Speech by Mahmoud Mohieldin, Senior Vice President of the World Bank Group
Good morning. I am very happy to represent the World Bank Group at this opening ceremony to discuss an initiative which has the potential to impact billions of people. Before I give my remarks, I want to acknowledge Mr. LI Yong, Director General of UNIDO, Mr. Heinz Fischer, former President of the Republic of Austria, Mr. WANG Xiaotao, Vice Chairman of the National Development and Reform Commission of China, Ms. Debora Serracchiani, President of Region Friuli Venezia Giulia in Italy, and Mr. WU Zhong, Director General of the Finance Center for South South Cooperation (FCSSC) and congratulate UNIDO and the FCSSC for organizing and supporting this important event.
This place, the UNIDO headquarters, reminds me of the pyramid builders. You know pyramids as massive constructions which last forever. And one of those contemporary builders was a fellow Egyptian Ibrahim Helmi Abd-elRahman, who was the first and founder Executive Director of UNIDO. He is known back home as a scientist specialized in building institutions, globally like UNIDO, nationally, like the Institute of National Planning, and he spent the rest of his life until he passed away 20 years ago building institutions for development in his home village, which is also mine. What he did is very relevant to today’s topic on how to link global initiatives to national policies, with local impact.
The Belt and Road Initiative has the potential to be global in its reach, but local in its impact. It will reach 65 countries -- potentially affecting 4.4 billion people and leveraging 40 percent of the world's GDP. Huge investments will be channeled toward infrastructure projects across Asia, Africa, and Europe. Six new land corridors will be rehabilitated, and maritime connectivity will be improved. And it has the potential to help countries reach their national objectives embedded in the Sustainable Development Goals, in areas such as jobs, poverty, infrastructure, and sustainable cities.
This initiative can be transformative for all cities along the new corridors, and could bring unprecedented opportunities for their economies and their population. The vision behind these investments supports an economic agenda to promote trade across domestic and international borders, thereby seeking to enhance prosperity among local populations.
It is important that the projects embedded in the initiative promote economic growth in a way which ensures a fair distribution of benefits within and across cities. To be consistent with the Sustainable Development Goals, they should also promote social inclusion, adequate financing, environmental sustainability and inclusive economic growth.
Lower costs and travel time increases the mobility of firms and workers, but this also increases the competition between cities for jobs and talent. We know that big transformative infrastructure projects might be associated with concentration of resources in a few places, and the newly created benefits might be unequally redistributed within and between cities.
How can we maximize welfare impacts and avoid adverse consequences? For cities along these corridors, transport infrastructure is a necessary but not wholly sufficient condition for development.
Complementary policies and investments -- in addition to transport infrastructure – will be critical if we are to leverage more fully these large corridor investments. This includes better spatial and land use planning, improved policy and regulatory investment frameworks, a healthy business climate, and strengthened trade facilitation and logistics capabilities.
Ensuring that the new infrastructure is low-carbon and climate-resilient is equally important. When implementing such ambitious transport projects, it is important to include improved environmental regulation, pollution reduction measures, and incentives for the adoption of new green technologies and higher environmental standards.
Science, Technology, and Innovation – key multipliers for reaching the SDGs – are critical to position cities with the technology of tomorrow, not just the legacy technologies of today. Access to data will be essential to the development of new technologies and their application to key industries.
Uncertainties on the financing schemes of such major investment projects raise concerns regarding the implementation and the equitable distribution of the financial burden across locations. Varied modalities of co-financing should be considered to ensure that there is sustainable infrastructure financing across domestic institutions and across countries, based on shared interest. New financing vehicles that can more efficiently bring together public and private resources should also be explored.
The World Bank Group is already deeply engaged in countries along the BRI corridor, based on our joint country partnership frameworks. The World Bank has commitments of about $80 billion dollars for infrastructure in Belt and Road countries, with numerous additional projects addressing infrastructure, trade, and connectivity in its project pipeline. Furthermore, the World Bank Group helps countries to address trade and connectivity issues by providing advisory services and analytics. IFC, our private sector arm, is engaged in numerous BRI countries supporting private sector engagement, and MIGA, the World Bank Group’s risk insurance arm, provides guarantees for outward foreign direct investment.
These opportunities and challenges for this ambitious project are immense, and we can indeed maximize its benefits if the partners – including host countries, the private sector, CSOs, international organizations, and many others – all work together closely. The World Bank Group is delighted to work with UNIDO and all the partners of the Belt and Road Initiative to maximize these investments for people and the planet.