DAVID THEIS, WORLD BANK GROUP SPOKESMAN: Good morning, everyone. Thanks for dialing in. Hope you're keeping well. I'm David Theis, the World Bank's Press Secretary. Welcome to this call with World Bank Group President, David Malpass, who is joined by our Vice President for Western Africa, Ousmane Diagana.
Mr. Malpass will give brief highlights of his remarks to open the call, and then we will turn to your questions. We may try to send a longer version of the remarks after the call.
It looks like folks are still coming in. Sorry. So, if I can ask everyone to please stay on mute and, when we open up for questions, please click the "raise hand" button at the bottom of the participant list. If you're on an Apple device, you'll have to click at the top. So, again, when we open up for questions, please click the "raise hand" button at the bottom of the participant list; or, if you're on an Apple device, click at the top.
If you want to listen in French, please click the translation tab at the bottom of the screen; and if you want to listen in English, of course, please click English.
We have several reporters on the line and we want to make sure to get to all of you, so, please, only one question per outlet. Thanks again for joining.
Mr. Malpass.
DAVID MALPASS, WORLD BANK GROUP PRESIDENT: Thank you very much, David. Let me make sure I'm not muted. I want to say good morning to everyone. I'm in Washington, D.C. right now, and you may be anywhere in the world in any time zone. I am pleased to be with so many of you from West and Central Africa; and also, with Ousmane Diagana, our Vice President for the Region. Some of you have interacted with him in the past.
I want to quickly go through several of our major undertakings. As you know, COVID-19 has taken a toll on lives and livelihoods and economies, so it's the highest priority in the various meetings and in our work. It's devastating the poor and the job losses are immense. And also, the reversals in education is a giant challenge.
Over the last ten years, the World Bank Group has invested over $200 billion in Sub-Saharan Africa and, as I announced on Tuesday at the summit in Paris, in just the next five years, we intend to invest and mobilize about $150 billion in Africa to support the continent's recovery. And a large portion of that is through grants and long-term zero interest rate loans from IDA, which provides a strong net-positive flow for Africa. We're working full speed on an ambitious IDA20 replenishment, to be concluded by December 2021, and that will be critical for the concessional financing and grants that the IDA countries in Africa need. That gives you the context for the funding support that we're doing both for the public sectors and the private sectors through IFC in Africa. It's an all-out effort by the World Bank to provide as much support as possible during the crisis.
One of the areas of our work has been on vaccines themselves. Since the outbreak of the crisis, we have invested more than $24 billion in Africa to support health and economic recovery. Our Board authorized $12 billion for the vaccination efforts. And as of today there have been 38 African countries that have requested support on vaccination efforts, and 18 of those from West and Central Africa. We have six projects already approved by the World Bank Board, that includes Cote d'Ivoire, The Gambia, Cabo Verde, and more are scheduled to be approved over the next few weeks, several weeks. And so, this effort is moving along fast from the World Bank standpoint, providing financing for countries to both purchase vaccines or receive vaccines from other intermediaries, and, importantly, to distribute those vaccines to people within their countries.
Unfortunately, the supply of vaccines has been limited. The delays are deepening. The inequality, the divide that's going on in the world and is a serious problem for fragility and for people's lives and livelihoods, and I've repeatedly urged countries that expect to have excess vaccine supplies to release their excess as soon as possible to developing countries that have delivery programs in place. This is a very important connection that needs to be made week-by-week now. We're at the crisis stage. We have been--of the COVID pandemic, and there has to be a matching between the countries that have access and the countries that have delivery programs that are ready to go. I've emphasized the need for transparency on that, because one of the big gaps is in knowing who has excess vaccines, which manufacturers have deliveries available, and which countries have programs that are ready to actually put shots, put jabs in people's arms.
So, in that spirit, the World Bank yesterday launched--we launched a comprehensive online portal that provides easy access to information. I tweeted about it this morning. I encourage everyone to click on the website and see how the vaccination programs are set up in each of the now 22 programs that we have in place, and it's going to mount week by week. We hope to reach 50 programs by midyear, which have clear documentation, clear explanation of the connection to the deliveries in countries.
This builds on the assessments that we did earlier in the year and late last year, 140 assessments of the capacity to actually deliver vaccines. This becomes the critical path in the vaccination effort for the countries that have excess vaccines to free up their options, their control, their export limitations so that the vaccines can go to developing countries that have programs and the World Bank has active, transparent programs that reach people’s arms, and they're available now and they're transparently disclosed on the website. And we encourage other intermediaries and other participants in the global vaccination effort to do the same in terms of transparency.
I want to turn to debt sustainability. It also has a very important transparency aspect to it. The contracts are burdened by collateralization, by non-disclosure clauses, and by restraints on comparable treatment as countries look to restructure their debt contracts. This is a major problem in West Africa. And as COVID-19 persists into 2021, the debt situation will certainly deteriorate further.
Comprehensive debt solutions, we think, involve four elements which we have proposed: One is debt suspension; then, there is debt reduction; there is the resolution of debt; and there's transparency, debt transparency. So, in all four areas, there needs to be much more progress. We supported the DSSI (Debt Service Suspension Initiative) but recognize that there was only partial--for many of the major creditors, there was only partial participation. And during 2020, and now into 2021, large profits are being withdrawn from Africa, even during the crisis, and there's no real prospect for cancellation of those debts.
One of the themes of the Paris Conference two days ago, on Tuesday, was the call by African heads of state for cancellation of debts, but that's not the direction that the world is moving at this point. A permanent solution is necessary for this overhang of debt stocks for countries that have unsustainable debt levels. World Bank is working closely with the IMF to try to implement the G-20 Common Framework for debt reduction. The success of that hinges on full participation by the private sector, and also improvements in debt transparency. The full private sector participation is an essential part of any path to lasting debt sustainability.
Let me give you some examples: It's not sufficient that Chad or Ethiopia, which have asked for Common Framework treatment--merely for them to seek comparable treatment from private creditors. The private creditors themselves must do their fair share and deliver debt relief in a timely manner and on fully comparable terms to official bilateral creditors. That process is underway, but it has moved very slowly and it means continuing burden of unsustainable debt on countries within Africa.
The private creditors need to recognize that a successful debt restructuring is a beneficial outcome for all parties involved. It brings relief to the people of the country, as we are trying to do in Chad, and it also benefits the private sector, because it limits their losses compared to a scenario of outright default. In the longer term, we want, the World Bank and the countries of Africa are working to try to have a stable and thriving economic growth prospect for the people of Africa and the business opportunities that are available there. But without the private creditors fully on board, the Common Framework won't be able to provide sustainable solutions for Chad, Ethiopia, or Zambia, the three countries that have asked for Common Framework treatment.
I wanted to go through that in some detail because we're at an important turning point in the Common Framework and we are urgently trying to implement it successfully so that we can have sustainability in debt. This builds on very strong World Bank financing, including to Chad. Over the next decade, the World Bank plans to put as much as $1.4 billion into Chad. This will strengthen Chad's ability to sustain a moderate debt burden, if that can be achieved. That's the overall goal, to bring Chad to a moderate debt level. But so far, the participation by creditors has been limited and we're working on that in detail.
I want to also mention, and I'm happy to take questions on these areas--but I want to mention climate change. This is a critical part of the World Bank efforts. We are working with countries to strengthen their capacity to absorb and adapt and transform their systems in response to climate change. We've announced the elements of our climate change action plan.
These include--and importantly, we want to integrate climate and development so it works for the people of the countries. We want to have actual results in terms of successful adaptation and successful mitigation efforts within the climate sphere. There needs to be electricity access, and so that means growth in the production of electricity, but in ways that are cleaner and that are lower carbon emitting as we go along. That's a major effort underway and the elements have been announced and we'll be releasing the plan itself and also participating actively in countries' Nationally Determined Contributions, the NDCs that are part of the Paris Agreement, as we, the World Bank, work to align our financing with the Paris Agreement. And we're also participating actively in the runup to COP26.
I wanted to mention also, and I'm sorry to be so brief on very important issues, the work that we're doing on Fragile, Conflict, and Violent states. Eleven of the 22 countries in the West Africa Region are now affected by FCV, and more than 70 percent of the population live in FCV countries. We're scaling up our financial aid to the G-5, the Sahel countries: Burkina Faso, Chad, Mali, Mauritania, and Niger through IDA to support the conflict prevention and also the resilience and emergency responses that are needed. Our aid to those five, we expect to reach $8.5 billion for the fiscal years 2021, 2022, and 2023. So, that is starting now for the next two or so--little more than two calendar years from now.
Let me conclude, very nice to be with you today. We know that the road to recovery will be a long one. The countries in the Region have applied lessons from previous crises, such as the Ebola outbreak in 2014. Many countries have strengthened their social safety nets to help protect the poor, and the World Bank is working actively--World Bank Group is working actively on those efforts and we think those are important preparations for future crises and the ability to get money to people during a crisis is a critical part of preparation.
And we want to also move faster on the key reforms that each of the countries is facing that will help draw in new investment. That gives you some description of the expanse of our work and I look forward to your questions.
Thanks.
MR. THEIS: Thanks very much. I see we have some questions in the queue already. Just as a reminder to attendees on the line that, if you do want to ask a question, you click the "raise hand" button at the bottom of the participant list, unless you're on an Apple device, in which case it will be at the top.
And I see our first question has come in from Obinna Chima from ThisDay Nigeria. Obinna, over to you, please, unmute.
MR. CHIMA: Thank you, thank you. Mr. President, thank you for this opportunity.
I would like to know, in 2020, Nigeria requested for a 3-billion-naira loan from the World Bank. We were able to get 1.5 billion. How soon are we expecting the balance of 1.5 and--or is there any change, delay, in the payment of that 1.5 billion? Thank you.
MR. MALPASS: Thanks. And I'm going to turn to Ousmane, as well, but I wanted to say one thing, which is Nigeria has huge potential. And with some of the improvements in the economic policies, the growth can be rapid for people across Nigeria. We've encouraged efforts that would reduce the subsidies for fossil fuels, that would encourage trade across borders, where Nigeria could be doing more in that area.
And very importantly, the multiple exchange rates has been a burden on the people of Nigeria, and we've encouraged the elimination of the official rates and the unification of rates so that money and investment and remittances can flow in and out of Nigeria with less friction. Our program remains strongly supportive of the people of Nigeria and of Nigeria.
Let me turn to Ousmane for some specifics on Nigeria.
OUSMANE DIAGANA, WORLD BANK VICE PRESIDENT FOR WEST AND CENTRAL AFRICA: Thank you very much, David.
As we speak, we have probably the largest portfolio of the World Bank in Nigeria. More than $12 billion. Those are programs under implementation covering a variety of sectors, access to electricity, water, education, health, agriculture.
Especially for this year, indeed, we have prepared a pipeline--we had a pipeline of a number of programs and we have delivered about $2 billion for Nigeria in order to help the population have access to critical services but also to support governments and institutions to provide some technical assistance to a variety of stakeholders.
The conversation of when [audio distortion] Nigeria continues around some of the critical reforms that I think Nigeria has been waiting for some time. And we have seen progress and producing the [audio distortion] will continue in Nigeria as a very important partner for the Bank and also the role that it plays in Africa clearly--we make any investment in Nigeria will have also some positive externalities for African countries.
Thank you.
MR. MALPASS: Yeah, can I underscore that last point of Ousmane's, as well, that throughout Africa, if one of the major economies can do well, it has very positive synergy with its neighbors, and that's one of our primary goals, to have successful economies that then bring synergy with neighbors, because that's a way that there can be massive progress in Africa.
MR. THEIS: Thank you.
Calling next, Nuno Ferreira. Nuno, go ahead, please.
MR. FERREIRA: Hello, good afternoon. I would like to ask you a question about the meeting in Paris earlier this week. The term "lost decade" was used by some political leaders. Do you believe that we are in danger of having a lost decade in Africa? And what can we do to avoid it, or what debt relief will have to do with the solution?
MR. MALPASS: Yeah, thank you. Well, COVID itself was a historically large setback, and it was particularly harmful for people--for the poorest and most vulnerable. And so, from that standpoint, we recognize that it will take years to claw back some of the losses.
I mentioned earlier the education system. By having the advanced economies close down, and then the education systems--often, schools closed--children weren't able to move forward, and that's a critical part of the future of every country, and especially in Africa with the youth.
So, we're working very hard to avoid a lost decade; I want to say that. And I think there are still pathways forward in order to avoid having all of the setbacks extend in Africa. I want to give some specifics on that.
One is from the vaccination effort. We have to get vaccination started in more countries, and that means getting the supply, and that means those countries with excess releasing the supply. And that means using programs that are ready, that are on the shelf, that are on websites, and fully disclosed as the World Bank programs are, to get vaccinations to people across their countries. That's a key starting point.
And then, I wanted to say a second vital area is on debt. Oftentimes, the term "lost decade" is applied to Latin America, and I worked throughout the 1980s on the Latin debt crisis. And we're trying hard to avoid the situation that occurred in that crisis where, year after year, the debts were rescheduled, they were pushed forward into the future, but never actually reduced. And so, the new investment couldn't come in because they realized that they were going to end up be used to pay previously contracted debt. There needs to be a mechanism for those countries in Africa that have unsustainable debt burdens, for them to have actual debt reduction, debt relief.
And that's what we're working on with--that's what we're trying to do with my call a year ago--over a year ago--was for a debt moratorium. The G-20 put forward the debt suspension initiative, which delayed the payments but kept the interest rates compounding on that debt. And now, we have the Common Framework, where it faces the obstacles from the debt being--much of the key debt being collateralized, being nondisclosed as far as the contracts, and these are obstacles to successful debt restructuring and raises the concern or the possibility of a lost decade; so, we're working on that.
And then third, and my final point, is on the economic advancements themselves. Many countries have key things that they could be doing in terms of digitalization, in terms of trade facilitation, in terms of unification of exchange rates, in terms of the business climate being improved, in terms of infrastructure, which is so vital. All of those things could be done more.
And I would like to cite Sudan. We are making progress in Sudan. And you know on Monday there was a major conference in Paris on the progress on Sudan. We were able to clear our arrears, then the African Development Bank's arrears. And now, the IMF's arrears are on track to being cleared. And that enables the international system to help Sudan. And then, in order to accomplish that, Sudan was taking very important steps to help itself through the unification of the exchange rate and other reforms that are really working.
I encourage each country to work to avoid the last decade that is still a risk for the continent.
MR. THEIS: Thank you.
I see our next question is from Abdou Diaw of Senegal. Abdou, over to you.
MR. DIAW: Hello, everyone. Thank you for the invitation. Just to add one question.
MR. THEIS: Go ahead.
MR. DIAW: [Through interpretation] During the summit, the President of Senegal, Macky Sall, asked developed countries to release their vaccines to other countries and to work with institutions such as the World Bank. What do you think of what Macky Sall said during the conference? Thank you.
MR. MALPASS: He and other leaders were very effective at the conference on Tuesday in expressing visions and goals. I know Senegal has been an integral part of finding solutions to problems and moving forward and is involved already in the vaccination effort.
Makhtar Diop, our Managing Director of the IFC, the World Bank private sector arm, was meeting with President Macky Sall on Tuesday. We're encouraged by the vaccination possibilities--the possibilities for vaccination supplies to be increased through production in Africa, of various components of the vaccines and various parts of the vaccination operations.
So, World Bank Group is encouraged by the progress and very engaged in the financing and operations that will help.
MR. THEIS: Excellent. Working on an honor system here, I see the next question comes from an iPhone. So, I'm simply going to presume that you're a reporter and go ahead, please. And if you could identify yourself and your outlet, please.
[Pause]
If not, we'll move on to the next question, which--go ahead, please, yes.
MR. RODNEY SIEH: Yeah, my name is Rodney Sieh. I'm Editor, FrontPage Africa, in Liberia.
Recently, the World Bank received--approved financing for Liberia in terms of increased access to sustainable roads and reliable energy projects. But most people are concerned about the fact that there aren't enough help for private sector investment. Is there any plan--are any plans for that for the World Bank?
And also, the issue of vaccines, Africa has a lot of issues with temperature and stuff. We are concerned people are not taking the vaccine because of the issues regarding whether the storage issues are being resolved. Are there any concerns that the World Bank will help in that area?
MR. MALPASS: Thanks. I'll give--briefly, and then I'll turn to Ousmane, as well.
On the private sector, we're strongly supporting the details of private sector development. That means trade finance, for example, which had fallen off the cliff as a result of the COVID-19 pandemic. IFC has doubled its support for trade finance. And then, also, small business finance is a critical part of it and also the overall business climate. So, I will turn to Ousmane on that.
And with regard to the vaccination effort, we are very aware of the individual constraints by various countries. I mentioned in my opening that we'd done assessments of 140 countries, including Liberia, as far as what the preparation is for various kinds of vaccines.
So, if you look at our website that just went up yesterday, it shows the project documents for various countries and it gives details about the needed support in various parts of the supply chain. We recognize that as important that the--that individual vaccines are provided to countries that can use different--countries will want different kinds of vaccines for their own situation.
For example, a country may want some vaccines that need deep cold storage for their urban areas; but then, may want a different vaccine for rural areas. That's comprehended--that's part of our programs and it's an important part of the delivery effort for the vaccination effort.
Let me turn to Ousmane.
MR. DIAGANA: Thank you very much, David.
Liberia, the Bank is one of the very few donor agencies very, very active in Liberia. Most in terms of our field presence, we have significantly increased our footprint in Liberia. We have today about 25 staff, composed of experts in variety of areas. But also, in terms of financial assistance, our portfolio in Liberia is more than $400 million. No later than yesterday, I have chaired a decision meeting on a vaccine project that will go to our Board before the end of fiscal year. We have prepared a new project on the electricity sector. And we have also a budget support operation going to the Board in middle of June.
Particularly very, very important for Liberia is the need to continue to push for reform that will allow the private sector to come in and to invest in a company [audio distortion] and indeed, the budget support operation that we have just prepared include a variety of reform area that certainly will improve the climate investment for Liberia.
Thank you.
MR. MALPASS: Can I add one point on that, and a reminder to people that many countries in Africa benefitted from the debt reduction effort, the HIPC, Highly Indebted Poor Country, effort that was done early in the 2000s, in Liberia included. Now, Sudan is moving toward the decision point. Somalia has benefited in the most recent.
But this effort, I want to underscore the importance of having a successful debt relief effort for the highly indebted--for countries that have unsustainable debt burdens. That was an important part of Africa's growth in the early part of this century, meaning in 2002 through 2008. Debt reduction provided the basis for new investment and for recovery, including in Liberia.
Thanks. David.
MR. THEIS: Thank you very much. The next question I see comes from a participant, 442-2600. Please identify yourself and your outlet and go ahead, please.
MR. TAO: [Through interpretation] Good morning.
INTERPRETER: The interpreter apologizes, but we cannot hear anything. There is an echo.
[Technical difficulties]
MR. THEIS: Sorry we have an echo on your line. We are not able to hear your question. I apologize. I can try and come back to you or you can send your question in the chat, please. But in the meantime, I'm going to turn to George Wiafe.
George, go ahead.
MR. WIAFE: Can you hear me, Mr. President?
MR. THEIS: Yes, George. Thank you.
MR. WIAFE: My question is, you talked about how the pandemic has escalated the debts of [audio distortion] Ghana. In the case of Ghana, what is the policy recommendation to help deal with our rising debt stock in terms of something that has gotten to threatening levels? Are there any proposed policy recommendations for Ghana to help deal with our rising debt stock going forward, sir?
MR. MALPASS: Yeah, thank you. One issue is to try to hold down the non-concessional debt that is being taken on, and non-concessional means higher interest rate debt, because that burdens the future generations.
Another important step is the transparency of both the debt that's taken on and the investment projects that might be funded by that debt. These are big challenges. Also, working closely with World Bank and IMF as we both look to have countries have sustainable debt burdens rather than unsustainable debt burdens.
Let me turn to Ousmane for more on Ghana.
[Pause]
MR. THEIS: Ousmane, are you coming in?
MR. DIAGANA: No, thank you very much, David.
Just to supplement what David has said, in fact, Ghana's geographical position and reform has proceed over the last couple of years. Of course, placed it in a very unique situation also in Africa.
I think we have a good dialogue with Ghanaian authorities. We are preparing a new Country Partnership Framework in Ghana with the new government put in place, and we are also using a very inclusive approach in order to make sure that the private sector and the civil society will be part of the dialogue that will lead to preparing of [audio distortion] a new strategy. It is clearly very critical to push in order to make sure that the depth of policy will be conceived for better investment and better results for Ghanaian population.
And also, I think the poverty reduction agenda in Ghana has made some progress. This also has to be also be sustained. I think the principle that David has already mentioned regarding how debt should be managed will be critical in that regard.
MR. MALPASS: And as we think about debt for countries, the world has seen a major reduction in interest rates, into zero or even negative for some of the borrowers; whereas, for some borrowers in Africa, the interest rates are still high. So, one of the questions to creditors and to potential lenders is, are there ways to have much lower interest rates for debt as it is rolled over in Africa.
The World Bank is working in particular to have concessional debt levels and also to have grants and zero interest rate loans through IDA, as sources of financing for countries, in general. And that's a high priority, to try to find light at the end of the tunnel so that the people of Africa are not constantly under the burden of unsustainable debt.
MR. THEIS: Thank you. I'm going to try the guest, 442-2600 one more time just to see if we can get rid of that echo. Please identify yourself and your outlet. Yes.
MR. ABDOULAYE: [Through interpretation] Good morning. It is Tao Abdoulaye from Burkina Faso, The Economist.
My question relates to the supply of vaccine for African countries. It seems that the Bank already had a plan to help African countries, but what did the Paris Summit change? Because we're talking about multilateral initiatives, so what about that? Thank you.
MR. MALPASS: Yeah, thank you. Well, there was clearly the recognition at the Paris meeting that vaccines were at the top of the list of concerns by the leaders of Africa.
One of the challenges has been to achieve more transparency in terms of what the manufacturers are able to produce, and what the constraints are on those manufacturers in terms of getting their product to developing countries. In many cases, this means the options that some governments have, even if they may have sufficient supply, they're retaining options which constrain the delivery of vaccines to the developing countries.
That clarity of transparency is what the World Bank is calling for today with the release of our website showing very clearly the documents and the documentation of our programs, and we encourage others, including the intermediaries, the manufacturers, and the countries that are controlling the manufacturing, to release more information about the constraints on that supply.
For Burkina Faso, I think the questions are, what contracts do they have to get vaccines; who is on the other side of that contract; were those contracts signed; and does the other side of the contractactually have the prospect of delivering vaccines to Burkina Faso? These are some of the unanswered questions in the international sphere.
World Bank Group has a massive effort underway to encourage the transparency of other parties within the vaccination effort to be more transparent in their available supply and in their commitments. How much have they committed to Burkina Faso? What are the delivery schedules that they envision?
Thank you.
MR. THEIS: Thank you. And we had a reporter, Alonso Soto, from Bloomberg, wasn't able to raise his hand but is next in the queue. Alonso, go ahead, please.
Alonso?
MR. SOTO: Yeah, can you guys hear me?
MR. THEIS: Yes, thank you.
MR. SOTO: Great. Mr. Malpass, you have talked a lot about Chad and about how key it is for private creditors to participate in the debt problems of that country, or the debt renegotiation.
I wanted to ask you if Glencore and the syndicate of lenders should have to renegotiate their oil-for-cash loan with Chad and take a haircut, if you think that is necessary, that is needed. And also, if Glencore and the syndicate of lenders should be included in the common framework talks in Chad.
MR. MALPASS: Short answer is, yes and yes.
So, by far, the biggest amount of reschedulable debt is with Glencore and very important to engage in that debt sustainability effort for Chad. And as I mentioned in my remarks, the World Bank continues to put large flows in--has been and will be putting large flows to the people of Chad. And so, there's benefit in the creditors working with the development community and with Chad, with the Government of Chad, on sustainable solutions.
Thank you.
MR. THEIS: Thank you.
Abdoulaye Tao, can you come in next?
MR. ABDOULAYE: [Through interpretation] I've already asked my question.
MR. THEIS: Oh, thank you very much.
Next, I think we have Thierno Camara from Guinea. Thierno.
MR. THIERNO CAMARA: [Through interpretation] Can you hear me?
MR. THEIS: We're trying to. Go ahead, Thierno.
[Technical difficulties]
MR. CAMARA: [Through interpretation] So, I was saying that I'd like to thank you for this opportunity to meet with you today and to give us all these details about your efforts.
I'd like to ask about the Guinean economy and it's becoming more resilient and we're improving our resiliency, despite the fact that we're having difficulty mobilizing resources and we have been able to increase our efforts over recent years to sign contracts for funding. But today, we are looking at issues such as the increasing cost of gas, which is another outcome related to COVID that are having an impact on our economy. And so, we're wondering what other efforts the Bank will making in terms of helping us with this.
Thank you.
MR. MALPASS: Okay. Thank you. I'm turning to Ousmane on this.
MR. THEIS: And Ousmane, I think you're in the French channel right now. If you could make sure that you switch to the English channel. They will interpret for you, but just please make sure that on the screen that you're on French--on English, excuse me. Thank you.
MR. DIAGANA: [Through interpretation] Let me answer the question from our friend in Guinea in French.
I think that Guinea has been making significant progress in the recent year, but there is still strong dependence on extractive resources, particularly in the mining sector, which means that unification of the economy, the Guinean economy, which is indispensable in order to consolidate progress in eradicating poverty. But it's also important to have a lot more investment so that the economy can create more jobs and this is also necessary to generate more revenue.
This is one of the most important things that has to be done. In Guinea, there's a huge potential in terms of electricity production and supply, but there's a disconnect, a very serious disconnect, and I think we need to make more efforts--and the World Bank is working on this--with Guinea. When I say "World Bank" I really mean the World Bank Group. The World Bank Group, IFC, and MIGA are working on a number of programs. We are having very good dialogue with the authorities to discuss partnerships that we can put into place to frame our future initiatives in terms of reforms and investments to help finance initiatives in Guinea from the World Bank Group.
Thank you.
MR. THEIS: Thank you. I see the next question in the chat, from Claude Plagbeto, of Benin: "The World Bank is now in the forefront of financing energy projects in West Africa; however, there is a strong trend toward the promotion of thermal power plants, with implications in terms of production costs and pollution. What is the World Bank's interpretation of this race for thermal energy, given its growing interest in climate change issues? Thank you."
MR. MALPASS: Yeah, thank you. That's a good question. Regions of the world need to think about where they're going to get electricity access, and do it in a way that has the lower carbon output.
And what has been happening, and this may be a reference from the questioner, is, as the demands go up rapidly, the fastest way is with techniques that are carbon-intensive, which is the opposite of where the world would like to go. The World Bank wants to work with countries on their long-term strategy, meaning, where will they get the growth in electricity access that they need? And what are the lower-carbon sources of energy that are available? This might be hydro; it might be natural gas; it might be improvements in the transmission grid that save electricity and allow more renewables to be brought on stream.
We have solar projects in many of the countries that are successful at bringing low-cost, clean energy to the countries, but they also need the expansion of baseload in the city areas. These are all parts of our climate change action plan that are important in moving this along.
One other thing that we mentioned in the elements of our Climate Change Action Plan is the importance of countries reducing the subsidies that they apply for fossil fuels. That often takes the form of subsidies to the electricity generation facilities that give them fossil fuel energy at a lower cost than the market cost or than the full cost to the world.
So, we're working on all of those through IDA, through IBRD, and also very much by trying to encourage countries to align their development practices--I mean, their development goals, which certainly include clean energy for the health--you know, in urban areas, they're clogged with the output, the emissions, from thermal plants.
Ousmane, more to add there?
MR. DIAGANA: [Through interpretation] No, David. I think you've covered everything on that point. Thank you. Thanks.
MR. THEIS: Thanks very much. Next question coming from Central African Republic, and I'll read it from the chat. We've got it translated from French:
"In addition to the health crisis that's led to a slowdown in growth, there is a security crisis with the involvement of several regional international actors, which has consequences for vital sectors of the economy. Under these conditions, how can the World Bank help the Central African Republic? Thank you."
MR. MALPASS: Yeah, yeah. This is a grave challenge. I mentioned in my opening remarks the G5, the challenge for the Sahel. And as we look at CAR, it and its neighbors face immense challenges from security issues.
As the World Bank, we strongly support development that creates jobs for people, a starting point for stability is jobs, and that's a major part of our efforts. Also, where there is fragility, we can meet some of the needs by improving food security issues. Those are important. And we can work with the governments to have stronger governance structures that improve the stability of the countries.
And I need to mention also vaccinations as an important part of the one-, two-, and three-year time horizon for trying to find economic growth and stability.
Ousmane, more on that or on the constraints?
MR. DIAGANA: [Through interpretation] Yes, thank you, David.
Perhaps I would just add that, in addition to the health crisis, which has been an endogenous shock, especially with the context of COVID-19 which has really aggravated other factors in countries such as CAR, such as the security issues. And so, we need to invest more to strengthen the health systems and, consequently, help build resiliency, and this is a priority for the Bank. So, we will be working on this with the Central African Republic.
Now, with respect to the security crisis itself, this is a consequence of inequalities and exclusion, which really creates a breeding ground for this type of activity. So, it's extremely important in this area, as well, to create initiatives in terms of reforms, but also investment that will be distributed equally geographically and that will also enable us to help correct some of the structural difficulties that we are seeing in countries such as CAR and the new strategy that we will be working on with Central African Republic will focus on putting into place milestones so that agreements that Central African authorities will sign with different international partners will actually be implemented to help CAR make progress. And the new financing that we will be providing for CAR will depend on the progress that is made in terms of achieving these milestones and indicators that will be decided by the authorities and with the international community.
Thank you.
MR. THEIS: Thank you very much.
And this will conclude our press conference for today. David or Ousmane, do you have any closing remarks before we end? Thank you.
MR. MALPASS: Thank you. Thanks everybody, for good questions. As you can see, we are very interested in the specific country progress that's being made. That's where a huge amount of World Bank efforts are underway.
I do want to say to--a little bit repetitive--vaccinations are very important and it's important to have programs in place and to have the contracting be transparent; we're working on that.
With regard to debt, it's important that we recognize that some countries have unsustainable debt. The G-20 has been very clear that it expects private sector creditors to participate, and that was the context of the discussion of Chad. That's part of the Common Framework.
And with regard to climate, and I was happy that the questions came up on climate, both adaptation and mitigation are very important for many of the IDA countries. The high priority is to be prepared for changes in climate as they occur, and we're working with countries on their plans for that.
To conclude, really, the World Bank Group is heavily engaged country-by-country in Africa in looking for progress at the country level, at the subregional level across borders, as a key part of the strategy or the future to provide jobs, to provide growth, to provide better living standards, access to electricity, to clean water, to health, to education, to vaccines, all of the things that are vital for people's lives.
Thank you very much for joining, today.
MR. THEIS: Thanks, everyone. And this concludes our press conference for today. Thank you all.
