DR. KIM: It's a pleasure to be back in Korea. This is my third visit as President of the World Bank Group and one of the important purposes of my visit is to discuss the World Bank Group Korea partnership in education. Just before coming here I gave a speech at the symposium on innovation and Korean education for a creative economy, co-hosted by the World Bank Group and the Korean Education Development Institute. I also met with President Park to briefly discuss the role of education in realising the vision of a creative economy. I know that Korea has prioritised policies for a creative economy, and there's no doubt that education plays a critical role in building skills that feed such an approach.
In my speech this morning I pointed out that Korea's education system does an excellent job developing students' cognitive skills as well as certain non-cognitive skills like conscientiousness and grit. Korea actually does well on the innovation front. The problem however is that within Korea's education system, this skilled development process comes at a heavy cost. For example, students endure a substantial psychological burden from competition and long hours of work. Korean society's value preference for cognitive skills may also result in young people foregoing opportunities to develop non-cognitive or technical skills. Their families also bear heavy financial and personal costs because Korea's demanding university admissions process has spawned widespread private tutoring and substantial parent involvement in educational activities.
Since last year, the World Bank Group has worked closely with the Korean Educational Development Institute and six other think tanks to [evaluate] ways to promote a creative and innovative Korean economy through new approaches to education and the labour force. I'd like to say that the World Bank Group is grateful to Korea for planning to contribute $5 million to the Global Partnership for Education to help countries educate children. The decision I believe is based on the belief that Korea's incredible economic success is largely attributable to prioritising and investing in education and also on the belief that education is the most powerful weapon for changing the world.
I'd also like to touch on one last topic. Ebola. I'd like to thank Korea for committing to send about 20 military and civilian medical personnel to West Africa in the coming weeks to help contain the outbreak and for its pledge to contribute $5.6 million to the response. I'd also like to thank China for its contribution in sending many medical responders to these countries as well as Japan for sending personal protective equipment. But many countries in Asia that could help simply are not, especially when it comes to sending health workers. I call on countries across Asia to offer trained health workers now to help stop Ebola at its source. Focusing only on border control is not the right response. The world needs to put the fire out at its source because if it doesn't, Ebola could spread to any country, including those here in Asia.
Asia has a wealth of medical personnel who could be among the heroes needed now on the front lines. After the Philippines typhoon, more than 150 medical teams, each with 25 people and most of them from Asia, responded. Today, 11 months into the Ebola crisis, just 30 medical teams from around the world have gone to Guinea, Liberia and Sierra Leone. So again, I call on leaders across Asia to send their trained health professionals to the three West African countries. We can defeat Ebola but only if we fight the outbreak at its source.
Thank you and now I open to questions.
JOHN DONNELLY: Thank you. So please identify yourself and your outlets. Right here?
KTV: You are putting a lot of efforts into fighting Ebola. The Korean government has decided to send a medical team comprising civilian volunteers and military medics to Ebola-hit West African countries. How do you assess Korea’s response so far and what incentives can be provided by the international community to encourage more countries to participate?
DR. KIM: Let me just emphasise again that in order to understand the appropriate response to Ebola, you have to understand the virus and the medical aspects of the disease. There is no way to stop the Ebola outbreak without stopping it at its source. Right now, the epidemic is still not under control in any of the countries. The numbers seem better in Liberia, but that doesn't mean that we have it under control. We do not. Many countries are responding by simply trying to close its borders but that's not - that does not work in terms of just the medical dynamics of the virus itself.
So Korea's approach, which is to focus on trying to help the three countries identify and stop the virus at its source is the right approach. Now we need many, many more health workers. We know that we need thousands of health workers and we're going to need them over the next six months to a year.
Now the fight against Ebola is not over until each of those three countries go to zero in the cases. That will take a very long and difficult effort and if we don't get to zero, there is a very good possibility that Ebola will surge again with much higher numbers. So I know that there's a discussion but we have to [inaudible]. We have to take heed of the science. The science suggests that closing your borders only is like - for example, if you were in a burning house and you were in a room in a burning house and you saw smoke coming under the door, if you just put wet towels under the door, that might help for a while but you have to put the fire out. I'm very encouraged that Korea, even though it's very far away from the epidemic right now, that it's committing both personnel and money.
MAEIL ECON. DAILY: You gave a speech in the morning about nurturing creative talents. Although education played in big part in Korea’s remarkable economic growth, students suffer from excessive competition and parents often have to bear huge financial burden for private tutoring. How should we go about fixing the problem?
DR. KIM: Let me first of all start by saying that one of the most important outcomes of the research was our conclusion that Korea has one of the best education systems in the world. Not only do they do well on tests of cognitive ability, but they do extremely well on tests of creativity. What we were pointing out, that competition itself is not the problem. One of the problems are that there is a very high psychological cost for the students going through. I pointed out that in one survey, Koreans were the most unhappy students in the entire world. So there is a psychological cost.
Also, with the intense desire to get better tutoring, some of the socioeconomic inequalities get played out. In other words, those who can afford expensive tutoring, get children do better. So this builds in a kind of inequality that we think could be very damaging in the long run.
So the things that could improve the system we think are (1) finding ways to reduce the psychological burden on students. That may be related to changing the way that students are pushed to study, reducing the overall number of hours, reducing the demands on tutoring. There are many different approaches and I think we weren't making any specific recommendations but we'll continue to work with KEDI in trying to come up with possible solutions for the psychological impact. Also, equalising access to tutoring would be one way of lessening the inequality in access to good outcomes.
I think one of the really exciting possibilities though is to change the way college admissions is handled so that it's not just test scores but lots of other capabilities and also, there's - in the United States for example and many European countries, there's a much greater diversity of the different topics that students can study, so that students can find success and great passion not just in the traditional disciplines, but in the disciplines that are much more diverse, much wider and can I think excite a much broader range of students.
So there are many small things that can be done. We want to emphasise that the Korean education system right now is having great success. Not just in test scores but also in creativity, and we also think that the Korean educational system helps to build determination, discipline, grit, into young people. So there's a lot of great things to keep, but also modifications to make. We're not making specific suggestions on modifications but we encourage this discussion and we'll continue to work with KEDI to come up with some good ideas that maybe could be experimented with and piloted.
JOHN DONNELLY: Okay, another question?
QUESTION: How do you think the US Fed’s ending of quantitative easing will affect the Korean economy? The Bank of Korea has already cut its benchmark interest rate twice in the past three months. What’s your opinion on that?
DR. KIM: So, the good news is that we think that the Korean economy will grow at around four per cent this year. So compared with other OECD countries, this is very healthy robust growth. Now overall, we think that this will be another disappointing year for the global economy, but there are some bright spots.
So I know that many developing countries are worried about the tapering of quantitative easing measures in the United States. But we have to understand that the reason that bond buying is going down by the Fed is because the US economy is getting better. Because the US Fed has announced, well ahead of time, what it's going to do, that it's given lots of warning about the fact that it's going to bring down the bond buying program, it has given enough time for countries to adjust. So the good news is that the United States economy is growing, and growing in a way that looks sustainable, at least currently.
Now, in terms of the rest of the economy, of course, Europe overall will grow at less than one per cent and there are still a lot of questions. I think there is greater stability in Southern Europe, Greece, Italy, the countries that we were most worried about. But, now difficult decisions are being made. On the one hand, fiscal consolidation is still required. On the other hand, these countries need to grow their economies, so lots of different discussions are being held. Mario Draghi and the European Central Bank are looking for different ways that they can stimulate the economy to go beyond what they've done before, and including bond buying. So the European economy of course will be another - one more - and there will be another year of disappointment.
But developing countries as a whole will grow, and the good news is that Asia will be responsible for about 40 per cent of all the growth next year. East Asia will do better than just about any other region. Also, East Asia will be responsible for about a third of all trade next year, so the outlook is strongest for East Asia.
Now, in terms of specific policies, monetary policies, I won't comment. But I think what you're seeing, especially with Japan's announcement of accelerated bond purchasing program, I think you're still seeing that countries, central banks especially, are still worried about tepid and disappointing growth. They're doing everything they can to stimulate the economy to get back to growth. Japan has been very clear, they will continue to stimulate the economy until they reach two per cent inflation rate, and they worry most about deflation, which they suffered from for two decades.
I - right now, we're living in a time where people are instituting policies that we've never seen before. This level of quantitative easing throughout the world is something we've never seen before. But also, I think the complexity of the economy and the severity of the downturn from 2008 to 2013 has required innovative approaches to stimulate the economy.
I think that overall there's very good news for Korea. I also think that it's very good news that the President of Korea, despite the fact that Korea has one of the best education systems in the world, is still thinking about how to improve education. Because we believe that improved educational outcomes are critical for spurring medium and long-term growth. The focus of the meeting I've been attending, and the meeting that I'll be attending tomorrow, is really on how to create more innovation, more entrepreneurship and innovation-led growth in the Korean economy. Those are all the right things to be thinking about.
XINHUA NEWS: Hello, I'm from China's Xinhua News Agency, and my question is also about Ebola. You just mentioned that the Ebola epidemic is still not under control, so I was wondering, what kind of future impact will the Ebola epidemic have on the world economy, in your opinion? Could you please introduce World Bank's future plan on fighting against Ebola? The third question is, are you considering establishing a long lasting or sustainable system to fight against other epidemics such as Ebola? Thank you.
DR. KIM: Thank you. Our original estimate is that, in just West Africa alone, the cost of the epidemic could be as high as $33 billion, just in the region. We still have a long way to go in order to get the epidemic under control. Cases are still growing quickly in Sierra Leone and Guinea, it seems to be slowing down in Liberia. But what we've seen with even single cases in the United States, is that even a single cases in the United States, it had a significant economic impact. Airline stock has dropped, interest in tourism in those areas has slowed down. So unless we get the epidemic under control, the impact could be enormous.
The thing I worry most about is if the virus were to spread to other developing countries. If it were to begin spreading to other developing countries, especially to urban areas, I think we'd be talking about a completely different level of concern. Again, the answer to this epidemic in human terms, in public health terms, and in economic terms is the same. The answer is to send as many health workers as we can to those three countries and stop the epidemic.
If, as a medical doctor, as an infectious disease physician, I can tell you that we feel that if cases are caught early and intensive therapy can be provided, the survival rate from Ebola can be very high. So that the most important task is to get this high level of clinical services, this very strong ability to detect cases, prevent new infections, and treat cases, is critical to do in those three countries.
Now, if you look back and say, why did it take us so long to respond? Part of it was because we did not have a fund that could rapidly disperse literally billions of dollars to fight the epidemic. So we're now, at the World Bank Group, working with the IMF, working with United Nations, with other multilateral development banks, to create what we're calling an epidemic or pandemic emergency fund that will be like an insurance plan. In other words, we will prepare many billions of dollars to be dispersed immediately, but only if there is an epidemic outbreak. We've talked with many ministers of finance and central bank governors and ministers of health, and we all agree that something like this will be critical.
So we're going to be - we're actually working on it right now with our colleagues and partners, and we hope to be able to present some ideas very, very soon. This would be a large fund, many billions of dollars, that would only exist and only come into existence if there was an outbreak. We would borrow money on global markets at very low rates, disperse this money to fund the epidemic response, build epidemic response teams from all over the world, and in the future, get these epidemics under control early.
The vast majority of the economic impact from outbreaks is not usually due to the virus itself, but due to fear around the virus. For example, if we had been able to immediately begin attacking the virus in January 2014 when it really first became an issue, we could have avoided all of this impact, both in terms of human lives and impact on the economy. We intend to build that kind of mechanism as soon as possible, so that we can protect not only human beings, but the global economy from these kinds of unexpected downside risks.
JOHN DONNELLY: Time for one more question, okay?
JOONGANG DAILY: Hello, Mr President, this is Soo-hyun Song from JoongAng Daily. As far as we know, the South Korean government is currently formulating a contingency plan for unification of the two Koreas, and it is estimating that there would be significant confusion and problems in the South Korean economy, including a huge number of jobless North Koreans, when the two economies are integrated. So my first question is, how can you advise the South Korean government in devising its contingency plan, and what is the most important factor that should be considered by the South Korean government? My second question is, is the World Bank also working with the Korean government to complete the plan? Thank you.
DR. KIM: Thank you for your question. As an organisation, we do not have a relationship with North Korea, North Korea is not a member of the World Bank Group. So I really can't comment specifically on North Korea, because we simply don't have the data and the information to comment.
I think if you look around the world, though, there are a lot of very interesting experiences that might be useful. For example, in Myanmar, a country that was quite isolated from the global community for a long time, when they opened themselves up, when they undertook reforms, that opened themselves up to the global community and they became part of the IMF and the World Bank, we were able to move very quickly in providing support for everything from improving cellular telephone service, to supporting their health and education systems, to reforming government structures to be more open to foreign direct investment for private sector growth. I think that's a very interesting model to consider, going forward.
Again, I'm also not an expert on reunification, so I wouldn't provide any direct feedback. We're not right now directly involved with the South Korean - with the Republic of Korea in talking about specific reforms or paths forward. But I think the Myanmar example is a good one. I think there have been other countries, as well, who joined the World Bank. I would also think that if there were opportunities, that there would be many governments who would support the efforts of multilateral development banks in supporting North Korea prior to full reunification.
Our experience in Myanmar teaches us that it makes sense for countries to open up, it makes sense for countries to engage with the global community, and that there are many benefits that can arise from working with institutions like the World Bank, the Asian Development Bank, and other multilateral development banks. We have a tremendous amount of experience in precisely the development activities that would be needed, I think, in a place like North Korea. Thank you very much.