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Speeches & Transcripts January 22, 2021

Remarks by Axel van Trotsenburg, World Bank Managing Director, Operations at the Avenir Suisse Think Tank Summit 2021

Good Morning/Good Afternoon to everyone. It is a pleasure to be here today.  Many thanks to Avenir Suisse for providing this annual summit tackling one of the biggest development issues facing the world today, at a moment of great global instability.   

Today’s event on refugees is important.  The difficult situation facing refugees and their host communities has been further exacerbated by the COVID-19 crisis, and we need to think about what we can do to mitigate it.

To put things in context, we see over the last 20 years the number of fragile states increasing. We also see poverty increasingly concentrating in fragile countries.  Our estimates are that by 2030 about 2/3 of the extreme poor will be living in fragile and conflict situations.

Worst of all, we see today that forced displacements are at an all-time high.  According to the UNCHR, there are 80 million people forcibly displaced around the world due to conflict, including 26 million refugees.    

Most of the refugees – about 85 percent – are living in low and middle income countries and often do not have adequate support.

The COVID crisis that affects us all is affecting them, even worse.  We are concerned about the poverty situation. In our estimates, with the COVID crisis we see extreme poverty increasing for the first time in roughly two decades.  Our estimate shows that people living in extreme global poverty will increase between 88 and 115 million in 2020. Another 35 to 60 million people could be added this year.

We have embraced the fact that in the development community, we can no longer think in paradigms that separate development from security and humanitarian issues.

They are all linked. This has been much more integrated, including with much better coordination among the international and multilateral development institutions.  Even within the World Bank, we have gone a long way to integrate those vectors together.  We see that humanitarian crises often degenerate into acute development crises with huge effects on education standards, health standards, etc.

What needs to be done?

First, in my mind - action, action, action.  It is unfortunate that we don’t act enough; we need to do a lot more. We need to keep in mind that the plight of refugees is part of the Sustainable Development Goals.

Too often we see discussions about country developments, but which exclude refugees. This is completely unacceptable.  We need to keep in mind when we are looking at the Sustainable Development Goals (which the international community has signed on to), that outcomes are often worse among internally displaced people or refugees.

We are pleading for inclusion rather than exclusion; this is a work in progress and a lot more needs to be done. Before we can get to concrete measures, political will is needed to act decisively.  Here we need political will and solidarity – and at a much greater scale than what we are seeing today.

And that means we need to act at the national, bilateral, multilateral and private levels – a call for much greater coordination, cooperation and complementarity.  

On the multilateral scale, the World Bank is very closely cooperating with the UN system. Particularly we have a very close relationship with the UNHCR and with UNICEF. We are increasingly financing projects that are then executed by UNICEF and UNHCR, complementing each other by promoting action on the ground. We need more of this type of cooperation. We also have close cooperation with the World Food Program and with the Swiss-based organization ICRC.   We can provide added value, especially when we see each other’s strength and can leverage them to have better interventions. And we need more of this.

Secondly, we need finance.  Certainly, this is one of the key challenges. Over the last 15 years we’ve been scaling up enormously our engagement in the poorest countries. 

Just to give you a sense – in Africa alone, about 20-25 years ago, we would commit about $3.5 billion a year, now we are at $20 billion a year and increasing.  In IDA, the World Bank’s Fund for Poorest countries, we are dedicating an increasing share of our resources to fragile countries. It has now reached about 30 percent – in the last three years this was in the order of $22-24 billion.  We are expecting increasing amounts.

For refugees, we have dedicated (financing) windows that help both refugees and host communities. This provides about $2.2 billion in financial support, which is not in loans but grants. We see enormous scope to help countries that are in desperate need of support.

While the poorest countries get grants, an added challenge is support to the middle-income countries.  There the topic is more difficult.  Because with these countries, we are observing a much greater challenge to mobilize additional resources. 

We have seen challenges in the Middle East, with Syrian refugees.  This is why we created [with the UN, and the Islamic Development Bank] the Global Concessional Financing Facility, as a way to help middle income countries deal with this enormous challenge.

We have also extended this facility to Latin America when it came to the surge in refugees from Venezuela.  Relatively little support has been provided to this specific crisis, despite millions and millions having left the country. The fact is that Venezuelans who left their country due to dire circumstances are often not considered refugees. As a consequence, it’s difficult to access additional support measures. We need to think about it, because for all practical purposes, they are refugees.

What we are finding, in a crisis like with COVID, is that existing challenges are exacerbated, and our support and cooperation are needed more than ever.    

We are pleading for more inclusion of the refugee situation and therefore we welcome this seminar because it is important to draw the attention on this. But most of all, it requires action.  

The COVID crisis has shown that, while the whole world is affected, the low income and the fragile countries are impacted most and deserve more support.  The OECD countries need to stay engaged, including financially, so that these communities can receive support.

We are making this clear in our operations as we are scaling this up. For example, in the Sahel zone, we have been increasing over the last 6 years our support and have moved from $4 billion, and now we are at $6 billion and in the next 3 years, $8.5 billion. This is what is needed.

The entire international community needs to act because the needs are large. This topic needs to not only be center stage in the development debate, but also to spur action – and we need to act decisively and with solidarity.