During the briefing, Ms. Georgieva took stock of the recently completed Spring Meetings of the IMF and WBG, reflected on the major trends in the global economy, and presented the World Bank’s efforts to meet the aspirations of the 2030 Development Agenda.
On the Spring Meetings, Ms. Georgieva underlined that despite multilateralism is going through difficult times, the atmosphere was extremely energetic, with a record 9.000 participants from governments, private sector, civil society, foundations and even celebrities. One of the main message she distilled from the meetings is that none of the main problems the world faces today, be famine, climate change, terrorism or youth unemployment, can be resolved by a single country or organization alone, we need to work together.
Regarding the world economy, she noted that the expectations for growth are more positive. For the first time in years the growth forecast has been revised upward in the US, the eurozone, China, India and other developing countries. There is also a convergence of growth projections for commodity exporting and importing countries, and developing countries will deliver 75% of this growth projection. Ms. Georgieva continued by reflecting on a number of dark spots that cast a shadow on this positive forecast. The first is that famine has returned to the world. More than 20 million people in South Sudan, Somalia, Yemen and North Nigeria are facing famine or a credible risk of famine, and the situation is also difficult in Ethiopia and Kenya. This is a heavy burden on our collective conscience. The second is monetary uncertainty. We have lived through a period of loose monetary policies, which is not going to last forever. We see the first signs of tightening of the monetary policy in the US and Europe, which will have an impact on interest rates and repercussions to the rest of the world. The third is the recurrence of shocks caused by nature, terrorism and conflict, for which we need to build a more resilient world economy.
On the World Bank’s efforts, Ms. Georgieva reminded the audience of the Bank’s twin goals of ending extreme poverty and boosting shared prosperity within countries, across countries and across generations, and referred to the Forward Look exercise, which set the vision for the Bank in 2030. She outlined three important aspects of the WBG’s work. The first one is to build confidence. The world has trillions that are underutilized, while at the same time there are tremendous development needs. The WBG’s obligation today goes beyond investing in projects; it needs to bridge between the trillions in liquidity or low yielding investments and the trillions in development needs. For that, the WBG is being reinvented as a facilitator of private investment in development, to help identify first what can be funded by the private sector, second what could be funded by the private sector if the risk was brought down, and, third, the public sector needs that are not and should not be funded by the private sector.
The second important aspect Ms. Georgieva underlined is that in times of tight budgets, the Bank has received a vote of confidence with a record IDA18 replenishment of $75 billion. It is a bigger but also a different package, since for the first time IDA will go to the markets to raise resources, and because of the strong focus on fragility and conflict. Focusing on the issue of fragility, Ms. Georgieva shared that the UN and the World Bank signed a new partnership framework to build resilience and sustain peace in conflict areas. She also referred to the successful Spring Meetings discussion on the famine, where the Bank made a pledge of $1.8 billion to help mitigate the immediate risks while supporting communities and countries to be more resilient in the future. She underscored the good work in Yemen with WHO and UNICEF to provide live saving assistance and the discussions to work with ICRC in Somalia as concrete examples of humanitarian-development collaboration.
The third aspect Ms. Georgieva highlighted is the rise of the green economy, particularly in emerging economies, and the Bank’s interest in supporting countries’ efforts in renewable energies, resilient agriculture and financing for green growth. She shared the case of a Global Environment Facility (GEF) $14 million grant to assist China set up a regulatory framework and predictability of prices for green energy, which has been a key condition allowing a $80 billion industry to blossom. This is an example of the kind of function countries are asking of the Bank, to assist set up the conditions to reduce the obstacles for private sector investment.
In her closing remarks, Ms. Georgieva noted that financial inclusion and the future of work are also areas if interest for the Bank. These are issues that exemplify the speed of change in today’s world, and that we can choose to complain about these changes or take them as an opportunity for progress, given that adaptability is in human nature.
The questions and answers with the audience further discussed the state of multilateralism, the impact of conflict and terrorism, climate financing, women empowerment, migration and forced displacement, the humanitarian-development nexus in the context of the famine, sustainable agriculture, water management, automation and the future of work.