The 2023 World Bank Group-IMF Annual Meetings took place from October 9-15 in Marrakech, Morocco, and unveiled the Bank’s bold new vision: creating a world free of poverty on a livable planet. Events and discussions highlighted this new mission, highlighting an expansion in financial capacity, stronger partnerships, deeper engagement with the private sector, and finding more efficient processes.
In this special edition episode of The Development Podcast, we draw on some of the highlights from that week and share more about the institution’s new mission and vision. Listen on to hear from: World Bank Group President Ajay Banga, IMF Managing Director Kristalina Georgieva, Senior World Bank Managing Director Axel van Trotsenburg, World Bank Managing Director of Operations Anna Bjerde, Zanzibar’s Minister of State for Finance and Planning Saada Salum, UNICEF’s Executive Director Catherine Russell, CEO of Standard Chartered Bank Bill Winters, and Ethiopian entrepreneur Kidus Asfaw.
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[00:00] Srimathi Sridhar: Hello and welcome to the Development Podcast from the World Bank. Coming to you from Washington DC, I'm Srimathi Sridhar. In this special episode, we'll be bringing you highlights from the 2023 World Bank-IMF Annual Meetings, which just wrapped up in Marrakesh, Morocco.
During these meetings, the World Bank unveiled its new vision, to create a world free of poverty on a livable planet. Ajay Banga, President of the World Bank Group, spoke about the bold ambition.
Ajay Banga: The truth is we cannot endure another period of emission heavy growth. We must find a way to finance a different world where our climate is protected, where pandemics are manageable, if not preventable, where food is abundant, and fragility and poverty are defeated.
Srimathi Sridhar: How can this be achieved while addressing conflict, climate change, poverty and debt?
Kristalina Georgieva: What are the no regrets actions that will help us write a better story for the next 50 years? Investment in strong economic foundations and investment international corporation.
Srimathi Sridhar: We'll also be getting the views from global leaders tackling these challenges head on.
Saada Salum: The policies, economic policies, and financial policies are those that also contribute to women empowerment
Srimathi Sridhar: From businesses that are using climate smart technologies and hearing why time is running out to protect future generations.
Catherine Russell: The truth is the world is on fire for children. It is a desperate situation, and the urgency I think of all of us is to say, we have to address this and we have to address it now.
[02:01] Srimathi Sridhar: All that and more coming up on this special Annual Meetings edition of The Development Podcast.
This year's Annual Meetings were held against a backdrop of intertwined global challenges, climate change conflict, high debt levels. Ajay Banga, President of the World Bank Group, said the institution has a new playbook to tackle these priorities.
Ajay Banga: Our task is great, and looking across the world, it can become easy to be consumed by a sense of despair. Yet in all corners of the globe, people are eager to go to work. They want to create with their own hands, they want a better life for their children and their grandchildren.
The bank has an obligation, in fact, a duty to match their energy with a fierce determination. We have to be the hand on their back, moving people forward. We must be an institution that exports optimism and impact, but we must change to make good on that promise and deliver on what is being demanded from us.
Today, there is a new vision and mission for the World Bank, and that is to create a world free of poverty on a livable planet. But time is of the essence. This urgency is what's motivating us to write a new playbook, a new mission, knowing that when development is delayed, development is denied.
We are collaborating with partners to maximize impact, we are working side by side with the private sector. There are new frontiers to explore, like moving from small bespoke loans to large, standardized investments that can be packaged. Do it right, and we can draw in institutional investors, pension funds, insurance companies, sovereign wealth funds, and put their $70 trillion to work in developing countries.
Don't forget, we're not starting at square one. Every day, millions of people do their best to be part of the solution. There are real examples of action. In Nigeria, shopkeepers are using solar power to keep their shops open and medicine safe late in the evening. In Indonesia... I saw all these myself, by the way. Mangrove rehabilitation efforts are reducing carbon emissions. They're creating sustainable employment for women, they protect communities from floods. In Vietnam, rice farmers are embracing new techniques that slash methane emissions while increasing incomes.
We do not suffer from a shortage of solutions, we are just paralyzed by a persistent lack of courage to pursue them. The good news is that we have solutions like these within reach and resources at our disposal to scale them. For example, we can start by spending better. Every year, $1.25 trillion are spent on subsidies for fossil fuels, for agriculture and fisheries. Some of these are very important, they're very needed, but in other cases, we can all do better.
The economic costs of fertilizer runoff, unnecessary air pollution, and overfishing is 6 trillion more dollars every single year. By repurposing some of this money, some, to incentivize sustainable practices, we can protect air, water, and forest while continuing to support those most in need.
Not all solutions are years away. We are in the final stages of a 20-year effort to build sound, transparent, voluntary carbon markets. This effort learns from the past to protect against greenwashing and ensure the integrity of emission reduction credits and that assurance is a crucial piece of a complex puzzle.
Srimathi Sridhar: Kristalina Georgieva, Managing Director of the International Monetary Fund, echoed the sentiment that there are numerous challenges and we face an uncertain and unpredictable time. She explained how the world can navigate these challenges to create a better future for all.
Kristalina Georgieva: The recovery from the shocks is slow and uneven. Slow because at 3% growth is currently well below the average of the last two decades before the pandemic, and median term growth prospects are also the weakest in decades. Uneven because the economic scaring from the recent shocks vastly different across countries with emerging markets and developing countries clearly the hardest hit.
After a long period of economic convergence, a dangerous divergence between countries and regions has emerged, made worse by fragmentation, climate change, and fragility, which has left many countries at the breaking point. This is especially the case here on the African continent, home of the world's youngest population. Progress in closing the income gap with more advanced economies and generating job reach growth will be vital over the next 50 years.
In this moment of radical uncertainty, what are the no regrets actions that will help us write a better story for the next 50 years? Investment in strong economic foundations and investment international cooperation. In an environment with weak medium term growth prospects, the right policies and reforms are essential.
Price stability is key. It is a prerequisite for growth and it protects people, especially the poor. This means the fight against inflation remains paramount, so is safeguarding financial stability. Prudent fiscal policy is more important than ever. Why? Because debt and deficits are well above pre-pandemic levels.
The time has come to restore fiscal space. This means tough decisions for governments. The right package of reforms could boost output levels by up to 8% in four years, but the highest return of all comes from investing in people, especially education to ready the young people, including those right here in Africa for the jobs of tomorrow.
[08:33] Srimathi Sridhar: Away from the main stage events, we got some amazing insights from experts and thought leaders in our digital zone. Anna Bjerde, Managing Director for Operations at the World Bank, explained what it will take to achieve ending poverty on a livable planet and what we mean by a better Bank.
Anna Bjerde: Sometimes people ask me, since the SDGs are off track, should we change them? My view is not we have to keep the ambition level, and that's also what the World Bank is doing Through its new playbook. We have to step up ambition.
In order to reach the ambition, we need to change, and we need to change in the sense of how we operate, how we deliver our support to countries around the world, and we need to change in how our financial capacity allows us to do that. Perhaps most importantly, we need to work together.
This is why I really like the emphasis on partnerships, other banks for us, but also development partners around the world, civil society, everybody. We have articulated a new vision for the World Bank, which is much more ambitious than the one we had, and that is to end poverty on a livable planet. That livable planet part is so important because that brings in squarely all the global challenges we're facing today. Ending poverty, of course is for us, non-negotiable. That is what we are about.
A much more ambitious goal again, coming back to that, and then on changing and becoming better, it's about becoming quicker, it's about reaching scale, and it's about getting impact sooner. Our projects otherwise, and our support can take a long time. We want to shorten that and bigger, well, it's about really having more financial capacity because that's how we work and being able to offer concessional support to countries that need it the most.
[10:24] Srimathi Sridhar: In Tanzania, Zanzibar has made huge strides towards education for all and empowering its female population. Saada Salum, Minister of State for Finance and Planning, told the World Bank's, Meriem Gray, more about the island's successes and ambitions and why investment in the blue economy is critical to its future.
Saada Salum: Zanzibar, being an island means that we have to cope with the whole aspect of climate change management. For people to actually live in Zanzibar, have to have adequate access to food, but also we have to have access of infrastructure, but education is also important, particularly girl's education.
Zanzibar is a home of around 2 million population, in which 52% women and girls, and we have quite a number of 15 to 34 year age in which it's a young age, so to have infrastructure and education is really important, but also health as well as clean and safe water.
To us, poverty means also not to have access to health. To us, poverty means not to have access to education, and all those areas where there are challenges, we actually need to address them.
Meriem Gray: Tanzania has made an incredible progress in poverty alleviation and especially in the education and women empowerment.
Saada Salum: Absolutely.
Meriem Gray: What advice do you have for other countries in these two areas?
Saada Salum: Women empowerment has to be across all the sectors. When you empower women, not only you empower her to have access of economic means, but also the society behind her.
We have what we call the blue economy. Blue economy means that we have to take advantage of the resources surrounding us. We have quite a substantial number of women engaging in seaweed farming, in which the government is believed that to enhance those women, we have around 50,000 women in that, and we have capacitated them by providing them with the facilities and equipment necessary for them to be in the sector.
We are now facing a challenging moment where we have quite a number of women dying from reproductive challenges. We have constructed around 11 district hospitals in Zanzibar, which have not been there. That is in the span of only one year.
I'm the second Minister of Finance in the history of Zanzibar since 1964, but I have that obligation to ensure that the policies, economic policies, and financial policies are those that also contribute to women empowerment.
[13:18] Srimathi Sridhar: Now the complexity of global challenges means that no one institution can solve issues alone. Stronger partnerships between organizations are crucial. The World Bank Senior Managing Director, Axel van Trotsenburg, spoke alongside UNICEF's Executive Director, Catherine Russell, about the importance of partnerships and of the impact of COVID-19 and climate change on children.
Catherine Russell: Well, when you think about it, children really are the most vulnerable in any society. What we've seen over the last few years because of COVID, but not only because of COVID, is that the systems that children rely on have been so disrupted. Children are losing incredible amounts and have lost incredible amounts of education.
We're estimating two thirds of 10 year olds in the world can't read a simple sentence or do a simple math computation. Millions of children didn't get their immunizations or routine immunizations, and millions of children, and this is an issue that we work on together, were pushed into poverty. For them, that just makes their lives so much more difficult, so much more miserable.
I think for us, for UNICEF, and for the Bank, and others, we're trying to think about ways that we can help these children because everyone talks about children are the future, but really children are the future. If they're not taken care of, what kind of future do we expect for the world?
Axel van Trotsenburg: The World Bank is not only about money, it is about the knowledge, it is about the development practices. We're building actually on decades of analytical work, and that helps to really understand the problems, but also helps to inform how we do better operations on this.
The most important thing is what we have been raising also as a result of the COVID crisis is that extreme poverty has been increasing. We are looking at two decades where we really made huge progress in reducing extreme poverty. COVID has reversed, this is dramatic if we don't act and if we don't see this whole value chain, what is our future, then we're missing something.
I think what we have to raise jointly, and you are extremely good at that at UNICEF is applied for children, essentially the human rights, and then basically what the World Bank has to do is to say how we can be complimenting it?
When you say the World Bank can do, we can only do that together with government, with the communities, and then with other multilateral partners so that together, we have at least a fighting chance. Right now, we are running a losing battle and it is a need for reversal.
Catherine Russell: These challenges are so difficult for children and sometimes children get lost in the mix. What we see, certainly COVID has had a devastating impact on children. Immunizations are down, education has challenged, all the rest of it, but I think we also know that the challenges of climate are real in communities. We see that every day.
We know that that has a real impact on children, just as an example, because their bodies are smaller, they're more susceptible to heat. If they were here, they would be melting as we are. It's very warm and children don't sweat, so they're not able to release that. They're also more vulnerable to air pollution. Children, in all of these categories that you raise, are so vulnerable, and I think we have to keep them at the center of our thinking, the center of our work.
Partnerships are absolutely critical to that because no agency... UNICEF, I take pride in being associated with it, they're fantastic, do great work. World Bank is fantastic, but no organization in the world can handle all of these problems alone. There are just too many problems.
I think that the key to the partnership question is we all bring different skills and resources to bear, but I think working together, it's the only hope we have for making a better future for children.
Axel van Trotsenburg: Partnerships are key. I would mention a couple of key areas is urgency, urgency to act, move beyond the rhetoric, do the real partnership. We need to act, we need to break down barriers. We did that recently with pandemic preparedness with the WHO, that you can bring very operational partnerships.
Can we deliver? Can we actually produce the results? I think it's more as needed. Finally, it will have also to involve money and so increased commitment, whether that is together with the private sector or with the public sector.
Catherine Russell: I love when Axel said that we need to bring urgency to this. I think that that is the most important thing because the truth is the world is on fire for children. It is a desperate situation. The urgency I think of all of us is to say we have to address this and we have to address it now because are children for a short period of time. If you lose them, you don't get them back.
That's the case in nutrition, education, all sorts of challenges. We need to recognize as a world that these children are in desperate need and we need to do better by them.
[18:29] Srimathi Sridhar: The private sector is another crucial component when we talk about ending poverty on a livable planet. How can finance be sustainable? Bill Winters, the CEO of Standard Chartered Bank, gave us some insights on this and how he sees a just transition.
Bill Winters: First of all, the whole idea of a just transition, it's surprisingly controversial. Clearly there's a very vocal subset of the global population that is less concerned about just and more concerned about transition and sooner rather than later.
Given where Standard Chartered operates, across Africa, Asia, Middle East, absolutely critical for us that we're affecting the transition to a zero carbon economy, but in a way that allows for underlying economic growth to continue. I know that that's a core mission of the World Bank Group as well, so we share that together.
But there's many, many ways that the public and private sector are working together to get some really impactful things done. Now, I'll take some of the projects that we've completed, whether they're very, very large renewable power projects in Africa or in India or in the Middle East, where we've brought together export credit agencies, so public sector at a government level, at a single country level, multilateral [inaudible 00:19:39] and banks, global capital markets, together with perhaps banks or other private sector lenders into a financing package where the risk is apportioned to the person that's in the best position to actually manage that risk.
The political risk may be best taken on by insurers or by the World Bank Group. Some of the construction risk may be best taken on by an export credit agency type lender. Some of the capital markets or foreign exchange risk might be best taken on by a private sector lender, et cetera. There's many examples of where that public private partnership has worked prospectively.
I'll look at some of the super high impact programs like the JET piece, the just economic transition partnerships that have been led by the UK, the EU, the US in really important markets for us like Indonesia and Vietnam, where I think these are prototype projects that involve some really novel financing structures as well around the monetization of effectively carbon credits that come about as a result of terminating coal-fired power plants much earlier than their productive life. Maybe 15 or 20 years off the backend of the life of these projects.
That's a necessary, it's a critical component actually to decarbonizing the economy, but somehow we have to find the money to pay for that. This JET piece where the private sector, organized largely through [inaudible 00:20:55], which is this financial services sector group, which has come together, I'm a principal in that group.
The Net Zero Banking Alliance, which Standard Chartered chairs, where we are positioning private sector capital alongside prescribed public sector capital to deliver these really impactful climate reduction initiatives.
[21:12] Srimathi Sridhar: We also heard about how businesses are piloting exciting climate solutions. Kidus Asfaw is an Ethiopian entrepreneur whose company converts recycled plastics into sustainable building materials. He explains more.
Kidus Asfaw: Cubic is an environmental technology company. Our mission is to build dignity through clean and affordable living for all.
How we do this is by recycling hard to recycle plastic waste and converting it into low carbon and low cost building materials because one of the biggest priorities that municipalities have all over the world is to reduce waste, increase the affordability of housing, all while being able to be a solution in climate change.
We are seeing the gap between the need and the supply of affordable housing growing every day. Just in Sub-Saharan Africa, over 100,000,000 housing units are actually needed. One of the critical issues right now is that real estate developers, who are the linchpin for making this happen, don't see the business proposition to actually engage in affordable housing projects because materials are very expensive.
What we do is make them our client and give them anywhere from 30 to 50% discount on these building materials that they're used to, also, that they're incentivized to address this massive problem all over the world.
We need a livable planet. That comes down to people having the opportunity and choice of how and where they live. The more that we scale as a business, we are reducing plastic waste, we are making very beautiful homes a lot more affordable to everyone, all while making the most polluting sector, which is real estate, less polluting over time. We need to decarbonize cities. It's once we do that, that this massive issue around climate change could also be addressed.
[23:04] Srimathi Sridhar: As we've heard in this episode, the interlocking crises affecting the world cannot be addressed in isolation, and they're going to require creativity and partnerships across the board.
To end our snapshot of some of the conversations from this year's World Bank-IMF Annual Meetings, let's hear again from World Bank Group President, Ajay Banga.
Ajay Banga: We have inherited decades of knowledge, we have benefited from the generosity of every nation, and now when we are called upon to lead, I believe we have never been better positioned to deliver the progress that has demanded of us.
Srimathi Sridhar: On that powerful note, and what has been an unveiling of the World Bank's ambitious new vision, that's a race around this year's World Bank-IMF Annual Meetings in Morocco.
While we provided highlights of topics and conversations, there is still so much more available online, and we encourage you to check it out on World Bank Live or live.worldbank.org.
Listen out for a very special episode next month where we'll be bringing you the first in a series about ending poverty on a livable planet. If you have any thoughts on that, we'd love to hear from you.
Thanks so much for joining us and until next time, goodbye.
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