By 2030, up to two-thirds of the world's extreme poor could live in fragility, conflict, and violence settings, so without addressing the challenges in these economies, we will not succeed in our mission to eradicate extreme poverty and boost shared prosperity. The disturbing trend of rising and compounding crises points to an urgent need for the international community to come together and develop new and innovative approaches to support countries facing conflict and fragility.
During the 2022 World Bank Group-IMF Spring Meetings, we discussed how to stay engaged during times of crisis and meet the challenges in new and innovative ways, along with our partners. World leaders came together to discuss how to best build resilience & manage uncertainty. Listen to the Spring Meetings highlights in a special series of The Development Podcast.
- Maeen Abdulmalik Saeed, Prime Minister, Yemen
- Alejandra Botero, Director General, Department of Planning, Colombia
- Axel van Trotsenburg, Managing Director of Operations, World Bank
- Hervé Ndoba, Minister of Finance and Budget, Central African Republic
- Catherine Russell, Executive Director, UNICEF
- Makhtar Diop, Managing Director, IFC
- Donald Kaberuka, Chairman and Managing Partner, SouthBridge
- Mary Nazzal-Batayneh, Founder of Landmark Hotels & 17 Ventures
[00:00] Ntombie Siwale: Welcome to a special edition of the Development Podcast from the World Bank Group. I am Ntombie Siwale. This is the third of five episodes recapping the World Bank Group-IMF spring meeting. This year's discussions took place as the world tackled overlapping crises and conflicts from growing food insecurity, war in Ukraine, climate change and more, so how can we navigate and manage uncertainty and build resilience and how can we best help the most vulnerable living with conflict, violence or in fragile situations?
Maeen Abdulmalik Saeed: Unprecedented times need unprecedented actions.
Axel van Trotsenburg: The most important thing is we need to stay engaged. We cannot walk away just because it is difficult.
Ntombie Siwale: The country is grappling with growing numbers of displaced people.
Alejandra Botero: It's like being a Colombian citizen without the voting when it has every single other opportunity. So it's very integral and it's very long term in it's approach because it's really going to allow these families to set up a life in Colombia.
Ntombie Siwale: And what role can the private sector play?
Donald Kaberuka: These small businesses what you call the informal sector, unfortunately are actually the ones able to provide the daily jobs which people need.
Ntombie Siwale: That's all coming up in the next 25 minutes here on the Development Podcast.
[02:15] Ntombie Siwale: In the last few months, we have seen threats to stability in Asia, Latin America, and Africa. And now with the war in Ukraine, Europe joins the list. The ripple effects of which are already being felt across the globe. Today, it is estimated that more than half the world's poor reside in economies suffering from fragility and conflict. By 2030, two thirds of the world's poor are expected to live in these conditions. It's clear that eliminating extreme poverty will require an urgent focus on these fragile contexts. One country which has been grappling with conflict for years is Yemen. His Excellency, Maeen Abdulmalik Saeed, Prime Minister of Yemen spoke to Kathleen Hays, global economic and policy editor at Bloomberg Television and Radio. Kathleen asked the prime minister about the development challenges repeated crisis have presented and the key steps the government has taken to address them.
Maeen Abdulmalik Saeed: Yemen facing a complicated, severe crisis and now accumulated during the seven years of full humanitarian crisis, we have deteriorating an economy, UNDB, estimated that the Yemen economy set back two decades. And it go back maybe to four decades, if its continue. We have 4 million IDPs, internally displaced people. We have 20 million food insecure in Yemen, and also the COVID 19 that we face in 2020. The main concern for the government is to preserve the economy. We don't want the people to lose the purchasing power. We need to control the deterioration of the currency.
Kathleen Hays: So let's talk more about the role that international community has played. What steps have been most important? Where could this assistance, this cooperation improve?
Maeen Abdulmalik Saeed: One of the key issues is staying engaged. The cost of disengaging is high and also mitigating risk rather than avoiding risks is important. And also presence on the ground. If the donors knows more about political atmosphere and economic atmosphere inside the country, they can design good ways in implementation and helping the country and also balancing between emergency response and long term development. It's always emergency responsible, but we need to balance that.
Kathleen Hays: The world is watching the war in Ukraine. We know there are several countries around the world that are in crisis. What lessons can they learn from Yemen from the steps you have taken, how you've gotten through this?
Maeen Abdulmalik Saeed: We have 31% of our wheat come from Ukraine at the beginning of this year. That's why wheat prices rise seven times between 2015 until now. In a country like Yemen with the loss of support purchasing power, that affects a big sector of people. We are facing a devastating situation by the end of this year. The issue also is important to scaling support to the countries like Yemen. Unprecedented times need unprecedented actions. The response of the crisis determine how we can build back better after the crisis. So the response should be unique. So it's one of the lessons learned from the Ukraine-Russian war that affect the whole world, not only Yemen.
[06:03] Ntombie Siwale: His Excellency, Maeen Abdulmalik Saeed, Prime Minister of Yemen spoke to Kathleen Hays, global economic and policy editor at Bloomberg Television and Radio. Forced displacement is a growing global challenge and a surge in violent conflict since 2010 has led to historically high levels of people forced to leave their homes. Now, the war in Ukraine has caused the fastest growing refugee crisis in Europe since the end of World War II and globally, there are more than 84 million forcibly displaced people. One country which has been tackling this issue for some years is Colombia where people from neighboring Venezuela number over 1.7 million. Kathleen Hays asked Alejandra Botero, director general department of planning in Colombia, how her country has addressed the issues.
Kathleen Hays: Colombia has become for several years now, a critical refuge for Venezuelans. Venezuelan migrants who are leaving because of insecurity, instability, violence. So how did this evolve? How did you do what you had to do? And can you have any suggestions and share your experience for what other countries can do in this position?
Alejandra Botero: We have about 4% of the population right now of Colombia is comprised of Venezuelan migrants. 6 million Venezuelans have left Venezuela. Of them five are staying in Latin America and it is estimated that around 2 million of them are in Colombia. We're a country of 50 million people. So about 4%. Of these 2 million people, half of them are undocumented. So they come, they cross the border without any documents, without anything. 97% of them are under 55. 40% are between 25 and 50 so working age and the rest are young, youth. So you have to have a very focused mechanism on families who are coming mostly looking for economic opportunities and they're coming. People who are coming to work and the children. What I think the key issue and I think what has been recognized internationally is the temporary protection statute that we started last year.
Alejandra Botero: It's a temporary protection statute for 10 years. Very few countries in the world have done a 10 year working permit. And it gives every single right except voting rights. So social rights, civil rights, economic rights. It's like being a Colombian citizen without the voting when it has every single other opportunity. So it's very integral and it's very long term in its approach because it's really going to allow these families to set up a life in Colombia. Now this can't be done if we don't think about an articulation of all the other sectors in addition to migration, both on a national level or on a territorial level, because if we're going to promise to give them all the services so that they can be part of the social system, that they can be part of the health system, that they can go to the schools, everything, you have to have a plan to integrate the migrants at all these sectors.
Alejandra Botero: And that's why setting up a center of government approach, it's an office in the presidency that makes sure that all the sectors are doing the plan at the same time, because this has been very short and very recent. So to give you an example, we have to make sure that the banks accept the temporary protection status to be able to open an account. You have to make sure that they're in the health service so that they can access the health program and so on.
Kathleen Hays: This is a great idea turned into actually all the nuts and bolts that you need to get it done. Very impressive. How about helping the most vulnerable people, women, women with children, kids?
Alejandra Botero: In terms of numbers of the temporary protection status we have almost 100% of the Venezuela population that is right now in Colombia has applied for the temporary protection status. And we've given around 700,000 already physically, but when they apply, what's great is that they have to fill up a questionnaire. And that questionnaire serves to understand who they are. Because half of them are undocumented. So who they are, what education level do they have? What skills do they have? Where do they think we're going? And that information is fundamental to be able to target the most vulnerable population.
Alejandra Botero: So in that sense, for example, one of the biggest issues that we've had is the fiscal way that this has meant on the health system because they're coming in very dire conditions directly to the emergency system where they're not regulated. And in the emergency system versus being part of the health system, it costs 2.5 times more to help someone. So to making sure with the temporary protection status that they are in the health system, and that way it's less expensive for the country to be able to help them, it has been, I think, one of the key success factors when it comes to the health program. Also working with the local governments to see what are the hospitals that are attending the biggest number of migrants and refugees.
[10:15] Ntombie Siwale: Kathleen Hays, speaking to Alejandra Botero. So with this in mind, what can we do to help let's hear from experts, change makers and people on the front lines of the humanitarian-development-peace nexus to learn how the international community can come together to assist the most vulnerable. Kathleen Hays, global economic and policy editor at Bloomberg Television and Radio.
Kathleen Hays: Hervé Ndoba is Minister of Finance for the Central African Republic. Axel van Trotsenburg is the Managing Director of Operations here at the World Bank. And Catherine Russell is Executive Director for UNICEF. I welcome you all. Hervé, let me start with you, lasting recovery that's quite an accomplishment. How did you make that happen and how has the World Bank supported your efforts?
Hervé Ndoba: Thank you very much for this question and for the opportunity to give into talk about Central African Republic, my country, which is known for the last three decades to live in a period of social crisis. We actually have been able to establish security into the country and we are working very hard through those measure. So some of them political measures and some of them financial measure. For the political measures, for example, we've started to be some tools into the country, for example, the DDRR, which is Demobilization Disarmament Reintegration and Repatriation of people who used to be into the war so that we can integrate them back into the society.
Hervé Ndoba: We also are setting up another tool, which is APPR which is a political agreement just with all the stakeholders of this conflict. At the high take of the crisis, we count 17 army groups into the country, but we've been able to manage all those army group into those different tools. We are also doing important things on the financial parts. Of course, when we're facing fragility, the fiscal space is very reduced and we have to find solutions in order to increase this fiscal space. And then we have started cleanup of the public financing. This is very important, and I'm very pleased to have the World Bank on the board because we have two projects which are very important for us. According digitalization, for example, and we are very working on those subject in order to move forward.
Kathleen Hays: Catherine, hundreds of millions of children have had their educations, not just disrupted, but maybe permanently damaged, thrown off track. And it seems also in some of the poorest countries, they're going to have the hardest time catching up because they don't have the richness of resources. How is UNICEF, are you going to use all the partnerships you have with so many countries, so many other agencies to work on this?
Catherine Russell: We had 260 million kids who weren't in school. This is pre COVID. We had 50% of 10 year olds in low and middle income countries couldn't understand a simple sentence. Read and understand a simple sentence. So now we have COVID on top of that. We've had school closures. We have 23 countries still, where schools are not fully back on track. These children have been out of classes for so long. They've lost so much learning. Our estimate now is that it's close to 70% of children in some of these countries at age 10 don't have very basic skills. UNICEF is very focused on this, very committed to this, but we cannot do this alone. We need partnerships.
Catherine Russell: And one really good example of that is the work we've been doing in Yemen where we work with several people. Save the Children is doing teacher training. The World Bank has thankfully come and done financing for us. UNICEF is doing a lot of work building and refurbishing schools, and also providing a lot of the basics for children to learn. The World Food Program is there providing food. So everybody comes together, you have to have the coordination efforts. It's not easy to coordinate in these places but we now have a thousand schools that are open and operating in Yemen, where it's a dreadful situation overall. And so many children are still out of school and hungry and lots of problems but you can show that we can make progress even in the most difficult circumstances.
Kathleen Hays: And so I want to ask you about the fragility, conflict and violence strategy of the World Bank. I mean, if in this, what we called the FCV, focus and strategy, what have you learned? What would you say that the main focus is now?
Axel van Trotsenburg: What we have had for decades far too long, was a paradigm of pillars. Here you have humanitarian, now you have developed, here there is security. So now we talk about the Nexus and here is basically what it is. Nobody can do it alone. You have to work together and to see how we can be complemented each those strengths. And this is badly needed, not only for actually having results on the ground, but actually that the situations are different. I'll take and take off Afghanistan when you cannot really deal with the Taliban but at the same time people are suffering. How can you still there? The UN is a great, UNICEF but WFP. But there are many other interventions that you have to do. And that means that you have to coordinate that smartly with bilateral, with multilateral.
Axel van Trotsenburg: And I think that is where we need, what I'm learning is actually most what I've learned now with Afghanistan since August last year is we have an Afghanistan reconstruction trust fund where donors are coordinated. And where we are actually discussing the hard questions, not to find an excuse, not to do it, but to do it. And I think we have been able to make progress because you need also to find in consensus on ultimately what is from an operational perspective is about the cert of the IDA resources are going to FCV countries. And it's also the right thing to do. But we have also to realize that the last year has been a total disaster with FCV countries. It started with coup d'etats in Myanmar. You saw Afghanistan, Yemen, horn of Africa, Sahel, and not to forget Haiti, but the most important thing is we need to stay engaged. We cannot walk away just because it is difficult.
Kathleen Hays: The question for everybody, a little bit more of a lightning round here-
Axel van Trotsenburg: Ukraine is going to take a lot of attention. And should take a lot of attention. Also, the FCV countries deserve a lot of attention. So we need to do the dual test. There can be a hotspot that where we need now to focus on. We cannot forget on the other countries. And then particularly in the delivery and the coordination, it needs to be on the delivery. Like for example, in the UN family, you have different agencies who are good at delivery. I think UNICEF has an excellent record. WFP, they're moving it. With those agencies you can actually move a lot. And I think the final thing is we need to stay very focused on this because our estimate shows that extreme poverty will be concentrated in the FCV in the next couple of years so if we want to stop that trend, we have to invest.
Kathleen Hays: Catherine.
Catherine Russell: Yeah. I would agree with that. I would say roughly 425 million children right now are living in conflict zones. That's more than ever before in UNICEF's history. So you have that and you have a crisis with the climate and you have a conflict and you have COVID. So these children are living in places where the compounding of the efforts, or the challenges requires a compounding of the responses. And we need to be smarter about how we try to deliver responses to these people. And I think it means being smarter about how we do education. It means building resilience into our sanitation and water programs. It means really doing our best to deliver the best for the people who are most in need, because those are the people who never, it's always the most fragile situations, the poorest children and the children who are out of school, and then they have conflict. And it's just one thing after another. And I think we have to try to respond to that in a multilateral and coordinated and multi sectoral way.
Ntombie Siwale: Executive Director for UNICEF, Catherine Russell. A quick reminder, you're listening to a special edition of the Development Podcast with me, Ntombie Siwale.
Multiple speakers: Namaste. I am [inaudible] in New Delhi. [inaudible], I'm Muslim City Mohamed in [inaudible]. Hello [foreign language] everyone? I am [inaudible] in Port Vila, Vanuatu. Hello. I'm [inaudible] in Phnom Penh, Cambodia. [Inaudible] I am Mapunza Esther in Uganda in the World Bank Group-IMF Spring Meetings. World Bank Group-IMF Spring Meetings. World Bank Group-IMF Spring Meetings. World Bank Group-IMF Spring Meetings.
[19:44] Ntombie Siwale: Let's find out more about how the private sector can play an essential role in this context, even in situations where there is ongoing conflict or a lack of strong institutions. Makhtar Diop is the Managing Director of the International Finance Corporation, a member of the World Bank Group, and the largest global development institution focused on the private sector in emerging markets. He was joined by Donald Kaberuka, co-chair United Nation's Secretary General's high level panel on international displacement and by Mary Nazzal, founder of Landmark Hotels, and 17 Ventures. Makhtar began by summarizing how he sees the global situation.
Makhtar Diop: In my entire career, I've never seen a period like this with so many shocks and so many different type of shocks. And the magnitude and the size of the shocks. So we are faced with a multi faced challenge and in a very unpredictable geopolitical environment. At the same time, more than ever, we know that the private sector can play a role in promoting peace and prosperity. The situation demands, obviously bold action to venture the world in the most difficult places. We need to be persistent enough to convince our private sector partner to invest in fragile country, but also we need to think differently about how the private sector can engage and how can help mitigate the risk of working in this context.
Donald Kaberuka: When I was president of the African Development Bank, one of the first things I did was to create a department to deal with the fragility in some parts of Africa because I found that we are not good at doing it. International organizations were used to rewarding good performance, indeed, which means that those countries who are made in conflict were not getting the resource they needed actually to get things done.
Donald Kaberuka: And second, I recognized that when we say situational fragility would basically mean that there's no effective state to deliver services. If you take case of Somalia, Africa's first failed the state, it is the business community, which actually kept the country together in some ways. If you go to a place like Hargeisa or even be so Mogadishu, what was providing hospitals, schools, infrastructure, digital facility was business people supported by banks like Dahabshiil, which had found a way of making transfers from Somalis abroad quite effective.
Donald Kaberuka: Business can actually function reasonably well even when the state is not able to pursue its function, but business does not have to mean big business. It means from the smallest company delivering digital payments, from the smallest company delivering goods, services far too often, actually these small businesses, what we call the informal sector unfortunately, are actually the ones able to provide the daily jobs which people need. And the absence of government curiously enough actually often removed the burden, especially a regulatory burden on some of them.
Donald Kaberuka: Now I'm not saying that that is necessarily good thing because you need business environment which is regulated, which can settle disputes and the lot it, but the experience I've seen in Somalia basically is that actually people have made set up informal rules and regulations, informal dispute resolution mechanisms and business has been booming. The World Bank set up something, which I find completely exemplary. It worked with governments of some African countries, I was in the government of Rwanda at the time, and we agreed to part with a bit of our IDA location money to seed an organization called the ATIA, Africa Trade Insurance Agency, which basically picked up the risks in countries, whether there was civil or coming out of civil where business, both production and trading was difficult. I just wish it had been brought to scale because it has a capacity to pick up some of those risks which some business people are not willing to take up.
Makhtar Diop: Thank you so much, Donald you bring me to a time when we visited like you Somalia and it was amazing to see how the private sector was brilliant and was creative. Mary, you might think that the situation is very different in the Parisian territories, but there are a lot of similarities with what have been said by Donald in some part of Africa. Tell me a little bit, what is the success of your model and what do you measure success in general?
Mary Nazzal: So the model that we have, our core value is that you can do well and do good at the same time. So we have adopted several causes, whether they are poverty, displacement, gender equality, sustainable agriculture, as part of our business. And we have also partnered with organizations, such as Endeavor to create an innovation impact hub within our hotel. So this shows because the private sector is so agile, it can take on causes beyond their core business. And I think looking at the multiple crises that we are facing as humanity, even pre pandemic, it shows that the public sector and private sector and civil society need to work together within the spirit of SDG 17.
Mary Nazzal: I'd like to state that I am speaking to you today from a very small but aspiring company called Kama. This is a social enterprise that is empowering women all over Jordan to create artisanal products for export. And it's an example of how a small company can create jobs for women who need it the most. And there is another company that I'd like to highlight that I've been supporting for the past 10 years called SEP Jordan. And this is Jordan's first B Corp, and they are creating jobs in the poorest refugee camp in Jordan. So the point is that no matter what your business is, whether it's making zaatar, which is a local herb, or whether it's embroidery on scarves, like SEP Jordan, you can always incorporate social justice work or human rights work within your business.
Makhtar Diop: But what needs to be done to attract them to de-risk them? Because there are companies which don't have a lot of financial resources, which are entering a difficult environment, what can we do more to support you and to support from a policy stand, what they're doing? Donald.
Donald Kaberuka: What these people need. They need security. The second point they need most is someone to pick up some of the risk that they face. I think the World Bank in the past has been very instrumental in experimenting with some of those risk mitigating instruments. The third thing they will need is data information. Look, take a bank like Dahabshil, first time, the issue of money laundering or terrorist financing was becoming a threat and banks were being sanctioned, a lot of European banks stopped dealing with Dahabshiil, you know this. So all these transfers, Somalis living in Scandinavia or Canada was difficult to transfer to their country. I wrote personal letter to some European leaders in a number of, instead of the banks. I said, this is the wrong thing to do, let us identify what, who is the sender of the money, who is the receiver of the money. Let us have that data, all right? Once we have that, then criminality in between can be minimized.
Mary Nazzal: We have worked from 2018 to design the first blended finance investment fund for Jordan. And we used the first lost facility. And the idea there of course was to de-risk real risk or perceived risk. I don't really know sometimes what it is. So our fund, we have a refugee lens in the sense that we are looking to invest in companies that hire refugees or run by refugees. We're also looking at companies that are inclusive when it comes to people with disabilities. So we have to identify and increase the amount of impact capital providers that are looking beyond the bottom line. But I think for all investors, countries need to have an investment climate where they find consistency, transparency, especially when it comes to tax regulations.
[28:14] Ntombie Siwale: Mary Nazzal finishing the illuminating discussion with Makhtar Diop and Donald Kaberuka about the role the private sector can play in the phase of escalating instability, plenty of food for thought. That's all for this edition of the Development Podcast. I'm Ntombie Siwale. The producer is Sarah Treanor. And please to join us for our next episode where we'll be hearing for more global leaders. They'll be discussing how to best preserve open trade around the world. It's a don't miss listen. So please do join us next time.
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ABOUT THE WBG-IMF SPRING MEETINGS 2022
Preparing for future crises and strengthening international cooperation are essential to deliver a resilient recovery and a better future for those most in need. At these Spring Meetings, the World Bank Group convened leaders, experts and activists to discuss the impact of these global shocks on the most vulnerable communities.
ABOUT THE WORLD BANK GROUP
The World Bank Group is one of the world’s largest sources of funding and knowledge for low-income countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.