World Bank Pres­i­dent Jim Yong Kim

Southasia - - CONTENTS - Ali Velshi: You're about 40 per­cent into your five-year term and you have been think­ing about this, fig­ur­ing out what the World Bank is in terms of its own struc­ture, and what it does in terms of the changes in the world. So, what is the role of the World

Dr. Kim: The World Bank is part of a mul­ti­lat­eral sys­tem that was cre­ated in the 1940s, and the great thing about it is that we have 188 Gover­nors. We have 188 mem­ber coun­tries. And so, all the prob­lems in the world, but also all the pos­si­bil­ity for col­lab­o­ra­tion in the world sort of hap­pens right in this build­ing and then out in the 140 coun­tries that we work in. This is an ef­fort of 188 of the gov­ern­ments in the world to come to­gether to try to see if we can help coun­tries to de­velop their economies, and that's pretty spe­cific th­ese days.

It's in­vest­ing in health, ed­u­ca­tion, roads, en­ergy, all the things that it takes for peo­ple to lift them­selves out of poverty, but also join the group of peo­ple who have ed­u­ca­tion and who have the global mid­dle class, if you will. We're fo­cused on pros­per­ity. We're fo­cused on a pros­per­ity that is shared by ev­ery­one, and we're very now fo­cused on lifting the bil­lion or so peo­ple liv­ing in ex­treme poverty out of that con­di­tion so that they can have those things that every­body in the world seems to want.

Somebody said, "No man can end

poverty un­less we kill pol­i­tics." Your view on that?

Dr. Kim: By our Con­sti­tu­tion, we are not sup­posed to be in­volved in pol­i­tics. So, maybe we are the right or­ga­ni­za­tion after all to tackle the end of poverty. I see a shift in the po­lit­i­cal realm, in the sense that I think many, many more politi­cians are aware that they can­not ig­nore the poor, they can­not ig­nore the poor­est. I was in Bo­livia and Pres­i­dent Eva Mo­rales said, "I want to meet you. I want to spend the day with you, but you're go­ing to have to go fly with me to 14,000 feet to play soc­cer." Lit­er­ally, he said this to me. So, I went there, we went to a lit­tle small com­mu­nity, and it was the last com­mu­nity in Bo­livia that spoke the orig­i­nal Bo­li­vian lan­guage, a com­mu­nity of about 4,000 peo­ple. It was in the mid­dle of nowhere. We took a he­li­copter, it was so iso­lated, and as we were land­ing they took pic­tures of us with their smart phones. He had put In­ter­net ac­cess - they didn't quite have 4G yet, but they were go­ing to get it. And in In­dia, I went to Ut­tar Pradesh - the poor­est state, and peo­ple were watch­ing Korean soap op­eras on their smart phones.

So, the fun­da­men­tal thing that's changed, and this is re­ally in the last 5 to 10 years, is the poor know how the rich live. The poor know what they are as­pir­ing to, and they're not go­ing to back down from this. They've got the smart phones. They know how to or­ga­nize now. I mean, to start a so­cial move­ment 30 years ago was in­cred­i­bly dif­fi­cult. You had to make posters and signs, and I'd done that, so I know how dif­fi­cult it was. Now, it's much, much eas­ier.

So, I think the fun­da­men­tal dif­fer­ence is that peo­ple know that the poor­est of the world are not go­ing to tol­er­ate their sit­u­a­tion. And so, the time is now to think about pos­i­tive ways of mov­ing in a di­rec­tion where we grow economies and we also, at the same time, in­crease the par­tic­i­pa­tion of ev­ery­one.

Dr. Kim: Well, first of all, China is a very im­por­tant client of the World Bank Group. China con­tin­ues to come back to us, work with us and, in­deed, take loans, be­cause they know that if they work with us we will do im­mac­u­late project prepa­ra­tion. We will do all

the an­a­lytic work be­fore we start in on a project and then we will do the anal­y­sis of what the im­pact was after we do the project. So, with China, we are almost a kind of part­ner that tack­les im­por­tant pi­lot projects. What we've no­ticed is that when China de­cides that some­thing is re­ally work­ing and worth­while, they will scale it up. But for us, we also have a huge stake in this, be­cause when we work with China, we learn things about how to do de­vel­op­ment that we then share with ev­ery­one in the world.

Over the last three or four G20 meet­ings, this is all we've talked about, how we can pos­si­bly de­velop sources of long-term fi­nanc­ing for in­fra­struc­ture. All of of­fi­cial de­vel­op­ment as­sis­tance, all of for­eign as­sis­tance is about 125 bil­lion a year, but if you look at the needs, Africa it­self has 100 bil­lion in in­fra­struc­ture needs. In­dia, over the next five years, a tril­lion in in­fra­struc­ture needs. The of­fi­cial de­vel­op­ment as­sis­tance money avail­able will never meet those needs.

And so, we need to then find a way of us pro­vid­ing that long-term fi­nanc­ing in some cases, but I think even more im­por­tantly one of the things we're talk­ing about is can we lever­age our dol­lars to crowd in pri­vate cap­i­tal so that we can put to­gether what we call the bank­able projects so that you look at them and think, "Okay, this is longterm fi­nance for some­place in Cen­tral Africa."

It's go­ing to have an im­pact on many coun­tries at once and, on the face of it doesn't look bank­able. We think that we at the World Bank Group, have so much ex­pe­ri­ence in mak­ing th­ese projects bank­able that we can cre­ate all new sets of part­ners who will be in­ter­ested in those kinds of projects, be­cause still it is nec­es­sary. This next ques­tion is from Shafiqur in In­dia, and it's meant to cre­ate trou­ble be­tween you and Chris­tine La­garde: "Is there any need for the IMF? What is spe­cial with the IMF which the World Bank can­not deal?"

Dr. Kim: A tril­lion dol­lars is the big­gest dif­fer­ence. Chris­tine and I have worked very, very closely to­gether. And their in­stru­ment is to help coun­tries with bal­ance of pay­ments, and that's crit­i­cally im­por­tant. The other thing that I'm es­pe­cially grate­ful for is that Chris­tine has re­ally pushed the bound­aries of the IMF. She started talk­ing about cli­mate change. Global eco­nomic sta­bil­ity will be af­fected by cli­mate change, that's why it makes per­fect sense and it took great courage for her to do that, but it's great that she's do­ing it. Chris­tine is talk­ing about in­equal­ity. And again, she's say­ing, "We're talk­ing about global eco­nomic sta­bil­ity."

So, I think there's a hugely im­por­tant role, there will con­tinue to be. They'll come in and they'll help (a coun­try) im­me­di­ately with a large pack­age and they'll help with just hav­ing ac­cess to cap­i­tal. We're go­ing to go in and work on things like health pro­grams, ed­u­ca­tion pro­grams and so­cial pro­tec­tion pro­grams. I think it's a very good one-two sort of punch, and we’ll never be as big as the IMF. An Ox­fam re­port says that the 85 rich­est peo­ple in the world have more wealth than the bot­tom 3.5 bil­lion. Those sound like out­ra­geous statis­tics. When you talk about in­equal­ity in in­come or in as­sets, it im­plies to those with the money that we're talk­ing about re­dis­tri­bu­tion of wealth. Is this a re­ally se­ri­ous is­sue?

Dr. Kim: One has to step back and one has to say, so, for the wealth­i­est peo­ple in the world, what kind of world do they want to see? Do they want to see a world in which the econ­omy is grow­ing and in which there are more con­sumers to buy their prod­ucts if they make prod­ucts? Do they want to see a world in which there is less con­flict? Do they want to see a world in which more peo­ple get to par­tic­i­pate? Or do they want to see a world in which the economies are shrink­ing, but they're

The poor­est of the world are not go­ing to tol­er­ate their sit­u­a­tion.

main­tain­ing their piece of it? Now, for the peo­ple who say, "We don't care if the econ­omy grows or shrinks, we just want to keep our piece of it." You know, I think we at the World Bank Group would say, fun­da­men­tally, we dis­agree with you. So, if the wealth­i­est peo­ple in the world want to see a world that's both grow­ing and also, at the same time, in­clud­ing more peo­ple, then I think we have a lot of ideas about what we need to do.

First of all, you need to invest. We need to fig­ure out a way to stop con­flicts be­fore they hap­pen. I've been work­ing very closely with the UN Sec­re­tary-Gen­eral, Ban Ki-moon. We've been trav­el­ing to­gether. We're try­ing to get to a point where we're say­ing se­cu­rity is­sues and de­vel­op­ment is­sues go hand in hand. And if we can be­gin de­vel­op­ment pro­grams early in the process of a con­flict, maybe that de­vel­op­ment, the pos­si­bil­ity of jobs, the pos­si­bil­ity of health care, ed­u­ca­tion will ac­tu­ally lessen the pos­si­bil­ity of fur­ther con­flict. We are try­ing to do that.

But then, we know things like in­vest­ing in health and ed­u­ca­tion of - es­pe­cially among the poor­est is the surest way to invest in peo­ple in a way that will grow the econ­omy. Th­ese are things that we now know. This is not an eth­i­cal or moral po­si­tion. I've been work­ing on this is­sue and ar­gu­ing that health care for the poor is a moral is­sue. Now, we have ev­i­dence and no less than Larry Sum­mers is telling us that in­vest­ing in ed­u­ca­tion is one of the best things you can do for eco­nomic growth. So, I would tell the rich­est peo­ple in the world this very mes­sage. Peo­ple like Bill Gates and War­ren Buf­fett - they're do­ing that right now. They're try­ing to put their riches to fo­cus on things like health and agri­cul­ture and ed­u­ca­tion and I think that's the right mes­sage. What are the top five driv­ers of in­equal­ity or poverty in the world?

Dr. Kim: I think still the most dev­as­tat­ing is con­flict. Con­flict is a huge driver of poverty. In­vest­ing in hu­man be­ings, this is re­ally a crit­i­cal as­pect of it. But then, at the end of the day, all those things, the in­vest­ments in in­fra­struc­ture and hu­man be­ings have to lead to growth. And so, you know, what are the ways for us to spur the kind of in­clu­sive growth, as we talk about it--and we're ask­ing that ques­tion right now: What have we learned that sug­gests to us that cer­tain kinds of in­vest­ments lead to more in­clu­sive growth ver­sus the growth of just par­tic­u­lar in­dus­tries or en­rich par­tic­u­lar in­di­vid­u­als? We're ask­ing our­selves that ques­tion right now and, as we go for­ward, we re­ally want to be the or­ga­ni­za­tion that is the cham­pion of those kinds of in­vest­ments that lead to a more in­clu­sive growth.


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