially for developing countries, if they continue with structural reforms, they'll be able to prepare themselves for the eventual unwinding of the unconventional monetary policies.You know, I'm worried about future epidemics. One of the things that we have to do is think about, if we had an influenza pandemic, if we had another SARS- like pandemic, would we be ready? And I think we need to think about that.Climate change is another issue that we have to be concerned about. When we think about shocks to the global economy, we don't always think about pandemics or climate change, but I think now we have to. We have to think about whether we're going to be prepared for that.QUESTION: Are you concerned that climate change…QUESTION: How do you rate Ebola becoming a pandemic? You were talking about it spreading to East Africa and beyond East Africa, beyond the African continent?DR. KIM: Well you know in - Ebola in the form that it is now is relatively difficult to transmit. There was an Ebola patient who came to the United States, but because every hospital in the United States uses universal precautions, nobody else was infected. Now the concern though of course is that the longer it stays in human beings and the more people get infected, the more chance the virus has to mutate. This is the concern.But that concern - again it's the same solution. The same solution is prevent new infections and treat everyone who is sick. So as long as Ebola doesn't mutate and we get the response out then I'm not very concerned, but we've got to move and we've got to move now.[Over speaking]QUESTION: Who's going to manage (inaudible) who.DR. KIM: Well the good news for me is that the Secretary General has really stepped up. He's put together an outstanding team. That team is coordinating very closely with the Americans, with the UK, with the French, with all the different groups that are involved, coordinating with us very closely. For something like this, this is no longer just a health emergency. It's a food security emergency. It's a security emergency. Because it's in - because it has so many dimensions right now, it's entirely appropriate for the Secretary General himself to be at the at the center of it and the fact that he's stepped up I think is really important.QUESTION: Are you concerned that climate change is not on the G20 agenda and the Australian Treasurer has ruled it out?DR. KIM: Well you know climate change is an extremely important issue for us at the World Bank group and next week, there will be a climate summit. So I don't think that climate is being ignored. The climate summit on the 23rd of this month is unprecedented, More than 125 heads of state will be getting together. They'll be making announcements about what they're planning to do to combat climate change. We're going to be going into the meeting and we think that there's been tremendous progress on issues like a price on carbon, tremendous progress on the preservation of forests, on building cleaner, more livable cities.So there's a lot going on in climate change and so I wouldn't say that the issue of climate change is being ignored, not at all. It's just that right now the UN's taking the lead on it.QUESTION: Do you have a comment on the shutdown in Sierra Leone in relation to the Ebola, the shutdown in Sierra Leone. I think some people are staying in their homes…DR. KIM: Yes. So I mentioned it earlier, but there - with every great outbreak, there are two contagions. The one is of the actual virus. And then the other is the fear related to the virus. So that's what - it's not just happening in Sierra Leone, it's happening everywhere. So the mines have shut down. People have left their fields and so the impact on the economy is enormous.The only way things will get back to normal is if they feel that we're now competent at preventing new infections and that no matter where you are, you can get effective treatment for Ebola. So that's what has to happen and once we do that, we think that the people of Sierra Leone, Guinea and Liberia will go back to work, will go back to their homes, go back to their villages. That's what we need to do.So if you look back at SARS for example. That was a terrible epidemic, 800 people died. The cost was $40 billion, in terms of economic productivity. So already more than 800 people have died from Ebola and yet because it's spread so much more slowly, it's not yet had like a $40 billion impact. But the whole point is that the only way to stop that second contagion which is the fear that leads to the great economic losses and people staying in their homes, is to get the treatment out.You know, pay attention over the next week, week and a half, you should be seeing announcements about very effective protocols that we're going to scale up everywhere. Thank you very much. Show Less -
Ladies and Gentlemen,This morning, I would like to talk about risk management in agriculture. In particular, I would like to draw some lessons from international experience in dealing with risk m... Show More +anagement in agriculture that I believe are particularly relevant for Romania.I would limit my remarks to three.The first is that risk management in agriculture is important, and likely to become more so in the future, and that the tools to manage risk are many, with agricultural insurance being only one of them.My second point is that experience with traditional, multi-peril crop insurance schemes throughout the world has been rather disappointing. Romania should learn from these costly and ineffective policies, and avoid repeating similar mistakes.My third message is that new tools, based on catastrophic insurance instruments, if used smartly in combination with already existing public policies and tools can be made very effective in managing weather and climate related risks facing Romanian agriculture. Let me elaborate a bit on each of these points.Risk Management in AgricultureAgriculture is inherently risky. Because it is risky, it can have large negative impacts on agricultural income, on food security, and the capacity of the sector to develop, invest, and compete in particular among the large, commercial farm enterprises. As a result, governments and public policies have historically and throughout the world trying to address this problem.Agriculture faces 3 broad sets of risks:Regulatory riskPrice riskProduction risk: weather (drought, floods, hail) and other natural risks (pest attacks, crop diseases, pandemics: Avian Flu).Regulatory risk, derives from possible changes in agriculture policies and regulations, has come down significantly with the entry into the EU due to stable and predictable policies under the CAP.Price risks made of price fluctuations continue to exist (witness the recent spike in world food prices), but the CAP – directly through its income support policies and indirectly through its support programs in market development and integration— and other tools (e.g., forward and futures markets, social assistance programs) have reduced those risks as well.Production risks are very much here. The succession of floods, droughts, pandemic (AI) over the last 5 to 6 years are a stark reminder of the importance of weather-related and other “natural” events. Climate change may induce more permanent changes to Romanian agriculture such as drier summers, and warmer and drier winters. It is also likely that climate change will make weather events more unstable, and catastrophic events such as floods and droughts not only more frequent but also more severe. How do you manage such production risks? There are both ex ante and ex post strategies:Ex ante strategies are those strategies that allow you to reduce your exposure to production risks (crop diversification, changes in cropping patterns or seeds on the farm; or public programs: irrigation systems, agricultural extension services, pest management systems, preparedness to pandemics, adaptation to climate change), or those that allow you to transfer risks –in part or whole-- through risk-sharing mechanisms such as crop insurance.Ex post strategies are those strategies that allow you to cope with the shock once it has happened. Asset sale, re-allocate labor, take credit, migration are typical private responses. Public responses include catastrophic or disaster assistance, and social assistance programs.Summary: my key message is that there is a wide range of tools for managing weather-related risks in agriculture, and agriculture insurance and catastrophic assistance are some of them. Some work better than others, and each have different objectives in mind –some to reduce exposure of farmers’ income to risk, some to share risks, some to cope with the shock after the fact. When setting public policies, it is important to be clear about the goals and objectives you are trying to achieve, and find the most effective way to get there; and to acknowledge that these various tools are not mutually exclusive, but can or need to complement each other.Crop Insurance: Lessons from International ExperienceLet me now turn to my second point, about learning from the mistakes and successes from elsewhere.Crop insurance schemes have been implemented in many countries across the world, rich and poor. What have we learned? What are the stylized facts, and lessons from international experience?Such schemes, implemented both in developed and developing countries, often proved fiscally expensive for the respective governments, had a limited outreach to few farmers – typically, the large, commercial farms - and agricultural activities, and have not eliminated the need for disaster assistance. More on these lessons will be further presented in a later session.In summary, the heavily subsidized crop insurance provided by governments elsewhere is both costly and questionable. Romania should learn from these mistakes. It should avoid introducing traditional crop insurance schemes that would require large fiscal resources, and, in a world of limited fiscal resources, take away resources from alternative agricultural risk management tools that would be more effective and better adapted to the structural characteristics of its agriculture and farming population.Way Forward: New and existing tools and policies.New tools are being added to the tool box which could help avoid the pitfalls discussed earlier. These new tools combined with improved other risk management tools, either ex ante (better irrigation systems, more adapted seeds, better flood prevention works, better advisory services) or ex post (e.g., more and improved funding for social assistance programs) would be powerful instruments to manage effectively risks in agriculture.Index-based insurance products are part of the new tools being added to the tool box and they introduce two attractive features:First and foremost, index insurance products do away with many of the problems (high correlated risks, asymmetric information, and high transaction costs) plaguing traditional crop insurance, hence making them more viable and less reliant on public subsidies. However, they introduce new ones such as basis risk.Index insurance mechanisms make possible the layering of risk, and facilitate the transfer of risks, including that of CAT risks (low probability, high consequence losses) through markets instruments. I do not want to say much more about these new instruments, since this topic will be addressed in greater details by experts through presentations that follow.Let me just conclude by saying that index-based insurance is potentially a new and useful tool that is being added to the tool box government of Romania has at its disposal to manage its agricultural risks better and more effectively. This new tool, alone will not solve all problems, but it can help solve important ones, and avoid repeating costly mistakes of others. This new tool can be smartly combined with other risk management tools, either ex ante (better irrigation systems, more adapted seeds, better flood prevention works, better farm advisory services) or ex post (e.g., more and improved funding for social assistance programs targeted at smaller and poorer farmers; financial coverage for contingent liability under disaster relief programs through CAT bonds or re-insurance mechanism) to provide the Government with powerful and cost effective instruments to manage risks in agriculture. Show Less -
Statement Made Via Videoconference to the International Pledging Conference on Avian and Human Influenza, Beijing, ChinabyPaul WolfowitzPresident, The World Bank GroupJanuary 18, 2006Good morning... Show More + from Washington to you all in Beijing at this important pledging conference.Let me offer a very special word of thanks to the Chinese Government, and the European Commission, for co-sponsoring this event together with the World Bank. I would also like to thank the OIE, FAO, and WHO for their excellent technical work, as well as other partners in the UN family for coordinating the international response to avian influenza. My own staff at the World Bank led by Vice President Jim Adams, who is with you today, has been devoting enormous time and energy to this effort because we recognize how important it is.By hosting this event in Beijing, the Chinese Government is sending a powerful message…that we urgently need a global commitment to share information quickly and openly, and to find ways to work together effectively.We need no reminders of why this pledging conference must deliver results. All countries could be affected if a pandemic occurs. All countries share a responsibility in fighting the spread of the disease, and putting human and financial resources behind the effort. We know from experience that if the international community does not support these control measures now, the potential cost to the world will be much higher in the long-term. Past outbreaks have already cost more than $10 billion dollars in economic losses, even though governments have moved quickly to control the disease by disposing of infected poultry flocks. Although that is a large sum, it is small compared to the economic damage that would result if we were to fail to control the disease.To prevent the spread of avian flu, we need leadership at the highest levels to deliver programs that address both animal and human health concerns, while also preparing for a possible human pandemic. These programs must include sufficient financing to support the culling of infected birds, and compensation for farmers who surrender their sick birds. And it is vital that donors coordinate their efforts to provide the maximum help possible to ensure successful implementation. The World Bank and its partners estimate the cost of such prevention and preparatory programs could reach between US$1.2 to $1.4 billion dollars over the next three years. Countries can only cover a small share of these costs, so international financing will be critical.Funding is also needed for global and regional stockpiles of medicines and medical equipment, and there are likely to be global funding needs for vaccine research, development, and distribution. It will only be possible to meet the financing gap of more than one billion dollars if development finance partners work together and combine donor funds.For the donors and financing partners who stand ready to help, we will have to show that our talk of harmonization is more than just rhetoric. We are committed to providing sustained and effective support to those countries infected or facing the threat of avian flu.Our partners have asked for a coordinating mechanism rather than a single new fund. The conference co-sponsors have proposed an Avian Influenza Multi-donor Financing Framework covering a menu of country, regional, and global needs. The framework would focus on coordination of donor activities and contributions, giving donors the flexibility to provide support through grants, loans or credits and to channel their funds in various ways, including through a trust fund facility at the World Bank.For its part, the World Bank Group has designed a 500 million dollar Global Adaptable Program Loan for countries to prepare and carry out a national program to control bird flu. Such national programs can be co-financed or financed in parallel by other donors, ideally through grant funding. The trust fund facility would be one of the options for channeling that funding.In conclusion, let me salute your efforts to raise the funding we need to control and prevent this latest form of the avian flu virus from spreading further. None of us can know whether this strain…H5N1…will result in a global pandemic. But what we can be certain of is that the investments we make now, to prevent and control further spread of the virus, are investments in long-term development. They will help countries better protect themselves against future threats of pandemic, and prevent the unraveling of their hard-won economic and social gains.Thank you and good luck to you all in this important endeavor. Show Less -