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Speeches & Transcripts October 30, 2020

Remarks by Axel van Trotsenburg, World Bank Managing Director, Operations at the 95th Foundation Training Programme at Lal Bahadur Shastri National Academy of Administration

Good morning to all of you.

I am very happy to be here.  It was this time last year that David Malpass addressed all of you and talked about “Strengthening Indian Civil Service towards Efficient Service Delivery.”

David’s remarks focused on the shift from compliance to enable service delivery, partnerships with private sector and community organizations.

David noted that making India’s economic hopes a reality will require patience, persistence, and lots of energy from you and your colleagues.

Much has changed since David’s remarks last year - and likely the single biggest change has been the impact of the COVID-19 pandemic.

But many of the same challenges you faced last year, you likely face this year as well – how to be an effective, resilient, versatile, and adaptive civil service, one that can help your country respond to both the short-term needs and prepare for a better future. 

So, let me start with Impact of COVID

The COVID 19 pandemic has brought on the biggest global crisis we have faced in 80 years. 

Unlike the financial crisis of 2008, this one is truly a global shock.  For example, the 2008 crisis impacted the G7 mainly – while countries such as  India and China continued with strong growth. The COVID crisis, in contrast, has forced governments world-wide to purposely slow down their economies to manage the pandemic.

As a result of the unprecedented sudden stop in global economic activity, the global economy is on track to contract by 5.2% this year — the deepest global recession since World War II, and the fourth deepest since 1870.

According to our forecasts, per capita income would contract in over 90% of the world’s economies in 2020, the highest rate since 1870.

And extreme poverty is expected to increase this year by an additional 115 million people.

In the longer term, the pandemic could have scarring effects on households, firms, and governments, leading to persistent behavioral changes that lower potential growth. The crisis threatens to set back decades of economic progress and poverty reduction.

And this concerns us very much, at the World Bank, and is one of the reasons we have been working so hard to support countries mitigate the economic, social, and health impacts of this crisis. 

Here in India, on top of existing development challenges, the COVID-19 pandemic has had significant consequences for lives, livelihoods and the broader economy.

Although India has made remarkable progress in reducing absolute poverty, the COVID-19 outbreak has likely reversed the course of poverty reduction.

Between 2011-12 and 2017, India's poverty rate is estimated to have declined from 20.3% to values ranging from a little over 8 percent to a little over 11 percent. Recent projections of GDP per capita growth rate indicate that, due to the pandemic the poverty rates in 2016 and 2020 will be in that upper range –  11.4 percent in 2016 and 11.1 percent in 2020. 

The pandemic has exacerbated the vulnerabilities for traditionally excluded groups, such as youth and women. It has hugely impacted jobs.

Micro, Small and Medium sized enterprises are considered to have been impacted the most from lockdown – and these MSMEs account for the largest non-farm employment (30%) with about 20% female participation.

The economic impacts also put at high risk the continued delivery and uptake of essential services such as education, health, nutrition, water and sanitation which are key in ensuring that India’s human capital gains are not compromised.

The government of India  has responded rapidly and comprehensively to the crisis with a package corresponding to about 10% of GDP, including:

  • A social protection scheme – the Pradhan Mantri Garib Kalyan Yojana (PMGKY), to protect the poor and vulnerable
  • Support to MSMEs to include Emergency Credit Line Guarantee Scheme
  • An Agriculture infrastructure fund - proposed financing facility to promote post-harvest management infrastructure and Micro-food enterprise.
  • And increased outlays to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) - a universal employment guarantee program.

We at the World Bank Group have been closely supporting the Government’s strategy, which consists of three phases.

  • In the first phase, the GoI tackled the health aspects, and partnered with the Bank for a $1 billion health project.
  • In the second phase, GoI invested $23 billion in social protection program to support the poor and vulnerable communities during the lockdown, and the Bank provided financing of $ 750 million. 
  • In the third phase, GoI focused on economic stabilization and reducing  the costs of the lockdown. This includes support to MSMEs and their workers during lockdown by committing about 1.5% of GDP to MSME finance. The Bank financing of $750 million is supporting this program. 

Taken together this three-pronged strategy aims at ensuring that tackling COVID-19 does not lead to a stark policy choice between lives and livelihoods, thereby forging an approach that seeks to protect both.

The Broader Implication of the pandemic

So what does this all mean for India, and for your role as civil servants?  COVID has brought about a different global paradigm where change is constant, faster and uncertain.   Financial shocks, climate change, pandemics – such shocks were there before but the frequency and globality of impact is higher.

The world needs to become resilient, adaptive and future ready - this is key for survival.

It is both a world of “black swans” (the unanticipated) and a “gray rhino” (obvious but ignored). You can only see black swans in the rearview mirror, but gray rhinos lie ahead in plain view through the windshield.

So how can India play its part in becoming more resilient and adaptive, and future ready?  Anticipating the black swans and paying attention to the gray rhinos?

Climate is one such area. 

  • India has set an example for the world in its commitments under the Paris Agreement, and its ambitious goals to develop 175 GW of renewable energy by 2022. 
  • The Bank is proud to be supporting this effort with over $1 billion in financing which will mobilize over $7 billion in private capital for solar PV markets across India. 
  • India is also embracing the future through e-mobility, and revolutionary new technologies for energy storage which will reduce its reliance on imported fossil fuels, and we’re proud to also be supporting India in this.

Another important way to get ready for the future is by investing in the civil service – and ensuring that you have the skills, commitment, and passion to lead your country forward.

And this brings me to the second part of my remarks – your Role

COVID-19 really heightened people’s awareness of the role of public service in our daily lives. Citizens and businesses realized that there are certain things only government can do. They saw government acting to protect public health.

Now they are equally focused on what government is doing to support economic recovery. This offers a window of opportunity to re-establish the public service brand.

India's public sector performance is critical to building back better from the impacts of COVID-19 and to achieve its growth and inclusion targets.

Demand for better public services and public sector performance will only grow as the economy recovers from COVID-19 impacts and the middle class returns to its pre-COVID trajectory. 

It will be critical to bridge the gap between the aspirations of citizens and the ability of governments and the public sector to meet these aspirations.

A competent, motivated and modern civil service will be necessary to achieve the Government of India’s priorities and aspirations. There is a well-established connection between institutional quality and economic growth. Strong and resilient public institutions underpin successful economic growth and development.

So, my challenge to all of you is how are you responding to this opportunity?  What should you be thinking of, doing, to change the way you work and deliver?

The notion that people are motivated to work in the public service as a result of altruism, a desire to serve, or a wish to have an impact on society is a long-standing one. You are to be congratulated for your choice.

How should a modern civil service approach today’s changing world and thrive in tomorrow’s disruptive environment?  I see four areas to focus on: resilience, versatility, sustainability and foresight:

Resilience: Do things differently:  Some new ways of working are simply stopgap solutions. But others can improve mission delivery moving forward. Because in some cases, doing things differently means doing things better. What we have to ask of ourselves: Does the solution improve mission delivery?

  • Examples from India: The National Disaster Management Agency (NDMA) – India’s FEMA – and the State Disaster Management Agencies have funding and protocols for dealing with physical disasters.
  • When Covid-19 struck, they had to adjust quickly to deem the pandemic as a “disaster” to allow release for disaster funds, ensure emergency supplies (e.g. oxygen), deploy security personnel, and help establish emergency protocols, including the guidelines for lockdowns, at the National, State and District levels.)

Versatility: Do different things: Push the boundaries of what government does to deliver the mission in new ways.  What we have to ask of ourselves: Does the solution provide a new way to deliver on the mission?

  • Examples from India (subsidizing electricity for farmers versus income support: cutting the Gordian Knot). In rural India where subsidized electricity for agricultural water pumping has resulted in inefficient energy and water use and disastrous impacts on groundwater, the Government is now piloting direct benefit transfer schemes for farmers which will result in energy savings, water savings and more productive agriculture.

Sustainability: Define the future: Can some of the solutions provide a springboard to the future and be made standard practice with the resources available and the policy and institutional environment? If not, do we need to reimagine the solution or reimagine the policy and institutional envelope?

  • Examples from India (the PM’s solar revolution) India has already shown its ability to shape the future of the world – the creation of the International Solar Alliance, and the Prime Minister’s vision of ‘One Sun, One Grid, One World’ – where India would buy and sell solar power to markets in the east and the west through an integrated regional power system are revolutionary steps. 

Foresight: Anticipate the future: The pandemic has highlighted the importance of foresight, which has been a hallmark of some agencies, particularly those tasked with fighting adversaries or responding to disasters. Does the government have the abilities to understand trends and uncertainties and analyze scenarios to build a bias toward action in the face of uncertainty?

  • One practical and critical area of investment for India is data systems that will support better and more evidence-based planning, monitoring and evaluation. 

Part Three:  Reimagining the Civil Service

You all have the opportunity to define the future. A key goal of the Government of India is to model new ways of working and new ways of delivering its mandate. To do this, the focus will be on renewing capacities and building new capabilities amongst civil servants.

To be future ready in this changing world requires both organizational shifts and individual shifts to commit to the future of India.

There is a strong correlation between organizational culture and business performance. Organizational culture needs to be stable but also able to adapt to the need for change.

A vision for the civil service cannot be achieved without significant change to how we work. To initiate this, we need to prioritize improvements in four main areas:

  • unified civil service
  • professional civil service
  • responsive civil service and
  • open and accountable civil service

These changes will require some reimagination. 

  • It will require collaboration internally
  • It will require collaboration externally -  with the private sector, with civil society and with academic organizations to foster innovation, deliver services and validate policy decisions. 
  • It will require moving away from the hierarchical model of bureaucracy focused on compliance and regulation to focus on developing solutions with people, not just for them.
  • And it will require positioning civil service organizations as agile, innovative, and learning organizations:

And of course, it goes without saying, governments and civil services need to innovate and embrace digital technologies: The greatest innovations are taking place using ICT’s.

So let me now conclude  --  India is changing. India is aspirational. India is on the cusp.

The Prime Minister last year noted India’s ambition to become a 5 trillion economy.  COVID has dented this trajectory in the short run but in the medium term the country will regain this path.

You are critical to the global progress on climate change and poverty eradication.  India needs to address its vulnerabilities become more resilient, strengthen its institutions and markets, while leveraging its amazing diversity. This will be key for India to move from low middle income to high middle-income country.

The role of civil servants to bring forward strengths of India and address the challenges in governance will be critical for India to realize its potential and ambitions.

I challenge you all to rise to this challenge.   Thank you and I look forward to any questions.