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Speeches & Transcripts March 30, 2022

Keynote Remarks by Mari Pangestu, Managing Director, Development Policy and Partnerships, at the World Government Summit 2022

Ladies and gentlemen, it is a great honor and pleasure to be with you today. We gather at a time when the world faces multiple interlinked crises – from COVID-19, to climate change, to conflict – when the urgency of the moment can make it difficult to envision a ‘new normal’.

The devastation caused by the war in Ukraine is likely to significantly erode near-term global economic prospects. This puts developing countries at risk of falling further behind, as COVID-19 recovery efforts had begun to falter.

At the World Bank Group, we are supporting developing countries that have been hit hardest to meet immediate needs. But as the opening remarks of this summit by His Excellency Muhammed Gergawi, Minister of Cabinet Affairs emphasized, the speed of change means governments must be able to keep up with the challenges. Governments and institutions must be fit for purpose and fit for the future to better prevent, prepare and respond to shocks as well as the challenges ahead. We must also look ahead, to take this opportunity to help achieve development that is more green, resilient and inclusive. Just now, World Bank Group President David Malpass provided an important component of such development through a just energy transition.

Today, I want to say a few words about institutions and governance systems, which are an essential part of this approach. The pandemic showed us very clearly that institutions matter, and good governance has always been the foundation for development.

Bangladesh provides a good example of how procurement reforms can help, even during a pandemic. Driven by a strong, sustained commitment by the government, they established an electronic government procurement system, enhanced transparency by making information publicly available. These procurement reforms resulted in annual savings of around $150 million – which the country can use to build over 1,500km of rural roads or 3,000 primary schools, while also enabling them to deliver timely and quality public works during the pandemic.

Having institutions and systems that anticipate change helped the UAE government,  which had introduced digital platforms for education many years ago. When the pandemic hit, they were able to pivot to online and hybrid learning easily so schooling could continue.

The time is ripe for a change in governance and institutions, to better enable us to tackle complex global challenges that can only be resolved through collective action. Let me outline three key areas for action that will help us move towards better governance and institutions:

First, we must enhance public trust. Our work shows that high levels of integrity, fairness and openness in institutions are strong predictors of people’s trust in government.

Government’s responsiveness and reliability in delivering public services and anticipating new needs is crucial for boosting trust in institutions. Working with partners and local communities can improve outreach efforts.  Rebuilding social contracts will also require governments to increase efficiency, transparency and accountability, as well as to manage corruption.  On the point of openness, leadership and clear communication to the public during the pandemic serves as an important lesson learned in building public trust.

Second, we must make greater use of technology and data for decision making. The pandemic accelerated digitization and showed us how data and technology can contribute to better governance – to inform decisions taken by governments, to monitor the implementation and impact of decisions taken, and to correct course as necessary. The pandemic also underscored the need to address the digital divide, so that citizens who lack digital access and skills are not left behind.  2.9 billion people still remain offline and 43% in the developing world are not using the internet.

Machine learning and artificial intelligence are revolutionizing what is possible. At the World Bank we are piloting AI based solutions for procurement and financial management, and data analytics to support government systems and monitor high-risk projects.  Governments can play an important role in fostering private sector participation in the public sector, and harnessing the innovations of tech companies around the world, while providing a trusted digital ecosystem and protecting users.

Third, we must build the institutions required for risk identification and crisis management. Every government needs to build out its capability of long-range risk forecasting to improve their capacity to deal with future crises. Critical decisions need to be made swiftly, as crises’ impacts may spread beyond national borders and trigger significant economic, social and environmental effects.

Governments have a significant role to play in strengthening the resilience of their populations, communities, and critical infrastructure networks and systems. Given the potential shocks that we are facing, this ranges from strengthening health and surveillance systems, macro-financial systems, adaptation and protecting natural resources. 

On climate related risks, the increased frequency of draughts, floods, cyclones and extreme temperatures can lead to large damages and affect food and human security, including in the MENA region. For instance in OECD and BRIC countries (Brazil, Russia, India, China) damages amount to nearly 1.5 trillion dollars over the last decade. New vulnerabilities and interconnections may further exacerbate economic impacts.

To tackle these challenges, we need a fundamental shift in risk management, and move towards a whole of society effort. This means considering all the actions that governments can take, at all levels of government, in collaboration with the private sector, academics, think-tanks, NGOs and individual citizens. This collaboration is indeed the theme of the Dubai Expo 2020 of connecting minds to create the future – our common future, so we can better assess, prevent, respond and recover from the effects of extreme events, as well as take measures to build resilience.

To summarize:

Resilient recovery and development is not possible in the “new normal”,  without

o   First, rebuilding trust in and increasing openness of governments,

o   Second, utilizing technology and

o   Third, improving risk management to build resilient government systems to better prevent, prepare and respond to crises.

This involves reimagining the government. That’s precisely why we launched the Future of Government Initiative at the World Bank, to help developing countries identify the various pathways for that transformation and to accompany them in the journey.

Moving forward in these three areas will enable us to navigate the challenges ahead towards achieving green, resilient and inclusive development which will improve the wellbeing of the people of developing countries.

Thank you.