MR. MILLS: Good afternoon, everyone. Thanks for joining us for this roundtable. My name is Richard Mills. I know many of you; welcome.
I want to set up a couple ground rules to begin with. First of all, we're going to have this session embargoed until the end of the session, so that should keep all the--maybe some of the hurried typing down to a minimum.
The other thing I would just ask is that you--when we call on you, just repeat, for the record of the transcript, your name and organization, and then we can go into questions.
I handed out a statement and I will turn it over to President Kim.
MR. KIM: Well, thank you very much for coming and I want to welcome you here.
I'm taking over at the World Bank at a pivotal moment, as we said, and we're very encouraged by some of the things that we saw over the last two weeks, what happened at the G20 meeting, the commitment of middle-income countries to continue lending to the IMF at levels that were very encouraging.
Also, what happened this past Friday in moving toward a stronger financial and banking union in Europe was all very encouraging.
Our mission here at the World Bank is to boost prosperity, especially in low- and middle-income countries, and to eradicate poverty. We have just an outstanding staff. I've been working in developing countries all my life and have known from the ground just how outstanding World Bank staff are.
We are prepared to continue the dual mission of boosting prosperity in the world and eradicating poverty and to do so with great energy, especially in this very difficult time. And let me just stop there and ask for questions.
MR. MILLS: Okay. Anyone who has any questions?
DANNY XUFENG: Thank you.
Danny Xufeng from China Xinhua News Agency. Thank you for all [unclear].
President Kim, today you are in a World Bank tie – a green tie – and you are the first non-Wall Street banker and non-Washington politician to run this agency. How would your background help you to continue modernizing this global agency in this multi-polar world, and [inaudible] your predecessor, will your Chief Economist will also be from a developing country?
Secondly, to some observers, you are a good golf player. In your golf bag, you have a “putter” of global and medical experience. But how would you improve your [inaudible] in managing such a big agency as well as [inaudible] of tackling economic and trade issues?
DR. KIM: Wow.
Just a few things. Let me just say that I bring two relevant experiences to the World Bank.
First, I've been working in development all my life. I've actually had extensive experience with World Bank employees in the field tackling difficult problems. And so, I feel I share the passion for development and poverty alleviation with the World Bank staff. I come into the organization feeling very close to them in terms of why they came here.
I've heard over and over again from World Bank staff that I've met over the past few months, we came into this institution because we have passion for development. I share that with them and I think that's important that the World Bank President has worked on the ground on the issues, many of the issues, that the World Bank tackles.
Secondly, many people have noted that the World Bank's greatest contribution may be as a knowledge institution. We have a combination of experience on the ground, and that experience on the ground isn't just being in developing countries, it's actually investing, not only with governments, but in the private sector. So, the World Bank has people who have actually experienced doing projects, bringing resources to the ground.
Secondly, the World Bank has enormous amounts of data and information.
Let me just take a moment to thank my predecessor, Bob Zoellick. I mean, his openness initiative was revolutionary. It's leading the way for all multilateral organizations to be more open, and I welcome that. It's critically important. It's time to do that.
So, we have more data than any other institution about development.
Moreover, this is like a huge academic institution.
There is a tremendous amount of research and analytical firepower in this organization. So, this combination, on-the-ground experience, data, and analytic capacity is unique to the World Bank. And so, having come to this job from a knowledge institution now helping to run a knowledge institution that has the capacity and has a history of providing critical information where it's needed, I feel that those things have prepared me.
Now, as for your golf metaphor, I don't think that there's anybody except maybe Tiger Woods and a few others who do everything well, and the history of this institution is that people have brought to the institution certain experiences and expertise.
Let me say that, in my--in the last few months, I have been just extremely impressed with economists, development experts, sociologists, others who are in this institution who bring a huge variety of expertise that will be very helpful as we go forward.
So, I certainly don't bring absolutely everything--one of the tools that you might want. On the other hand, no one does, and I feel very confident in our staff, in our leadership, to be able to deal with all of the critical problems that we'll face.
MR. MILLS: Howard.
MR. SCHNEIDER: Howard Schneider, Washington Post. Thank you for doing this.
A couple things: First off, on this sort of nuts and bolts of transition, I wonder if you can sort of give us a sense of what you've been doing the last two weeks and specifically who you've been relying at U.S. Treasury, whether you're bringing folks from Treasury over with you to Bank staff.
And secondly, you know, one of the things that when you look at President Zoellick's comments over the last year, it's clear he's been very, very concerned with conditions in Europe, and I'm wondering whether you have come to share his concern about that as it might affect the developing world, or whether you feel the Bank's mission really is more on sort of longer-term, systemic, development-type problems rather than the euro crisis.
MR. KIM: So, a couple of things.
The transition has been run by the President's office here, but also I've been working very closely with people in U.S. Treasury who were working with me during the campaign.
So, this is an enormous amount of--this is a huge organization and so there's an enormous amount of information to digest. So, what I've been doing is meeting with almost every single one of the Vice Presidents. I've had multiple meetings with the Managing Directors, with the CFOs. So, over the past two months, what I've been doing mostly is meeting our leadership.
So, I can tell you that I'm just extremely impressed with the leadership of the World Bank. Many of them have been in the organization for years and years and years. And again, what's been most exciting is that every single one of them have come here because of the mission.
So, I've been reading lots and lots of documents in preparation for the G20. Of course, there were a tremendous number of documents, many of them prepared by World Bank staff, and I've been going through them.
Now, in terms of our specific position, President Zoellick brought a series of extraordinary experiences and an expertise to the Bank and I bring, frankly, a different set.
So, am I concerned about the euro zone crisis? Of course. I talked about it a little bit in the beginning. I am encouraged by what happened over the past two weeks, but we are monitoring the situation very carefully.
The primary mission, I think, of the World Bank in this crisis is to make sure that low- and middle-income countries are protected.
Since 2008, we have invested over $300 billion to support lower- and middle-income countries to weather the crisis. So, what are the things that we do? We make sure that children can stay in school, we make sure that health clinics stay open. We've done a lot of work on food security and not just in terms of providing food in times of crisis, but moving toward more sustainable approaches to agricultural development.
So, the primary mission, of course, is to just ensure that global growth continues and that, in the process, we support countries to provide basic services that everyone needs.
Often, what happens in crises is children get pulled out of school, health clinics close. We've done a lot to make sure those things do not happen.
MR. SCHNEIDER: And anybody from Treasury coming over to your staff?
MR. KIM: Yeah, well, we—Navjet Dhillon who was a former Bank employee and had worked with Jim Wolfensohn among others had been at Treasury for a while and, with his experience at the World Bank, he'll be joining me in my office.
MR. MILLS: Okay, any other questions?
MS. WROUGHTON: Hello, Lesley Wroughton, from Reuters.
I want to get back into the issue of we see today manufacturing in Europe going down, China going down. We've already seen effects on developing countries through trade finance and a tightening of Bank flows.
When Mr. Zoellick came in, he immediately increased funding to countries and said that's the way to stop it. I was wondering how the Bank would be positioned currently under the finances to move quickly and to move with such big amounts to help countries if there is this extreme worsening of global conditions. We know that the World Bank's finances may be declining over the next few years. So, the question is, how do you raise resources like that?
One of the issues has been raising finances through the World Bank actually offering its services to developed countries, i.e., Greece. I was wondering how your feeling is about that.
MR. KIM: Let me say, we've been having lots of conversations about the financial strength of the World Bank, and what I've found is that the Bank is in a very strong position.
We've had, over the last few years, a successful IDA replenishment, we've had a capital increase. Bob has done a great job in putting the Bank on very solid ground.
Now, we feel prepared to tackle crises as they come forward. Now, of course, it all depends on the scale and the severity of the crisis, but the World Bank is in very sound financial footing.
Now, in terms of our work in high-income countries, as a person who has been focused on how to tackle social problems in developing countries my entire life, I am very impressed with the quality of our staff and the range of insights we have on everything from fiscal policy, getting--understanding macroeconomic trends and getting fiscal policy right from country to country to health care to education, all the way down to our International Finance Corporation has been very effective in investing in the private sector in developing countries.
So, all the way from fiscal policy down to investments in the private sector, I am very impressed with the expertise that we have of, could that be applicable and useful to high-income countries as well? I think so.
Now, you have to understand that we only go into countries when we're asked, but I feel the kind of expertise we have could be relevant in many, many countries in the world, including high-income countries.
MS. WROUGHTON: So, you're not ruling out if Greece or the EC asked you to, that you would move--you would go--you would happily help Greece.
MR. KIM: Well, I've talked to our staff--and again, my job as a leader is to really understand our staff, our capabilities and what we can do. And my staff feel that they have relevant experience that could add value. And if that's the case, and if we were asked, I would be open to the possibility.
IKKI YAMAKAWA: Ikki Yamakawa with Asahi Shimbun.
So, [unclear 14:25] little country and the [unclear], emerging countries that are hoping to increase their involvement and contribution, both in power [unclear]. How are you going to [unclear]?
And also, secondly, I want to ask you about, you know, [unclear] should come from [unclear] and also how--do you have any will to increase the transparency of the election process within five years of your term?
MR. KIM: In terms of middle-income countries and the lower-income countries, you know we are very much involved in both, middle-income and lower-income countries. Our commitment to supporting the lower-income countries through IDA grants and loans and also with expertise. And, in fact and increasingly, the IFC has been making more and more private sector investments in the poorest countries. So our commitment to lower-income countries is unshakeable. Of course, it's a primary part of why we exist.
But in middle-income countries, I think it's important to know that more than two-thirds of the people living on less than $2 a day live in middle-income countries. Our mission is about eradicating poverty, so we must remain engaged with middle-income countries.
Moreover, in working with middle-income countries, we are learning again so much about how to tackle the most difficult problems, and so we will remain engaged in both, and I think there are very good examples of how we've had successful work in both.
Let me just say something about the election.
So I was very proud to be part of the first contested election in the history of the World Bank. Issues of share and voice in/and election, these are issues that I look forward to discussing with the Board and with the Governors. These are very important issues and ones that affect all member countries, and it's not for me to decide as President how this will happen. These are issues that will require full discussion, and I look forward to those.
JEREMY TORDJMAN: Hi. I'm Jeremy Tordjman.
Before leaving office, your predecessor, Mr. Zoellick cancelled a loan made to Bangladesh and I was wondering if you would think that is it an appropriate way to address some of the critics made to the WB especially about corruption.
MR. KIM: I've been following the situation closely, and Mr. Zoellick and the senior staff have informed me fully about the decision.
The Bank has a sterling record in fighting corruption. The Bank was the first to raise the issue of corruption in the 1990s and has a no-tolerance policy for corruption. The discussions with the government of Bangladesh started in September. Even toward the very end, there were extensions given so that there would be what we would think of as an appropriate response; and not seeing one, we cancelled the bridge project.
Now, we're very concerned about the well-being of the poorest people in Bangladesh, but what I must stress is the Bank's position is that we do not tolerate corruption.
JEREMY TORDJMAN: Do you think it was appropriate?
MR. KIM: Yes. I do think it was appropriate.
MR. MILLS: Any other questions?
KAZUHIRO HARUKI: Hi. My name is Kazuhiro Haruki, Kyodo News [unclear].
And Tokyo will host Annual Meetings in October [unclear 18:45]. How [unclear] Annual Meeting and what is your expectation for Japan [unclear]?
MR. KIM: So, I'm very much looking forward to my visit to Japan. As you may know, I visited Japan during the campaign and had a wonderful meeting with the finance minister and other leaders there.
I have--we're preparing for the meeting. I think it's going to be an important meeting at an important time. I know that Japan has been a very strong supporter of the World Bank from its inception, and we value Japan as a member country very, very much. I think it's important that my first meeting, in fact the first annual meeting, will be held outside the country. It's part of a tradition here at the World Bank, and I think it's an important one.
MR. MILLS: Sandrine.
SANDRINE RASTELLO: Sandrine Rastello with Bloomberg. So, besides Japan and that trip for the Annual Meetings [unclear], do you plan to get personally involved in certain projects like the IDA replenishment or do you have a planned visit to your [unclear]? And my second question there's been a lot of talk about the World Bank doing too many things and not finding, you know, what it is as an institution. Do you plan to refocus the Bank or do you plan to continue being involved in everything from the environment to education and [unclear 20:28]?
MR. KIM: Let me say, I am very--I'm a practitioner, a development practitioner, and I have been for most of my adult life. So, I'm going to take great interest in a wide variety of projects that we work on, and I hope that I can help in the success of some of these projects.
In terms of focus, one thing to remember is that we are very much a client-driven organization. In other words, we have to respond to the priorities and the aspirations of our member countries, and that [is] a critical piece of our work going forward.
Now, having said that, I think it's also very important to have strategic discussions with not only inside the Bank among our staff but with the Board of Directors and the Governors. These are important questions about where the Bank should focus its energy, where the Bank brings the most value, and how we can organize our activities going forward.
So, I think it's critical to have strategic discussions but also critical for us to be responsive to the aspirations of member countries.
MR. MILLS: Yes, sir.
MR. FERNANDEZ: [Unclear] Fernandez from the Spanish newswire EFE.
I wanted to know your views about Latin America, the [unclear]. How can the World Bank help the region?
MR. KIM: As you may know, I have worked for many years in Latin America. I've worked in Peru and Chiapas in Mexico. Also visited many, many countries and worked technically on health-related issues. So, I think it's remarkable that the resilience, as you said, during the economic crisis was remarkable and also very encouraging. I think that the support for the poorest countries, of course, will continue through IDA and other mechanisms.
But I think it goes back to the issue of high-income countries and what our role might be in some of the high-income countries.
There are many situations in which what our member countries want most of all is our technical expertise, and, you know, there are so many sources of capital these days in the world that we know that often that's not going to be our role but that our role will be to provide technical assistance.
We have learned an enormous amount from countries like Mexico, for example. Mexico's experience with conditional cash transfers, the expansion of that program in Brazil. These are important lessons for many countries in the world. And so we will continue to engage deeply, of course, in Latin America, the poorest countries through IDA. And the middle-income and emerging countries, we both will provide technical assistance but also look forward to learning from them as they have weathered the last few years.
MR. MILLS: Yes, sir. I think we'll take our last question.
Okay. I'm Gwang-ik Jang of Maeil of South Korea.
There was--you mentioned Korea's success story as a model of success with [unclear]. How does the experience of Korea's economy's success affect your ability to carry on the World Bank [unclear]?
MR. KIM: Well, I think, on a very personal level, when I came to this country, many people thought that Korea was--and the word that was used was "a basket case"--impossible for Korea to develop. And the reasoning was--seemed fairly clear: no natural resources. Even--there was even talk of Korea having cultural deficits so that they couldn't develop. And so now, look what happened.
What it gives me in tackling this new job is an unshakeable optimism that any country can go down the path of development, and so I bring that optimism with me every day to work. I spoke about it today at a meeting with staff. I think for those of us who are fortunate enough to work in an institution like the World Bank, every day we walk through the door and we read on the wall "Our dream is a world free of poverty," I think that it's critical for every single World Bank employee to bring with them every day the sense of optimism, that no country is a basket case, that we have to work with every single country to try to help them down the path of development, just as--that's been my experience, and I feel that deeply in my bones.
MR. MILLS: Okay. We'll take one last question from Jeff.
JEFF: Jeff from Financial Times.
If I could pull up on a previous question [unclear 25:49] for a bit more. You said that the Bank now has a very strong financial capital position. Is the Bank in position to accelerate lending if, in fact, the global economy does go into a much deeper, prolonged downturn as some of the recent indicators are indicating. And if it is in that position, is that something that you will consider doing or are considering doing [unclear 26:09]?
MR. KIM: So the financial position of the Bank, as I said, was very strong. It--you know, this is my first day and it's one of the things that we're going to be talking about.
We feel that, especially in lower-income and middle-income countries, we are ready to respond to support those countries.
And let me clarify an earlier comment when asked about Greece.
We're not talking about the World Bank investing massive amounts of finances in higher-income countries. I think where we feel like we can add value is in the technical support around some of the structural issues that some countries are facing. And so for lower-income and middle-income countries, we're prepared; we're ready to support countries as needed, and of course, as I said, we are monitoring the situation very carefully, and we'll respond as countries come to us to ask for assistance.
MR. MILLS: Very good. Thank you all very much.