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Speeches & TranscriptsJanuary 24, 2024

Transcript of Remarks by Axel van Trotsenburg at the EU Sustainable Investment Forum 2024

It’s a pleasure to be here today at the European Sustainable Investment Forum.

We are here because we know that much more needs to be done - our development goals are badly off track. 

At the midterm review of the SDGS at UNGA in New York, it showed that only 15%  of the SDGs have been achieved. 

In terms of climate progress, we are also off track — and we are not achieving the goals we have set for ourselves. 

Even worse for developing countries, we are seeing that the decades of progress in reducing extreme poverty has been halted. It has even been reversed. There are now 100 million more people living in extreme poverty.

Our analysis shows that that if we do not deal effectively with the climate challenge, we will see even more extreme poverty, particularly in the fragile countries. 

And while we all try to do more, we realize this is not enough, and everybody needs to step up — bilaterals, multilateral organizations including the multilateral development banks.

We, at the World Bank, are part of this effort, and are doing a lot – but it will not be enough. 

  • We have redirected our support increasingly to Africa which accounts for half of our operations, 
  • We are also increasing our funding to climate change. We have about doubled our commitment over the last four years to now $39 billion.  That’s about 40% of our total commitments. In our next fiscal year we’d like to get to 45%
  • But the question is, is this enough - particularly when you act alone?

We have to act in concernt – because only in concert will we be successful.

The challenge for us as a multilateral development bank is: what can we do more and what can we do better? How can we be better coordinated? How can we act as a system so that we have actually a fighting chance to make a difference? 

And this is where the Reform process known as the Evolution Roadmap comes in. 

At the heart of it, is a change in our thinking about development, our objectives.  For a long time, our main objective was reducing poverty - that was captured in our ambitions and mission statement that our dream is a world free of poverty. 

We've since updated that mission statement to reflect a world free of poverty on a livable planet.  

Because if the planet is not livable - because of climate change or increasing fragility or health concerns - if we don’t address these global challenges, we will be hard pressed to make progress on poverty reduction.   

At the same time we have to avoid fragmenting our efforts in dealing with global challenges such as climate, fragility, digital. We have to realize that developing countries are at different stages of development and require a different approach – that is why, in some countries such as low-income, we need to keep a strong focus on the adaptation agenda.  As an organization we are keeping half of our climate commitments on adaptation.

So how do we translate these ambitions into action?

First we need to think about how we can get more resources - everybody's talking about more resources.  So the challenge from our membership has been how to mobilize internally and externally. 

What that means internally is looking at your own balance sheet. In the G20 context, the Capital Adequacy Framework put forth some recommendations on how to do more and subsequently, we have a whole set of new measures, including reducing the equity loan ratio that produced about $40 billion of additional financing over 10 years.  There are additional measures – as well, such as from guaranteed hybrid capital to generate more money. 

We cannot forget in this discussion the low-income countries.  If you’re looking at the latest DAC numbers, flows to Sub Saharan Africa are falling. 

So we need to stay committed, particularly to Africa - it’s a continent that is disproportionately affected by climate change, while actually only a very small contributor to the overall emissions in the world. 

And we need to stay focused - and for us that is through the vehicle of our funds for the poorest, which is called the  International Development Association - or IDA. That fund is replenished every three years.  Our last round we mobilized $93 billion. For IDA21, we want to be the most ambitious ever, reaching, hopefully well over $100 billion, but that will also depend on the donor generosity. 

(By the way, keep in mind, of these amounts, it does not all come from donors - about 1/4 of it comes from donors, the rest is mobilized internally and on the capital markets.) 

Second, we need to increase and deepen our partnerships. 

And here particularly (we need) the private sector — there is no alternative but to involve the private sector as aggressively as possible, because the financing from the public sectors will not be enough. We need to find new ways of cooperating. 

We work closely with our private sector arm - the IFC - and are also working through MIGA to see how we can expand the guarantee program.  We would like to massively step up that ambition. 

We also need to increase our internal efficiencies to be more focused on the global challenges as well as have also the strongest possible analytical base. 

The country Climate and Development reports are a good example - climate cannot be seen in isolation. It has to be seen in conjunction with development — if we don't do that, we have failed. 

So what are the challenges that we are facing together? 

First, let us remind ourselves multilateralism matters — whether that is coming from the European Commission or from multilateral development banks —  we will need strong multilateral cooperation. 

It is up to us to jointly fight that fight – we cannot do without. That also means that we need to see how we can cooperate much better.   We need to see how we can better work as a system.  We should be self-critical - there have been good examples of cooperation, but also examples where we are failing - and we need to change that and correct them. 

Second, we need to mobilize the private sector —  and not only have them engage in the middle income countries but also in the low income countries.  

And we need to continue to step up on climate action. That means that every institution needs to be as ambitious as possible, have stretch goals, and then engage and deliver.

Finally, we cannot leave the low-income countries and particularly the African countries out of our perspective, whether we are talking about climate change or development.  

That means we need to stay committed with concessional resources - and increase those resources - because these are good investments and it is our obligation to provide support. We cannot get there if we are resigned … we need to work together as hard as possible to make a difference!

Thank you very much.


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