(Press Access) Opening Press Conference

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(Press Access) Opening Press Conference

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World Bank Group President David Malpass will address the press during the World Bank Group and International Monetary Fund 2021 Annual Meetings. He will provide updates on the Bank Group’s efforts to rapidly scale up our support to help countries acquire and deploy vaccines and also talk about assisting countries accelerate an end to the pandemic and build a green, resilient, and inclusive recovery.

This year, due to the coronavirus, the Management of the IMF and World Bank Group and their Executive Boards are adapting the 2021 IMF-World Bank Annual Meetings to a mostly virtual format.

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00:00 Welcome to the 2021 Annual Meetings press conference
00:52 Opening remarks by WBG President David Malpass
08:41 Public spending in Mexico
11:28 Climate finance provided to developing countries
14:25 Support to Sub-Saharan Africa, including Ghana
17:31 The role of young people in global climate action
20:07 Support to Middle East and North Africa, including Egypt
24:30 India's economy and COVID-19 impact
27:20 Measures to save companies in difficulty
30:41 Lessons learned from this health and social crisis
34:22 Support from the World Bank Group to low-income countries
40:00 Thanks! Closure of the press conference

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  • 0:01 DAVID THEIS, WORLD BANK GROUP PRESS SECRETARY:  Good morning, afternoon, or evening, depending  
  • 0:05 on your time zone. I’m David Theis, the World  Bank’s press secretary. Thank you for joining  
  • 0:10 our virtual 2021 Annual Meetings press conference  with World Bank Group President David Malpass.
  • 0:16 Mr. Malpass will give brief opening  remarks and we’ll turn to your questions.  
  • 0:20 Incidentally, because he values transparency, you  can also follow the World Bank Group President  
  • 0:24 at DavidMalpassWBG. That's  on Twitter @DavidMalpassWBG,  
  • 0:29 and you'll find that on the chat, as well.
  • 0:32 Thanks to those who’ve sent questions in advance,  and we’ll be looking for more questions online  
  • 0:36 in real time. We may edit for clarity or  length, so appreciate your understanding.
  • 0:42 Hope everyone’s keeping well.
  • 0:43 Mr. Malpass?
  • 0:47 DAVID MALPASS, WORLD BANK GROUP PRESIDENT:  Hi everybody. Good morning from DC.  
  • 0:57 It’s Wednesday and it must be DC at the Annual  Meetings. I’m glad you are all able to join.  
  • 1:02 We are in virtual Annual Meetings, with full  run of meetings both on Monday and Tuesday.
  • 1:11 I’ve already participated in meetings with the  G24, Parliamentarians, and CSOs, the civil society  
  • 1:18 organizations. I joined a meeting of the G20  Leaders yesterday on Afghanistan. I’ve also met  
  • 1:26 with Secretary Yellen, John Kerry, the President  of Colombia, and ministers from Mexico, Japan,  
  • 1:33 and Korea. I’ve welcomed their strong and growing  support for a successful IDA20. That’s important.
  • 1:43 Throughout the week we will be discussing  a broad range of development issues –the  
  • 1:48 economic outlook, growth, vaccines,  debt, climate, trade, among others.
  • 1:55 As you know, the world is suffering  
  • 1:58 from a dramatically uneven recovery. Inequality is  worsening across country groups. Per capita income  
  • 2:06 in advanced economies is growing nearly 5%  in 2021, but that is compared to only 0.5%  
  • 2:14 in low-income countries. The outlook remains grim  for most of the developing world. There’s high  
  • 2:21 inflation, there’s too few jobs, there’s shortages  that extend to food, water, and electricity.
  • 2:28 For example, due to the pandemic, the factory  and port shutdowns going on, the bottlenecks  
  • 2:36 in logistics and supply chains are worsening. We  see sharp increases in the backlog of orders. Our  
  • 2:44 estimates suggest that 8.5% of global container  shipping is stalled in or around ports. That's  
  • 2:52 twice as much as in January of 2020. These  disruptions are placing sharp price increases  
  • 2:59 on shipping fees, and the final costs of  goods, and some of them will not be transitory.  
  • 3:06 It would take time and cooperation of  policymakers across the world to sort them out.
  • 3:13 As we look at development, the  pandemic is pushing up the poverty  
  • 3:17 around the world. It's already  pushed nearly 100 million people  
  • 3:22 into extreme poverty. That's the  added number in extreme poverty.
  • 3:27 We’re witnessing a tragic reversal in development.  The progress in reducing extreme poverty has been  
  • 3:34 set back by years – for some, by a decade.  And it’s vital that we address this head-on  
  • 3:46 by redirecting policies in  both the advanced economies  
  • 3:49 and developing countries so that growth  and investment are more widespread.
  • 3:54 Our highest priority is to secure  access to vaccines and speed up  
  • 4:00 shots in arms. I chair the Multilateral Leaders  Taskforce, which includes Kristalina [Georgieva,  
  • 4:06 IMF Managing Director], Tedros [Adhanom  Ghebreyesus, WHO Director-General], and  
  • 4:07 Ngozi [Okonjo-Iweala, WTO Director General].  We had a good public discussion yesterday  
  • 4:12 and we’ll soon be holding our fifth meeting of  the Taskforce focused on matching the extensive  
  • 4:19 pledges and trying to help actual vaccinations  come out of the pledges that have been given  
  • 4:26 by the advanced economies. There's got to be a  way to close that deployment gap. The World Bank  
  • 4:32 is able to finance the doses and the deployment,  but there needs to be early deliveries scheduled,  
  • 4:40 so we are urging governments that have  sufficient doses to swap early deliveries  
  • 4:46 to allow for vaccinations in developing countries  and we are urging the finance ministers and health  
  • 4:52 ministers of developing countries to enter  contracts in order to get deliveries early,  
  • 4:59 as soon as possible of vaccines. And we're  working with countries also to reduce the  
  • 5:04 hesitancy to encourage the vaccination of  people. Our observation through the Task force,  
  • 5:11 and through our country programs, is that when  the countries are able to get vaccines, people are  
  • 5:20 being vaccinated and the vaccination rate is going  up consistently, when the supply is available.
  • 5:27 The World Bank’s support for the poorest  countries is at an all-time high.  
  • 5:32 We’re working to help countries secure more  doses and deploy them. I was in Sudan and Jordan,  
  • 5:40 where I witnessed firsthand—this is now two  weeks ago, seems like yesterday—vaccination  
  • 5:49 efforts, and they are accelerating.  I’m pleased, the World Bank now  
  • 5:54 has 250 million[i] doses under contract with  Bank financing. Those deliveries will be going on  
  • 6:02 in the coming months, and that is  very important to saving lives.
  • 6:06 I want to mention another couple of priorities and  then turn to your questions. The debt challenges  
  • 6:13 are confronting many countries. On Monday, we  released the annual IDS [International Debt  
  • 6:17 Statistics] report. And it showed a 12% increase  in debt for the low-income countries, reaching  
  • 6:24 $860 billion. We need new systems to push that  along, because so many countries are in external  
  • 6:32 debt distress or at high risk of it. We need a  comprehensive approach, including debt reduction,  
  • 6:40 swifter restructuring, and more transparency  in order to make progress on this problem.
  • 6:47 With the IDA20 replenishment in December,  African heads of state have already called  
  • 6:54 for donors to be ambitious in their support for  IDA’s mission. The financing needs are urgent,  
  • 7:01 they’ll remain elevated for years, and a  successful IDA20 is vital. We’re moving  
  • 7:09 toward the conclusion of the IDA20 fundraising  effort in December in Tokyo. I met with the  
  • 7:17 deputy finance minister [of Japan] yesterday. And  we’re pleased with the progress—we’re very pleased  
  • 7:23 with the strong support worldwide  for a larger IDA20 replenishment.
  • 7:30 Resources will be a topic this week.  And we’ll also need active participation  
  • 7:36 with the public and private sectors. I mentioned  my meetings with parliamentarians, with CSOs,  
  • 7:42 and we’re meeting regularly  with foundations—indeed  
  • 7:46 the whole international community in order to  help bring the resources to bear on the range of  
  • 7:54 challenges, including vaccines, debt,  and of course climate change issues.
  • 8:03 I have received a note. I must have said 250,000  doses, but I meant 250 million doses—a quarter of  
  • 8:11 a billion doses are under contract by the World  Bank that can get to countries through country  
  • 8:18 financing programs. And we are working as hard  as we can 24/7 to expand that number as soon as  
  • 8:27 we can get doses and delivery schedules from the  advanced economies and from the manufacturers.
  • 8:33 Okay, with that I will be happy to  take your questions. Thanks all.
  • 8:37 MR. THEIS: Great. And plenty of  questions on screen, already.
  • 8:41 I see the first in is from Yolanda Morales of  El Economista in Mexico. "Mr. Malpass, World  
  • 8:47 Bank experts used to suggest to strengthen the  efficiency of public spending to promote growth  
  • 8:52 and support development. How do we make public  spending more efficient in a country like Mexico?"
  • 8:57 MR. MALPASS: Governance processes are important.  How do you make your budget? Mexico has a  
  • 9:04 system of elections that's welcomed by the world  that allows there to be choices made by people  
  • 9:14 through the system that can always be  strengthened, as we see around the world.  
  • 9:18 And then, governments and the system—the  people's input into the spending, needs to  
  • 9:25 be thinking about what's best for the people of  Mexico. There's got to be a balance of health, of  
  • 9:34 education—in particular, education at the primary  school level is vital. The World Bank keeps track  
  • 9:40 of the Human Capital Index, which one part of  that is how many children by age 10 can read a  
  • 9:47 basic story. Literacy is one of the most important  building blocks for future growth and success for  
  • 9:56 economies. There needs to be funding either in  the public sector, the private sector, some way  
  • 10:02 to get that moving. Teachers are vital. I just  spoke on International Teachers Day, which was  
  • 10:10 a week ago, on the importance of teachers  in classrooms. So, that's just one of many,  
  • 10:16 many priorities. Mexico and other countries  need infrastructure, and some part of that is  
  • 10:23 a public-private partnership where the public  sector does an effective job of contracting.
  • 10:29 I emphasize this whole range of good governance  to have solid contracts, good choices. You know,  
  • 10:37 I'm in Washington, D.C. today and I'm a  U.S. citizen, I work for the World Bank.  
  • 10:42 But I'm aware of the challenges facing the  U.S. budget process. I started my career in  
  • 10:49 government on the staff of the U.S. Senate  Budget Committee in 1984. And those issues,  
  • 10:56 the exact issues of Yolanda's question were  paramount in 1984. How can the government  
  • 11:04 spend efficiently, and it's a big challenge  around the world. I just urge politicians and  
  • 11:13 the people of countries to recognize that,  when the governments make spending choices,  
  • 11:19 it's coming from the resources that the people  create. It should be used wisely. Thanks.
  • 11:25 MR. THEIS: Thank you. And next question  coming in from Fiona Harvey of The Guardian,  
  • 11:32 who sent the question in advance. "I recently  interviewed Lord Stern, former World Bank  
  • 11:37 Chief Economist, who said climate finance  provided to the developing countries by the  
  • 11:41 World Bank should be doubled in the next few  years. Will the World Bank commit to that?"
  • 11:45 MR. MALPASS: We have a 35 percent target for  all of our spending, for all of our commitments,  
  • 11:52 which is a high target; it's aggressive. We're  moving up from the 20s into the 30s and well, on  
  • 12:00 average, we're committed to reaching 35 percent.  That won't be the doubling that was mentioned,  
  • 12:06 but it will be big increases in dollars because of  the expansion of the World Bank commitments book.
  • 12:15 In addition, we can add to that through  private sector mobilization, ways to bring  
  • 12:21 in the private sector, and I think also people  should recognize, in addition to the spending  
  • 12:26 by the World Bank, which is at record levels and  moving higher and it's—the World Bank alone spends  
  • 12:36 more than half of all of the multilateral  development banks. It's a big number, already,  
  • 12:44 but we should also put heavy emphasis on the  results. The key thing for countries and for  
  • 12:51 climate change progress is to identify  large greenhouse gas emitters and help  
  • 12:59 them reduce their emissions. The results of  the projects—and one other point I'll make,  
  • 13:05 David—I know people want to focus on how much did  you spend, but I want to focus also on what did  
  • 13:12 you get; what were the results for it? Because  otherwise, it's a lot of talk about spending,  
  • 13:17 but not that much about the results.  We should talk about the results.
  • 13:21 Then, I think we also have to talk about the  project pipeline to achieve those results.  
  • 13:28 We are working with countries on their NDCs  [Nationally Determined Contributions], which  
  • 13:33 are important. And then, how does each country,  the developing countries that we work with,  
  • 13:40 how do they set up their economic plan so that  it incorporates climate change in that? And then,  
  • 13:47 how does it actually have projects to decommission  coal plants or to use cleaner fuels than what  
  • 13:54 they're using? A lot of the developing world is  burning bunker fuel in order to make electricity,  
  • 13:59 with no plan to terminate those contracts. That's  an immediate challenge. It's not so much the money  
  • 14:08 as what are the results that you're seeking to  achieve, and is the country on board? Do they  
  • 14:13 have a plan to do it, and how does the whole world  help them? The World Bank can help design that,  
  • 14:19 and we're doing that with our new country  climate development reports. Thanks.
  • 14:23 MR. THEIS: Thank you. A question  now coming in from Ghana, from  
  • 14:27 Julius Kofi Satsi with Business Finder newspaper.
  • 14:30 In view of the many opportunities available  to Sub-Saharan Africa as mentioned in our  
  • 14:35 latest Africa Pulse, what is the World Bank's  willingness and readiness to support countries  
  • 14:40 in Sub-Saharan Africa, especially Ghana, to  fully take advantage of opportunities presented  
  • 14:45 by climate change and to support  climate private sector investment?
  • 14:48 MR. MALPASS:  
  • 14:50 Thanks for that question. Those are core areas  of World Bank’s mission—the mission is to reduce  
  • 14:58 poverty and increase shared prosperity. That means  median incomes should be going up. Unfortunately,  
  • 15:04 they are lagging way behind the advanced  economies. We have this inequality problem.  
  • 15:14 Core to making progress on that is improving the  private sector capabilities of countries including  
  • 15:22 Ghana, working with governments to identify the  strengthening that could be done that brings in  
  • 15:29 new investment. And a chunk of that new investment  can come into climate-related issues. There needs  
  • 15:36 to be efficient, clean energy and plants so  that there can be more electricity with less  
  • 15:42 carbon dioxide emissions. That's a core goal of  the greenhouse gas reduction agenda. And also  
  • 15:51 land use, and ways that there can be protection  of biodiversity, which acts as a carbon sink.
  • 15:59 We're working throughout Africa  in practically every country,  
  • 16:04 on the climate agenda alongside the development  agenda, recognizing that countries in order to be  
  • 16:12 fully engaged, countries are going to need  to see development as part of their outlook.
  • 16:19 That means a lot of thought. World Bank can  help supply the global knowledge for that,  
  • 16:26 and leadership by the countries in moving in a  good direction. That means toward cleaner fuels.  
  • 16:32 That means toward a plan that gets expanded  electricity access. Clean water access is actually  
  • 16:39 a critical part, and water itself is a critical  part of the climate agenda, because in many  
  • 16:46 cases and countries, there are subsidies that are  being done for economic activity that's harmful to  
  • 16:54 climate efforts. And this is very clear in the  water area where crops are grown in areas that  
  • 17:01 may not be the best for that kind of crop and it  misuses the water; and water itself, for example,  
  • 17:08 flooding of rice crops causes a large emission of  methane. This whole dynamic of the world needs to  
  • 17:20 be thought through from the standpoint of bringing  together development and climate change. Thanks.
  • 17:28 MR. THEIS: Thank you very much. Next question  coming from Gabriel Yin of CGTN in China:  
  • 17:35 "How does the World Bank see the role of  young people in global climate action?  
  • 17:39 And how is the World Bank empowering the  youth to take climate action? Thanks."
  • 17:43 MR. MALPASS: Thanks. Incentives are  really important country by country.  
  • 17:50 So one of the challenges that  we're facing, if you identify  
  • 17:53 any problem that's going on in climate action,  it's that huge subsidies are going in the wrong  
  • 17:58 direction by countries. They're subsidizing  fossil fuels, they're subsidizing the mining  
  • 18:04 of coal and the burning of coal. They're  subsidizing farmers that are digging up  
  • 18:13 carbon sinks in order to plant crops that are  subsidized by their governments for export.
  • 18:22 A starting point for this, is to identify the  subsidies in countries. Also, I think we need  
  • 18:31 to look at the price of carbon, at taxation  of carbon, and also some kinds of systems  
  • 18:39 so that there's incentives that go in the  right direction. Young people are aware of  
  • 18:46 incentives, so there's a joint action so people  can understand what the challenge is. That's good,  
  • 18:53 but people wake up in the morning and they react  to incentives that are within their country  
  • 19:00 structure, and I think there's a huge amount  of progress that needs to be made in that area.
  • 19:06 Technological change and entrepreneurialism  are important. I was in, as I mentioned,  
  • 19:12 Sudan and Jordan, I was also in the West Bank,  and met, in each place, with young people,  
  • 19:19 with entrepreneurs, and their ideas. And one  I'll just mention is the world is changing  
  • 19:25 because of digitalization. I think this  should have, and it should be designed,  
  • 19:30 so that it's very positive from a climate  change aspect. People, young people,  
  • 19:36 are doing that. They recognize that. And so,  to the extent that we can have digitalization  
  • 19:41 penetrate more, it helps across the board from  the economic growth standpoint, because it has  
  • 19:49 so many side positive effects in terms of the  information people have available, their ability  
  • 19:56 to interact with the global system, all that's  improved, in general, in a carbon-friendly way.
  • 20:03 MR. THEIS: Thanks very much. Great. Next question  is from Egypt. We've got Doaa Abdelmoneim  
  • 20:12 from Ahram Online. "What kind of support has the  World Bank been expending to the MENA Region,  
  • 20:18 including Egypt, to boost health systems and make  them more resilient to shocks like COVID-19?"
  • 20:23 And a related question from Jafar  Sadaqa to Palestine News Agency:  
  • 20:28 "Just wondering about your recent  visit to the Region. Thanks."
  • 20:30 MR. MALPASS: Got it. Thanks.
  • 20:34 A core part of it is our COVID-19 response  program. What we did in March and April  
  • 20:42 of 2020 was design a new fast-track system within  the World Bank that can push through a lot of  
  • 20:48 programs. So, we've reached the point where  we have nearly 150 programs around the world,  
  • 20:55 including heavily in the MENA Region  that allows the provision of health care  
  • 21:02 basics that are financed by the World Bank through  grants and through very low interest rate loans.  
  • 21:08 That extends even, for example, to Iran where  we work with the United Nations so that they can  
  • 21:14 supply health care needs into Iran, but it's  particularly in the rest of the MENA Region.
  • 21:26 We do vaccination programs in many of the  countries, and we've worked with and encouraged  
  • 21:34 Egypt in contracting. But we have programs in  Jordan and others where they have, the World Bank,  
  • 21:41 has helped finance vaccines. That's true with  Lebanon; they were one of the early ones. It was  
  • 21:47 problematic to try to have a system that was  fair and equitable to distribute the vaccines  
  • 21:52 once they've been brought under contract. I  just mention those two and in the West Bank,  
  • 22:01 where I was maybe one week ago—and this is on  Twitter, you can read some of the remarks that  
  • 22:08 I made in meetings that I had—very interesting set  of meetings. One project site that I visited there  
  • 22:16 was the water treatment facility in Hebron, which  is interesting because it can help the West Bank  
  • 22:24 save money, and it can help save money because  that wastewater is being treated now as it moves  
  • 22:33 into Israel. So, it's being treated by Israel,  and if it can be treated more in the West Bank,  
  • 22:39 you get cleaner water in West Bank and a reduction  in costs. It's a cost-effective kind of a project.
  • 22:46 I also met with Israeli officials in Jerusalem.  It was very interesting as, well, in both Jordan  
  • 22:54 and in Israel, the countries would like to see the  West Bank doing better economically. There's a lot  
  • 23:02 of fiscal challenges and debt challenges in the  West Bank and also in Jordan that can be met by  
  • 23:11 stronger country programs. External resources  are important. Jordan, if I can turn to that,  
  • 23:18 is working with the Syrian refugee  inflow that came in, and they're  
  • 23:22 providing flexible—they're providing a system,  and World Bank working very closely with Jordan to  
  • 23:30 help provide a social safety net and a system of  work permits that can operate even as people are  
  • 23:39 receiving some benefits through the government  systems. There's a recognition of the burden  
  • 23:45 on Jordan, of the refugee challenge, of its  responsiveness, and of a global responsibility  
  • 23:54 to try to help with that situation.  The World Bank is helping with that.
  • 23:58 In Egypt, we're working on various country  programs that would increase the productivity.  
  • 24:07 Egypt faces challenges in the agriculture sector,  in the logistics sector, in the tourism sector,  
  • 24:14 in electricity, that they're making progress  on, that we're working with them on,  
  • 24:20 and I think there can be more focused effort  that will extend to health care, as well.
  • 24:27 Thank you.
  • 24:27 MR. THEIS: Thank you very much.
  • 24:30 And the next question we have in from Lalit Jha,  from the Press Trust of India. Lalit asks, "What  
  • 24:35 is your impression of India's economy and recent  steps taken by the Government of India to reform,  
  • 24:40 and how has the pandemic  impacted India's poor? Thanks."
  • 25:12 MR. MALPASS: Thank you. India was hard  hit by the waves of COVID and that's  
  • 25:17 unfortunate. They responded with a huge  production of vaccines, and there's been  
  • 25:23 progress on the vaccination effort, but we have  to recognize the hit that COVID caused on the  
  • 25:30 Indian economy, and especially on the informal  sector of the Indian economy, which is large.
  • 25:38 The World Bank must have put out a new GDP  forecast for India. I don't have it with me,  
  • 25:44 but the Indian economy is recovering, and  we welcome that. It's going through to  
  • 25:51 the other side of the COVID—of the latest  wave, and so that's good. But India, like  
  • 26:00 other countries, is hit hard now by the supply  chain disruptions and by the inflation that's  
  • 26:06 been rising in the world. I guess I'm giving  the general mixed view that there's progress  
  • 26:13 but not enough. And India faces huge  challenges of integrating more people  
  • 26:19 into their economy and to the formal sector  economy, and raising the earnings of people.
  • 26:26 The government's been focused on that. I went to  India in late 2019 and saw changes that were being  
  • 26:37 made that were quite positive in terms of the  banking system, the financial system, the civil  
  • 26:44 service system, and India was looking for ways  to improve the clean water, the water situation,  
  • 26:55 which is very important in India for child  nutrition and for improving nutrition  
  • 27:03 because clean water is one of the most important  starting points for life. I'll mention that, and  
  • 27:10 this is a huge, giant challenge for  the world's biggest democracy. Thanks.
  • 27:17 MR. THEIS: Thank you very much.
  • 27:20 And our next question comes in from Cameroon,  actually, from Houzer Ngoupayou of Libertepresse.  
  • 27:26 "Mr. President, beyond COVID-19, the economy  is suffering from real and constant damage.  
  • 27:31 Have you thought of measures to save companies  in difficulty? And if so, what are they?"
  • 27:35 MR. MALPASS: This is particularly relevant,  given the supply shock. One of the things  
  • 27:44 hurting the world right now is the companies that  were small companies in logistics—you can think  
  • 27:50 truck drivers, small trucking companies—many  went out of business in the pandemic. That's  
  • 27:59 really challenging, because it's hard to  form one of those businesses. You need  
  • 28:03 to put together some equipment, some contacts,  meaning who's your route, who do you work with?
  • 28:09 One of my first jobs in the 1970s was with a  trucking company, and setting up that system  
  • 28:20 is one of the biggest challenges in economics  because computers haven't been as good at doing  
  • 28:26 it. People have to be involved and you have  to bring them back to work. I went on on that  
  • 28:32 because in May of 2020 we recognized  this was going to be a big problem. IFC  
  • 28:40 took some particular changes in its operation  to expand its trade finance business. One of  
  • 28:50 the challenges within logistics is how do you  do import/export transactions if the banks are  
  • 28:55 closing down that route. The correspondent banks  were closing down and trade finance was closing.
  • 29:04 IFC was able to double that business rapidly, I  think, in 2020 and into 2021. We're continuing  
  • 29:12 that program in MIGA, now. MIGA and IFC  are working on a joint—or have launched—are  
  • 29:19 doing transactions in a  joint MIGA/IFC trade finance  
  • 29:23 operation. Credit to small- and medium-sized  businesses is also vital in all of this.
  • 29:30 And one of the things that we are attempting  and working to expand is to have systems or  
  • 29:40 have a transaction possibility that will help  banks exit some of their loans, some of their  
  • 29:49 safer loans, and that allows the banks to take  on more small- and medium-sized business loans.  
  • 29:54 If I can digress a minute, this is a  giant problem in the advanced economies,  
  • 29:59 because the central banks are using bank loans in  order to buy long bonds that are safe bonds. It's  
  • 30:07 the opposite of the direction that we need to  go in order to improve small business finance.  
  • 30:13 In the developing economies, we're trying to go  in the other direction of having banks be able  
  • 30:22 to sell or to reduce their safe loans, and that  creates space on the balance sheet of the bank to  
  • 30:30 find small business loans, which are the lifeblood  of job growth for these economies. Thanks.
  • 30:37 MR. THEIS: Great, thank you. Pivoting now to  Morocco, we have a question from Hicham Benjamaa  
  • 30:43 of La Vie Eco. "The populations  of developing countries have been  
  • 30:47 hit hard by the consequences of  COVID-19 and assistance created  
  • 30:52 by their governments have been minimal  or even nonexistent. What lessons should  
  • 30:56 developing countries draw from this health  crisis, particularly on the social level?"
  • 31:01 MR. MALPASS:  
  • 31:04 This is a little bit like that very first  question on how do governments spend money well,  
  • 31:10 and especially when the world descends. The number  one thing is vaccinations for COVID, or is climate  
  • 31:19 change, where the country is looking and seeing,  wait, we have these huge social needs in terms of  
  • 31:27 the general health care system, maybe vaccinations  for other diseases. Those have declined because  
  • 31:36 people are not having as much connectivity. They  don't go to the rural health clinic as much as  
  • 31:42 they did in the past, and they miss their  vaccines, and children have missed vaccines.
  • 31:46 I really want to urge people in developing  countries to do their checklist of nutrition, of  
  • 31:54 range of vaccinations. And if COVID  vaccinations are available, that too.
  • 32:01 Another area that I mentioned,  David, in my opening was the  
  • 32:06 debt situation. Starting in March of 2020, I  called for and was joined by Kristalina of the  
  • 32:15 IMF, Georgieva, to ask for a moratorium on debt.  The G20 adopted a debt suspension initiative  
  • 32:24 in April of 2020, and then deepened it  with the Common Framework late in 2020. But  
  • 32:32 this is not creating as much fiscal space as  the countries need. The debt burdens are high,  
  • 32:40 unsustainable, as I mentioned the IDS data that  came out early this week by the World Bank,  
  • 32:46 shows the dramatic increase in debt  levels and the unsustainability problems.
  • 32:55 These are major challenges facing the country,  because it takes up fiscal space. I really want  
  • 33:01 to urge us to move forward more on the Common  Framework, find more ways to make it effective.
  • 33:08 I'll be meeting with the G20—I guess today—finance  ministers, and it's an important discussion  
  • 33:15 in the G20 of how to make the Common Framework  more effective so that there can be more fiscal  
  • 33:23 space in countries for the range of good spending  that they need to undertake. That's a wide range:  
  • 33:32 nutrition, education, health, infrastructure,  climate, climate-related activities toward  
  • 33:38 cleaner fuel and toward adaptation in countries  that are facing climate change challenges,  
  • 33:46 and 12 more—you know, 50 more high-priority  items for people in poor countries.
  • 33:55 I think the world should help by  focusing on more resources—IDA  
  • 34:00 is a critical part of that—and by debt relief,  
  • 34:04 the Common Framework is a critical part of that.  And then, by countries doing—and the private  
  • 34:10 sector bringing in huge amounts of new resources  in order to fight these problems. Thanks.
  • 34:16 MR. THEIS: Thank you for that answer,  which actually goes to the next question,  
  • 34:23 which was from George Wiafe of Joy FM in Ghana.  So, the next question that we will close with  
  • 34:28 is actually one that touches on what  you were just talking about, but  
  • 34:32 perhaps in a little more detail from Maoling  with Xinhua. "You mentioned the pandemic would  
  • 34:36 mean setbacks in poverty reduction,  especially in low-income countries.  
  • 34:40 How can the World Bank support those countries'  efforts, and are there enough resources?"
  • 34:44 MR. MALPASS: Yeah, thank you. And  that's really good to close on. It's not  
  • 34:50 just poverty; it's the backsliding on women, on  vulnerable, on children. These are tragic setbacks  
  • 35:03 due to the pandemic and due to the global  slowdown and the closures and now due to  
  • 35:08 supply chain disruption and  inflation, and debt among those.
  • 35:14 The World Bank is responding with resources.  In the 15 months ending in June of 2021,  
  • 35:22 we committed $157 billion of financing that helps  countries. A lot of it, a chunk of it, is in  
  • 35:33 grants. There's a lot that's zero interest rate  loans and very low interest rate loans to help  
  • 35:40 countries have better development outcomes. That's  the core mission of the Bank. And we use the  
  • 35:51 tool—and I want to again reiterate the importance  of IDA within this. It's replenished normally  
  • 35:57 every three years. We accelerated that because  of COVID. We're doing a hurry-up, that is vital  
  • 36:05 for helping countries with vaccines, with their  health care systems, and with poverty reduction.
  • 36:14 Now, let me turn to the bigger core  of that question. We're talking about  
  • 36:20 a reversal of development and one part of  that is the poverty numbers are going up. And  
  • 36:27 how can the World Bank interact with that?  Well, we can identify country by country  
  • 36:33 where the reversals are occurring;  it's broadly around the world. And then  
  • 36:42 try—what we can do is identify ways that  the world can do better on these problems.
  • 36:49 I've done that in my Sudan positioning speech.  I'll be speaking today at the G20; also,  
  • 36:56 tomorrow at the IMFC meeting. You know, we've  got the Annual Meetings of the IMF and the World  
  • 37:01 Bank this week, which is bringing together  finance ministers from around the world,  
  • 37:08 and also world leaders. And I think the world  should be asking leaders, how can this be done  
  • 37:16 better? Why are so much of the resources going to  the upper end? Why is median income going down,  
  • 37:23 not up? And what aspect do policies play?  If I can—I'll criticize and then compliment.
  • 37:32 To criticize, we've got a system that's  clearly guiding resources toward the upper end;  
  • 37:38 that's the central bank system and that's also the  fiscal systems of the advanced economies. Those  
  • 37:44 need to be rethought and changed in a way that  allows growth by small-, medium-sized businesses.  
  • 37:53 People that are looking for a new job, get them  placed in the new job, especially in developing  
  • 37:59 countries. In Jordan, where I was a week ago  or so, the youth unemployment is nearly 50  
  • 38:07 percent. There needs to be a system of global,  of international finance that is better suited  
  • 38:15 toward people getting jobs in the poorest  countries, in order to reduce the poverty rate.  
  • 38:21 And then, in the developing countries  themselves, better policies in order to allow  
  • 38:28 state-owned enterprises to be less dominant,  that's—we talked about Egypt a little earlier.  
  • 38:33 That's a major challenge. The economy is dominated  by state-owned enterprises. And we worked  
  • 38:39 to try to say, can there be boundaries? Can  there be oxygen for new businesses to set up,  
  • 38:45 because they'll be the ones that create the  most jobs and bring down the poverty rate.
  • 38:50 I'm going on a little bit David, but I  think there are—on the positive side,  
  • 38:56 I met recently with new presidents from many  countries that are really working to change their  
  • 39:02 country. I met with the President of Tanzania that  needs to really dig out of the COVID pandemic and  
  • 39:08 move forward. I met with the new President of  Ecuador—in 100 days, they were able to vaccinate  
  • 39:16 those that wanted to be vaccinated, by allowing  the vaccines to go to companies. And then,  
  • 39:22 the employer had a huge self-interest in  order to have the people of the country  
  • 39:28 be—their employees be vaccinated. It  accelerated the vaccination process  
  • 39:34 using the incentive structures of the country.  There's a self-interest of businesses in having  
  • 39:41 their employees be vaccinated when they want  them to be vaccinated. That's one powerful tool,  
  • 39:47 and we could think about that worldwide. If we  can harness incentives in the right direction,  
  • 39:52 that will give us a way forward out  of this reversal in development.
  • 39:58 Thanks very much.
  • 39:59 MR. THEIS: Thank you, David, very much. And  this will conclude our press conference,  
  • 40:04 today. In case you missed it at the top,  you can also follow David Malpass on Twitter  
  • 40:09 @DavidMalpassWBG. And he posts long form  opinion pieces on LinkedIn: David R. Malpass.
  • 40:15 Thank you all very much. Have  a great day and good meetings.
  • 40:18 MR. MALPASS: Thank you.

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ANNUAL MEETINGS 2021

Tune in, ask questions, and share your views with participants from all over the world during the 2021 Annual Meetings of the World Bank Group and the International Monetary Fund (IMF).

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Oct. 11: Growth in a Time of Crisis
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