World Bank Group President David Malpass and Sky News Ian King
Glasgow, United Kingdom
Ian King: Welcome back. Now it's been reported this morning that UK is to guarantee a $1 billion World Bank loan to India to develop green infrastructure. Prime Minister Boris Johnson is expected to make the announcement at the COP 26 climate summit in Glasgow, but wealthy nations are facing mounting pressure to deliver on a pledge made in 2009 to spend $100 billion a year to help developing nations make the transition. I’m joined now from Glasgow by David Malpass, President of the World Bank. David Malpass, very good morning to you. Nice to see you again. What progress is the World Bank making in terms of encouraging wealthier nations to support the transition in developing countries?
David Malpass: Good morning, Ian. It amounts to a lot of projects. How do you bring various funders into various types of projects? The India example you gave is a good one. We have a big program in India, and this will enable us to go larger in the program and we have a big climate program within India that includes adaptation, people getting prepared for changes in the climate, and work to begin the process of reducing greenhouse gas emissions in India. These are valuable interactions between the developed countries and the World Bank, and we can be in the middle talking with the governments and moving them toward projects that are impactful.
Ian King: And more broadly, what role is the World Bank playing in terms of supporting investments in clean energy projects?
David Malpass: Some of it is direct, but the World Bank is small compared to other countries. For example, you mentioned the $100 billion. The World Bank is shouldering fully a quarter of that burden - all the rest of the world [is] the other three quarters - that's a bigger share for the World Bank or a big enough share. That's what we can do within that mix. What we can do is bring together all the sources of funding - you need private foundations; you need to design the projects themselves in countries. This was mentioned at length by President Putin of Russia yesterday, a summation of projects around the world that are impactful. What I think is an important part of this step is to prioritize which projects you do. One very fruitful area is the leakage of methane pipelines. That’s a challenge for Russia. How do you reduce the methane because it has over 80 times as much impact on global warming as carbon dioxide and it's relatively inexpensive. Many of the leaks can be plugged and then you get an immediate positive impact in terms of greenhouse gas emissions. We can look around the world and try to find things that are the most impactful for the given dollars that can be invested.
Ian King: And to what extent are you making support from the World Bank contingent on nations giving up all polluting forms of energy such as coal?
David Malpass: The World Bank hasn’t made coal loans since 2012. It was one of the originators of that concept. As far as a condition, we're working with the countries on their NDCs. The countries have a relationship with the Paris Agreement on what they're going to do to set targets and reduce emissions. We work with them on that. We don't fund coal projects. One of the challenges for the world is how do you pay for things like an old coal mine that may be emitting emissions? Who does the clean up? How do you do the land repurposing for that? Who’s going to be funding that? That's going to take grants from, as I say, private foundations; also, from corporations that are interested in buying carbon offsets or in being associated with good projects for the climate. This is a big range. There are some 9000 coal fired electricity plants in the world. Of those there are some ultra-emitters, ones that really should be shut down and that would have a big impact. I come back to methane. One other that I'll mention is diesel. Around the world, as the grid breaks down in in some countries, if they don't have 24/7 electricity, the wealthier people and the corporations put in diesel generators. That's one high emitter that could be changed in a profitable way if you had a functioning grid with enough electricity in it.
Ian King: Interesting [that] you mentioned diesel there. I've just been told that the price of diesel per liter in this country has hit an all-time high of one pound 47.94 per liter. You've just published some information. Sorry, go on.
David Malpass: I was going to make the bigger point. Inflation is a real problem, and the World Bank is the voice for developing countries, and they're really hurting by inflation and the shortage of energy that's emerging and the supply chain bottlenecks. We now have this slowdown in the US and China at a time when much of the developing world didn't actually get much of a COVID recovery process going. This is a big challenge on the global macro stage for the winter, for the next six months.
Ian King: Now you were obviously at the G20 summit in Rome over the weekend where you warned that progress on restructuring the debts of developing nations has stalled. Why has that happened?
David Malpass: There really should be more focus on this. The low-income countries have a huge amount - $860 billion of debt. It rose by 12% last year, even though there were these G20 initiatives to work on the debt. I think we need to have much stronger and faster implementation of the Common Framework. That's the current process to try to provide debt relief for countries that are overindebted, that have unsustainable debts. Another thing that was discussed at the G20 is vaccines. I chair a vaccine task force with other multilateral leaders. The challenge is to get swaps of the early deliveries into November and December. The developing countries are desperately needing more vaccine doses and the diluents - it's what you add to the vaccines. Those are being constrained in the advanced economies. There need to be hundreds of millions of doses that aren't needed in the heavily vaccinated countries that can be made available to the developing countries right now in November and December.
Ian King: Now separately you’ve just published some research at the World Bank about the impact of climate change on Africa in particular, and you're suggesting 86 million Africans are going to embark on migrations in coming years Which are the countries most affected by that.
David Malpass: This can be the Sahel, which goes from the Atlantic all the way across the Red Sea and involves Niger and Burkina Faso and Chad and Sudan even. People are feeling the effects of climate change and of food insecurity. Then they migrate, they move to places that have more jobs or more opportunity for their children. It's a very difficult situation. I'll be speaking today here on the Great Green Wall. The World Bank is a primary funder of an effort to create better land use in the Sahel. That's one region that I'll point out. Sudan, we should mention, I was there three weeks ago, four weeks ago. It's in difficult circumstances today because the military has taken over and stopped the transition government. We've called for a restoration of the transition process in Sudan to a civilian government. There were demonstrations yesterday, and there are an increasing number of deaths during the protests, which is heartbreaking.
Ian King: How much of a problem is this potentially for Europe, though, if these people decide to try and leave Africa altogether?
David Malpass: It's a big problem. I spoke with President Erdogan in Rome at the G20. Turkey bears some of the brunt but Europe does as well and North Africa. It’s a combined problem for the world as a populous country breaks down. Ethiopia is in very difficult circumstances. It has some 100 million people, a large population that's also having huge pressures from insecurity, from leadership problems, from economic problems at the core. We need to do much better both on vaccines and on debt relief. Ethiopia is a candidate for debt relief, but the progress has stalled. We need private sector creditors to recognize that they have to participate in the debt relief for the low-income countries.
Ian King: David, before I let you go, I know it's a big ask here but briefly sum up for me if you would please. What is the one thing that you would most like to see coming out of COP26?
David Malpass: That's a big ask. I’ll be speaking on nature-based solutions. The big thing is for people to recognize that these are complex problems that involve finance. There needs to be funding of various maturities, and then projects that may last for years. They have to be implemented well to actually achieve the result. We also need adaptation. All three of those are complex problems that need to be thought through by the world and need to be balanced so that the poor don't bear the cost. We can't punish the poor in this effort.
Ian King: David Malpass. Appreciate you joining me this morning. Good to talk to you.