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As Prepared for Delivery, IFC’s 14th Annual Global Private Equity Conference

2012-05-15T14:00:00.000Z

As Prepared for Delivery

IFC’s 14^th Annual Global Private Equity Conference:

Prevailing in a New Financial Landscape

Robert B. Zoellick

President, World Bank Group

Tuesday, May 15,2012

Introduction

It’s a great pleasure to join you today for IFC’s 14^th Annual Global Private Equity Conference in association with the Emerging Markets Private Equity Association, or EMPEA.

The story of this conference is emblematic of how the world economy has changed: Fourteen years ago, a small group met in the basement of IFC to discuss the prospect of private equity in developing countries.

Today, there are more than 800 people here, from nearly 60 countries: institutional investors; public and pension funds; private investors; endowments and family offices; senior investment professionals; chief investment officers, and directors from leading fund managers around the world, as well as representatives from development institutions and government agencies.

Plenary sessions and roundtable discussions cover a range of issues over three days – the global economic outlook and regulatory trends, of course – but also non-financial risks, infrastructure, SMEs, mezzanine…and intriguing markets beyond the BRICs to Turkey, Palestine, Africa, and frontier markets.

The success of this conference is in large part because of the enormous potential of emerging markets: over the past five years, developing countries have provided two-thirds of global growth.

This conference also reflects the terrific partnership between Lars Thunell and the Private Equity Funds group at IFC, and Sarah Alexander and her team at EMPEA. Together, they’ve made this conference one of the leading global forums for private equity. So I want to thank them for their hard work and their leadership.

I also want to thank an impressive set of participants: sponsors; panelists; speakers –and all of you.

Yet I want to add a special word of thanks for Lars.

When I came to the Bank in July 2007, it was a time of trouble.

Frankly, meeting Lars was like having a breath of fresh air: He was steady, sensible, constructive – clearly an excellent executive, committed to the private sector’s role in development, and doing interesting things.

Together, we came up with some innovative ventures both to help developing countries during tough times, and to move IFC even closer to the cutting edge of private sector development in these exciting markets.

He always offered good counsel, fine judgment, common sense, and friendship – for which I’m grateful.

Keeping the Focus on Growth and Structural Reform

Last month, at the Spring Meetings of the World Bank Group and IMF shareholders, much of the focus was – understandably – on macroeconomic stability.

This attention to the macroeconomic picture is necessary – but it’s not sufficient. Extraordinary monetary policies buy time – but they don’t solve the fundamental problems.

As my friend, Deputy Prime Minister and Finance Minister Tharman of Singapore said at our Spring Meetings, investors will accept short-term costs if they perceive good returns over time. All countries – developed and developing – need to focus on the structural reforms – the microeconomic policies – that will drive future growth.

Structural changes are essential to enhance productivity, competition, and innovation for developed and developing countries – whether it’s so that Europe can restore its economic performance, or China can avoid the so-called “middle income trap” and meet its challenges in the coming decades. Structural reforms are important for the United States, too.

In practical terms – and for investors like you – what does structural reform mean?

It means strengthening the fundamentals of productive supply-side growth in all sectors – agriculture, manufacturing, services.

It means investing in infrastructure – especially through public private partnerships.

It means private sector development – the engine of innovation and job growth: markets; investment; small and medium-sized businesses; as well as focusing on jobs training and skills.

It means expanding markets – through both the hardware and software of trade: regional integration; ports and infrastructure; lowering the costs of formal, informal, or logistics barriers.

At the same time, structural reform means investing in green growth and energy efficiency – because “growing dirty, cleaning up later” is not a viable option. Environmental degradation cannot be the price for short-term growth.

Structural reform also means investing in human capital:

- Efficient and affordable safety nets – because only 1 out of every 5 people in the poorest countries has any form of social protection;

- Basic financial services – because more than half the world’s poor, almost 2.4 billion people, are “unbanked”;

- Basic nutrition and health – because without these essentials, people cannot begin to achieve their potential; and

- Quality education, connected to training, which leads to better jobs, more innovation, and greater gains for all.

Investing in people means tapping the energies and genius of all: young people, the elderly, and not least girls and women – an under-realized source of growth everywhere.

Importance of Partnerships

You can play an important role in making all this happen.

Countries need private equity more than ever to push forward the structural agenda. But to be most effective, the right partnerships are critical – to seize opportunities, open up new markets, share market knowledge and learning.

We’ve seen this at the World Bank Group with IFC’s Asset Management Company, or AMC, which Lars and I created in 2010 to supplement IFC’s traditional model of raising money in bond markets and then investing it. The idea was for the AMC to tap sovereign wealth funds, pension funds, and other institutional investors that are looking to increase their exposure to emerging markets, and that are interested in accessing IFC’s transaction pipeline, investment approach, and track record of superior returns.

Now ably led by Gavin Wilson and a fine team, the AMC considers investments in spaces where IFC-supported private equity fund managers are not active, either because of the size of the investment or the riskiness of the sector. As the AMC makes profitable returns for its institutional investors, these investors are likely to feel more comfortable investing in smaller private equity funds and frontier markets.

The AMC now totals over $4 billion – almost $3 billion of which had little previous exposure to Africa and other less recognized emerging markets. Building on the success of its $1 billion African, Latin American, and Caribbean Fund, last year, the AMC established an African Capitalization Fund that invests in commercial banking institutions in northern and Sub-Saharan Africa. This Fund has already made investments in Ghana and Malawi.

AMC offers a great model for a win-win partnership between capital, experience, and expertise.

When I asked one pension fund manager what attracted him to AMC, he told me: We now know developed markets are risky, too; we see growth potential in developing markets – but we don’t know where to invest. IFC does. And we can learn through this partnership.

Opportunities: Doing Well and Doing Good

We have seen the positive impact private equity can have.

IFC has private equity investments of about $3 billion across 180 funds in emerging markets. We estimate that these investments alone have helped create about 300,000 new jobs over the last 10 years, many of them for women. We see much more potential for the future.

Private equity also increases the wealth – the savings – of pension funds and other institutional investors who assist many millions of savers, small and big.

Increasingly, institutional investors want their investment capital not only to do well, but to do good. Private equity can help companies grow, hire more workers, raise productivity. But at the same time, private equity can also be a powerful driver of change: raising standards; fostering growth; promoting new opportunities for businesses and individuals; helping to overcome poverty; bringing hope.

Let me give you some examples.

China Environment Fund

Tsing Capital’s China Environment Fund: Founded by Don Ye in 2000 to focus on clean tech investments, the Fund adopted a triple bottom line, balancing social, environmental, and financial returns.

At first, portfolio companies were resistant to the Fund’s focus and approach. After all, government regulations were weak. Investors would say, “We give you the money, and you give us a return. Why are you talking to us about welfare, child labor, the environment, and insurance?” Deal flow was slow for the first fund: it only raised $13 million from socially responsible investors.

Now, Tsing Capital’s investors are telling a different story. The company has become a market leader, generating three digit financial returns. The latest China Environmental Fund, in which IFC invested $20 million, had a target size of $350 million.

What’s the secret of Tsing Capital’s success? Certainly persistence on the part of Don and his team. But they also chose the right partners.

From the outset, Tsing Capital performed social and environmental risk screening on companies during due diligence before it invested. The company checked standards against national laws and regulations, but they also made thorough use of IFC’s performance standards which provide guidance on how to identify – and avoid – risks and impacts.

If Tsing Capital identified any excluded activity – potential deals were dropped. If they found risks, they were corrected. Tsing Capital worked hand-in-hand with companies to improve corporate governance and upgrade management capability and strategies.

Their hard work has paid off. Today, Tsing Capital is raising environmental and social standards across the industry, and transmitting those standards into multiple start-up companies. It has twice been honored as a corporate citizen in China, and Don Ye has been recognized by Business Week as one of China’s 40 most powerful people – alongside President Hu Jintao and Yao Ming of the Houston Rockets!

It’s a great success story. It shows how commercial concerns linked to environmental and social standards offer win-win opportunities. It demonstrates how private equity can be a powerful driver of growth and change.

Pragati India Fund

One of IFC’s recent investments, the Pragati India Fund, offers another good example of doing well and doing good.

The fund is a pioneering investment vehicle that will focus on economically under-developed states in India. These are areas where it has traditionally been a challenge to attract private investments – but where the changing political, social, and economic development dynamics offer new opportunities that are largely untapped. Sixty percent of Pragati’s investments target the country’s 8 poorest states.

IFC is investing up to $20 million in the new fund. The idea is to help Pragati provide growth capital to start-ups outside of major urban centers – adapting successful business concepts to small- and medium-sized enterprises in low-income states and rural regions. In India, small- and medium-sized businesses typically receive only 5 percent of all private equity capital, forcing them to rely on high-cost informal borrowing. The Pragati Fund is designed to fill that funding gap and support the development of India’s financial infrastructure.

As a co-investor, IFC can help increase the impact of the project – bringing not only capital but management expertise, which can help strengthen operations as well as environmental and social governance.

Just last month, Pragati India Fund made its first investment – in Jash Engineering Limited, a manufacturer of customized engineering goods for the water and waste water infrastructure sector. Jash is now expanding into manufacturing equipment for water treatment plants, and even generating clean power from residual water of the plants. The company is looking to move into municipalities across India.

With India’s government pushing for world class water treatment facilities, investing in a company like Jash offers real opportunities – to help these enterprises access finance, create jobs, promote inclusive growth, and contribute to cleaner, healthier water and energy for hundreds of thousands.

Supporting the Poorest

I hope more fund managers and investors will look for these types of opportunities – and look for them beyond BRICs and within frontier regions.

IFC is increasingly shifting its focus in this direction. Since 2007, over half the funds supported by IFC have been in the poorest countries supported by the World Bank’s International Development Association, or IDA. IFC's equity returns over the last 10 years in low-income countries, compared with IFC as a whole, provide a compelling case for investment.

Africa has been IFC's top performing region over the last 10 years, with a real rate of return of 25 percent compared to 18 percent for IFC worldwide.

Sub-Saharan Africa is also the region where IFC’s investments in private equity funds have grown the most, and where we have more private equity partners – a total of 38 – than anywhere else. In FY11, IFC committed new investments in 5 funds in Africa, and so far in FY12 we’ve invested $70 million in 3 funds.

We already have plans for 2 or 3 more funds this fiscal year – including 8 Miles Fund, a pan-African private equity fund backed by Bob Geldof.

8 Miles plans to make investments in growth areas across Africa such as agribusiness, consumer and retail health, telecommunications, banking and financial services. The target fund size is $450 million, with $15 to $40 million investments in 10 to 12 African companies with above-average potential for revenue growth and job creation. Investors partnering with IFC include the United Kingdom’s CDC, the African Development Bank, and Vital Capital Fund. J.P. Morgan will provide fund administration services.

Private equity is already changing the face of Africa – and funds such as 8 Miles recognize that there’s huge potential to do more. The fund’s name refers to the fact that, at their nearest points, Africa and Europe are only eight miles apart.

For much of Africa, however, the distance is far greater. Countries dealing with fragility and a history of conflict are home to the world’s poorest – the Bottom Billion, as Paul Collier pointed out in his 2007 book, though today, it’s more on the order of 1.5 billion.

In 2010, the World Bank focused on these countries in our World Development Report on Conflict, Development, and Security. One of the conclusions of that report was that private sector development is a key factor in infrastructure and logistics, local banking, service delivery, and job creation – to show early results as well as longer-term growth. Access to capital and finance is vital for putting these countries on the path to economic stability. But, of course, most fund managers aren’t ready to provide the risk capital and strategic advice that private equity provides.

That’s why IFC conceived of SME Ventures, an initiative to support local private equity fund managers and raise equity and advisory services funds in low income – and particularly post-conflict – countries. Today, we’re putting private equity to work is some of the most underdeveloped areas of the world.

Take Central Africa – a region rich in minerals, but with a history of fragility and instability. Private equity groups have traditionally focused on larger investments in the extractive industries. Yet it’s small- and medium-sized businesses that create the most jobs in any economy.

So two years ago, IFC committed up to $12.5 million to the Central Africa SME Fund. Managed by XSML, a Dutch SME fund manager, and Cenainvest, its partner based in Cameroon, the fund aims to mobilize a total of$25 million from other development finance institutions and the private sector. With offices and a team on the ground in the Democratic Republic of the Congo and the Central African Republic, the fund’s focus is on making investments and providing advisory services to the local business community, to help African entrepreneurs build sustainable businesses that create jobs and income.

The funds’ first investments in the DRC have been in a healthcare clinic, including new medical training for staff; a call center; and a food processing company for baby cereal, where the fund is also helping improve the company’s financial management and developing audited financial statements. In the Central African Republic, the fund is preparing to invest in an internet service provider.

The Central Africa SME Fund is also looking ahead. So, for example, it’s conducting a market study on fresh fruits for a fruit producer in Kinshasa, and helping prepare a business plan and financial projections for a cassava mill run by smallholders.

Through the SME Ventures initiative, IFC has also committed equity to funds for Liberia and Sierra Leone; Bangladesh; Nepal; and we are currently working on a fund for Bhutan.

And just last month, IFC made its first private equity investment in Haiti.

When Haiti was hit by a major earthquake in 2010, we knew that the Bank Group’s support to help the country recover, rebuild, and break its dependence on aid must include bringing in the private sector.

IFC has already committed five investments and significantly scaled up its advisory operations in Haiti. These projects are helping create 5,000 new jobs – as well as safeguard 5,000 existing jobs.

Now, IFC is committing up to $10 million to the Leopard Capital Haiti Fund to support small and medium-sized businesses.

With a team already on the ground in Port-au-Prince, the fund is raising $75 million in equity to invest in four main sectors: renewable energy; low- and medium-income housing; agribusiness; and hospitality. It’s also raising $4 million in donor money to provide technical and managerial assistance to companies that were thriving before the earthquake, but now want to upgrade their operational capacity and grow. At the same time, this Haiti Fund will work with its portfolio companies to enhance corporate governance, and environmental and social standards and practices.

It’s an exciting new partnership for IFC. Our Private Equity Funds team has already catalyzed an additional $10 million from investors – and will continue to support the Leopard Capital team in raising more.

We hope this will encourage more investors to invest in Haiti’s potential.

Importance of Openness

Over the past five years, I’ve seen this private equity conference grow in size, scale, and quality. I’ve also seen, from my discussion with our clients in developing countries around the world, just how important they consider the capital and expertise that private equity brings in helping their countries grow and raise standards.

Yet the role of private equity has come under increasing scrutiny and political focus in the developed world – not least here in the United States. For some, the very term is synonymous with corporate raiders, asset strippers, and secretive back room deals.

The private equity industry needs to respond to the demand for higher standards of openness, transparency, and integrity. Private Equity should be a major part of the new investment climate in emerging markets. It should increase overall investor confidence.

I recognize that some investment professionals aren’t used to being in the public eye. But you are now. And transparency is the best antidote to conspiracy theories.

At the World Bank Group, we can see the transformative power of openness. Our new information and knowledge-sharing initiatives may turn out to be the most important legacy of my tenure at the Bank Group.

Our Access to Information policy releases to the public vast numbers of documents about the Bank’s projects, analytic and advisory activities, and proceedings of the Board. It’s now viewed as the “gold standard” for financial institutions.

Our Open Data initiative has unlocked our world-class knowledge and development data. We now provide free access to more than 7,000 indicators, including GDP data and development statistics, meaning that anyone – from a PhD student, to an NGO, to a farmer, or even a private equity investor – can download our data, analyze it, and come up with solutions.

Our Mapping for Results website shares geo-spatial information on more than 2,500 Bank-funded projects.

Now we are beginning to work with communities to map their own infrastructure – clinics, wells and schools. The next step is to allow people to use hand-held devices to let the Bank know, from wherever there are in the world, what is really going on with our projects and investments.

These initiatives are making the World Bank Group more open, transparent, and accountable; helping us fight corruption and build better governance; and getting us ready for a new era of democratized development.

The investment community can benefit from greater openness as well.

Conclusion

I have always enjoyed taking part in this conference. I have spoken at it every year during my time at the World Bank Group.

I wanted to come here again, for the fifth time, because I am convinced that private equity investments can be one of the most powerful and important agents of change for developing countries: boosting local economies and creating jobs; improving governance and sustainability standards in private industry and capital markets; transforming thinking about growth; reducing poverty and creating hope.

That Change agenda is the core of our mission at the World Bank Group. It’s what we strive to do every day. It’s why private equity – and this conference – is important to me.

The success of this event demonstrates that I’m by no means alone in this conviction.

So I want to thank you again for joining us today. I hope your time at this conference opens new insights and creates new partnerships for all of you – and for the World Bank Group.

But most of all, I hope that it affirms your commitment to doing well and doing good – to using the power of private equity to support people in developing markets who want to create, build, and seize new opportunities.

That can be a lasting legacy for all of us.

Thank you.

Food Prices Rise Again on Higher Oil Prices and Adverse Weather

2012-04-25T14:00:00.000Z

Increases reverse downward trend that began in October 2011

WASHINGTON, April 25, 2012—Global food prices increased by 8 percent from December 2011 to March 2012 due to higher oil prices, adverse weather conditions, and Asia’s strong demand for food imports, according to the World Bank Group’s latest Food Price Watch.

The World Bank’s Global Food Price Index was only 1 percent below a year ago and 6 percent below the February 2011 historic peak. If the current forecasts for increased food production do not materialize, global food prices could reach higher levels, underscoring the need to remain very vigilant.

“After four months of consecutive price declines, food prices are on the rise again threatening the food security of millions of people,” said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM). “Putting food first must remain a priority for the international community and in our work in developing countries.”

According to the quarterly Food Price Watch report, prices of all key staples increased between last December and March of this year, except for rice, due to both abundant supply and strong competition among exporters. Maize prices increased by 9 percent, soybean oil by 7 percent, wheat by 6 percent, and sugar by 5 percent. Crude oil prices rose by 13 percent.

In addition, domestic food prices remain high, especially in Africa as the result of a combination of large food imports and local factors, such as trade restrictions between neighbors, hoarding, civil unrest, high fuel transportation costs and bad weather conditions.

In a global context, domestic food price increases have been larger than price declines across countries. Wheat prices from March 2011 to March 2012 rose 92 percent in Belarus, while the price of maize increased by 82 percent in Malawi, 80 percent in Ethiopia, and 71 percent in Mexico.

Production outlooks remain strong for 2012/13 and a number of factors have kept pressures on prices at bay. Record prices in late 2010 and early 2011 led to increased production of major crops worldwide, and are a key factor in the strong projections for the 2012/13 season. The slowdown in maize use for ethanol production in the U.S. and weak global demand due to the euro crisis are contributing to keeping upward price pressures on check.

How the World Bank Group (WBG) is helping to put food first

In response to drought in the Horn of Africa, the WBG is providing $1.8 billion to save lives, improve social protection, and foster economic recovery and drought resilience.
A first-of-its-kind risk management product, provided by the International Finance Corporation (IFC), will enable protection from volatile food prices for farmers, food producers, and consumers in developing countries.
The Global Food Crisis Response Program is helping 40 million people in 47 countries through $1.5 billion in support.
The WBG is boosting spending on agriculture to some $6 to $8 billion a year from $4 billion in 2008.
Supporting the Global Agriculture and Food Security Program (GAFSP), set up by the WBG in April 2010 at G20’s request. Seven countries and the Gates Foundation have pledged about $1.1 billion over 3 years, with $612 million received.
The WBG is coordinating with UN agencies through the High-Level Task Force on the Global Food Security Crisis and with non-governmental organizations.
Advocacy for more investment in agriculture research -- including through the Consultative Group on International Agriculture Research (CGIAR) – and monitoring agricultural trade to identify potential food shortages.
Supporting improved nutrition among vulnerable groups through community nutrition programs aimed at increasing use of health services and improving care giving. As part of its response to the food crisis, the Bank has supported the provision of some 2.3 million school meals every day to children in low income countries.
IFC will invest up to $1 billion in the Critical Commodities Finance Program, aimed to support trade in key agricultural and energy-related goods, to help reduce the risk of food and energy shortages, as well as improve food security for the world’s poorest.

Contacts:

In Washington: Alejandra Viveros, (202) 473-4306, aviveros@worldbank.org

Michael Christopher Jelenic, (202) 473-2075, mjelenic@worldbank.org

For Broadcast Requests: Mehreen Sheikh, (202) 458-7336, msheikh1@worldbank.org

To access Food Price Watch, please click here.

Q&A: Why are Food Prices on the Rise Again?

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Transcript: Development Committee Press Conference

2012-04-22T15:19:04.000Z

2012 Spring Meetings

April 21, 2012

MR. MILLS: Well, thank you very much for joining us for this closing press conference.

Our participants will each make an opening statement and then we'll take your questions.

If I can ask everyone to please turn off your mobile devices or put them to vibrate, we would appreciate it.

Chairman Belka.

MR. BELKA: Thank you. As we are late, I am not going to be very descriptive about the meeting of the Development Committee. You know the agenda. The discussion was very rich, centering around the social safety nets, the private sector involvement in growth initiatives, as well we discussed modernization of the World Bank.

However, one thing that is obvious, it took so long because all the delegates took the opportunity of this Development Committee meeting to express gratitude and admiration for the achievements of the outgoing President of the World Bank, Robert Zoellick. So, I give you the time to ask questions both to him and Christine Lagarde.

Please.

MR. MILLS: Very good, thank you.

President Zoellick.

MR. ZOELLICK: Okay. Well, I'd like to welcome Marek Belka as the new Chair of the Development Committee. I have great respect for what Poland has achieved over the past 20 years and also respect for Marek's service to his country and to Europe. So, I'm delighted that he can share his country's and his own experience with the Development Committee.

And I want to thank Christine for a fine stewardship of the IMF at what's clearly a critical time for the world economy.

The next meeting of the Development Committee will be in Japan with a new President: Jim Yong Kim. I'm sure he'll do a great job.

And I also want to extend my thanks to the members of the Development Committee.

I am pleased our shareholders have endorsed the World Bank Group's efforts to boost support for efficient and fiscally sound social safety nets, including conditional cash transfers, public works and school feeding.

At international meetings, we hear a lot about global financial safety nets, and we need to focus equal attention on the human safety net. As we know, there are dangers that, when institutions are too big to fail. But let's remember that beyond the talk of financial systems and of regulations and of firewalls, it's people who are too important to fail.

The shareholders also want us to continue to assist developing countries with multi-pronged approaches to deal with higher and volatile food prices.

I’m pleased our shareholders have support for the moves for more innovative and stronger partnership with middle-income countries – home to 70 percent of the world's poor.

A key element of this is the development of infrastructure to boost future growth, including through Public-Private partnerships.

Shareholders endorsed the Bank's knowledge agenda, whether it be on safety nets or global public goods or the South-South agenda.

The global recovery depends on proper incentives for private financing, and the World Bank Group has been a leader in developing public policies to encourage private sector innovation, investment, and job creation.

And our private sector arm, IFC, has done a particularly good job in innovative financing, technical assistance, investments, and mobilizing others.

At the end of the day, the best safety net is a job.

So, finally, I'm pleased that Ministers endorsed our modernization agenda with its focus on results and openness and accountability. They commended the work to date and called for the momentum to continue.

It's more vital than ever that support be continued to help developing countries to navigate the tricky road ahead.

So, I'd like to just close with a special word of thanks to the World Bank Group staff, including our talented and diverse Senior Management team. They're superb people who bring ideas and energy and commitment from around the world to our service to our clients and shareholders. It's been a privilege to serve with them and I wish them the very best.

Thank you.

MR. MILLS: Thank you.

Managing Director.

MS. LAGARDE: Thank you very much.

Very briefly, because this is late in the day and it's a day for Bob, not for me. I will just begin by saying how privileged I have been in the last nine months to work across the road from Bob and I thank him for the learning experience that this has been, including to this very last moment when he was congratulated and highly supported by his constituencies.

Just very briefly, what the IMF focuses on in terms of low-income countries, and in particular developing countries in general is, number one, making sure that we have the right tools and the right analysis specific to the low-income countries and this is something that we will continue to work on going forward, because the low-income countries are facing specific risks, if they have done reasonably well, including in the post-crisis period, much more so, actually, than the advanced economies. They have the share of risks, as well, and they have clearly the risk of the external shock coming out of the advanced economies in crisis. They have less room to maneuver because they have used much of the buffers that they had before entering into the crisis. They have less scope to use policies, and they have the longer-term challenges that Bob has been dealing with and addressing during his tenure in the last five years: Make inroads in reducing poverty, generating more inclusive growth, developing infrastructure, and all the rest of it.

Now, what are the priority actions for the IMF and the international community? It is moving forward on three priorities.

First of all, helping countries manage global uncertainty and volatility more effectively, and to do that we need to have the right tools. We will be this summer looking at all the tools that we use for low-income countries, making sure that they are rightly adjusted to very specific needs.

We also need to have the right resources on the right terms, that is, concessional terms, and we've received a boost to that effort this week, but more is going to be needed.

Second, we need to push the quality of growth. It needs to be inclusive, it needs to be associated with strong social safety nets, and it needs to be creating jobs and reducing poverty. This topic was discussed yesterday at the Rio+20 breakfast, as well.

And third, clearly, we need--and that's more of an internal matter, but it really means quite a lot to the low-income countries, as well. We need to push our governance reform at the IMF and make sure that the quota reform of 2010 and the governance reform actually delivers on the credibility of the institution, it's representativeness, so that it secures the voices of not only the low-income countries but more generally all countries appropriately in accordance with an appropriate share of the global economy.

So, those are the directions in which we are working to make sure that we serve our constituencies in that particular respect.

MR. MILLS: Thank you very much.

Yes, right here in the first row.

QUESTION: Thank you. Daniel Jiang with China's Xinhua News Agency.

I have a question for President Zoellick and one question for Madam Lagarde.

President Zoellick, what is your insight on the process of modernizing multilateralism in a multipolar world you propounded on several years ago, as well as evolving of the Bretton Woods system, and how can the Bank facilitate the process.

And for Madam Lagarde, what do you hope to achieve at the Tokyo meeting?

Thank you.

MR. ZOELLICK: Well, as for your question to me, I think the heart of it is to focus on clients and recognize that the diversity in the developing world requires customizing approaches, but increasingly, we're able to draw from across the developing world and bring experience and insight from some developing countries to other ones.

And as an institution, it's important that we recognize that good intentions are not sufficient. So, we have to be rigorous in focusing on results. We also have to be accountable, and to be accountable, it helps to be open.

So, I think one of the key aspects of the modernization agenda are the initiatives we've taken in terms of open information, open data, open research.

And the more we can expand that not only to the governments around the world but take it all away to communities with the use of different technologies that now enable us to engage social accountability.

And one of the initiatives that we took this week in starting an effort for a Global Partnership for Social Accountability, I think is a good example of that.

I think on the notion of customizing, one of the topics that came up in today's discussions was the key need for the Bank to continue to adjust to the special needs of middle-income countries. These are the countries where you still find 70 to 75 percent of those living under $2 a day. They have special challenges.

And as in the case of China, as you know, we made that adjustment by working with DRC and China on a report to examine the possibilities of future structural reforms as part of China's changing growth model.

In other countries, we'll use a combination of knowledge and financing. But I think that will be an ongoing dynamic for the institution.

MS. LAGARDE: All right. You asked me what are my expectations or my goals for the Tokyo Annual Meetings. I have four objectives.

The first one is to make sure that we have programs in place for some of the Arab transition countries.

Second objective is to enhance and tailor to low-income countries our surveillance tools.

Third is to get as close as possible, and if possible, the finishing light of the quota and governance reform.

And fourth, I want to replenish the Poverty Reduction and Growth coffers.

Thank you.

MR. MILLS: Yes, Sandrine.

QUESTION: Sandrine Rastello, Bloomberg.

Mr. Zoellick, I'd like to follow up on the comments you made about China and working together with China, especially in the light of the contribution that China just--or that we expect China to make for IMF resources. As you know, China has become a lender of its own in Africa. I was wondering whether we see the future of the World Bank lending alongside China, and because I don't think we've seen many cases or examples of that so far, and what it would take, especially in terms of safeguards for lending.

MR. ZOELLICK: So, Sandrine, you mean lending with China in third countries, or investing in third countries? Yes.

Well, I think you're going to see an increase of outward investment, not only from China, but if we're looking over the medium and long term from other emerging market economies. And that's an area where IFC, our private sector arm, is already working to develop partnerships.

I think there is also a key aspect in terms of the knowledge and experience transfer. Just to give you an interesting one, Indonesia was bringing some of its experience with community development after difficult situations to Haiti. So, this is much more than a Chinese issue.

Brazil--I was here this past week with the head of the Brazilian Development Bank and we're talking about cooperation with the African Development Bank and areas of agriculture development. So, I think it's much broader than the Chinese side.

I will say, though, that one other aspect that my colleague Justin Lin has encouraged, and I think has got very interesting prospects is that as China has a population that, over the next five years, there will be more people leaving the labor force than coming in. So, there's a need to move up the value chain, and that means increases in productivity that will warrant additional wages which warrants a higher living standard.

Justin estimated the share of about 85 million workers in low-wage manufacturing in China. In all of Africa, South and North, there's about 8 to 10 million.

So, some of those jobs--and one of the Party secretaries in Guangdong, Guang Yang has emphasized this. Some of these jobs are likely to move out of China.

Now, some of them will move elsewhere in Asia, Southeast Asia, but Justin actually visited a recent operation in Ethiopia where there are plans for substantial numbers, even by the end of this year and over a few years probably manufacturing employment of about 25,000, which would be the same as the number they have in China.

Now, to create this, we have to create an environment of ports and infrastructure and roads and energy and other things that China has had as part of its growth model.

So, one of the reasons that I've been so adamant about the need to connect with the middle-income countries is that not only do they face development challenges, but I don't want the Bank to be hollowed out. I think that those countries will be very important in the future of the Bank in helping a lot of the poorer countries, because you can already see with trade and investment and even foreign assistance flows.

As I noted in one of my recent remarks, last year, a conservative estimate of the traditional foreign assistance from new donors was about 15 billion. That's about 15 percent of the 100 billion that developed donors make.

For our IDA process, we not only got contributions but a number of developing countries, including China, prepaid their IDA credit. So, that's one reason we're able to get a record number of 49 billion.

So, there are huge opportunities. And what it just underscores is if you think about the issues that Christine was dealing with in terms of growth and macroeconomic stability, if you think about the Rio+20 issues and environment, frankly, it's going to be true in the security area, we want to draw more to bring these countries--not only China, but all the middle-income countries--as effective beneficiaries and contributors to the international multilateral system that the United States and Europe and Japan created in the first 20 years after World War II.

MR. MILLS: Thank you.

To the gentleman right over there, in the fourth row.

QUESTION: This is Asit Mishra from Mint Newspaper, India. This is to Mr. Zoellick.

The G-24 countries have expressed concern over falling development finance in the World Bank. So, this is happening at a time when your sister organization is able to garner some 430 billion for a fund.

So, how do you see it? Do you see that it's lack of interest in development finance and poverty reduction among the member countries?

MR. ZOELLICK: Well, I'll let Christine explain, I think, the benefits of the additional funding or backstop for the IMF, but I think they're designed for the global economy, and that would certainly include developing countries, and obviously this is part of an overall effort that's also done by the Europeans on their own behalf, but the World Bank also had a capital increase, the first one in 22 years.

Our equity-to-loan ratio is about 28 percent. So, we've got some significant ability to expand, even with our current equity.

I did suggest in the meetings that I think we need to continue to be creative about other ways we could support countries such as India.

For example, when I was in India, we talked about a public-private partnerships infrastructure facility. It might draw some government money from the Indian government, from the World Bank Group, but also from other private partners. But to do so, we'll need perhaps to use the IFC approach to those projects as opposed to some of the things with the traditional IBRD approach.

As you may know, we increased the single borrowing limit for India, made an exception. I personally think that India's credit should allow us to expand that more.

Another tool that we could use and is used in the case of India is that if some of the reserves that countries hold are in the form of IBRD bonds, which actually have better returns than some of the things that they invest in, that allows us to expand the lending. So, that's another tool.

And one of the things I briefed the Development Committee about is when, in the autumn of last year where financial markets were particularly in a risky situation, a number of emerging markets came to us and said, "What's most important to us is have access to large amounts of credit, regardless of whether you have to adjust the price or maturity.

And we--with our current capital account we could expand that considerably if we do some flexibility and maturity in pricing.

So, there's a lot of tools that one can use either from the IFC or the IBRD side. India is also in a transition stage with IDA, and some of the types of things that--where countries made contributions to the Fund are similarly the type of things one might be able to do in an IDA account where you have long-term credits at very modest interest rates.

But again, I think they're slightly different. I mean, you want to be careful with the apples and oranges, because they're a backstop facility often done by central banks in the case of the Fund. And so, the idea is to have them there but not necessarily to draw on them. And what we're talking about here are ways that you can actually put investment funds to work on growth strategies.

MR. MILLS: Is that fair?

Okay. Yes.

Lesley. This is the last question.

QUESTION: Lesley Wroughton at Reuters.

Bob, I wanted to find out from your discussions over the last few days what are the biggest concerns for the low-income countries as far as the spillover effects.

I mean, we know the IMF is saying they're not seeing a slowdown in the low-income--in Sub-Saharan Africa, but what are you hearing? From the Finance Ministers' meeting, they were saying that they're pretty afraid of how this could really set itself into the economies.

And then, for Ms. Lagarde, as the negotiations get underway for the next governance reforms, including the formula and then moving into--I think it's the 15th review--what do you think are the issues at stake here? I mean, the emerging markets want more say. The Europeans don't want to lose further power. They want to obviously hold onto something.

What are the issues that you think that the membership needs to focus on to get the deal done?

MR. ZOELLICK: Well, Lesley, as for your question to me, just realize this is a slight difference from your focus, but I think what we've been trying to stress is growth is one of those things that's not a zero sum; and so if you have the emerging markets in developing countries growing, that benefits developed countries and other developing countries. So, two-thirds of global growth has come from developing countries. So, it's in everybody's interest to continue their growth.

I shortened my initial remarks, but what I've tried to emphasize in these meetings is that, in addition to the macroeconomic stability, which is very important, it is important for developed and developing countries alike to focus on the structural reforms, the microeconomic reforms that will drive future growth. And indeed, the Chair of the IMFC, Tharman of Singapore, made this point very well, how the fiscal adjustment needs to focus on the foundations for future growth.

Now, more particularly, and I think Christine and the IMF staff have made this point: Some of the emerging markets have less space and so they have less fiscal movement and, in some cases, depending on their monetary policy, they have less flexibility if things turn down.

A point that Pascal Lamy of the WTO and I have emphasized is we have some worries in the trade finance area, driven in part by the deleveraging of European banks, many of which were very active in trade finance, combined with some of the Basel rules, which have been changed but, in my view, still use as their examples more consumer finance and mortgage than the evidentiary basis for trade finance, but we will help develop the evidentiary basis for that, and that's particularly because for when you have a credit squeeze, it tends to hurt the smaller countries and the smaller banks and the smaller businesses, and those are ones that are obviously important for some of the future development.

And particularly, if you're trying to build future growth models, it would probably be the intra-African trade as opposed to the African commodity trade with others. So, that's a second area.

Third, it depends on the clients. The fragile states are obviously, by definition, fragile. So, they're worried about anything that could shock the system.

There's a worry about oil prices, if you're an oil consumer as opposed to oil producer.

And if you're a middle-income country or low-income country, I pick up a very strong interest in the infrastructure agenda, which is why I just touched on it briefly, but I think there's things that we started to do at the Bank, not only with our own investments but with public-private partnerships and really to try to make that a bigger deal flow, and what would be appealing is if we could then combine it with the private capital markets, as we're starting to do with a fund that IFC and Singapore are putting together. So, it varies a lot by market.

MS. LAGARDE: Okay. On your question about governance, quota, formula, I take reforms one step at a time. So, my focus at the moment is make sure that we implement the 2010 reform, for the Tokyo Annual Meetings. Then, we have the January 2013 deadline.

We've begun the discussions about the formula review of the quota. That will take its course, its time, its discussions. Everybody wants to have a bigger share of the same pie, so there will have to be gives and takes.

And the 15th review will be in January 2014. So, we have a little bit of time.

MR. MILLS: Very good.

Thank you very much.

[Whereupon, the press briefing was concluded.]

World Bank and Arab Monetary Fund Join Forces to Promote Housing Solutions

2012-04-20T20:45:00.000Z

WASHINGTON, April 20, 2012 – An agreement to foster knowledge and best practice on housing finance in the Arab world was signed today in a Memorandum of Understanding between the World Bank and the Arab Monetary Fund (AMF). The Arab Housing Finance Initiative (AHFI) aims to enhance cooperation on this important challenge for the Middle East and North Africa (MENA) region.

The agreement will facilitate the establishment and dissemination of a centralized source of knowledge and best practices on housing finance in the Arab World.

“The demand for decent, secure and affordable housing is growing in MENA because of strong demographic trends and large existing housing shortages,” said Inger Andersen, World Bank Vice President for the MENA region of the World Bank. “Supporting the housing demand is essential for growth and job creation, especially in the private sector.”

The main objective of AHFI is to expand access to sustainable housing finance solutions and improve the affordability of housing in the AMF member countries. This will be achieved by raising the standards of risk management, improving underwriting, expanding access to long-term funding, introducing legal and regulatory best practices and developing innovative solutions and targeting smarter subsidies

“Recent developments in Arab countries highlight the urgent need to achieve a more equitable and balanced economic growth. In this context, extending access to housing finance has become one of the top priorities on the economic and social agenda of the region” said Dr. Jassim AI-Mannai, Director General and Chairman of the Board of the AMF.

The signing of the MOU follows a successful regional conference which was held in Abu Dhabi, UAE on April 4-5, 2012. Discussions during the event focused on identifying the areas where technical assistance is most needed to strengthen and develop housing finance systems. Under the auspices of AHFI, a regional workshop will be held on an annual basis to monitor progress, disseminate results and identify new requests and needs for assistance.

Contact:

In Washington: Lara Saade, (202) 473-9887, lsaade@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

For more information on World Bank activities, please visit:

http://www.worldbank.org/mna

Visit us on Facebook: http://www.facebook.com/WorldBankMiddleEastNorth Africa

Be updated via Twitter: http://www.twitter.com/worldbank

For our YouTube channel: http://www.youtube.com/worldbank

Developing World Lags on Global Targets Related to Food and Nutrition, Says IMF-World Bank Report

2012-04-20T16:45:00.000Z

Washington D.C., April 20, 2012 – The developing world’s progress is seriously lagging on global targets related to food and nutrition, with rates of child and maternal mortality still unacceptably high, says the Global Monitoring Report (GMR) 2012, released today by the World Bank and the International Monetary Fund (IMF).

Recent spikes in international food prices have stalled progress across several of the Millennium Development Goals (MDGs), the report says.

GMR 2012: Food Prices, Nutrition and the Millennium Development Goals reports good progress across some MDGs, with targets related to reducing extreme poverty and providing access to safe drinking water already achieved, several years ahead of the 2015 deadline to achieve the MDGs. Also, targets on education and ratio of girls to boys in schools are within reach.

In contrast, the world is significantly off-track on the MDGs to reduce mortality rates of children under five and mothers. As a result, these goals will not be met in any developing region by 2015. Progress is slowest on maternal mortality, with only one-third of the targeted reduction achieved thus far. Progress on reducing infant and child mortality is similarly dismal, with only 50 per cent of the targeted decline achieved.

“High and volatile food prices do not bode well for attainment of many MDGs, as they erode consumer purchasing power and prevent millions of people from escaping poverty and hunger, besides having long-term adverse impacts on health and education,” said Justin Yifu Lin, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “Dealing with food price volatility must be a high priority, especially as nutrition has been one of the forgotten MDGs,” he added.

GMR 2012 details solutions for making countries and communities more resilient in the face of food price spikes. Countries should deploy agricultural policies to encourage farmers to increase production; use social safety nets to improve resilience; strengthen nutritional policies to improve early childhood development; and design trade policies that enhance access to food markets, reduce food price volatility and induce productivity gains. However, the challenges countries face in responding to high food prices have been made more difficult as a result of the global recession.

“The fragile global economy could very well slow developing countries’ progress on human development goals, since the fiscal, debt, and current account positions, particularly of low income countries, have been weakened by the global financial crisis,” said Hugh Bredenkamp, Deputy Director of the IMF’s Strategy, Policy and Review Department.

Regional progress towards the MDGs is uneven. While upper middle income countries are on track to achieve most targets, low-income or fragile countries are lagging, with only two goals achieved or on-track. While food prices have declined from their 2011 peaks, commodity prices remain volatile.

“To help deal with volatility, more developing countries are complementing their fiscal and monetary policy responses with insurance or hedging operations, such as selling crops in forward markets. This can be part of a broader strategy for managing risks like natural disasters and swings in commodity prices,” said Lynge Nielsen, Senior Economist at the IMF.

Jos Verbeek, Lead Economist at the World Bank and lead author of GMR 2012, cautioned that declining development assistance, population growth and high food prices will make the need to focus on nutrition programs for the poor even more challenging.

“According to our projections, an estimated 1.02 billion people will still be living in extreme poverty in 2015. Clearly, assistance must be leveraged in new ways if we are to improve food security and nutrition, particularly for the poor and vulnerable,” said Verbeek.

The full report, progress charts, and country information are available at www.worldbank.org/gmr2012

Contacts

In Washington:

Merrell Tuck-Primdahl +1 (202) 473-9516, +1 (202) 476-9897, mtuckprimdahl@worldbank.org;

Indira Chand +1 (202) 458-0434, +1 (703) 376-7491, ichand@worldbank.org

For TV/Broadcast:

Mehreen A. Sheikh +1 (202) 458-7336, msheikh1@worldbank.org

Regional Highlights

In East Asia and Pacific, the targets on extreme poverty, gender parity and access to water and sanitation have been reached. Progress is substantial with regards to primary completion and the goal should be achieved in the years remaining to 2015. Child and maternal mortality are the targets lagging the most.

In Europe and Central Asia, the targets on poverty and access to water have been reached. Universal primary education and gender goals are currently on track. Increased efforts must be undertaken with regards to improving maternal health and access to basic sanitation.

Latin America and the Caribbean has already reached extreme poverty, primary school completion, gender equality and access to safe water targets. The region is performing well in terms of child mortality, but progress on maternal mortality is lagging.

Middle East and North Africa has reached the targets on poverty and provision of improved sanitation facilities. The region is making fast progress towards achieving universal primary education and gender equality. However, progress towards ensuring safe drinking water and reducing maternal mortality is lagging.

South Asia has reached the target on access to safe drinking water and will most probably eliminate gender disparity in primary and secondary education by 2015. Progress has also been made on primary school completion and, to a lesser extent, extreme poverty reduction. However, progress on reducing child and maternal mortality and improving access to sanitation facilities is off-track.

Sub-Saharan Africa is lagging on most MDGs. Although the region has achieved more than 60 per cent of the progress required on goals such as gender parity, primary school completion, access to safe water and extreme poverty, health-related MDGs, particularly maternal mortality, require urgent attention.

Governments moved to prevent job loss, boost skills in response to global financial and economic crisis

2012-04-20T13:00:00.000Z

ILO and World Bank partner to release new data, report on government actions

WASHINGTON, April 20, 2012 – Today the International Labour Organization (ILO) and the World Bank (WB) released a joint report and new online data tool with the first comprehensive stocktaking of countries’ jobs-related policy responses to the recent global financial and economic crisis.

A follow-up to a request from leaders at the 2009 G20 Pittsburgh Summit, the report, Inventory of Policy Responses to the Financial and Economic Crisis, demonstrates how governments across the globe and of all income levels used labor market interventions to limit the economic and social impacts of the crisis and spur employment, household income, and economic growth, and reduce poverty. This new online data tool provides a detailed track record of policies enacted during the height of the financial crisis (2008-2010), and implications for the design of policies to address future economic downturns.

“For the first time, policymakers now have access to data on what other countries did during these turbulent times, in order to better understand what works best to create jobs and reduce poverty in the wake of crises,” said Tamar Manuelyan Atinc, World Bank Vice President for Human Development. “These findings affirm the Bank’s new Social Protection and Labor Strategy’s focus on promoting resilience, equity, and opportunity for the world's poorest and most vulnerable people.”

“The ILO has joined forces with the World Bank to create a database unprecedented in its scope and size on crisis response measures taken by both developed and developing countries following the framework of the ILO's Global Jobs Pact,” said Jose Manuel Salazar-Xirinachs, International Labour Organization Executive Director for Employment. “Policy makers and researchers worldwide will be able to use this database to analyze policies and draw further lessons which continue to be highly relevant today as the jobs crisis persists.”

The report reveals that in most of the 55 low-income and middle-income and 22 high-income countries surveyed, unlike previous crises, there was considerable government intervention to mitigate the impacts of the downturn. Not only did a majority of effected countries use expansionary fiscal and monetary policies to stimulate the economy, they also directly intervened to protect or create employment, preserve skills and facilitate the matching between job-seekers and employers, and protect the incomes of the unemployed and vulnerable groups. In many cases, social dialogue helped guide the policy response. This was critical, for instance, when implementing work-sharing arrangements.

On the demand side, high-income countries focused on facilitating access to credit, while low-and middle-income countries prioritized direct job creation and employment incentives

On the supply side, skills and training measures were a priority for countries of all income levels, but high-income countries had more resources to support for young people during the crisis

Source for charts: based on full sample of 77 countries of ILO/WB inventory of policy responses to crisis

But there are questions about how well prepared countries were to respond to the economic crisis, particularly developing countries. Many countries, for instance, did not have significant social security programs that could be scaled up during the crisis. In addition, across the board, the coverage of social insurance programs was low. Policies such as the increase in the level and duration of unemployment benefits, for example, were helpful, but in some cases, might have only benefited formal sector workers. Active labor market programs such as employment services, training, and wage subsidies, were also commonly used, but there are many lessons as to how their design and implementation can be improved. Finally, many countries lacked surveys or administrative data to track the impacts of the crisis on labor markets and workers.

The report recommends that countries focus on: (i) improving the coordination between macro and sectoral policies; (ii) expanding the coverage of social insurance to all workers; (iii) integrating and strengthening safety nets; iv) rethinking the design of active labor market programs including those used to stimulate labor demand; (v) investing in labor market information systems; (vi) promoting social dialogue; and (vii) increasing vigilance to avoid violations of rights at work.

The online database was enabled by financial support provided by the Swiss State Secretariat for Economic Affairs (SECO) for the ILO, and by the Multi-donor Trust Fund on “Labour Markets, Job Creation, and Economic Growth,” with funding from Austria, Germany, Korea, Norway, and Switzerland for the World Bank. It will allow researchers and policy analysts to conduct case studies or cross-country analysis to better understand which policies were the most effective. The data can also facilitate discussions between government ministries, employers, international development agencies and civil society organizations involved in the design and implementation of social protection and labor programs.

The ILO and WB will launch the database and report on Friday, April 20, 2012, from 12-2 p.m. EST during a special event at the WB-IMF Spring Meetings. To watch the webcast, please go to www.jobsknowledge.org.

About the ILO (www.ilo.org)

In response to the crisis, the ILO constituents, in every country, reprioritized their Decent Work Country Programms (DWCP) to put in place crisis response measures based on lessons from the past, and the policy portfolio of the Global Jobs Pact (GJP). The GJP was adopted in June 2009 as a portfolio of policy measures including macroeconomic, enterprise promotion and SMEs, Active Labour Market Policies, labour intensive investment in infrastructure, skills development, expansion of social protection, social dialogue, and International Labour Standards (ILS).The ILO also stepped up efforts in support of new global strategies for addressing the youth employment crisis and prioritize employment and social protection in global policy rebalancing. The ILO works closely with the other UN agencies and programs in supporting member states facing the challenges brought by the crisis. The ILO has also played an important role in supporting the G20 policy agenda.

About the World Bank (www.worldbank.org/jobsworldeconomy)

In response to the global food, financial, and fuel crises, the World Bank Group (WBG) increased its labor-related financing from an annual average of $477 million in 1998-2008 to an annual average of $634 million for 2009-2011. From 1998-2011, the WBG supported job creation and worker protection activities in 103 developing countries, with total lending reaching $7.14 billion. With WBG financing, technical assistance, and analytical work, countries are protecting workers and investing in programs that help promote job creation. The WBG’s job-creation initiatives coordinate efforts on macroeconomic policy, the investment climate, industrial development, innovation and entrepreneurship, private-sector development, labor regulations, education and skills, and social protection.

Contacts:

ILO: Jim Palmer, (202) 262-9823, jamesv.palmer@verizon.net

World Bank: Melanie Mayhew, (202) 458-7891, mmayhew1@worldbank.org

Database: http://www.ilo.org/crisis-inventory

Report: http://siteresources.worldbank.org/INTLM/Resources/ILO_WB_2012.pdf

Follow the discussion on Twitter at #wbjobs

World Development Indicators 2012 Released

2012-04-19T17:38:10.000Z

Definitive Reference for Measuring Development Progress

WASHINGTON, April 19, 2012 — The 2012 edition of World Development Indicators (WDI), released today, includes updated data on global development, the quality of people's lives, the environment, the economy, the functioning of states and markets, and global links - how actions in one part o f the world affect people elsewhere.

Alongside the WDI and the latest update to the on-line WDI database, major improvements to the data access, analysis and visualization tools are also now available. These make it easier than ever to use and analyze the full range of datasets available in the Bank’s data catalog (http://data.worldbank.org) – all freely available as part of the Open Data Initiative launched two years ago.

"These new tools and mobile applications take us closer to our vision of getting data into the hands of people everywhere, so that they can be used to inform the decisions of both the policy maker and the individual citizen", said Shaida Badiee, Director, Development Data Group.

WDI 2012 includes data for the first ten years of the Millennium Development Goals (MDGs), providing an important data resource for the Global Monitoring Report (GMR), being released tomorrow. Measured against 1990 benchmarks, progress accelerated in the past decade, lifting millions out of poverty, enrolling millions of children in school, and sharply reducing the loss of life due to preventable causes.

“The World Development Indicators laid the path for the Bank’s expansion into the frontiers of open development and are highly valued as a definitive reference for measuring development progress,” said Justin Yifu Lin, World Bank Chief Economist and Senior Vice President.

The WDI provides relevant and high-quality data on a wide range of development issues. New data in this year’s WDI include more recent data on poverty at international poverty lines, for more countries, including global and regional estimates; measures of malnutrition disaggregated by sex; health indicators disaggregated by income quintile; carbon dioxide emissions by economic sector, and data on climate variability, exposure to impact, and resilience. This year’s WDI illustrates that:

- Fewer people live in extreme poverty, though poverty and hunger persist. The proportion of people living on less than $1.25 a day fell from 43.1 percent in 1990 to 22.2 percent in 2008. And preliminary estimates for 2010 indicate that the extreme poverty rate fell further, reaching the global target of halving world poverty five years early.

- The proportion of people in developing countries with access to an improved water source increased from 71 percent in 1990 to 86 percent in 2008, which means that the MDG target of halving proportion of the population without access has already been met.

- Some goals still remain out of reach. Only one region, Latin America and the Caribbean, will reduce child mortality by two-thirds. In Sub-Saharan Africa, only two countries (Madagascar and Malawi) are on track to reach the target in 2015. And while primary school enrollment rates have reached 87 percent, that leaves 64 million children out of school, mostly in South Asia and Sub-Saharan Africa.

- Women in the Middle East and North Africa have made impressive gains in health and education. The total fertility rate fell from 4.9 births per woman in 1990 to 2.7 in 2010, women’s secondary enrollment rate increased from 46 percent to 69 percent between 1991 and 2009, and tertiary enrollment rate tripled from 9 to 27 percent. But women’s labor force participation remains at about 20 percent – by far the lowest among all regions.

- Africa is urbanizing rapidly. In 2010, only 37 percent of Sub-Saharan Africa’s population lived in urban areas, but between 1990 and 2010 the urban growth rate of 4 percent per year was the highest among developing regions.

- The East Asia and the Pacific region spends more on Research and Development than other regions. And China leads the developing economies of the region, spending about 1.75 percent of GDP in 2010 on R&D.

- People in the developing countries of Europe and Central Asia have greater access to commercial bank branches and automated teller machines than people in other developing regions—about 18 commercial bank branches per 100,000 adults and 45 ATMs per 100,000 adults. The region also ranks highly on access to commercial deposit and loan accounts.

- Latin America and the Caribbean has the greatest share of protected land and marine areas among developing regions, with 20 percent of the land area and 13 percent of the territorial water area designated as protected areas. Even so, Latin America and Caribbean, which has about one quarter of the earth's forest resources, has lost some 93 million hectares -- about 9 percent of its forest area -- between 1990 and 2010.

- High-income economies use nearly four times as much energy per capita as middle-income economies, and more than 13 times as much as low-income economies. Per capita energy use in South Asia remains the lowest among all developing regions even after an increase of 51 percent between 1990 and 2000 - from 340 to 514 kilograms of oil equivalent.

New and improved tools to access, explore, and interact with the WDI 2012 and other datasets include:

- New open data "mash-ups" for over 200 economies, with development indicators, household surveys, data on the World Bank's finances and projects, and data on climate change presented in a single snapshot, available at http://data.worldbank.org/country.

- Free, upgraded mobile applications ("DataFinder 3.0") for iPhone, iPad, Android and Blackberry mobile devices, to access and explore indicators in English, French, Spanish and Chinese.

- A new version of the popular "DataBank" interface to the World Bank's time-series databases: create, save, and share tables, charts and maps – and embed them in blog posts and websites.

- In-depth data portals on poverty, jobs, climate change, and financial inclusion.

Links

WDI and Regional Highlights: http://data.worldbank.org/data-catalog/world-development-indicators

DataFinder 3.0 app: http://data.worldbank.org/products/applications

New DataBank: http://databank.worldbank.org/data/home.aspx

Poverty data portal: http://povertydata.worldbank.org/poverty/home/

Jobs data portal: http://datatopics.worldbank.org/jobs/

Financial inclusion data portal: http://datatopics.worldbank.org/financialinclusion/

Data website: data.worldbank.org

Contacts

In Washington: Azita Amjadi, 202 473-3840, aamjadi@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369,ncieslik@worldbank.org

Transcript of Opening Press Conference with World Bank Group President Robert Zoellick

2012-04-19T17:12:28.000Z

April 19, 2012

MR. MILLS: Good morning, everyone.

Thank you for joining us for our World Bank Group press conference for the 2012 Spring Meetings.

Joining me this morning is the President of the World Bank Group, Robert Zoellick, who will have an opening statement and then take some of your questions.

If I could please ask everyone when they ask a question to identify themselves and your organization; and once again, I am sure you have been asked, but if we could have our mobile devices switched off or to "vibrate."

So, President Zoellick.

MR. ZOELLICK: Thank you, Rich.

Welcome, and thanks to all of you for coming.

This marks my last Spring Meetings as the President of the World Bank Group, so I would like to begin with a few words of thanks to the Ministers who have supported us and worked with us; to our Executive Board, who have labored hard to help our Management team to modernize the important multilateral institution; to the excellent Senior Management team that I have been proud to help build and to lead; and to the World Bank Group staff in Washington and around the world. They are motivated, they are committed, they want to make a difference, they are a tremendous asset, and we have been able to draw the best now from 170 countries.

This has been a pretty busy five years, so I suppose my tenure at the World Bank Group has had three phases--a turnaround from a time of some trouble; quickly moving into faster and more flexible, large-scale support for our client countries across the food, fuel and financial crises--in financial terms alone, about a quarter-of-a-trillion dollars; and the start of the modernization of the World Bank Group for the future.

That ongoing modernization effort will be a large part of my presentation to the Development Committee later this week and my discussions with our Governors.

With the first large recapitalization of the IBRD in over 20 years and two record-breaking IDA replenishments totaling more than $90 billion, I am pleased to turn over a well-resourced Bank with a AAA rating.

Yet we always need to think ahead about how to mobilize resources--for the growing interest in IFC and private sector development, for the poorest, and for the changing needs of our middle-income clients, which are still home to three-quarters of those living on under $2 a day.

Our Modernization Agenda is driven by our focus on clients, listening to their priorities, as opposed to an old top-down approach, and modernization involves a rigorous focus on results, openness, and accountability.

So our initiatives for open information, open data, and open access to knowledge may turn out to be the most important legacy of the past five years.

These steps are key to democratizing development, and these steps lay the foundation for expanding social accountability, fighting corruption, and building better governance.

Last year, I proposed that the World Bank and others should recognize that investments in civil society and good governance are as vital as investments in roads, factories, and clinics.

So I will be pleased to announce later today the formation of a new Global Partnership for Social Accountability that will provide support to civil society organizations in their work on social accountability.

Now, much of what you will hear over the next few days will deal with the ongoing shock waves of the financial crisis--issues of macroeconomic stability, fiscal and monetary policies. That is certainly important, but it is not enough.

Countries, both developing and developed, need to focus on the structural reforms that will be the drivers of future growth; otherwise, the world will keep stumbling along.

The World Bank Group will be emphasizing the structural growth agenda.

Structural reforms and changing growth models fit with our recent major reports such as the China 2030 Report and the Golden Growth Report that looked at Europe.

You will also encounter structural growth in our priorities for infrastructure, especially public-private partnerships; social safety nets, to protect human capital in a volatile and uncertain world; gender, so that countries can gain growth opportunities from empowering all of their people; and financial inclusion, including at these Meetings, a first-of-its-kind report on measurement to access financial services that will show that three-quarters of the 2.5 billion people living on less than $2 a day are shut out of access to banking.

Developing countries have provided two-thirds of global growth over the past five years. These are no longer charity cases; they are vital to the world economy.

But of course, they face huge challenges, too.

So it is the World Bank Group's aim to keep focusing the world's economic leaders on growth--not just stability; on human safety nets--not just financial safety nets; and on modernizing multilateralism so that all 188 of our shareholders can work together for their common interest.

Finally, I had an opportunity to talk to Jim Kim after his selection as my successor. We will have a chance to meet shortly after the Spring Meetings on the transition process. I think he will do a great job, and I wish him and all others associated with the World Bank Group every success.

I am pleased to take your questions.

MR. MILLS: Yes, Sudeep?

QUESTION: Sudeep Reddy with the Wall Street Journal.

I was hoping you could address the European crisis from two angles.

One, you previously noted that European countries had bought a lot of time with liquidity measures. I am curious what you think about how they have used that time and what they need to do next; and more broadly with emerging market countries, how are they faring with the shock waves from Europe, and is there anything in particular they should be doing now given the potential for another round with Spain?

MR. ZOELLICK: Well, on the first one, I think the euro zone in particular and the European Union is going to be walking a very fine line.

First, as you noted, with the anxieties late last year, I think the ECB's extraordinary actions were appropriate, but I think some misled themselves because they only bought time, and the time has to be used.

I think that, as the IMF has pointed out, on the one hand, the future of the euro zone depends on actions of individual countries, particularly the steps they take for fiscal consolidation and, as I have emphasized, the steps they need to take for structural reforms and future growth.

It is very difficult to take those steps in a no-growth environment, so it has to be balanced with steps that might be able to support demand and longer-term changes of growth.

So this week, I tried to make some suggestions on the supply side and ways in which the single market could also further deepen integration to support growth.

Now, again, as the Fund has pointed out, the banking system also remains under significant stress, and at the one hand, you need the banks to build their capital; on the other hand, what we have seen is that if the banks build their equity ratios by shrinking, as they by and large have been doing, that is going to put a stress on credit contraction and undermine the basis of growth.

So I think the debate understandably reflects the fact of trying to balance these issues, but I think we are now in a phase where, after the ECB provided very attractive financial resources to a number of the banks to be able to buy government debt, as we have seen in various newspapers--I think your own today, as I saw one story--they are about at the end of that point and limit. So I think further actions are going to be called for, and the point I keep emphasizing, wherever it is around the world, is not just to focus on the austerity and macroeconomic stability measures, but you need to do this in a context of growth, in part because we have to face the political economy issues.

So, as I have emphasized, the real countries that are critical because of size at this point are Italy and Spain. You have governments that are taking strong actions. It would certainly help if they got some support from some of the types of things that I and others have talked about so as to help with growth and the politics of reform.

As for your second question, the deleveraging process in European financial institutions has certainly begun. I tend to agree with I think the IMF report and others that said that there is more to go.

We have seen the effects, differential effects, around the world. I just came from East and South Asia. You have definitely had a pull-back in some of the project lending and sale of some of the assets in East Asia. A number of the Asian banks have stepped in, so it has not really had a significant contractionary effect.

Starting late last year, I again worked by my friends at the EBRD and EIB and EC to try to reactivate the Vienna Agenda because I have been most concerned about the Southeastern European and the Balkan countries. And there, working with the banks, we are seeing the contraction. So far it has been orderly, but it is a good example of trying to get ahead of the curb, Sudeep.

I was talking about this late last year, and people did not yet see the numbers, and as you saw the first quarter with the BIS numbers, you started to see this contraction.

And I was actually pleased--through the IBRD, we were able to expand our commitment over the next couple years by about $4 billion, IFC another $2 billion, so our total, I think, is about $27 billion.

I think that is an example of the types of things you need to do, frankly, even in the months ahead to get ahead of some of these problems.

North Africa has clearly been affected by this, and this is again the political implications, because for a number of the North African countries, Europe is a very important export market, so it is important. I was with the Tunisian Finance Minister yesterday, and I am going to meet them again--as they undertake these difficult reforms, they need to get support from us and others along the way.

And an area that Pascal Lamy of the WTO and I have been watching particularly closely is trade finance. A lot of the European banks were big players in trade finance, particularly the French banks, so you are seeing some shrinkage of that. In the areas, what I am most concerned about--and by the way, this is where the new capital rules from Basel III are going to have to be watched very closely; the Basel Committee took some steps to alleviate some of the changes that they had put in, overly stringent, in my view, but now we are trying to gather some data with the WTO and others to make a stronger case for easing some of the strictures they have--because what I am most worried about is a place like Sub-Saharan Africa, where I suspect that the exporters of major commodities to the U.S. and Europe will still get trade finance, but if you are a small country, if you are a small bank, if you are a small client, if it is intra-African trade--which should be the future of growth--those are likely to get squeezed.

So, again, what I try to do in these meetings, Sudeep, with my G20 colleagues, because we see all these marketplaces, is to try to anticipate some of those issues, and those are some of the ones that I am focusing on.

And then, the last one, of course, which is implicit in your question, is that we are not out of this mess yet, so if you have a more seismic event because of failures of management, that is going to hit everybody hard. It is still a fragile economy, as we and the IMF have pointed out.

MR. MILLS: Yes, the woman in the second row, please.

QUESTION: Yes, Antonella Ciancio from Reuters.

We would like to know how concerned are you with Argentina's move to nationalize the country's leading oil company, and if this somehow threatens to further isolate the country.

Thank you.

MR. ZOELLICK: Well, I think it is a mistake, and I think it is a symptom that we have to watch out for of, under economic pressure, whether countries will move to more national, autarchic policies, respond more to populism, respond more to protectionism. So I think it was the wrong thing to do.

MR. MILLS: Thank you.

Yes, Howard?

QUESTION: Hi, Bob, and thank you. Howard Schneider with The Washington Post.

On the Arab Spring, I was just curious--Madame Lagarde laid out what is basically now a stalemate between the IMF and Egypt over support there, and I was wondering from your perspective, to what degree you think political uncertainty in those countries is holding up the type of support you feel needs to come from the outside to get their economies back on track.

And then, secondly, briefly, what is your advice to Kim on transition? What are the mechanics of that going to look like, and what are you going to be able to do to help him in the door?

MR. ZOELLICK: Well, on the first one, Howard, it varies a lot by country. So let's take Tunisia, which I referenced with Sudeep. You know, Tunisia has gone through an election process. They have an Islamic-based government. The government seems to be stressing the continuation of the policies that the prior interim government focused on, and those are policies we are trying to do everything we can to support--not just basic financing, but policies of inclusion, because you have had sort of a growth model that didn't pay enough attention to people in the west and central part of the country--trying to focus on some of the youth unemployment issue, and--very nicely with the agenda we are setting on openness and social accountability--when we did a Development Policy Loan, they accompanied it with a series of changes to try to open up their process. And I think it is not only good politics, it is good economics, obviously, to have the society feel that they are engaged in the process.

But the Tunisian economy is still under significant stress; it has lost tourism; it has lost some of the effects of exports to Europe. So IFC, our private sector team, has also been doing investments in there.

So, in the case of Tunisia, this is not going to be done overnight. They are going to face a tough year. But I think it is in everybody's interest to try to support them if the government stays on the current path, because again, looking at this from a bit of an economic history point of view, I think the North African transformation is going to take a while, but what I saw happen in East Asia and elsewhere is that countries that undertook the reforms become models for others.

Morocco has had a fast-paced evolution as opposed to revolution. They are making a series of reforms, so we are trying to support them, again, on the openness side, the investment side, the private sector side.

We are trying to support Jordan. Jordan is going through a combination of political and economic reform.

In a country like Libya, they have the resources. There, we have been trying to work with some partners in a difficult security environment to help create the capacity for basic financial management and other activities.

So, the big one obviously is Egypt, which you referred to, and here, as I suspect from what you have said that Christine mentioned, they not only face an economic and financial challenge, but they are in the process of a political transition. And I understand that there will be a need to be able to base the legitimacy of whatever economic relationships they have on the Fund and the Bank with the people who will be exercising power under the new Constitutional arrangement.

So I think that that does slow up the process. Life is full of twists and turns. That is kind of the facts of life and the reality. There are things that I think the interim government can do to create a better environment for this. We have kept doing investment lending, and we have tried to focus some of the investment lending in Egypt on some of the sectors in need, but the bigger policy loans that we would do would depend on the macroeconomic issues that the IMF is addressing; and frankly--at least it has been my guidance--they will also be based on some of the openness and social accountability issues that we have seen in Tunisia and other countries. And that, I think--that is also important because I think you are going to be going through a political transition process, and the more open it is, then, whoever is elected in this year or next year or others I think will have a better sense of engagement with the economic changes in Egypt and the relationships with the World Bank.

So this is one of the things, I think--we have also had to learn lessons from the Arab Spring. Economic growth alone is not enough. It has to be inclusive. And frankly, the more we can emphasize the things I have been talking about, about openness and social accountability, I think that is the future direction of the Bank as well as these countries.

You asked a second one--oh, on Dr. Kim. Well, I have been through a lot of transitions in my life, so I have some experience with them.

We tried to centralize a team to avoid the standard problem of the 500-page briefing book by focusing on some of the issues that will come up first.

I think these Spring Meetings are timely because we will get a sense from the Governors and the Board about some of the issues that would be of nature to be a continuation--some of the things that I have talked about in this Modernization Agenda which has both internal and external aspects.

And beyond that, I always think that as you are turning something over, you have to actually have some degrees of restraint. You know, he will be the person in charge. I happen to believe that change is good for institutions as well as me, and it is good to have a fresh person come in.

So we will try to explain where we think some of the issues are. He certainly has a lot of perspectives, I am certain, from the tour that he took around the world and the discussion with the Board. So I am certain that by the time he takes office, he will have a pretty good feel for the challenges ahead.

MR. MILLS: Yes, right over there, to the gentleman with his hand up--no, to the gentleman.

Thank you.

QUESTION: Larry Elliott, of The Guardian.

In your five years at the Bank, what do you consider to be your biggest success, and what do you consider to be your biggest failure?

MR. ZOELLICK: Can I hold on the second one?

[Laughter.]

MR. ZOELLICK: Well, I tried, Larry, briefly, in the opening, sort of anticipating this question, to say that in my own mind, I have seen these three phases.

So, first, when I came into the Bank, as for those of you who have covered it, it was a tumultuous period. And so I had the challenge of a leader trying to turn around an institution. And to the credit of the institution, the best way to get out of some of the internal strife was to focus people on the mission--that is why people came to the Bank--and we were able to do that relatively quickly. We had some complicated issues to deal with in governance and anti-corruption and others where Paul Volcker and others helped.

Second, before too long, we had the food and fuel crisis start to hit us in late 2007, so I am particularly pleased that sort of a combination of my international experience and kind of reading what was happening in the market, we moved quite quickly, and I think if you talked to people in the food security community, they felt that the Bank was more agile than it might have been in the past, but--and in addition, we start to see this as an opportunity to invest in agriculture going into the future. And then, as I have mentioned, in the financial crisis, doing about a quarter-trillion dollars of support is not only important financially, but it was important to how we designed a lot of it. So the fact that in trade finance, Lars and the IFC team leveraged our financing to keep a lot of banks in the market. I mentioned the Vienna Initiative. In Indonesia, we organized with the Asian Development Bank, the Australians and Japanese, a backstop proposal.

So part of my point here is that it is not just financing; we need to be able to leverage it and kind of innovate it in innovative ways, and I think we were able to do that, including some things that I hope will become seeds of very important future growth, like this Asset Management Company which is a subsidiary of IFC, where we are now tapping the sovereign funds and pension funds, and we already have $4 billion of money that the Bank would have never seen going into African equity markets.

So it is not only the response in financial terms, but it is also the innovation. And then, as part of that, it goes to this modernization phase which I think has just been begun, and there, as I mentioned briefly in my remarks--and here, I credit some of my team, Caroline Anstey, Sanjay Pradhan--together, we decided this focus on really opening up the Bank as an institution was key to not only development, but frankly, having a healthier Bank. And so an Open Information policy, it is the first among multilaterals, based on an Indian and U.S. Freedom of Information Act--this Open Data Initiative is just going to--I have already seen it--it is going to drive a whole new way of doing policy, because we are making this accessible with mobile phone technology in any country around the world, so we are going to have a much more interactive process.

And just to connect this to a little bit of the transition debate, Larry, it was interesting that--and I am not saying this was any of the three candidates--but some others were saying: Oh, the Bank is doing too many things. It must focus on these three things.

In my view, that was a mistake that elitist economists made 20 years ago, where they said "We know what developing countries need." And maybe it is because of my private and policy background--my approach has been fundamentally different. It says let's focus on the client; let's hear what the client needs, and then let's take the innovation from the world and apply it so, and then, in the process, we can learn with the client through an open process about how to do it better.

So I think--I am sure you have encountered this with The Guardian, but I have encountered it at university campuses – is that you know, the Bank is still a big, multilateral, Washington-based institution, but the more you open up an institution, it is the best antidote to conspiracy theories and better policy.

Pardon?

QUESTION: [Inaudible; no microphone.]

MR. ZOELLICK: Well, I'll let you be the judge of the failures; how about that?

[Laughter.]

MR. MILLS: Yes--thank you--to the gentleman right here.

QUESTION: Thank you.

IMF Managing Director Christine Lagarde just said that low-income countries have to deal with lower aid resources. I would like you to elaborate a little bit more specifically on Latin America, if you have figures.

And I would also like to know if the World Bank is concerned about the rise of protest movements and more social demands in different countries, even the Occupy Wall Street movement here in the United States, in Europe, and all this situation.

MR. ZOELLICK: Well, on the first one, I guess the way I would approach the concerns for low-income is not just in certain countries but across countries, because one thing a lot of people have lost sight of is that two-thirds of the people living on under $2 a day are in so-called middle-income countries.

I was just in India, where I met with women with a Self-Employed Women's Association. These are extremely poor women. So one of the challenges for the Bank is getting people to recognize that you are going to need to deal with poor people in a variety of different countries.

Now, foreign assistance is clearly a piece of that, and it’s under stress. By and large, if you look at the OECD numbers, the countries have sort of generally kept up what they were doing. But I guess my suggestion on that goes to some of the things we have said in modernization. Take a country like the United Kingdom, which has maintained its effort to reach the 0.7 percent of GDP under difficult budget circumstances. It is a heroic effort. They, the Australians, Canadians, and others have done good work on this. But they need to show value for money, so this goes right back to the Results Agenda. And this is where some of the things we are trying to do to have evidence-based learning about what works and doesn't work--I think it is something Dr. Kim is interested in--this will be very important for the future.

But another point of it is, one reason that it is important to draw the middle-income countries into the multilateral institutions is about a conservative estimate of the foreign assistance from the emerging borrowers, or the emerging countries, was about $15 billion last year. That's about 15 percent of the total, and it is probably a conservative estimate. And recognize, part of my view is you’ve got different sources of funds. You are also going to have investment funds. So the rise of China and the increase in commodity prices has probably been one of the best things for Latin America. The challenge, however, will be for Latin America to use that--and that is one of the things I will be talking about with the Governors--as a broader basis for more inclusive growth.

So I tend to--I gave a speech last year where I talked about "Moving Beyond Aid," and the idea was not that we can overcome that today, but we need to move beyond kind of a charity model to the notion of investing in human capital, in infrastructure, with developed and developed countries, and in some ways, the best test is Sudeep's opening question--what are people most worried about today--Europe. And if two-thirds of the global growth comes from developing countries, we have to change people's mindsets. These are potential poles of growth.

I just met yesterday with the African Governors. What are they interested in? Energy. Infrastructure. Regional integration.

So those are the elements that we need to focus on. And I guess the last point on the poorest--the world is an unpredictable place. We are not going to change that. So people who believe they can control this price or that price, I wish them--well, I don't wish them good luck--but anyway, it is not going to work.

What we should be doing, however, is making sure that every country has an effective social safety net, and we had a function on this yesterday, because we have learned a lot from developing countries about how to do this in a cost-effective way.

The Bolsa Familia Program in Brazil, the Oportunidades in Mexicos--these are done for half of one percent of GDP. Trust me, if the U.S. Congress could get their entitlement programs down to any remote degree of that, they would be pretty happy; and yet they cover 15 to 20 percent of the people, and they provide a ladder up. So, and Ethiopia has a different model. So we at the Bank have helped extend conditional cash transfer programs to about 40 other countries. So we had the Philippines Secretary here yesterday, and they have expanded to 3 million families.

So to me, the message for aid is not just the aid number but its effectiveness, and for the poorest, let's focus on basic safety nets for every country to deal with the volatility and uncertainty, because the other lesson we learned is if you wait until the crisis, it is too late.

MR. MILLS: Okay. I think we have time for one more question.

Yes, we'll go to the gentleman in the back, please.

QUESTION: Hi. I am Bernard Busuulwa from Uganda.

Now, Robert, I would like to know--you talked about the pending problems with trade finance among African exporters. I would like to know what is your first advice to central bankers in Africa who are terribly challenged in getting their banks to increase access for the exporter, and pro-poor growth in cross-border trade, especially at a time when their economies are also feeling the heat of the euro zone stress and weakness in the American economy.

MR. ZOELLICK: Well, my first advice is not necessarily to the African central bankers; it is to some of, the Basel and developed world central bankers that, as they develop these rules, build back in feedback loops, because as sure as we are sitting here, they are going to find ways that over-constrict--it is the way the pendulum works--and I am most concerned about the effect of over-constriction on poor countries and developing countries. And in the area of trade finance--something that Lamy and I have talked about--part of the problem is they put in capital requirements and they don't have very good evidence, but frankly, the evidence we have is that it is a pretty short-term loan, and, it’s a pretty - it tends to get repaid.

So my first start is with the developed world.

But secondly--again, I would not focus so much on the central bankers--there is a huge opportunity in Sub-Saharan Africa to remove border barriers, to create more integrated markets. So--you are from East Africa--I visited a one-stop border place that we helped open up--I think it was actually Kenya and Uganda--and it had gone from two days for goods transporting to two hours. And this does not require huge sums of money. We now have the systems. We have worked with some private sector firms to develop the software on this. And it means sort of systematizing the process.

Then, if we can combine that with infrastructure development so, whether it is roads or railroads or ports or electricity, to be able to strengthen it.

So you are right--at least, I think you are right--by saying that subregional integration--and I would focus on sub-regions--East Africa, West Africa, Southern Africa, Central Africa--is the way to really start to drive a potential for growth.

And I just keep coming back to this, because when I read most of the press accounts of these meetings, everything is focusing on the macroeconomic/fiscal/monetary. Fine. I am not denying that. But you are not going to ever deal with this problems unless you create sources of growth, and there are sources of growth in Africa, and I see it with private sector firms being interested in it, but Africans have to create the right enabling environment.

MR. MILLS: Very good. Thank you very much.

MENA Must Launch Its Own ‘Employment Miracle’

2012-04-19T15:00:00.000Z

WASHINGTON April 19 2012 –The World Bank’s latest Economic Update for the Middle East and North Africa presents a two-track regional growth forecast for 2012. The report says growth in oil exporters will receive an anticipated 2 percent boost and achieve a rate of 5.4 percent in 2012, while oil importers are expected to grow at about half that rate as internal and external risks continue to threaten recovery prospects.

The report, entitled Middle East and North Africa: Enabling Employment Miracles (pdf), provides a full analysis of the region’s recent economic performance but also dedicates an entire section to its greatest policy challenge: job creation. With youth unemployment in MENA above 25 percent, a method for tackling one of the region’s longstanding development challenges is now more urgent than ever.

The authors examine the incidence, and subsequently the determinants of employment miracles across the globe over the past three decades, defining those miracles as large and sustained reductions in unemployment. Although such miracles are less prevalent in the MENA region, they occur fairly frequently elsewhere in the world and are associated with large declines in unemployment.

In this spirit the report identifies what might be helpful to MENA countries in the hunt for similar miracles now. The likelihood of embarking on an employment miracle is significantly higher for countries with better regulatory frameworks, the report finds. Critical policy levers for the creation of enduring employment opportunities include prudent macroeconomic management, sound business regulation and good governance.

“Good regulation pays a double dividend in terms of fostering employment,” says Caroline Freund, Chief Economist of the Middle East and North Africa region. “Our global sampling of past employment miracles show that good regulation is associated with lower unemployment on average, and better prospects for enduring employment creation in times when unemployment is high.”

Business regulations and policies promoting trade are especially important enablers of employment creation, says Freund, but stresses that the formulation and enforcement of regulations cannot be divorced from good governance. The extent to which business regulation is conducive to job creation depends not only on de jure rules, but also hinges critically upon how consistently these are enforced and implemented in practice. Thus the report concludes that the solution to MENA’s employment challenge lies in better governance, and associated improvements in regulatory frameworks and their enforcement.

Turning to the growth story for MENA, the report expects the overall rate of growth for 2012 to be 4.8 percent, surpassing the 3 percent growth the region achieved in 2011. The macroeconomic outlook is contingent on political developments both in the region and beyond. Risks are multiple and reflect the heterogeneous domestic conditions across MENA, especially in oil importing countries, and in the global economy. They include uncertainties about political transitions, oil price developments, domestic and global macroeconomic vulnerabilities, and geopolitical tensions.

Oil importers, especially those recovering from political turbulence, remain vulnerable with widening risk premiums, diminished foreign reserves and increasing difficulty financing fiscal and current account deficits. Net oil importers will be affected negatively by high oil prices, and those with strong EU links will be impacted by the weak growth expected in the Eurozone. Still, oil importers with Gulf Cooperation Council links will benefit from strong growth in the GCC group of countries through trade, investment and remittances.

“This picture underlines the two-track growth path for MENA in 2012,” says Freund. “Domestic political uncertainties and major developments in the global economy, including a significant rise in crude oil prices and weak economic activity in the Eurozone, create significant challenges for oil importers while elevated oil prices expand opportunities for exporters.”

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New Database Shows Three Quarters of World’s Poor Are “Unbanked”

2012-04-19T13:45:00.000Z

WASHINGTON, April 19, 2012 – Three quarters of the world’s poor do not have a bank account, not only because of poverty, but also because of the cost, travel distance, and amount of paper work involved in opening one, says the World Bank.

Those without access to formal banking often have to rely on money lenders who often charge high fees. The “unbanked” are also less likely to start their own business or insure themselves against unexpected events.

Financial inclusion, or being “banked” can be transformative, as it allows poor people to build a more secure future. The ability to save and borrow allows them to build their assets, start a business, invest in education, establish a credit rating, and eventually own a home.

"Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world's poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world's 'unbanked' makes the case: the more poor people are banking today, the more they are banking on their future."

Women are particularly disadvantaged when it comes to access to financial services. Only 37% of women in developing countries have an account, whereas 46% of men do. That gap is even bigger among those in poverty: Women living below $2 a day are 28% less likely than men to have a bank account.

Worldwide, 22% of adults report having saved at a formal financial institution in the past 12 months, according to the World Bank’s Global Financial Inclusion Database, or Global Findex. Findex provides the most comprehensive picture yet of how people around the world save, borrow, make payments and manage risks.

Even among those who do have a formal bank account, only 43% of adults use their account to save. Yet 61% of account holders worldwide use their account to receive payments from an employer, the government or family members living elsewhere.

The data was collected by Gallup, Inc. using the Gallup World Poll Survey. The Bank’s Development Research Group is building the database with a 10-year grant from the Bill & Melinda Gates Foundation.

Few adults in developing countries use formal financial products to manage risk. More than 11% of adults in developing countries have an outstanding loan for emergencies or health-care needs, but more than 80% of these adults use only informal sources of credit. Of adults in developing countries working in farming, forestry or fishing, only 6% of them have crop, rainfall or livestock insurance.

“Good, comparable national data is so important for the development of effective policies. I hope policy makers will use this research to help make sure everyone, everywhere, has access to financial services,” said Her Royal Highness Princess Máxima of the Netherlands and the UN Secretary General’s Special Advocate for Inclusive Finance for Development.

Money transfers through mobile phones is a form of increasingly popular nontraditional banking that often doesn’t require users to travel or set up an account at a brick-and-mortar bank. Such mobile banking, which allows account holders to pay bills, make deposits or conduct other transactions via text messaging, has expanded to16% of the market in Sub-Saharan Africa, where traditional banking has been hampered by transportation and other infrastructure problems. Kenya, where 68% of adults report using a mobile phone for money transactions, has seen particularly impressive growth in this market.

“Nearly two-thirds of the unbanked cite poverty as the obstacle to financial access, but about a third also blame the cost of opening and maintaining an account or the banks being too far away, which means long bus rides for many,” said Asli Demirguc-Kunt, the Bank’s director of development policy and chief economist of the Finance and Private Sector Network.

The Bank’s financial inclusion portfolio totals over $3 billion, with projects in over 60 countries. It supports country action plans for financial inclusion as well as increasing access to financial products and services such as credit, savings, payments, and insurance through low cost delivery mechanisms (ATM kiosks, mobile phones).

REGIONAL HIGHLIGHTS

High Income: Nine out of 10 adults in high-income economies report having an account at a formal financial institution.

East Asia and Pacific: 28% of adults in EAP reported having saved at a formal financial institution in the past 12 months, compared to 10 percent in the rest of the developing world.

Europe and Central Asia: 61% of account holders in ECA use their accounts to receive wages, compared to 32% in the rest of the developing world.

Latin America and Caribbean: 41% of non-account-holders in LAC cite cost as a reason for not having a formal account. 19% of adults in LAC report having a credit card, compared to 5 percent in the rest of the developing world.

Middle East and North Africa: Account holders in MENA access their accounts less frequently than do account holders in other regions: 17% of adults with a formal account report zero deposits and withdrawals in a typical month, compared to 8% globally.

South Asia: The relative gender gap in formal account ownership is highest in South Asia: 41 percent of men and 25 percent women have an account. 73% of savers in South Asia report saving for an expense in the future such as an education or a wedding.

Sub-Saharan Africa: 16% of adults in SSA report having used a mobile phone to pay bills, send or receive money in the past 12 months, compared to 3% in the rest of the developing world.

Contacts:

In Washington: Merrell Tuck-Primdahl, (202) 473-9516, Mtuckprimdahl@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

For More Information:

· Measuring Financial Inclusion: The Global Findex Database World Bank Policy Research Working Paper 6025. Asli Demirguc-Kunt and Leora Klapper, 2012.

· Global Findex Website - http://www.worldbank.org/globalfindex and Data Portal - http://datatopics.worldbank.org/financialinclusion/

· World Bank eAtlas of Financial Inclusion http://www.app.collinsindicate.com/worldbankatlas-fi/en

· Little Data Book on Financial Inclusion - http://data.worldbank.org/products/data-books/little-data-book-on-financial-inclusion

· For info on operational support as well as other related resource materials visit – www.worldbank.org/financialinclusion

3 out of 5 People in Developing Countries Lack Safety Nets

2012-04-18T15:00:00.000Z

World Bank announces new focus on Social Protection and Labor and releases new open data tool to help countries close the gap in coverage for the poorest

WASHINGTON, April 18, 2012 – The World Bank today released new data showing that at least 60 percent of people in developing countries – and nearly 80 percent in the world’s poorest countries – lack effective safety net coverage as countries struggle to protect their most vulnerable citizens from the negative impacts of global financial volatility and food and fuel price hikes.

Sixty six million children around the world go to school hungry and struggle to concentrate and learn, a deficit that can be addressed with school feeding programs for the poorest. More than 2.8 million newborns die in the first week of their lives. Many of these deaths can be prevented by providing more pre- and post-natal care for mothers and their children. Food insecurity leads to greater family conflict and divorce rates.

Expanding cost-effective safety nets – including cash transfers, food assistance, public works programs, and fee waivers – to help countries respond to crises and address persistent poverty will be a main item for discussion by finance and development ministers at the World Bank-IMF Development Committee meeting on April 21.

“Safety nets can transform people’s lives and provide a foundation for inclusive growth without busting budgets,” says Robert B. Zoellick, President of the World Bank Group. “Effective safety net coverage overcomes poverty and promotes economic opportunity and gender equality by helping people find jobs, cope with economic shocks, and improve the health, education, and well-being of their children.”

The Bank’s new 2011 Atlas of Social Protection: Indicators of Resilience and Equity (ASPIRE) provides the first-ever online snapshot of household-level data on safety nets and other social protection and labor (SPL) programs in developing countries, and was launched together with the Bank’s new Social Protection and Labor global strategy for the next 10 years. While sustained growth in many developing countries has pulled hundreds of millions of people out of poverty and into the middle class, this economic progress has yet to reach a majority in the poorest countries that face unemployment, disability, illness, and struggle to protect themselves against economic shocks, persistent poverty, natural disasters, or other crises.

A new strategy for expanding coverage to the poorest people

The Bank’s new strategy calls for investing in stronger SPL systems in countries to improve the quality and reach of safety nets and other SPL programs in four areas:

· First, extending coverage to the poorest countries and poorest and most vulnerable people, where the needs are greatest.

· Second, building a coherent and integrated portfolio of national SPL policies and programs that help people deal with multiple risks, and can be scaled up or down in response to crises.

· Third, increasing access to jobs and economic opportunities, with a strong focus on investing in early childhood development and in workers’ skills and productivity.

· Fourth, emphasizing evidence-based action and South-South sharing of knowledge of what works.

“With this new strategy, the Bank will help countries move their social protection and labor coverage from a set of isolated interventions to a smarter, more inclusive, and more responsive approach,” says Arup Banerji, World Bank Director of Social Protection and Labor. “This systemic approach helps countries address fragmentation and duplication across programs and create solutions tailored to their own contexts. With stronger social protection and labor systems, countries can expand effective coverage to the people who need it most.”

Well-designed SPL programs, such as Bolsa Família in Brazil and Oportunidades in Mexico, are cost-effective, costing countries as little as half a percent of GDP.

The Bank developed its new SPL strategy following extensive global consultations with governments, international development agencies, trade unions, and other civil society organizations. The three-tiered strategy discusses why and how the Bank can help countries invest in well-designed safety nets and other SPL programs that promote resilience by insuring people against risk; increase equity by protecting against dire poverty and catastrophic loss of human capital; and create opportunity through investments in young children, skills development, and improving ways for people to find jobs.

“It’s not a question of whether countries can afford to have safety net programs,” says H.E. Ato Sufian Ahmed, Minister of Finance and Economic Development of Ethiopia, where the Productive Safety Nets Program has protected millions from famine during recent droughts in the Horn of Africa. “It’s whether we can afford not to have them.”

“Our experience in Brazil shows that a strong safety net can help the poorest children grow up healthy and well-fed, go to and stay in school. In the future, we also expect that they will graduate, and get better jobs – so we can close the gap between rich and poor,” says Rômulo Paes da Sousa, Vice Minister of Social Development and Fight Against Hunger in Brazil. “The World Bank’s new strategy to help expand safety net coverage to the poorest countries and poorest populations is the right one – because safety nets are a critical investment to reduce poverty, promote equity and sustainable growth, and be prepared for the next crisis.”

New data on social protection in countries

As a companion to the new strategy, the Bank’s ASPIRE online tool is the most up-to-date compilation of global SPL estimates, including data from 57 countries – mostly in the developing world – from 2005-2010. ASPIRE provides open and accessible household-level data on populations’ social and economic status; assessments of SPL programs, including weaknesses such as low coverage and poor targeting; SPL program impacts on poverty and inequality; and ways to improve household data collection for SPL programs. Data from additional countries – especially those in Africa and the Middle East – will be added in the coming months, and the database will be updated twice a year.

World Bank support for social protection and labor

World Bank Group support for SPL programs reached $11.5 billion in 83 countries during the last decade. In response to the global financial, food, and fuel crises, the Bank almost tripled its SPL financing from an annual average of $1.6 billion in 1998-2008 to an annual average of $4.2 billion in 2009-2011. During the last six years, Bank-financed safety net projects have directly benefited more than 267 million people, mainly through conditional cash transfer programs (94.5 million), other cash assistance transfers (78.5 million), and public works (12.8 million).

Contacts:

In Washington: Melanie Mayhew, (202) 458-7891, mmayhew1@worldbank.org

Broadcast requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

For more information on the Bank’s Social Protection and Labor Strategy, visit www.worldbank.org/spstrategy.

To view the 2011 Atlas of Social Protection, go to www.worldbank.org/spatlas.

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World Bank and UN Partners Boost Action on Road Safety

2012-04-17T20:00:00.000Z

New initiatives announced to help tackle 1.3 million yearly death toll

WASHINGTON, DC, April 17, 2012 --- The World Bank hosted the 15^th UN Collaboration on Road Safety meeting in Washington, DC on April 16-17 aimed at strengthening efforts to support road safety action in the developing world ahead of a UN General Assembly debate on road safety on April 19.

As part of a growing international effort to help tackle the 1.3 million yearly death toll on the world’s roads, new initiatives were announced ranging from a road safety observatory for Latin America to the establishment of a road policing organization in Singapore.

“Road safety is a development issue that affects poor populations in developing countries disproportionately,” said Rachel Kyte, World Bank Vice President for Sustainable Development, in a video message at the opening session of the meeting. “Currently, 1.3 million people are killed on the world’s roads each year and 90 percent of these deaths occur in low- and middle-income countries, with an economic cost that can exceed total overseas aid flowing in. The World Bank is committed to taking bold action on this agenda.”

The UN Collaboration partners reviewed progress on the Decade of Action for Road Safety 2011-2020, which aims to save 5 million lives and prevent 50 million serious injuries by helping countries around the world improve their road safety outcomes, for instance through better road safety management, safer vehicles and roads, and post-crash care. The World Bank is supporting this effort through the Global Road Safety Facility, a donor-funded program that coordinates an initiative between seven multilateral development banks (MDBs) looking to harmonize their approaches to country road safety interventions.

"The development banks can play a key role during the Decade of Action by ensuring that the safety of citizens is prioritized in loans for road building,” said Dr. Etienne Krug, Director, WHO Department for Violence and Injury Prevention and Disability.

The UN Collaboration meeting announced several new developments aimed at boosting the road safety capacity of low- and middle-income countries, including CAF (development bank of Latin America) joining the MDB Road Safety Initiative and the launch of a new road safety observatory for Latin American countries.

“CAF is pleased to be joining this Initiative. We work on providing safe and environmentally sound infrastructure to our clients, and road safety continues to be a problem that must be solved,” commented Mr. Antonio Juan Sosa, CAF Vice President of Infrastructure.

The Government of Singapore and the World Bank Global Road Safety Facility (GRSF) are also establishing a new International Road Policing Organization (RoadPol) Secretariat in Singapore.

"Road safety policing in the developing world needs greater support to achieve results in protecting citizens. I am confident that RoadPol will play an important role in promoting higher standards," said Mr. Anselm Lopez, Director, Ministry of Home Affairs, Singapore.

On April 18, the Global Road Safety Facility and Safe Kids Worldwide will host a discussion with civil society organizations to explore how they can become more involved in action and advocacy on road safety. This meeting will be webcast live on the World Bank’s external website.

Contact:

In Washington: Cathy Russell, (202) 458-8124, crussell@worldbank.org

For more information:

World Bank Transport website: http://www.worldbank.org/transport

World Bank Global Road Safety Facility website: http://www.worldbank.org/grsf

UN Road Safety Collaboration website: http://www.who.int/roadsafety/en/

CAF website: http://www.caf.com/

Safe Kids Worldwide website: http://www.safekids.org/worldwide/

World Bank updates via Twitter: http://www.twitter.com/wbsustaindev

OPED: Europe is distracted by endless firewall talk

2012-04-16T21:18:56.000Z

By Robert Zoellick

*As published in the Financial Times online on April 16, 2012

Policy makers under pressure can get preoccupied with the fixation of the moment. For the eurozone, that idée fixe has been “the firewall”. How big is big enough? Who contributes and how?

Now that the eurozone finance ministers have exhausted themselves with a multilayered package of hundreds of billions of euros, the debate will go global at this week’s spring meetings of the International Monetary Fund and the World Bank. The next preoccupation will be how many more hundreds of billions of euros should be pledged to the IMF. It will be Firewall II: the Sequel.

I beg to differ. Not with firewalls exactly, but with the preoccupation.

The survival of the eurozone now depends on Italy and Spain. They are the countries that are too big to fail – or to rescue. Extraordinary action by the European Central Bank has lowered the interest rates that Italy and Spain pay on their debt, but not solved their problems.

In one sense, the much-badgered Germans are right. The fates of Italy and Spain depend on the steps their governments take to cut spending, reduce debt, strengthen banks and make structural reforms. Firewalls offer reassurance to markets, but the governments’ action, their political support and the ECB’s liquidity will be decisive.

The firewall preoccupation distracts from the fundamental issue: what should the EU do to help Italy and Spain retain political support for reforms? Structural steps are painful for any government. They are devilishly difficult without growth. Reforms can disrupt an economy for a time as investment, business and workers adjust.

In Italy, Mario Monti, prime minister, has begun an exemplary combination of fiscal consolidation and reforms of pensions and labour markets. But unemployment is rising. Will Italy sustain the politics of reform without supportive EU policies? Mariano Rajoy, Spain’s prime minister, has set a similar course, but even modest concessions on the path to reduce the deficit, combined with 23 per cent unemployment and challenges in elections and on the street, have prompted a rise in Spain’s borrowing cost. The economics of adjustment and the politics of reform would be easier if Italy and Spain could be boosted by European growth.

Yet as one European told me, economics is a branch of moral philosophy in Germany, so do not expect expansionary demand policies to trump rectitude, discipline and belt-tightening. There is, however, a supply-side growth alternative: strengthening investment, the single market, and the EU itself.

Instead of quarrelling over firewalls, Europeans should add just a fraction – say €10bn – to the capital of the European Investment Bank. Under current conditions, the EIB may actually have to reduce lending. Instead, the EIB could use more capital to borrow and then invest to support structural reforms, showing Spaniards and Italians that their sacrifices will draw productive investments. The EIB is now even led by a talented German, Werner Hoyer, from the governing coalition. President José Manuel Barroso of the European Commission should also demand disbursement of the billions of euros of structural and cohesion funds that sit on its books while poorer parts of Europe go wanting; find the logjam and break it.

The single market – the very fibre of EU integration – could also come to the rescue. Although goods move freely in the EU, the service sector in many countries – including Germany – could open up more. Labour movement is also far more limited than in a true single market. Whether the cause is language, habits, matching jobs with workers, or cost of relocation, now is the moment to overcome the hurdles and advance the true unification of the EU. Show people who want to work that the EU wants them, too.

The combination of fiscal and structural reforms, EIB and EC investments, the opening of service markets, and easing the movement of workers will pay dividends. Mr Monti has travelled to Beijing to show China’s sovereign investment fund that Italy is becoming a good place to invest. That makes more sense than lobbying the Chinese to add to firewalls, especially if the EU itself invests and makes the single market more attractive.

Firewalls have their purpose. But this debate risks becoming a distraction. Europeans and their partners need to keep their eye on the strategic Schwerpunkt: helping Italy and Spain with growth and the politics of fiscal consolidation and structural reforms that will boost business, competition and jobs. The ECB has done its work. The other institutions of the EU need a burst of activism on investment and strengthening the single market to preserve and secure their union.

The writer is World Bank president.

Statement from Dr. Jim Yong Kim regarding his selection by the World Bank's Executive Directors as 12th President of the World Bank

2012-04-16T18:35:12.000Z

WASHINGTON, April 16, 2012 - Dr. Jim Yong Kim today released a statement in response to his selection by the World Bank's Executive Directors as 12th President of the World Bank:

“I am honored to accept the Executive Directors’ decision to select me as the next President of the World Bank Group. I am delighted to succeed Robert Zoellick, who has served with excellence and distinction during the last five years, and I am grateful to the Bank’s member countries for the broad support I have received.

I have spoken with Minister Okonjo-Iweala and Professor Ocampo. They have both made important contributions to economic development, and I look forward to drawing on their expertise in the years to come.

It is befitting that I conclude my global listening tour in Peru. It was here in the shantytowns of Lima that I learned how injustice and indignity may conspire to destroy the lives and hopes of the poor. It was here that I saw how communities struggle to prosper because of a lack of infrastructure and basic services. It was here that I learned that we must raise our sights to match the aspirations of those most excluded. And it was here that I learned that we can triumph over adversity by empowering the poor and focusing on results.

As President, I will seek a new alignment of the World Bank Group with a rapidly changing world. Together, with partners old and new, we will foster an institution that responds effectively to the needs of its diverse clients and donors; delivers more powerful results to support sustained growth; prioritizes evidence-based solutions over ideology; amplifies the voices of developing countries; and draws on the expertise and experience of the people we serve.

My discussions with the Board and member countries point to a global consensus around the importance of inclusive growth. We are closer than ever to achieving the mission inscribed at the entrance of the World Bank - “Our Dream is a World Free of Poverty.” The power of this mission is matched by the talent of the World Bank Group staff. May this shared mission embolden our efforts to end the disparities which too often diminish our shared humanity. Let us work together to provide every woman and man with the opportunity to determine their own future.”

Contacts:

In Washington: David Theis, (202) 458-8626, dtheis@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

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Zoellick Congratulates Dr. Jim Yong Kim as New World Bank Group President

2012-04-16T17:02:40.000Z

Washington, April 16, 2012—World Bank Group President Robert B. Zoellick today congratulated Dr. Jim Yong Kim for being chosen to become the 12th president of the development institution and offered his support in ensuring a successful handover for July 1.

“I am pleased to work with Jim Yong Kim during the transition. He is an impressive and accomplished individual. Jim has seen poverty and vulnerability first-hand, through his impressive work in developing countries. His innovations in health-care have helped to save numerous lives. As President at Dartmouth College, Jim has had to take tough managerial and financial decisions while running a large, multidisciplinary organization. His rigorous, science-based drive for results will be invaluable for the World Bank Group as it modernizes to better serve client countries in overcoming poverty.”

Contacts:

In Washington: David Theis, (202) 458-8626, dtheis@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

For more information on the World Bank Program please visit www.worldbank.org

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World Bank’s Executive Directors Select Dr. Jim Yong Kim 12th President of the World Bank Group

2012-04-16T16:46:47.000Z

WASHINGTON, April 16, 2012 - The Executive Directors met today to select a new President of the World Bank Group. The Board expressed its deep gratitude for Mr. Robert B. Zoellick’s outstanding leadership and his dedication to reducing poverty in its member countries, the core mandate of the World Bank Group.

The Executive Directors followed the new selection process agreed in 2011 which, for the first time in the Bank’s history, yielded multiple nominees. This process included an open nomination where any national of the Bank’s membership could be proposed by any Executive Director or Governor, publication of the names of the candidates, interviews of the candidates by the Executive Directors, and final selection of the President.

The Executive Directors selected Dr. Jim Yong Kim as President for a five-year term beginning on July 1, 2012. The President is Chair of the Boards of Directors of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The President is also ex officio Chair of the Boards of Directors of the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the Administrative Council of the International Centre for Settlement of Investment Disputes (ICSID).

We, the Executive Directors, wish to express our deep appreciation to all the nominees, Jim Yong Kim, José Antonio Ocampo and Ngozi Okonjo-Iweala. Their candidacies enriched the discussion of the role of the President and of the World Bank Group’s future direction. The final nominees received support from different member countries, which reflected the high caliber of the candidates. We all look forward to working with Dr. Kim when he assumes his responsibilities.

Dr. Jim Yong Kim is currently President of Dartmouth College. A U.S. national, Dr. Kim is a co-founder of Partners in Health (PIH) and a former director of the Department of HIV/AIDS at the World Health Organization (WHO). Before assuming the Dartmouth presidency, Dr. Kim held professorships at Harvard Medical School and the Harvard School of Public Health. He also served as chair of the Department of Global Health and Social Medicine at Harvard Medical School, chief of the Division of Global Health Equity at Brigham and Women’s Hospital, and director of the François Xavier Bagnoud Center for Health and Human Rights at the Harvard School of Public Health.

Dr. Kim was awarded a MacArthur “Genius” Fellowship (2003), was named one of America’s “25 Best Leaders” by US News & World Report (2005), and was selected as one of TIME magazine’s “100 Most Influential People in the World” (2006). He was elected in 2004 to the Institute of Medicine of the National Academy of Sciences—one of the highest honors in the fields of health and medicine—for his professional achievements and commitment to service. He has published widely over the past two decades, authoring or co-authoring articles for leading academic and scientific journals, including the New England Journal of Medicine, Lancet, and Science.

Born in 1959 in Seoul, South Korea, Dr. Kim moved with his family to the United States at the age of five and grew up in Muscatine, Iowa. Dr. Kim graduated magna cum laude from Brown University in 1982. He earned a medical doctorate from Harvard Medical School in 1991 and a Ph.D. in anthropology from Harvard University in 1993. He is married to Dr. Younsook Lim, a pediatrician. The couple has two young sons.

Contacts:

In Washington: David Theis, (202) 458-8626, dtheis@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

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Be updated via Twitter: http://www.twitter.com/worldbank

For our YouTube channel: http://www.youtube.com/worldbank

Disclosure of Assets and Income by Public Officials Is Crucial to Curbing Corruption, Finds New StAR Study

2012-03-28T14:30:00.000Z

WASHINGTON, March 28, 2012 -- Disclosure by public officials of their income, assets and interests should be mandated if the fight against corruption is to succeed, according to a study released today by the Stolen Asset Recovery (StAR) Initiative of the World Bank and the United Nations Office on Drugs and Crime.

The first global study of financial disclosure laws and practices, “Public Office, Private Interests: Accountability through Income and Asset Disclosure” calls for renewed commitment to income and asset disclosure to deter the use of public office for private gain and to help manage actual and apparent conflicts of interest in the public sector. The study also finds that asset disclosure systems are more effective when there is a credible threat that violations will be detected and punished.

“Citizens want officials to be honest about their income and assets, to ensure that they are not looting the public coffers or accumulating ill-gotten wealth,” said Jean Pesme, Stolen Asset Recovery Coordinator. “This helps build a climate of integrity and trust towards senior public officials.” Recent cases involving large-scale looting of assets have also shown that effective Income and Asset Declaration Systems can be a crucial tool for countries in detecting and recovering such assets.

The United Nations Convention against Corruption (UNCAC), which came into force in 2003 and has been ratified or acceded to by 159 countries, calls on its States Parties to establish effective financial disclosure systems for public officials, as well as to consider sharing resulting information with relevant authorities in other States. The study aims to close the implementation gap on this critical UNCAC requirement. Among the topics it addresses are the difficult questions around the objectives and scope of a financial disclosure requirement, approaches to verification, sanctions and enforcement, and the often controversial subject of public access to disclosure information. It also makes the case that context matters, and provides practical recommendations on tailoring income and asset disclosure regimes to different country contexts.

“We hope that this critical study will not only help governments design and implement effective income and asset declaration systems but also drive advocacy to challenge policy-makers who might be reluctant to create or improve disclosure systems in their countries. We also have to remember that income and asset disclosure systems cannot function in isolation and need to be part of a country’s broader anti-corruption framework,” said Francesa Recanatini, Public Sector Specialist at the World Bank.

The study is based on analysis by the World Bank’s Public Accountability Mechanism (PAM) initiative of disclosure laws in 88 countries and eleven case studies which will be published in a companion volume later this year.

To access the report, please visit www.worldbank.org/star

Contacts:

In Washington: Xenia Zia Morales, +1 202 473 9027, xmorales@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

About StAR

The Stolen Asset Recovery Initiative (StAR) is a partnership between the World Bank Group and the United Nations Office on Drugs and Crime that supports international efforts to end safe havens for corrupt funds. StAR works with developing countries and financial centers to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets.

About the World Bank Group

The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.

About the United Nations Office on Drugs and Crime

UNODC is a global leader in the fight against illicit drugs and international crime. Established in 1997, UNODC operates in all regions of the world through an extensive network of field offices. UNODC is mandated to assist the Member States of the United Nations in their struggle against illicit drugs, crime and terrorism. As such, UNODC is also the guardian of several international treaties against drugs, transnational organized crime and corruption as well as a host of standards and norms relevant to criminal justice reform.

Governance and Anti-corruption Remain Integral to World Bank’s Work

2012-03-27T17:37:37.000Z

WASHINGTON, March 27, 2012 — The World Bank’s Board of Executive Directors today endorsed the institution’s updated governance and anti-corruption strategy and implementation plan as an integral part of the work to improve development effectiveness, reduce poverty and promote economic growth.

Strengthening Governance, Tackling Corruption: the World Bank Group’s Updated Strategy and Implementation Plan will focus on increasing and systematizing governance and anti-corruption work in country and sector programs; strengthening country institutions; better measuring results from programs and policies; managing risks; supporting governance in global initiatives; and improving the organization of the Bank’s internal resources for governance work.

“Accountable institutions are needed to improve development effectiveness, reduce poverty and promote inclusive economic growth,” said Linda Van Gelder, World Bank Director for Public Sector and Governance. “Our updated strategy will help build those institutions for better governance around the world. The Bank’s country-driven approach will be supported by global initiatives against anti-corruption and malfeasance.”

The update builds on the successes and lessons learned from the 2007 strategy, Strengthening World Bank Group Engagement on Governance and Anticorruption (GAC), in order to meet the challenges presented by fundamental changes that have happened around the world since then. In particular these changes include the financial crisis; greater citizen demands for transparency, accountability and participation --as evidenced by the Arab Spring-- and a more open and transparent World Bank (see factsheet).

In addition to strengthen governance and anti-corruption work in client countries, the updated strategy focuses on better measuring results and the development impact of Bank-funded programs and projects. Further, the Bank is strengthening its management of risk while at the same time applying a zero tolerance policy for fraud and corruption.

The Bank has now debarred 485 firms, individuals, and non-governmental organizations, preventing them from participating in future Bank-financed projects, through its Integrity Vice Presidency (INT), which has ramped up its work in the last few years to reduce the risk of fraud and corruption in projects.

In addition, the Bank has become more open and transparent. It has been actively working on a number of Open Development initiatives like the ‘Mapping for Results and Aidflows’ website to promote better monitoring of project results, enhance transparency, and strengthen country dialogue and civic engagement. Up to the end of 2011, the Bank had made available to the public 42,000 new documents since the Access to Information Policy became effective in July, 2010.

Strengthening Governance: Tackling Corruption: the World Bank Group’s Updated Strategy and Implementation Plan was informed by the feedback received as part of the World Bank country dialogue and online consultations from January 17 to February 19.

Contacts:

In Washington: Michael Jelenic (202) 473-2075, mjelenic@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

To read the Governance and Anti-Corruption Updated Strategy, please visit: http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resources/285741-1326816182754/GACStrategyImplementationPlan.pdf

To learn more about the World Bank’s work on governance and anti-corruption, please visit: www.worldbank.org/governance

Closing of Nominations for President of World Bank

2012-03-23T22:20:46.000Z

WASHINGTON, March 23, 2012 - The Board of Executive Directors of the World Bank confirmed today that, as announced on February 17, the period for submitting nominations for the position of the next President of the World Bank closed on Friday, March 23. The Board is pleased to announce that the following three nominees will be considered for the position:

Jim Yong Kim, a US national and President of Dartmouth College, New Hampshire

José Antonio Ocampo, a Colombian national and Professor at Columbia University, New York

Ngozi Okonjo-Iweala, a Nigerian national and Coordinating Minister of the Economy and Minister of Finance, Nigeria

In accordance with the procedures previously announced, the Executive Directors will conduct formal interviews of the three candidates in Washington, D.C., during the following weeks, with the expectation of selecting the new President by consensus by the 2012 Spring Meetings.

Contacts:

In Washington: David Theis, (202) 458-8626, dtheis@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

“Dirty Money” in Illegal Logging Can be Tracked and Confiscated—World Bank Reports

2012-03-21T00:00:00.000Z

Washington, March 20, 2012 – Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe. A new World Bank report released today shows how countries can effectively fight illegal logging through the criminal justice system, punish organized crime, and trace and confiscate illegal logging profits.

The report, Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging, affirms that to be effective, law enforcement needs to look past low-level criminals and look at where the profits from illegal logging go. By following the money trail, and using tools developed in more than 170 countries to go after ‘dirty money,’ criminal justice can pursue criminal organizations engaged in large-scale illegal logging and confiscate ill-gotten gains.

The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10–15 billion annually in criminal proceeds. Mostly controlled by organized crime, this money is untaxed and is used to pay corrupt government officials at all levels. The new report provides policy and operational recommendations for policy makers and forestry and law enforcement actors to integrate illegal logging into criminal justice strategies, foster international and domestic cooperation among policy makers, law enforcement authorities and other key stakeholders, and make better use of financial intelligence.

“We need to fight organized crime in illegal logging the way we go after gangsters selling drugs or racketeering,” said Jean Pesme, Manager of the World Bank Financial Market Integrity team that helps countries implement effective legal and operational frameworks to combat illicit financial flows.

Despite compelling evidence showing that illegal logging is a global epidemic, most forest crimes go undetected, unreported, or are ignored. In addition, estimates of criminal proceeds generated by forest crimes do not capture their enormous environmental, economic and societal costs— biodiversity threats, increased carbon emissions and undermined livelihoods of rural peoples, with organized crime profiting at the expense of the poor.

“Preventive actions against illegal logging are critical. We also know that they are insufficient,” said Magda Lovei, Sector Manager at the World Bank. “When implemented, the recommendations of this publication can have a strong deterrent effect that has been missing in many actions taken against illegal loggers.”

Organized crime networks behind large scale illegal logging have links to corruption at the highest levels of government. The investigation of forest crimes is made even more complex by the international dimension of these operations. Recognizing these challenges, this study calls for law enforcement actions that are focused on the “masterminds” behind these networks—and the corrupt officials who enable and protect them.

The full report can be accessed at www.worldbank.org/amlcft

Contacts:

In Washington: Beata Plonka, 1-202-458-5991, bplonka@worldbank.org

Xenia Zia Morales, 1-202-473-9027, xmorales@worldbank.org

Doing business in a more transparent world 2012 - economic profile : Kuwait - comparing regulation for domestic firms in 183 economies

2012-02-23T05:00:00.000Z

Doing business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. In a series of annual reports doing business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. This economy profile presents the doing business indicators for Kuwait. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 2011 (except for the paying taxes indicators, which cover the period January December 2010).

Arab development assistance : four decades of cooperation

2010-10-01T04:00:00.000Z

This study provides an overview of Arab official development assistance (ODA) over the past four decades. Trends in volume, composition, and direction are discussed in chapter two and the institutional framework is discussed in chapter three. Over 90 percent of Arab development assistance is provided by three countries: the Kingdom of Saudi Arabia (KSA), Kuwait, and the United Arab Emirates (UAE).

Doing business 2010 : Kuwait - comparing regulation in 183 economies

2009-09-30T04:00:00.000Z

Doing Business 2010 is the seventh in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. This paper presents the summary Doing Business indicators for Kuwait. The paper includes the following headings: introduction and aggregate rankings, starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, closing a business, and Doing Business 2010 reform.

Doing business 2009 : country profile for Kuwait - comparing regulation in 181 economies

2008-10-06T04:00:00.000Z

Doing Business 2009 is the sixth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 181 economies, from Afghanistan to Zimbabwe, over time. This paper presents the summary Doing Business indicators for Kuwait. The paper includes the following headings: introduction, starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.