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This event took place on October 11, 2021

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00:00 [Upbeat Music]
00:01 [Annual Meetings 2021]
00:24 [GROWTH IN A TIME OF CRISIS: WHAT'S AHEAD FOR THE DEVELOPING ECONOMIES?]
00:35 Welcome to everyone in our virtual audience around the world.
00:38 We’re glad you could join us for the World Bank Group-IMF Annual Meetings
00:43 here in Washington.
00:44 For this kickoff event about Growth in a Time of Crisis:
00:49 What's Ahead for Developing Economies.
00:52 I'm Michelle Fleury, and I'm coming to you live
00:53 from the World Bank Group's headquarters here in Washington, DC.
00:59 Global growth is set to reach 5.6% in 2021
01:04 the strongest post recession pace in 80 years.
01:07 Nonetheless, the recovery is expected to be highly uneven
01:11 and there is substantial uncertainty about the strength and durability
01:15 of this anticipated upturn beyond 2021.
01:19 Current signs of recovery may be fleeting and underscore
01:22 the need for policymakers in emerging market
01:24 and developing economies to drive a policy reform agenda
01:28 that will enhance future growth, shared prosperity,
01:31 private sector investment, and job creation.
01:35 In addition, the Pandemic has amplified
01:37 the existing social and economic gap, such as those between men and women.
01:41 Women have lost jobs at a faster rate than men,
01:44 and women-led firms have been more strongly affected
01:47 than firms led by men.
01:50 We'll explore all of these important issues
01:52 with three distinguished panels.
01:55 Let's take a quick look at what we have lined up for you.
01:58 [Upbeat Music]
02:00 [VIRTUAL ANNUAL MEETINGS 2021] [COMING UP]
02:05 [AVOIDING A DECADE OF LOST GROWTH]
02:06 [DAVID MALPASS, PRESIDENT, WORLD BANK GROUP]
02:10 [BUILDING AN INCLUSIVE RECOVERY]
02:11 [CARMEN REINHART, CHIEF ECONOMIST, WORLD BANK GROUP]
02:15 [RESTORING GROWTH IN LOW-INCOME COUNTRIES]
02:16 [FELIX MLUSU, MINISTER OF FINANCE, MALAWI]
02:18 [HUSNA AHMAD, CEO, GLOBAL ONE 2015]
02:20 [ELLIOT HARRIS, ASSISTANT SECRETARY-GENERAL, UNITED STATES]
02:25 [PROMOTING JOBS AND RESILIENT, INCLUSIVE GROWTH]
02:26 [ALI ALLAWI, DEPUTY PRIME MINISTER AND MINISTER OF FINANCE, IRAQ]
02:28 [REZA BAQIR, GOVERNOR, CENTRAL BANK OF PAKISTAN]
02:30 [MAYA CHORENGEL, CO-MANAGING PARTNER, THE RISE FUND]
02:32 [PIA TAYAG, DIRECTOR, OFFICE OF UNSGSA]
02:36 [Michelle Fleury] As you can see quite a lineup.
02:38 Now before our first discussion, let's hear from
02:41 World Bank Group President David Malpass
02:43 on how the developing countries can avoid losing a decade of growth.
02:49 Good day and welcome to the 2021 Annual Meetings.
02:53 We start the week with a topic that is on everyone's minds,
02:56 [WASHINGTON DC]
02:57 [David Malpass] Growth in a time of crisis,
02:59 What's ahead for developing economies?
03:01 In the wake of the COVID-19 pandemic,
03:03 we confront a looming era of reversals
03:06 of the development achievements of the last decades.
03:10 GDP will return next year to pre-pandemic levels
03:13 in many emerging and developing economies,
03:16 but per capita income will take more time to reach 2019 levels.
03:21 In many countries, the recovery is even slower
03:24 and full of complex challenges.
03:27 Poverty increased, and the gap between
03:29 the poorest and the wealthiest is widening.
03:32 While the incomes of the top 40% rebounded quickly,
03:35 the recovery has not started for the bottom 40%.
03:40 The result has been a substantial increase in global poverty,
03:44 with nearly 100 million additional people living in extreme poverty
03:48 and with several hundred million new poor
03:51 using the middle-income country poverty lines.
03:55 We've also seen significant reversals in gender equality,
03:59 educational attainment, and even nutrition.
04:03 At the same time, the COVID-19 crisis has brought about
04:06 unprecedented structural transformation,
04:09 with a recent surge in the number of newly established firms,
04:13 expanded venture capital, and proliferation of innovations
04:18 across sectors using digital means.
04:21 In this time of upheaval,
04:24 the question in front of the development community is,
04:27 what should we do to avoid a lost decade
04:29 and boost growth that's both inclusive and sustainable?
04:34 I hope we can aspire to do more in two ways.
04:37 First, we need much bigger scale for impact,
04:40 and second, we need a stronger focus on key priorities
04:44 with poverty alleviation at the center of the effort.
04:48 As a pre-condition to the work ahead, acceleration of vaccinations
04:53 to enable a return to normalcy is indispensable.
04:57 But there are also four areas in which determined action
05:00 should make a difference.
05:02 First, economic stability,
05:04 laying the groundwork for medium term growth.
05:07 Developing countries increase drastically their public debt
05:10 due to the pandemic and cannot keep doing whatever it takes.
05:14 The time has come to start charting a gradual path toward consolidation,
05:19 one that keeps the welfare of citizens as the guiding principle.
05:24 Enhancing and simplifying tax structures
05:27 while eliminating wasteful public expenditures,
05:31 increasing the efficiency of service delivery
05:34 and reallocating resources
05:36 toward their most productive uses will be essential.
05:40 But the transition needs to be well calibrated
05:42 considering country conditions, including current fiscal space,
05:47 monetary policy given inflationary pressures,
05:50 real sector dynamics and risks ahead.
05:54 Second, we need to leverage the digital revolution.
05:58 It opens the opportunity to fundamentally transform
06:02 many sectors of the economy, such as finance, services,
06:06 education, health, and even agriculture.
06:09 It also offers transformative impacts for the public sector.
06:14 This revolution requires scaling up resources
06:17 for investments in digital infrastructure,
06:20 the elimination of monopolies in the telecom sector,
06:23 national IDs for the population,
06:26 and an enabling regulatory environment.
06:31 Third, we need to make development greener and more sustainable.
06:35 Supporting the energy transition toward cleaner generation sources
06:39 is the most obvious entry point.
06:42 Halting the creation of new coal-fired plants
06:45 and decommissioning existing ones
06:47 will be expensive, but it needs to happen.
06:50 Win-win solutions in transport, agriculture, forestry,
06:54 and urbanization should improve
06:57 both living standards and environmental sustainability.
07:01 Efforts need to focus on the most impactful engagements.
07:05 The major sources of greenhouse gas emissions
07:08 need to be reduced
07:09 while at-risk populations in low income countries
07:13 would need much better preparedness and adaptation.
07:17 And fourth, investing in people is the best investment we can make.
07:22 Functional education and effective healthcare systems
07:25 require more than providing budgetary resources
07:29 in an efficient and prioritized way.
07:31 They need also to find scalable solutions
07:34 to enhance quality of health services
07:38 and improve children's learning, including through digital means.
07:43 Nowhere is human capital accumulation
07:45 more important than in conflict affected countries.
07:49 Finally, the equity and economic returns
07:52 of closing gender gaps in developing countries,
07:54 which worsen during the crises are massive.
07:58 None of this will be easy,
08:01 but the World Bank Group is uniquely endowed in position
08:03 to support countries in their efforts
08:05 while mobilizing private sector participation.
08:09 We will be discussing these issues and more during today's event.
08:15 [Michelle Fleury] Let's pick up now on some of the points
08:17 raised there by President Malpass.
08:18 I'm joined by the chief economist of the World Bank Group,
08:21 Carmen Reinhart.
08:22 Thank you for joining us.
08:23 You have been quoted in the past as saying,
08:26 “don't mistake a rebound for a recovery”.
08:29 What do you mean by that?
08:30 What does that mean exactly in the context of an inclusive recovery?
08:38 [Carmen Reinhart] We had exceptional declines
08:41 in output and GDP almost across the world in 2020.
08:48 So we're going to get a rebound.
08:49 We are indeed seeing rebounds.
08:51 Now, by recovery what I really mean is that
08:55 on a per capita basis,
08:57 income per person is at least where it was before the pandemic
09:02 that'll take longer,
09:03 so notwithstanding what we're seeing in rebounds
09:07 incomes per capita,
09:08 especially for the low-income countries and the middle-income countries,
09:12 that true recovery will take longer.
09:16 And I'm afraid that what this has done
09:20 is widen the disparity between the advanced economies
09:25 and the emerging markets in developing countries.
09:28 [Michelle Fleury] Now you've talked a lot, you've been on the record talking a lot
09:30 about the high debt levels
09:31 that governments have had to take on to try,
09:33 and if you like, buffer their populations, businesses
09:37 from the negative impacts of the pandemic.
09:38 The World Bank, I understand, just released a report today on this.
09:42 Can you talk to me a bit more about the significance of that
09:44 and what is in that report?
09:48 [Carmen Reinhart] I think the build up in debt across the world,
09:52 advanced, middle-income, low-income countries
09:56 in response to the Pandemic has meant that
09:59 for those that are among the low-income countries
10:02 that entered with a lot of vulnerabilities already pre-existing
10:08 are finding themselves already in debt distress.
10:10 This is not a hypothetical what if or what that.
10:13 At the moment of the 73 low-income countries
10:18 that are eligible for the Debt Service Suspension initiative,
10:22 more than half of those countries are either in debt to stress
10:27 or quickly approaching at a high risk of debt distress,
10:31 which means that debt restructuring,
10:34 debt forgiveness will have to remain a very big issue
10:39 in the development agenda going forward.
10:42 [Michelle Fleury] Of course, the stress isn't just limited to governments.
10:44 I mean, we're looking at households, businesses or individuals.
10:48 [Carmen Reinhart] Absolutely.
10:50 In effect, our next World Development Report
10:53 focus is very much on the distress that's a legacy of COVID-19,
11:00 firms that are finding themselves unable to establish tourism, services.
11:08 All these industries are really impacted for the long haul.
11:12 They have a lot of debt distress.
11:14 Households were job losses and insufficient income support
11:20 has been unavailable means odds of debt distress increase collectively.
11:27 What we're seeing is governments, households, firms,
11:33 all facing the legacy of the income and wealth losses
11:39 associated with COVID-19.
11:41 Big question ahead of the big challenge is
11:45 moving forward to make sure that
11:49 the COVID-19 crisis doesn't morph into a financial crisis
11:54 where financial institutions are also impacted.
12:02 Such a negative outcome would be a big head wind
12:08 to a green, inclusive recovery, which is what we all want.
12:12 [Michelle Fleury] I mean, given the huge challenges you've just laid out there,
12:15 what role in that context can the World Bank play?
12:19 [Carmen Reinhart] First of all, I think the World Bank, as you know,
12:24 we've had a record in lending during the Pandemic.
12:32 157 billion in lending.
12:40 Since the start of the multilateral framework in World War Two,
12:46 we haven't seen such a cohesive outreach to over 100 countries.
12:52 [CARMEN REINHART ON GROWTH OPPORTUNITIES AFTER COVID-19]
12:53 I think going forward, the World Bank is working with countries
13:00 not only to continue on the vaccine front.
13:03 It's involvement in inclusive and financial inclusion
13:11 is a big agenda to temper the effects of,
13:17 as I noted earlier, inequality, rising poverty rates.
13:24 The World Bank has a fresh agenda on climate.
13:29 So these are all areas where the needs are great
13:34 and they're greater across a very broad array of countries
13:40 ranging from the middle-income to the lowest-income
13:44 that are so hard hit by the pandemic.
13:47 [Michelle Fleury] Thank you for that summary of some of the problems
13:48 but also some of the actions that can be taken.
13:52 The economic effects of the pandemic
13:54 have had a particularly devastating impact
13:56 on youth around the world.
13:57 [COMING NEXT: YOUTH PERSPECTIVES ON COVID-19 CHALLENGES]
13:58 We asked some young people to tell us about the impact of COVID-19.
14:01 on their economic wellbeing.
14:03 What needs to happen to ensure
14:05 young people aren't left out of this recovery?
14:11 [SANTA LUCIA] [KEITHLIN CAROO, ONE YOUNG WORLD AMBASSADOR]
14:11 Paradise is lost.
14:14 That is invariably how I feel as an islander living in the pandemic.
14:18 [PANAMA][MANUEL RAMOS NAVAS] COVID-19 has definitely affected
14:23 the health and economy of thousands of Panamanians.
14:26 [Keithlin Caroo] The lifeblood of our island which is tourism
14:30 came to a screeching halt.
14:32 [SOUTH KOREA] [SUNGHEE TARK]
14:32 Farming communities have been [inaudible speech] touched.
14:34 [OMAN] [RUMAITHA AL BUSAIDI]
14:35 It has exposed many of our systemic flaws
14:37 in our local and global systems.
14:39 [TOGO] [YOUSSAKA ESSODONG FIDELE] As a result, many young people lost their jobs
14:42 [NETHERLANDS] [SALAM AL-NUKTA] And had to skip almost half a year of education
14:45 due to lack of infrastructure.
14:47 [TURKEY] [ELIK KORKMAZ] For the students who were living in the rural areas
14:50 and who didn't have enough sources,
14:52 keeping up with online education was so hard,
14:54 [UGANDA] [GEROME KWILYAME] and have a negative impact on their health,
14:58 behavior and social development.
15:00 [BRAZIL][MARIANA LOZZI] It's very likely that someone
15:03 is going to ask you for help.
15:05 They are going to turn you for money, food, medicine.
15:09 [MALAYSIA] [JONATHAN CHU] Many had to take on
15:12 bank loans or extra jobs just to support their families.
15:16 [Youssaka Essodong Fidele] I found that most of the jobs offers
15:19 require a professional training in a specific field.
15:22 [Mariana Lozzi] A lot of people that had shifted
15:26 to middle-income lifestyle,
15:29 they are going back to poverty.
15:31 [Keithlin Caroo] Our country was scrambling to strengthen
15:33 alternative sectors while grappling with widespread unemployment
15:38 [Inaudible speech] raising levels of poverty and violence.
15:41 [Mariana Lozzi] The same challenges are hunting us back against:
15:44 hunger, food insecurity.
15:46 [Manuel Ramos Navas] It has helped in the increase of insecurity
15:50 [KAZAKHSTAN][DILNAZ KAMALOVA] This unsettling feeling of uncertainty.
15:52 [Keithlin Caroo] But in the midst of obstacles
15:54 always comes opportunities.
16:00 [Upbeat Music]
16:01 [KHARTOUM, SUDAN] Hi, I'm Anita Min in Khartoum, Sudan and you are watching
16:04 the World Bank Group and IMF's Annual Meetings.
16:11 [Michelle Fleury] Some really interesting ideas there.
16:12 We're going to be hearing more from young people
16:14 around the world and their thoughts
16:16 on future opportunities and hopes a little bit later.
16:19 There are lots of ways that you can share
16:22 your ideas and comments on this event.
16:24 I'm joining by Sri Sridhar who can tell us a little bit more.
16:27 [Sri Sridhar] Thanks Michelle.
16:28 There are a lot of ways for folks to take part today.
16:30 You can follow us on Facebook, Twitter and Instagram
16:33 and share your comments at any time
16:34 using the hashtag for today's event which is Growth for all.
16:37 You can also post your questions and comments
16:39 directly on live.worldbank.org.
16:42 Now the event is being streamed at
16:43 English, Spanish, French and Arabic.
16:46 We've actually got experts standing by in all four languages
16:48 to answer questions.
16:49 In fact, you can see some of them right here, which is pretty cool.
16:52 I believe some of the most popular questions
16:55 will be answered here or later today.
16:57 [Michelle Fleury] Yes, I think we're going to be rejoined by
16:58 by Carmen Reinhart, Chief Economist here at the Bank
17:00 and also by Susan Lund, who is the Vice President,
17:03 Economics and Private Sector Development at IFC,
17:06 a member of the World Bank Group focused on the private sector.
17:10 We also have a poll, right?
17:12 [Sri Sridhar] We do, the first or four polls for this week.
17:13 Today's poll asks
17:15 what is the best way to boost inclusive economic growth?
17:18 We've got four options here and is it going to be
17:21 by creating jobs and increasing private investments through policy reforms,
17:26 by expanding vaccine distribution,
17:28 or is it by investing in safety nets that focus on vulnerable populations
17:33 You can head on over to live.worldbank.org
17:35 and cast your vote before the pool closes.
17:38 [Michelle Fleury] So that's it. Get voting now.
17:40 We also want to bring you
17:41 some voices from leaders of the developing world,
17:44 heads of States from seven countries
17:46 that are supported by the International Development Association,
17:50 that's the World Bank's fund for the poorest.
17:52 And in these clips they share what they need
17:55 to bring their economies back to health.
18:00 [JULIUS MAADA BIO, PRESIDENT, SIERRA LEONE]
18:01 The unprecedented challenges of COVID-19
18:04 have further exposed nations to heightened vulnerabilities
18:09 and to rethink delivery on SDGs.
18:13 [MACKY SALL, PRESIDENT, SENEGAL] Of course, like most countries,
18:17 our economic activity ground almost to a complete halt.
18:22 [MOHAMED BAZOUM, PRESIDENT, NIGER]
18:23 We've gone from a projection of 6% annual growth to about 3%.
18:29 [DAVID KABUA, PRESIDENT, MARSHALL ISLANDS]
18:30 As a small island state, our country faces unique challenges
18:33 including geographic isolation, rising sea levels and climate change impact.
18:39 We have also faced the challenge of COVID-19.
18:42 [IRFAAN ALI, PRESIDENT, GUYANA]
18:43 The uneven global response to the pandemic has not helped.
18:46 Great attention must be paid to strengthen resilience,
18:50 particularly for the most vulnerable countries.
18:54 [FAURE ESSOZIMMA GNASSINGBÉ, PRESIDENT, TOGO]
18:55 Because we have seen that this is a crisis
18:57 that comes in waves or cycles,
18:59 it is key that we are able, like other regions,
19:04 to very quickly reactivate our economies.
19:06 [HAKAINDE HICHILEMA, PRESIDENT, ZAMBIA]
19:06 There's an urgent need to enhance Africa's capacity
19:09 for innovation and development of ICT infrastructure
19:13 to realize and enjoy the benefits arising from industry 4.0.
19:19 [Julius Maada Bio] Let me conclude by reiterating the call
19:22 for partnerships and corporation to deliver on SDGs
19:26 in order to achieve the future we want.
19:33 [Michelle Fleury] To really understand the urgency of the challenges
19:36 those leaders are facing, let's take a closer look at the data.
19:39 This pandemic has hit the world's poorest hardest.
19:43 Just take a look at the impact
19:45 on global income distribution over the last two years.
19:49 This is what happened in 2020.
19:52 You can see the richest 20% had incomes 5% lower than
19:56 pre-pandemic projections,
19:58 but for the poorest fifth that loss stood at 6.6%.
20:04 While the incomes of the richest have begun to recover in 2021,
20:07 this is not true for the poorest.
20:09 Let's show you the World Bank Group's latest data on income losses
20:13 and you can see that for the very poorest,
20:16 the loss is even greater, 6.7% lower than projected
20:20 before the pandemic.
20:21 But for the wealthier, there are clear signs of recovery
20:24 with average incomes now only 2.6% lower than
20:28 pre pandemic projections.
20:31 In addition to this rising inequality,
20:33 we're also witnessing a substantial increase in global poverty.
20:38 Now, let's take a look at the latest data on extreme poverty.
20:41 How many people live on less than $1.90 per day?
20:46 This line shows you how poverty was falling
20:51 and expected to continue to fall before this crisis,
20:54 and then the shocking impact of the pandemic
20:58 causing those projections to reverse.
21:01 In all, the World Bank Group now estimates
21:04 that 97 million additional people are living in extreme poverty
21:10 because of COVID-19.
21:13 New World Bank data released today also shows that
21:16 the external debt owed by low income countries
21:18 rose to a record 860 billion US dollars in 2020,
21:24 12% increase over the year before.
21:26 And that's that as you can see here,
21:28 5.3% is the external debt levels
21:31 of both low and middle-income countries.
21:34 It rose to that level to $8.7 trillion US dollars in 2020.
21:41 So how can we support inclusive growth
21:44 to reverse those negative impacts of the pandemic
21:47 on poverty and shared prosperity?
21:50 Low-income countries
21:51 and the poorer people within those countries
21:53 have suffered the most.
21:55 So how can we help them regain momentum?
21:57 That's the question I put to a distinguished panel of guests earlier.
22:02 I'm joined by the Honorable Felix Mlusu, Minister of Finance for Malawi,
22:08 Elliot Harris who is the United Nations Assistant Secretary-General
22:12 for Economic Development and Chief Economist.
22:14 And lastly, Husna Ahmad, CEO of Global One 2015,
22:19 a Muslim woman led international development NGO
22:23 that uses faith and culture as tools for change.
22:27 Minister, if I could turn to you first,
22:30 what do you see as the main barriers to economic growth
22:35 as a leader in a low-income country?
22:38 [Felix Mlusu] Thank you very much for that question.
22:42 The main barriers for economic growth
22:48 for low-income countries, obviously, are many.
22:53 Starting with limited in fiscal space.
22:58 For low-income countries, for them to find their [Inaudible speech] programs.
23:05 They obviously limited in financial resources,
23:07 therefore, they cannot fully fund the government problems.
23:15 There are other barriers, too.
23:17 Economic growth for low-income countries
23:20 that is unsustainable high levels of debt,
23:25 which they have contracted over the last couple of years.
23:31 High levels of debt.
23:32 They cannot really finance their programs.
23:39 There are other limitations or barriers.
23:44 Second to economic growth is the lack of infrastructure development
23:51 almost in all sectors of their economies.
23:56 You're talking about areas like energy, transport, social services,
24:03 in the areas of health, in the areas of education
24:09 and in almost all areas of their economies.
24:13 Really, there is a serious lack of infrastructure.
24:18 Also, technology is another area where there's also serious limitation
24:25 for these low income countries
24:28 in order to reach economic growth.
24:32 [Michelle Fleury] I mean, there was a lot there
24:33 that you've just talked about, but I want to pick up on two points.
24:36 In particular, you talked about sustainable debt.
24:38 You also talked about having the fiscal space.
24:41 This is where I want to bring in Mr. Harris,
24:43 because you work at the UN and at the IMF
24:46 developing policies to create sustainable growth.
24:49 What should governments be looking at during this difficult time
24:53 as the global economy recovers from the pandemic?
24:56 [Elliot Harris] Thank you, Michelle.
24:57 I think the first thing the most important thing is
24:59 for governments to ensure that their policies are consistent
25:01 that their policies are consistent
25:03 with the sustainable development agenda.
25:03 with the sustainable development agenda.
25:05 {\an8}It is, on the one hand with regard to the government budget.
25:08 {\an8}In particular, that we want to see a government budget
25:10 {\an8}that is aligned with the SDGs
25:11 and that ensures that the budget
25:13 is not encouraging anything that is unsustainable
25:16 and that it helps to set up the right sorts of incentives
25:19 for private sector activity that is sustainable.
25:22 More generally, I think governments need
25:24 to have an integrated approach to policy-making involving the whole
25:27 of the government so that the overall legislative
25:31 and regulatory framework
25:32 is conducive to sustainable development
25:35 and to growth that is sustainable
25:37 that is rational, evidence-based
25:39 and above all, that is stable and predictable
25:42 and that last element is very important
25:44 for setting up a conducive environment
25:46 for the private sector to invest, to invest in growth for the future.
25:49 Without that private sector investment,
25:51 our governments are not on their own
25:53 going to be able to achieve sustainable growth.
25:55 {\an8}Now, the other part of the question,
25:58 {\an8}the question of whether we can get inclusive growth
26:01 {\an8}requires governments to take positive steps
26:03 {\an8}to go beyond just facilitating overall growth processes.
26:07 {\an8}One is to make clear and to take steps to ensure
26:11 {\an8}that the growth process itself doesn't lead
26:13 {\an8}directly to an acceleration of inequalities
26:16 a widening of inequalities, and sometimes that can be
26:19 as complicated as setting up the right sorts of incentives
26:22 that investments are directed towards
26:24 job intensive types of activities.
26:27 But it also means dividing policies
26:30 that enhance the access to the opportunity
26:33 for people to gain the kinds of skills they will need
26:35 to compete on the job markets of the future
26:37 and in many respects, in this day and age,
26:39 that means digital skills.
26:41 So governments have to make sure
26:42 that the digital infrastructure is created
26:44 not necessarily by the government itself
26:46 but that the right regulations are in place
26:48 and that people have the skills to take advantage of it.
26:50 [Michelle Fleury] I mean, that's the perfect segue to our next guest
26:53 {\an8}doctor Ahmad, because we have seen how this pandemic
26:56 {\an8}has affected women and children
26:59 {\an8}more substantially than other groups
27:01 {\an8}What would you like to see done?
27:03 {\an8}What is your message to policy makers out there?
27:05 [Husna Ahmad, CEO, Global One 2015] Women are facing increased
27:07 {\an8}domestic violence, early marriages, trafficking,
27:11 {\an8}mental health issues, lack of access to antenatal care
27:15 and hospitals for pregnant women is putting lives in danger.
27:19 Schools have been closed
27:20 due to the pandemic, but we don't know when they'll be open.
27:24 Mental hygiene management is a huge issue.
27:27 {\an8}Do we buy-- Do women buy pads or food?
27:30 {\an8}Today, humanity is struggling with [inaudible].
27:34 {\an8}The UN's goal to leave no one behind
27:37 {\an8}can only happen if we ensure everyone has access
27:41 and to the vaccine.
27:43 Will that happen?
27:45 Women are the bedrock of every society.
27:49 If we don't ensure their well-being,
27:52 we will be responsible for a lost generation.
27:55 What needs to be done, Michelle?
27:58 You know as well as I, that women are incredibly resilient
28:02 and women of faith are even more so,
28:05 Two things need to be done.
28:07 The World Bank and the IMF need to become faith sensitive.
28:11 The Bretton Woods institutions have evolved a long way from the days
28:17 of structural adjustments and development partnerships.
28:20 They are much more transparent and accountable,
28:23 but they're still using the Western lens to find solutions.
28:28 And without diversity and inclusion, they will fail.
28:32 Number two, investment, investment, investment.
28:37 Investment in healthcare systems,
28:39 in education, green technology and digital transition,
28:43 investment in social protection, economic inclusion,
28:47 and decent terms
28:49 Thank you.
28:50 {\an8}[Michelle Fleury]I want to pick up there on...
28:54 {\an8}You talked about the role of international organizations
28:58 {\an8}like the World Bank.
29:00 Um, Mr. Harris, if I could bring you in there
29:03 to sort of weigh in what your thoughts are
29:05 {\an8}Do you agree with what Dr. Ahmad was saying?
29:07 {\an8}What more would you like to see international organizations play?
29:11 {\an8}[Elliott Harris] I think, Michelle, that one
29:13 {\an8}of the big challenges that governments face,
29:16 as I said a little bit earlier, is to make sure they get
29:18 {\an8}their policies as right as they can.
29:20 {\an8}And I think that's the first thing
29:22 {\an8}that international institutions can do.
29:23 {\an8}They can help governments to achieve
29:25 that quality, and consistency of policy.
29:27 And that, I think, is the most important bedrock
29:29 for future progress, for sustainable growth
29:32 and for social justice.
29:34 Now, part of that might be helping to build up capacities,
29:36 to formulate and implement the right sorts of policies.
29:39 But it can also involve providing information
29:41 about the overall global context, for example,
29:44 about what other countries have done,
29:45 what's worked in other countries, and why, what's not worked so well
29:49 as a way of building up sort of the evidence base,
29:52 if you will, for informed policy-making.
29:54 {\an8}The second thing.
29:55 {\an8}All governments, around the world, face
29:58 {\an8}global challenges, many of them common to all of us.
30:00 {\an8}Climate change is just the most well-known example.
30:04 {\an8}The international institutions can help deal with that
30:07 {\an8}by providing, for example, the framework for negotiations
30:09 {\an8}around some of these issues, by providing
30:11 {\an8}policy options for consideration by the government and above all,
30:15 {\an8}by providing analysis and the evidence base
30:17 {\an8}to inform the policies.
30:18 Now, some of the institutions are
30:20 financial ones, and they can provide resources to help
30:22 the government move forward on some of these issues.
30:25 But that basic function of providing the framework
30:27 for some of these policies of formulating exercise
30:31 is really critical.
30:32 But there's one last thing that I think
30:34 the international institutions can do.
30:36 They can raise issues that are politically or socially sensitive
30:40 in a given country-context and in doing so, they can help
30:45 to create the space for policy change.
30:47 And these can be things like strengthening
30:49 the institutions that help for greater accountability
30:51 or that help to combat corruption.
30:54 It can be raising the problem of inequalities because, very often
30:57 that speaks against some of the vested interests
31:00 in social structures.
31:01 It can be things like promoting gender equality.
31:04 But in any event.
31:05 Fostering the discussion around these things creates the space
31:08 for civil society and government to work together, where possible
31:12 to start making the kinds of changes that are needed.
31:14 {\an8}[Michelle Fleury] Minister, if I could turn to you
31:16 {\an8}for the last word, we've heard, sort of, what role
31:19 {\an8}international organizations can play and being able to say
31:23 {\an8}things that perhaps governments like yours cannot.
31:26 {\an8}What, specifically, what help would you like to see
31:29 {\an8}from the global community for a country like yours?
31:31 {\an8}[Felix Mlusu] Thank you very much.
31:33 I'm sure for that question.
31:36 {\an8}I think there's a lot that the international community
31:39 {\an8}you know, can do to help the low income countries.
31:43 I think for the start, issues of investment, um...
31:50 The international community or global community can do a lot
31:55 in terms of foreign direct investments,
31:58 partnering local investors,
32:01 {\an8}but also looking at various models of investing in an economy,
32:08 {\an8}whether through public-private partnerships
32:12 or BOT arrangements, or indeed,
32:16 any other, you know, models
32:18 that can be used to invest
32:21 in these low income countries.
32:25 I think one other thing, also, which, you know,
32:28 the international community can do
32:31 is to give easy access
32:35 to concessional loans, and, of course, grants as well.
32:40 These will help to boost up the local fiscal spaces,
32:46 which are lacking, seriously,
32:50 in the low-- you know, low income countries.
32:54 So, concessional loans, grants.
32:57 These would help quite a lot and also adding on to this.
33:02 You know, um, of course
33:05 we cannot forget to ask for date forgiveness.
33:10 This definitely is going to help countries
33:16 to manage their fiscal spaces well
33:20 and that'll also assist them to look at other areas
33:24 of how, even locally, they can generate revenues
33:29 for them to be able to run their local programs.
33:33 So indeed, there's a lot that the international community
33:36 can do, you know, to assist stronger growth
33:40 for the low income countries.
33:43 Thank you.
33:44 {\an8}[Michelle Fleury] Thank you very much.
33:45 {\an8}It seems like
33:47 there is certainly a huge role
33:48 to be played by the international community.
33:50 We're going to have to leave it there, though.
33:51 I would like to thank Minister Mlusu, Elliot Harris.
33:55 And lastly, Husna Ahmad, Thank you so much for your time.
33:59 [Upbeat Music] Hello. My name is John Rosino
34:03 In Athens, Greece, and you are watching
34:04 the World Bank Group-IMF Annual Meeting
34:09 [Michelle Fleury] And to join in the conversation,
34:11 you can use the hashtag #GrowthForAll
34:14 to share your thoughts on this event at any time.
34:16 Up next, let's take a look at how a ride hailing business
34:21 in Sri Lanka was able to pivot during the pandemic
34:23 supporting employees and connecting the community.
34:38 I wake up at 4:00 a.m.
34:41 and then I start to prepare our meals
34:45 It'll be 5:30 a.m. when I'm finished
34:49 I make sure to start my day worshipping the Lord Buddha.
34:52 After I give the meals to my mother,
34:54 we leave the house around 5:15 a.m. to drop my daughter at her school
34:58 After that, I turn the app and start my work with PickMe.
35:06 [Jiffry Zulfer, Founder CEO PickMe]
35:08 When the news struck that there is going to be a curfew tomorrow
35:13 obviously, it was scary because we're not sure what this virus is
35:17 Amidst the pandemic in 2020 and this year,
35:21 PickMe has expanded and the number of female drivers doubled
35:25 has doubled over the months on the platform
35:27 providing them with ample opportunities
35:30 COVID-19 has been undoubtedly a difficult time for all of us
35:35 but I'm delighted PickMe has been able to support our community
35:40 and essentially our country
35:41 from various lines of business.
35:44 [Podimanike Rathnayake, Driver Partner, PickMe]
35:45 We need to take care of ourselves.
35:47 If we stay home doing nothing due to COVID-19
35:50 we can't feed our children.
35:52 When I'm working for PickMe people ask,
35:56 'Aren't you afraid to do a job like this as a woman?'
36:01 I'm not afraid of anything, I like what I am doing.
36:07 [Jiffry Zulfer] For us as a company we were all working from home.
36:11 Everyone was basically running the country's transportation
36:15 in their bedrooms, right?
36:17 And then we spoke to the relevant authorities
36:19 and they gave us the green light
36:21 you know because there is so much demand
36:24 because people wanted these essential goods delivered.
36:27 [L.P. Lasanda Deepthi, Driver Partner PickMe] But the key was we focused on our safety measures.
36:29 We didn't focus on the fear but the safety.
36:32 [Jiffry Zulfer] So we consider them [our drivers] like superheroes.
36:35 In fact we went and changed the icon on the app to a superhero
36:42 [Podimanike Rathnayake] I'm happy that we did something during this unfortunate time.
36:52 [Michelle Fleury] True superheroes, inspiring to see stories
36:55 of success and empowerment during these challenging times.
36:59 But we've already heard from the World Bank Group
37:01 chief economists, youth entrepreneurs
37:03 and leaders of low income countries.
37:06 Now let's turn to the situation in middle income countries,
37:09 and the need for the private sector
37:11 to create and restore jobs.
37:13 First, let's see what central banks can do
37:15 and here's Reza Baqir, Governor of the State Bank of Pakistan.
37:22 [Reza Baqir, Governor, State Bank of Pakistan] I'd like to share my thoughts
37:24 about how central banks can help to spur job creation
37:27 and investment by dividing it in two parts.
37:30 The first is the usual role
37:32 that central banks play,
37:34 and that is price stability, financial stability.
37:38 And we have been taught, and rightly so,
37:40 that these are necessary conditions for growth.
37:44 I would also like to add, though,
37:46 that our experience through COVID has illustrated
37:50 that in times of crisis, central banks have to
37:53 step beyond this normal conventional role.
37:58 And when Pakistan went through COVID,
38:02 what are some of the key lessons
38:04 that the State Bank of Pakistan took away?
38:06 And there are three.
38:07 First, is that central banks in such situations
38:11 have to provide aggressive liquidity support
38:14 to help protect jobs and investment.
38:17 In the case of Pakistan, we provided support
38:20 worth about 5% of GDP in liquidity support,
38:24 and our goal was to try to ensure that liquidity problems
38:27 don't turn into solvency problems.
38:30 It is important to realize one cannot fully and perfectly
38:34 target it, but it is better to err on the side
38:38 of giving liquidity rather than not.
38:40 The second key lesson we took away was that such support
38:45 needs to be targeted and in our case,
38:48 we gave concessionary liquidity support in those cases where
38:52 the borrowing companies committed to not lay off workers
38:55 or they use those proceeds
38:58 directly for new investment, which we could assess
39:01 based upon the letter of credit that the borrower
39:04 had to submit to the banks.
39:05 And the third, and final, and very important point
39:09 is that such support needs to be time-bound.
39:11 In the case of Pakistan, we have reversed nearly all
39:15 of the measures that were introduced during COVID,
39:18 and the reason this is very important
39:19 is that, in normal times, central banks should just focus
39:24 on price stability and financial stability
39:27 as the necessary conditions for growth.
39:31 And though the crisis has shown us that it
39:33 is extremely important to have a wide arsenal of tools
39:37 available to central banks to provide such support in crisis,
39:41 it is equally important for central banks
39:44 in normal times to resist the temptation to use
39:48 this arsenal of tools, and to recognize that it is better
39:53 for the long term growth and stability of countries,
39:56 the central bank balance sheets and not compromise,
39:59 and that they stick to price and financial stability roles.
40:08 [Michelle Fleury] That's the perspective
40:10 of a central bank.
40:12 Earlier, I also spoke with a panel of guests
40:14 whom I asked the same question,
40:15 what is needed in middle income countries to get back on track?
40:22 I am joined by a truly distinguished panel,
40:26 Dr. Ali Allawi. He is both the Deputy Prime Minister
40:29 and Minister of Finance for Iraq.
40:32 Maya Chorengel is co-managing partner
40:35 at the Rise Fund, a 6 billion dollar fund
40:38 that invests in companies driving social and environmental impact,
40:43 and Pia Tayag is the Director of the Office
40:46 of the UN's Secretary-General's Special Advocate
40:49 for Inclusive Finance for Development.
40:52 Thank you all three of you for joining us.
40:54 If I could start, Dr. Allawi, with you
40:57 you are the leader of a middle income country
41:01 that is no stranger to conflict and fragility.
41:05 Talk to us about some of the barriers to economic recovery.
41:09 Obviously, the oil price is recovering and that is helping.
41:11 But what are some of the other roadblocks?
41:13 [Ali Allawi, Deputy Prime Minister, Iraq] I think the main barriers,
41:15 really, apart from having
41:16 the correct mix of strategies and policies, are more to do
41:21 with institutions,
41:23 leadership, continuity of programs
41:26 and policies, and making sure that governance standards
41:31 are up to the needs and requirements of the country
41:34 in the society as a whole, any mix of correct policies.
41:39 And I think this is an absolute essential
41:42 that you have to have the right strategic framework.
41:44 But without what I would call the underlying superstructure,
41:48 the underlying structures of institutions,
41:51 leadership that is committed to change, reform into
41:56 an economic progress and development
41:58 without some degree of ethical,
42:03 or high ethical standards in public administration.
42:08 Without all the full range of governance standards,
42:12 it's very difficult to see how even the best strategies
42:15 can be implemented in a post conflict environment.
42:20 So while we can come up with the funds
42:22 and we don't have a resource cap here,
42:25 the way that we utilize our resources effectively
42:28 and efficiently requires this base of governance
42:33 it requires a base of leadership, it requires a base
42:36 of institutional depth and integrity, and this, I think,
42:40 is becoming absolutely clear
42:43 that development, improving the standard of living of people
42:47 improving the environment for growth,
42:50 and achieving a form of income
42:54 or reducing income disparities and wealth disparities
42:57 requires this underlying base of governance broadly understood.
43:02 So I think I would put my bet on that, that governance
43:06 is absolutely essential for continuity of economic growth
43:09 [Michelle Fleury] Interesting point, that governance
43:12 and leadership, you say, is what is required, of course,
43:15 that can come from governments,
43:17 but it can also come from other sectors.
43:19 Maya Chorengel, your fund seeks to expand the reach
43:22 of commercial capital to help new generations of entrepreneurs.
43:26 I want to ask you, what role can the private sector play
43:29 in this notion of leadership and governance
43:32 that Dr. Allawi was just referring to.
43:34 [Maya Chorengel, Co-managing Partner, The Rise Fundl] Private capital,
43:35 commercial capital is more abundant than philanthropic capital.
43:39 It's more abundant than government aid.
43:41 So where there are places that private capital can play
43:45 it's important for us to step in and play a role.
43:47 That said, one of the limiting factors is that
43:51 we step into environments where governance, infrastructure
43:56 and rule of law and a basic level
43:59 of professionalization is established
44:01 because often private capital has a fiduciary responsibility
44:05 to produce return.
44:06 That said, funds like ours,
44:08 The Rise Fund within TPG are specialists at investing
44:12 in growth stage companies
44:14 and growth stage companies are often great drivers
44:17 of employment and economic growth.
44:20 So where we participate in a lot of emerging market countries,
44:26 Nigeria, Kenya,
44:29 multiple countries in South Asia, in Southeast Asia and in East Asia,
44:35 we've invested behind companies
44:36 that have been tremendous forces for job creation.
44:41 This is also a role that other organizations
44:44 like the IFC have played.
44:45 We, at The Rise Fund, are also specialists at investing
44:48 in companies that are creating some of the infrastructure
44:52 required for job creation and growth.
44:54 So we invest in education companies
44:56 in vocational training companies that are creating technical skills
45:01 and professional layers of leadership
45:04 to lead the next generation of companies.
45:06 So there are various ways in which we play
45:08 and we're very mindful and oriented towards that growth momentum
45:13 that really does create growth within different countries.
45:18 [Michelle Fleury] I think one of the things
45:20 we've all learned during the pandemic is, sort of,
45:22 our increased reliance on technology, and it goes back to
45:26 something that was just referred, to this idea
45:28 of investing in infrastructure.
45:31 Pia Tayag, if I could bring you in here,
45:33 you focus on financial infrastructure, on the digital.
45:39 What role can that play?
45:40 What would you like to say
45:41 to say to governments in terms of the significance of that?
45:44 [Pia Tayag, Director, Office of the UNSGSA] Now, thank you for that question.
45:45 We definitely want to see technology
45:48 enable more efficient delivery of products
45:50 and services to a range of cost effective channels,
45:54 enable better product design
45:56 that truly responds to the needs
45:57 and capacities of customers, and finally enable broader reach,
46:02 especially to segments of the population
46:04 that have been left out.
46:05 We saw it during the pandemic.
46:06 These segments that have been left out,
46:09 limited access to finance or the digital economy
46:12 suffered significantly and disproportionately.
46:15 Yet we also witness the power of digital financial services
46:19 and having in place the rails to deliver them.
46:21 The countries that invested in these digital public goods
46:25 have been better able to efficiently
46:26 roll out social payments, expand beneficiaries lists.
46:30 Consumers were also able to pivot to digital channels
46:33 for payments and even e-commerce.
46:35 So with this in mind,
46:36 I would share, maybe, three messages for policy makers.
46:40 One is invest or continue to invest in digital public goods.
46:43 You said it yourself.
46:45 Many are already seeing this imperative,
46:47 but there are still those who lag behind.
46:49 These digital public goods include digital IDs, connectivity
46:54 enabling regulatory frameworks like consumer protection
46:57 cybersecurity, digital [inaudible], among others.
47:01 So what is important is to emphasize
47:03 that these public goods need to be designed
47:06 for fair and equal access
47:08 and with the needs of consumers front and center.
47:10 For example, our payment channels, taking into consideration
47:13 the gender gap, the smartphone ownership
47:16 or do ID systems allow for offline authentication
47:19 for areas with limited connectivity.
47:22 Which leads me to the second message,
47:24 to ensure that digitization, innovation
47:27 close gaps rather than exacerbate existing divides or inequalities.
47:31 Rural-urban divide, gender gaps in access
47:34 the digital divide, among others
47:36 and ultimately lead to positive outcomes.
47:39 Digital payments' an example,
47:41 digital payments targeted to women with financial literacy
47:44 and a savings mechanism can actually help build buffers
47:47 and better prioritize household spending.
47:50 Finally, encourage innovation and work closely
47:53 across government and the private sector.
47:55 So happy to be in this panel and represent people.
47:58 We do not want innovation for innovation's sake.
48:00 but solutions and products that truly democratize access
48:04 to financial services but more importantly,
48:06 the opportunities that they bring.
48:08 [Michelle Fleury] It's interesting,
48:09 you offered some solutions there as ways to tackle
48:12 one of the things we've seen as a result of the pandemic,
48:14 and that is this growth in the gender gap,
48:17 the inequality as a result of the pandemic.
48:21 Dr. Allawi, how much focus is your government
48:24 putting on that?
48:26 What other fiscal policies are required
48:28 to ensure an inclusive growth that benefits everyone?
48:32 [Ali Allawi Deputy Prime Minister/Iraq]
48:33 The main problem that we face here
48:35 is an inadequate banking system,
48:38 the financial structure that is not able to cope
48:41 with the current demands and future expectations.
48:43 We need to have radical reforms here
48:46 to bring now the state dominated banking system
48:49 into something more an equilibrium
48:51 of the private sector.
48:52 We also need to improve greatly
48:55 the usage of technologies, digitization,
48:58 in order to reach our goals of financial inclusion,
49:03 which are now pretty poor.
49:06 It is critical to focus on the reform of the banking system,
49:12 open it up, create more opportunities
49:15 for new entrance into the system,
49:17 particularly digitally based financial institutions,
49:20 in order to reach the large number of our population
49:24 that is not only on the bank,
49:26 but they don't have access to financial services
49:29 without a properly functional financial system
49:32 that's rooted in up-to-date technologies,
49:35 is very difficult to have a focused fiscal policy
49:38 that involves transfers to targeted sectors.
49:41 So for us in Iraq,
49:44 it is absolutely a priority to reform the banking
49:47 and broadly the financial sector as a whole,
49:50 including insurance, nonbank financial services,
49:53 stock markets.
49:54 And we're pushing in that direction
49:56 by creating the necessary government support
50:00 for this shift.
50:01 We need to do that as a matter of urgency.
50:03 And I think also that most countries in our position
50:08 need to radically reorient their financial system
50:11 towards the technologies that are opening up the market.
50:15 [Michelle Fleury] Interestingly,
50:16 one of the things that, I guess,
50:18 in the middle of a crisis arising from the pandemic
50:21 is that the priority of climate change
50:24 seems to have fallen down the list.
50:27 Maya, if I could bring you in here,
50:29 I was curious how your fund is still focusing
50:33 on green investments to promote a sustainable future.
50:38 Has that slipped down the priority list,
50:40 given the current environment
50:42 and the recovery that we're facing?
50:44 [Maya Chorengel] I'm very lucky within TPG
50:47 to be able to work on both what we call
50:49 the social side and issues of equity, poverty,
50:53 education, health care, financial inclusion.
50:56 But we also have a very strong practice on the climate side.
50:59 And in addition to the $6 billion
51:01 that you mentioned within the [inaudible] complex,
51:05 we've just re recently raised the $7 billion climate fund,
51:09 and this is very much a priority for us
51:11 as we look at the emerging markets
51:12 because we see both great opportunity
51:16 and absolute almost what I'll call 'moral and ethical need'
51:19 to invest in climate solutions.
51:21 And this is everything
51:23 from looking at new technologies
51:25 to working with companies to mitigate and adapt
51:32 to a greener world.
51:34 We have great hope in a number of the entrepreneurs
51:38 in the emerging markets.
51:40 We have a fantastic company, for example,
51:42 in India called Fourth Partner Energy,
51:43 which is the leader in this sector.
51:45 So it's very much a priority for us
51:47 in addition to the social side.
51:49 And I think it is for many investors.
51:51 [Michelle Fleury] Do you think that the private sector
51:54 is placed to address this in a way
51:56 that governments with less fiscal space
51:58 are less able to right now?
52:00 [Maya Chorengel] We believe that there needs to be
52:03 a partnership between the private sector
52:06 and government.
52:07 So we need regulatory frameworks,
52:09 and we need support for green initiatives,
52:13 which many countries in the world,
52:15 including in the emerging markets, are stepping up to do.
52:19 But because they are more capital constrained,
52:21 the important part is for commercial capital
52:24 and private capital to step in
52:26 to actually fund the companies.
52:27 One of the interesting things that we have as a global fund
52:31 is we can also connect the dots between technologies
52:34 that are developing in the west that can move to...
52:37 Or the Global North that can move
52:39 to the Global South, and actually vice versa.
52:41 So there are interesting technologies
52:44 that can be imported and exported
52:46 to accelerate the climate solutions
52:49 that we need to green the planet.
52:52 [Michelle Fleury] One of the things that we keep
52:54 hearing again is how...
52:57 whether we're talking about climate change or the pandemic,
53:00 the burden falls disproportionately
53:02 on different groups.
53:03 Pia, last word to you.
53:07 What would you like to see
53:09 to help the underserved, the vulnerable,
53:12 to make sure that they aren't left behind?
53:14 [Pia Tayag] Definitely.
53:16 What we need to do is really build resilience.
53:18 The pandemic highlighted that,
53:20 it has exacerbated inequalities.
53:23 MSMEs could not stay afloat, and far more firms,
53:26 no access to credit,
53:27 women more likely to lose their jobs.
53:30 And even before the pandemic, there was already
53:32 this lack of resilience.
53:33 In the developing world,
53:35 only half of adults can access a lump sum of funds
53:38 during an emergency.
53:39 What I really like to see is that we go
53:41 beyond payments and account ownership.
53:43 When we talk about building
53:45 an inclusive financial system.
53:47 To see products that really help
53:48 build buffers and cushion against shocks,
53:51 savings and insurance, as well as those
53:53 that enable to cease economic opportunity,
53:56 such as credit and investments.
53:58 We are making progress, but much needs to be done,
54:01 work by both policymakers, providers,
54:03 investors, as we heard.
54:05 Technology is an important catalyst.
54:07 Increased digitization offers opportunities
54:10 to support important segments
54:11 such as micro, small and medium enterprises,
54:14 or the agriculture sector.
54:16 For example, a merchant or a farmer
54:18 can benefit from a range of services.
54:21 Digital payments [inaudible] solutions,
54:23 insurance against climate risks, credit,
54:25 all made possible by digitizing
54:27 the ecosystem in which that merchant
54:29 or farmer operates.
54:31 This will have a positive impact on employment
54:33 for it needed forward and backward linkages,
54:36 and really contribute to broad based growth.
54:38 But underlying all of this,
54:40 I'd like to emphasize that we need
54:42 to make sure we are deliberate
54:43 on working towards financial health.
54:45 For Majesty Queen Máxima of the Netherlands,
54:48 UNSGSA is really supporting
54:50 adopting a financial health perspective
54:53 that broadens attention
54:54 from just accessing usage to positive consumer outcomes
54:58 to make sure consumers and small businesses obtain the value
55:02 from the financial services that they received.
55:04 [Michelle Fleury] It seems like
55:05 governance and leadership
55:06 are sort of the core things
55:09 that all of you have called for to address
55:10 these huge challenges we face.
55:12 Thank you to all three of you for your time today.
55:19 [CJ] Hi, I'm CJ, in Abuja, Nigeria.
55:22 And you're watching
55:23 the World Bank-IMF Annual Meetings.
55:30 [Michelle Fleury] If you have just joined us,
55:31 a warm welcome. I'm Michelle Fleury.
55:33 We're discussing what it will take to spur economic growth
55:37 and an equitable recovery from the pandemic.
55:39 If you want to learn more,
55:41 we have pulled together lots of interesting stories and blogs.
55:44 Just scroll down the World Bank Live page.
55:47 And I'm back with Sri.
55:48 You've been monitoring the conversation
55:50 online and on social media.
55:51 Sri, give us a flavor of what people are saying.
55:53 [Sri Sridhar] Sure, Michelle.
55:54 Today's hashtag was #growth4All,
55:57 and we have comments from all over the world.
55:59 Let me give you a flavor of where we're hearing from folks.
56:02 They are talking to us from India,
56:04 Pakistan, Venezuela, Saudi Arabia,
56:07 the United States, the United Kingdom,
56:09 Rwanda, Uganda and Kenya,
56:11 and a lot of different themes emerging.
56:14 A lot of folks online are saying that
56:16 to achieve economic growth for all,
56:18 the private sector should play an important role,
56:21 that there needs to be support for small businesses,
56:24 as well as strong institutions and good policies.
56:27 And that there also needs to be opportunities
56:29 around AI and renewable energy.
56:31 So a lot of these emerging themes
56:34 coming by these four topics.
56:36 We also do have notable mentions
56:39 because we also have been monitoring the conversation
56:42 on Facebook, Twitter, and Instagram.
56:45 And on LinkedIn,
56:46 we have [inaudible] Resende who's saying
56:48 that the COVID-19 pandemic
56:50 has enrolled enormously affected countries in the Global South,
56:53 and this is why World Bank efforts are essential,
56:56 as millions of people have fallen back to extreme poverty.
56:59 And I think it is a pretty interesting point
57:02 here in terms of the COVID-19 pandemic.
57:04 [Michelle Fleury] It goes back to that data point.
57:07 The 97 million additional people living in extreme poverty
57:10 because of COVID-19?
57:11 [Sri Sridhar] Exactly. And on Facebook,
57:13 there's Ifiok Inyang,
57:15 who says that the shock prone zones,
57:17 like emerging markets or economies,
57:19 need strong institutions and good policies,
57:22 and that this is the first and best answer
57:25 to mitigate some of these challenges.
57:28 And finally across Instagram, Jaldip Parghi says
57:31 that countries can create jobs after the pandemic
57:34 through artificial intelligence and robotics,
57:36 along with renewable energy product.
57:39 So this kind of goes back
57:40 to the beginning where I was saying
57:41 there is some conversation around these areas of AI.
57:44 [Michelle Fleury] I know you're going to continue
57:46 to monitor the conversation,
57:47 but I've been waiting for,
57:48 and many people have been waiting for,
57:50 what is the results of our poll? Do we have it?
57:53 [Sri Sridhar] Yes, we do. Today's poll asked
57:55 what is the best way to boost inclusive economic growth?
57:59 And we had four options.
58:00 They were, is it by creating jobs
58:02 and increasing private investments?
58:05 Is it through policy reforms?
58:07 Is it by expanding vaccine distribution, or finally,
58:10 is it by investing in safety nets that focus
58:12 on vulnerable populations?
58:14 Now, before I review the results,
58:16 what would be your vote, Michelle?
58:18 [Michelle Fleury] You're putting me in the spot.
58:20 I'd have to say they're all pretty good options,
58:23 so tough to choose.
58:24 [Sri Sridhar] It is. Yeah, I voted myself for creating jobs
58:26 and increasing private investments,
58:28 but it's it's definitely a tough one.
58:30 But let's see how folks voted.
58:33 [Michelle Fleury] Drum roll.
58:34 [Sri Sridhar] Drum roll?
58:35 And with 55% of the votes,
58:38 creating jobs and increasing private investments wins.
58:43 19.9% of folks saying that it's by investing to policy reforms,
58:47 4.5% by expanding vaccine distribution,
58:51 and 26% say it's by investing in safety nets.
58:55 that focus on vulnerable populations.
58:57 [Michelle Fleury] So it goes back to that comment
58:59 you read about creating jobs.
59:00 [Sri Sridhar] It does.
59:01 [Michelle Fleury] Sri, thank you so much.
59:02 [Sri Sridhar] Thanks, Michelle.
59:04 [Man] Hi, I'm [inaudible],
59:05 from Dhaka, Bangladesh.
59:07 Welcome to World Bank-IMF Annual Meetings.
59:14 [Francisca] Hello, I'm Francisca in Viña del Mar, Chile.
59:17 And you're watching
59:18 the World Bank-IMF Annual Meetings.
59:24 [Michelle Fleury] Now to answer
59:25 some of the questions you've been asking,
59:26 I'm pleased to welcome back
59:28 Carmen Reinhart, chief economist at the World Bank.
59:30 We're also joined by Susan Lund,
59:32 vice president of Economics and Private Sector Development
59:35 at the International Finance Corporation,
59:38 a member of the World Bank Group focused
59:40 on the private sector command.
59:42 If I could start with you,
59:43 we have a question from [inaudible] of Tanzania,
59:47 who wants to know
59:48 one of the most popular questions from our audience.
59:52 What is the biggest economic problem
59:54 facing developing countries?
59:56 [Carmen Reinhart] Lack of growth.
01:00:00 Growth is essential for poverty reduction.
01:00:03 It's essential for having, creating revenues
01:00:06 for governments to have fiscal space and engage.
01:00:10 So better social safety nets
01:00:12 and the provision of public goods.
01:00:15 So I think we had a challenge
01:00:19 in many emerging markets in developing countries,
01:00:22 even before the pandemic,
01:00:24 growth started to slow down around 2015.
01:00:27 And with growth comes jobs.
01:00:31 With growth and jobs comes recovery, and it self-feeds.
01:00:38 So when we think about the challenges ahead
01:00:41 in terms of development,
01:00:43 in terms of all the objectives associated with development,
01:00:48 growth will be key.
01:00:49 [Michelle Fleury] Susan, if I could bring you,
01:00:51 this next one focuses on the rural parts
01:00:54 of the global economy.
01:00:55 It comes from [inaudible] from Sri Lanka.
01:01:00 And the question is,
01:01:02 how can we develop the rural economy sector
01:01:05 in the COVID-19 pandemic situation?
01:01:07 [Susan Lund] Well, the rural economy
01:01:09 is incredibly important.
01:01:11 70% of the world's people living in extreme poverty
01:01:14 are in rural areas.
01:01:16 They're subsistence farmers, and they're facing two problems.
01:01:20 First is a lack of productivity.
01:01:22 So for the level of inputs that they give,
01:01:24 they get only half of the yields
01:01:26 that you get in other parts of the world.
01:01:28 And then the second problem is that
01:01:30 when they do produce crops, there's huge spoilage,
01:01:34 because they don't have access
01:01:35 to markets and places to sell the crops.
01:01:38 In Africa alone,
01:01:40 it's estimated to be $4 billion a year is lost
01:01:43 to crop spoilage, and that could be somebody's income.
01:01:46 So the solution is really around...
01:01:48 First, providing finance and skills to raise productivity,
01:01:52 so farmers can learn how to use different types of seeds
01:01:56 and inputs to raise yields.
01:01:58 Secondly, giving them access to markets.
01:02:01 And that includes everything,
01:02:03 from road infrastructure to rural electrification.
01:02:06 We now have exciting new opportunities
01:02:09 with off-grid or mini-grid renewable electricity.
01:02:13 And then finally, the digital economy has some opportunity.
01:02:18 There's a startup, a very small business
01:02:22 called Twiga in Kenya and other African countries
01:02:25 that connects tens of thousands of farmers
01:02:28 with vendors in marketplaces.
01:02:30 This lets farmers know what is the price they can get,
01:02:34 what's in demand.
01:02:35 It's enabled many to shift out of subsistence crops
01:02:38 into things that will sell, thereby creating income.
01:02:41 So it's extremely important
01:02:43 that we do address the rural population.
01:02:46 [Michelle Fleury] Some truly practical tips there.
01:02:48 But I think our next question, which comes
01:02:50 from [inaudible] of Liberia,
01:02:52 which is our most popular,
01:02:54 goes to the idea of some of the roadblocks.
01:02:57 How can a low-income country experience growth
01:02:59 in a time of crisis
01:03:01 when there is systemic corruption
01:03:03 and a lack of accountability
01:03:04 within the governing structure in that economy?
01:03:07 [Carmen Reinhart] The first part's not to despair.
01:03:12 That is... Many of these issues, if not all,
01:03:18 predate the pandemic.
01:03:21 So...
01:03:24 Rule of law, establishing better institutions
01:03:28 is a well-regarded long-time way of fostering better decisions.
01:03:39 Better allocation of resources,
01:03:44 and, therefore, what the Pandemic does is
01:03:51 make it all the more important
01:03:55 that at a time of scarce resources.
01:03:57 Those are decisions
01:04:05 that will impact particularly the most vulnerable populations,
01:04:12 which at the moment,
01:04:15 apart from rural,
01:04:17 include the urban poor, women and children.
01:04:21 That's where a lot of the new poverty is concentrated.
01:04:24 Dealing with corruption,
01:04:26 dealing with governance issues is not a new problem.
01:04:29 Better institutions, better rule of law is critical.
01:04:35 And let me say that both of those,
01:04:38 better rule of law and better institutions,
01:04:40 are also key to attracting foreign capital,
01:04:44 which will be very much needed, is very much needed now
01:04:49 and will continue to be needed
01:04:51 as we go forward in the recovery phase.
01:04:54 But let me end on the allocation point that I made.
01:04:59 I think at a point in which we are stretched
01:05:02 in terms of growth and recovering,
01:05:05 those allocation decisions towards the neediest
01:05:09 are very important and require that rule of law.
01:05:12 [Michelle Fleury] I like that you started that
01:05:14 with "let's remain optimistic."
01:05:16 We have time for one final question, Susan.
01:05:19 This one is from [inaudible] in India,
01:05:21 who wants to know the middle class and the self-employed
01:05:25 are the ones worst or amongst
01:05:27 those worst hit by the pandemic.
01:05:29 Vendors, small traders.
01:05:30 So the private sector
01:05:31 that the people you're willing to help.
01:05:33 How can they be assisted
01:05:34 if the government doesn't give them loans?
01:05:36 [Susan Lund] Well, it's incredibly important.
01:05:38 In low-income countries,
01:05:40 80% of the population is self-employed.
01:05:43 And in lower middle-income countries, it's two thirds.
01:05:46 So providing finance skills and access to markets
01:05:50 are the three parts of the solution there.
01:05:53 First is access to finance.
01:05:55 A lot of banks find it very hard.
01:05:57 It's not profitable to lend to small vendors.
01:06:00 And so there's a lot of work that we're doing,
01:06:03 and many institutions around the world are,
01:06:05 to enable banks to actually direct credit
01:06:07 towards entrepreneurs,
01:06:09 especially women-owned businesses.
01:06:11 There's a whole new initiative called We-Fi:
01:06:13 Women Entrepreneurs for Financial Inclusiveness,
01:06:17 that the World Bank Group supports and other institutions.
01:06:21 In addition, I think I'll come back to digital connectivity.
01:06:25 One of the things that enables me to remain optimistic, Carmen,
01:06:29 and actually have hope
01:06:31 is the fact that digital platforms are really
01:06:34 transforming even these very traditional markets.
01:06:37 There are all sorts of different apps like Trade More,
01:06:42 that connects suppliers to people in the market.
01:06:47 There are new technologies in agriculture
01:06:50 like Appeal, in which farmers can coat their crops
01:06:53 with a vegetable based preservative
01:06:55 to enable produce to last longer when it's in the market.
01:06:59 What we need to do is build out the digital infrastructure.
01:07:02 In addition to the traditional infrastructure.
01:07:05 Right now, only 28% of the population of Africa
01:07:09 has access to mobile Internet,
01:07:11 and the median price they pay
01:07:13 is 75% higher than what you pay in the EU
01:07:16 and in some countries
01:07:18 it's many multiples times higher.
01:07:21 So completing the undersea cables that are now
01:07:23 under construction down along
01:07:25 both the West Coast and East Coast of Africa
01:07:27 is going to be incredibly important
01:07:29 to drive down data costs.
01:07:31 But already, even without that, the stories of startups
01:07:35 that are just transforming markets
01:07:37 and helping everyone,
01:07:39 from the smallest self-employed person
01:07:41 up to transforming the large companies
01:07:44 is really inspirational.
01:07:46 [Michelle Fleury] Well, thanks to both of you.
01:07:47 So some tips there on how to get to inclusive growth.
01:07:51 And also thanks to those of you from around the world
01:07:53 who sent in questions.
01:07:55 Now to finish off our program on a high note,
01:07:57 we've asked youth from around the world
01:07:59 to tell us what gives them hope for the future.
01:08:01 Here's what they said.
01:08:05 [Rumaitha Al Busaidi] We have a collective duty
01:08:07 to reflect and envision
01:08:09 of a company that is more inclusive.
01:08:11 [Marko Sofranac] Innovation and creativity are key
01:08:13 for our community challenges during and after the pandemic.
01:08:17 [Lyubov Artemenko] Sustainable mobility
01:08:18 should be at the heart
01:08:20 of the COVID-19 recovery strategy.
01:08:22 [Salam Al-Nukta] It is time to realize
01:08:24 their challenges ignite new business ideas.
01:08:28 [Aravinth Panch] Future proof skills
01:08:29 should be interdisciplinary
01:08:31 so that people can dynamically adapt.
01:08:33 [Jonathan Chu] What we need
01:08:34 is more accessibility to education,
01:08:36 to help young people to upskill themselves.
01:08:40 [Favour Omokhaiye] To bring on knowledge and skill base,
01:08:42 which will ensure that we recover
01:08:43 and even come out more empowered than before the pandemic.
01:08:46 [Salam Al-Nukta] Young people are not the most threatened.
01:08:50 In fact, they are the hope to exponential economic growth.
01:08:55 [Keithlin Caroo] The resilience of Caribbean youth
01:08:57 has shone through.
01:08:59 [Marko Sofranac] We are game changers.
01:09:00 [Rumaitha Al Busaidi] Pulls an existential risk
01:09:01 to institutions that are looking
01:09:03 at just simply reverting to business as usual.
01:09:06 [Keithlin Caroo] When traditional sectors
01:09:07 had blocked us out, we created a new one.
01:09:10 [Marko Sofranac] We are the driving force
01:09:12 recovering the whole country.
01:09:14 [Keithlin Caroo] Our strength truly lies
01:09:16 in our human capital.
01:09:18 [Rumaitha Al Busaidi] We should be
01:09:19 enabled and empowered enough
01:09:20 to have a seat on the table to make those decisions.
01:09:23 [Abhinac Khanal] Creating a path towards a sustainable future
01:09:26 for the youth and their entire families and communities.
01:09:34 [Michelle Fleury] The voice of the young.
01:09:35 This marks the end of the first public event
01:09:38 in our Annual Meetings.
01:09:39 But there is so much more to come,
01:09:41 including tomorrow's event on Ending the Pandemic.
01:09:45 Then on Thursday the focus turns to climate,
01:09:47 and trade will be the topic on Friday.
01:09:50 You can watch all of those,
01:09:52 as well as catch a replay of this great event
01:09:54 at World Bank Live.
01:09:55 And you can share your comments on these Meetings
01:09:58 using the hashtag #ResilientRecovery.
01:10:01 We hope you have enjoyed today's event.
01:10:04 Do keep those comments coming, and goodbye for now.

Growth in a Time of Crisis: What's Ahead for Developing Economies

Follow the event on Twitter #Growth4All

The opening public event of this year’s Annual Meetings – Growth in a Time of Crisis: What’s Next for Developing Economies – delved into questions like these:

How can countries build back to a sustainable, resilient, and inclusive economic recovery while also investing in their people?
What are the fundamental barriers to sustainable and inclusive growth in low and middle-income countries and fragile and conflict-affected settings, and what does the future of growth look like?
What types of policies are important to support inclusive growth for vulnerable populations? How can digital technology help ensure inclusion?
What’s needed to support private investment, especially small and medium enterprises, and create jobs in developing countries?
What role can central banks play to help spur job creation and investment?

We heard from World Bank Group President David Malpass and World Bank Group Chief Economist Carmen Reinhart, as well as other high-profile experts, policymakers, private sector leaders and civil society representatives on the way forward for developing countries.

Felix Mlusu, Malawi's Minister of Finance; Elliott Harris, UN Assistant Secretary-General for Economic Development and Chief Economist; and Husna Ahmad, CEO of Global One 2015, discussed how to support inclusive growth and reverse the negative impact of the pandemic on poverty and shared prosperity for the bottom 40% of the population.

Ali Allawi, Iraq's Deputy Prime Minister and Minister of Finance; Maya Chorengel, co-managing partner at The Rise Fund; and Pia Tayag, Director at the office of the UN Secretary General's Special Advocate for Inclusive Finance for Development (UNSGSA), focused on how to increase private investment and create jobs in middle-income countries. Reza Baqir, Governor of the State Bank of Pakistan, reflected on the role of central banks in helping countries pull through this global crisis.

Throughout, the interactive and inclusive event reflected the voices of youth, heads of state and small business owners. View the event replay on World Bank Live!

See the list of speakers ˅

Event Program

A conversation with World Bank Group Chief Economist Carmen Reinhart on how to support sustainable economic growth in middle-income countries (MICs) and low-income countries (LICs) and broaden the economic recovery.

How to support inclusive growth to reverse the negative impact of the pandemic on poverty and shared prosperity.

How to increase private investment, especially for small-medium enterprises (SMES) and create jobs.

Polls & Questions From the Audience

? What is the best way to boost inclusive economic growth? It's time to find out the results of the #Growth4All survey done for the 2021 Annual Meetings. Over 3000 votes! Learn more by watching the replay of Growth in a Time of Crisis ➡️ https://t.co/nRQgfzI4cL pic.twitter.com/nNiHBb0Oga
— World Bank Live (@WorldBankLive) October 12, 2021

255 VOTES / Kponlawon B. Goanue
How can a low-income country experience growth in a time of crisis when there are systemic corruption and a lack of accountability within the governing structure of that economy?

124 VOTES / Neema Bimbiga
What is the biggest economic problem facing developing countries?

88 VOTES / Makheti Alex
Is there any plan by the World Bank to support small-scale manufacturers at the local level, or even home-based productions, to ensure the practicability of entrepreneurship?

71 VOTES / Shanmuganathan Helanjanani
How can we develop the rural economy sector in the COVID-19 pandemic situation?

66 VOTES / Pravesha
How can we get the participation of the younger population to contribute towards an inclusive, sustainable economy that enables us to move towards a speedy economic recovery?

Resources

Websites

Videos

Blogs

Read the transcript

00:00 [Upbeat Music]
00:01 [Annual Meetings 2021]
00:24 [GROWTH IN A TIME OF CRISIS: WHAT'S AHEAD FOR THE DEVELOPING ECONOMIES?]
00:35 Welcome to everyone in our virtual audience around the world.
00:38 We’re glad you could join us for the World Bank Group-IMF Annual Meetings
00:43 here in Washington.
00:44 For this kickoff event about Growth in a Time of Crisis:
00:49 What's Ahead for Developing Economies.
00:52 I'm Michelle Fleury, and I'm coming to you live
00:53 from the World Bank Group's headquarters here in Washington, DC.
00:59 Global growth is set to reach 5.6% in 2021
01:04 the strongest post recession pace in 80 years.
01:07 Nonetheless, the recovery is expected to be highly uneven
01:11 and there is substantial uncertainty about the strength and durability
01:15 of this anticipated upturn beyond 2021.
01:19 Current signs of recovery may be fleeting and underscore
01:22 the need for policymakers in emerging market
01:24 and developing economies to drive a policy reform agenda
01:28 that will enhance future growth, shared prosperity,
01:31 private sector investment, and job creation.
01:35 In addition, the Pandemic has amplified
01:37 the existing social and economic gap, such as those between men and women.
01:41 Women have lost jobs at a faster rate than men,
01:44 and women-led firms have been more strongly affected
01:47 than firms led by men.
01:50 We'll explore all of these important issues
01:52 with three distinguished panels.
01:55 Let's take a quick look at what we have lined up for you.
01:58 [Upbeat Music]
02:00 [VIRTUAL ANNUAL MEETINGS 2021] [COMING UP]
02:05 [AVOIDING A DECADE OF LOST GROWTH]
02:06 [DAVID MALPASS, PRESIDENT, WORLD BANK GROUP]
02:10 [BUILDING AN INCLUSIVE RECOVERY]
02:11 [CARMEN REINHART, CHIEF ECONOMIST, WORLD BANK GROUP]
02:15 [RESTORING GROWTH IN LOW-INCOME COUNTRIES]
02:16 [FELIX MLUSU, MINISTER OF FINANCE, MALAWI]
02:18 [HUSNA AHMAD, CEO, GLOBAL ONE 2015]
02:20 [ELLIOT HARRIS, ASSISTANT SECRETARY-GENERAL, UNITED STATES]
02:25 [PROMOTING JOBS AND RESILIENT, INCLUSIVE GROWTH]
02:26 [ALI ALLAWI, DEPUTY PRIME MINISTER AND MINISTER OF FINANCE, IRAQ]
02:28 [REZA BAQIR, GOVERNOR, CENTRAL BANK OF PAKISTAN]
02:30 [MAYA CHORENGEL, CO-MANAGING PARTNER, THE RISE FUND]
02:32 [PIA TAYAG, DIRECTOR, OFFICE OF UNSGSA]
02:36 [Michelle Fleury] As you can see quite a lineup.
02:38 Now before our first discussion, let's hear from
02:41 World Bank Group President David Malpass
02:43 on how the developing countries can avoid losing a decade of growth.
02:49 Good day and welcome to the 2021 Annual Meetings.
02:53 We start the week with a topic that is on everyone's minds,
02:56 [WASHINGTON DC]
02:57 [David Malpass] Growth in a time of crisis,
02:59 What's ahead for developing economies?
03:01 In the wake of the COVID-19 pandemic,
03:03 we confront a looming era of reversals
03:06 of the development achievements of the last decades.
03:10 GDP will return next year to pre-pandemic levels
03:13 in many emerging and developing economies,
03:16 but per capita income will take more time to reach 2019 levels.
03:21 In many countries, the recovery is even slower
03:24 and full of complex challenges.
03:27 Poverty increased, and the gap between
03:29 the poorest and the wealthiest is widening.
03:32 While the incomes of the top 40% rebounded quickly,
03:35 the recovery has not started for the bottom 40%.
03:40 The result has been a substantial increase in global poverty,
03:44 with nearly 100 million additional people living in extreme poverty
03:48 and with several hundred million new poor
03:51 using the middle-income country poverty lines.
03:55 We've also seen significant reversals in gender equality,
03:59 educational attainment, and even nutrition.
04:03 At the same time, the COVID-19 crisis has brought about
04:06 unprecedented structural transformation,
04:09 with a recent surge in the number of newly established firms,
04:13 expanded venture capital, and proliferation of innovations
04:18 across sectors using digital means.
04:21 In this time of upheaval,
04:24 the question in front of the development community is,
04:27 what should we do to avoid a lost decade
04:29 and boost growth that's both inclusive and sustainable?
04:34 I hope we can aspire to do more in two ways.
04:37 First, we need much bigger scale for impact,
04:40 and second, we need a stronger focus on key priorities
04:44 with poverty alleviation at the center of the effort.
04:48 As a pre-condition to the work ahead, acceleration of vaccinations
04:53 to enable a return to normalcy is indispensable.
04:57 But there are also four areas in which determined action
05:00 should make a difference.
05:02 First, economic stability,
05:04 laying the groundwork for medium term growth.
05:07 Developing countries increase drastically their public debt
05:10 due to the pandemic and cannot keep doing whatever it takes.
05:14 The time has come to start charting a gradual path toward consolidation,
05:19 one that keeps the welfare of citizens as the guiding principle.
05:24 Enhancing and simplifying tax structures
05:27 while eliminating wasteful public expenditures,
05:31 increasing the efficiency of service delivery
05:34 and reallocating resources
05:36 toward their most productive uses will be essential.
05:40 But the transition needs to be well calibrated
05:42 considering country conditions, including current fiscal space,
05:47 monetary policy given inflationary pressures,
05:50 real sector dynamics and risks ahead.
05:54 Second, we need to leverage the digital revolution.
05:58 It opens the opportunity to fundamentally transform
06:02 many sectors of the economy, such as finance, services,
06:06 education, health, and even agriculture.
06:09 It also offers transformative impacts for the public sector.
06:14 This revolution requires scaling up resources
06:17 for investments in digital infrastructure,
06:20 the elimination of monopolies in the telecom sector,
06:23 national IDs for the population,
06:26 and an enabling regulatory environment.
06:31 Third, we need to make development greener and more sustainable.
06:35 Supporting the energy transition toward cleaner generation sources
06:39 is the most obvious entry point.
06:42 Halting the creation of new coal-fired plants
06:45 and decommissioning existing ones
06:47 will be expensive, but it needs to happen.
06:50 Win-win solutions in transport, agriculture, forestry,
06:54 and urbanization should improve
06:57 both living standards and environmental sustainability.
07:01 Efforts need to focus on the most impactful engagements.
07:05 The major sources of greenhouse gas emissions
07:08 need to be reduced
07:09 while at-risk populations in low income countries
07:13 would need much better preparedness and adaptation.
07:17 And fourth, investing in people is the best investment we can make.
07:22 Functional education and effective healthcare systems
07:25 require more than providing budgetary resources
07:29 in an efficient and prioritized way.
07:31 They need also to find scalable solutions
07:34 to enhance quality of health services
07:38 and improve children's learning, including through digital means.
07:43 Nowhere is human capital accumulation
07:45 more important than in conflict affected countries.
07:49 Finally, the equity and economic returns
07:52 of closing gender gaps in developing countries,
07:54 which worsen during the crises are massive.
07:58 None of this will be easy,
08:01 but the World Bank Group is uniquely endowed in position
08:03 to support countries in their efforts
08:05 while mobilizing private sector participation.
08:09 We will be discussing these issues and more during today's event.
08:15 [Michelle Fleury] Let's pick up now on some of the points
08:17 raised there by President Malpass.
08:18 I'm joined by the chief economist of the World Bank Group,
08:21 Carmen Reinhart.
08:22 Thank you for joining us.
08:23 You have been quoted in the past as saying,
08:26 “don't mistake a rebound for a recovery”.
08:29 What do you mean by that?
08:30 What does that mean exactly in the context of an inclusive recovery?
08:38 [Carmen Reinhart] We had exceptional declines
08:41 in output and GDP almost across the world in 2020.
08:48 So we're going to get a rebound.
08:49 We are indeed seeing rebounds.
08:51 Now, by recovery what I really mean is that
08:55 on a per capita basis,
08:57 income per person is at least where it was before the pandemic
09:02 that'll take longer,
09:03 so notwithstanding what we're seeing in rebounds
09:07 incomes per capita,
09:08 especially for the low-income countries and the middle-income countries,
09:12 that true recovery will take longer.
09:16 And I'm afraid that what this has done
09:20 is widen the disparity between the advanced economies
09:25 and the emerging markets in developing countries.
09:28 [Michelle Fleury] Now you've talked a lot, you've been on the record talking a lot
09:30 about the high debt levels
09:31 that governments have had to take on to try,
09:33 and if you like, buffer their populations, businesses
09:37 from the negative impacts of the pandemic.
09:38 The World Bank, I understand, just released a report today on this.
09:42 Can you talk to me a bit more about the significance of that
09:44 and what is in that report?
09:48 [Carmen Reinhart] I think the build up in debt across the world,
09:52 advanced, middle-income, low-income countries
09:56 in response to the Pandemic has meant that
09:59 for those that are among the low-income countries
10:02 that entered with a lot of vulnerabilities already pre-existing
10:08 are finding themselves already in debt distress.
10:10 This is not a hypothetical what if or what that.
10:13 At the moment of the 73 low-income countries
10:18 that are eligible for the Debt Service Suspension initiative,
10:22 more than half of those countries are either in debt to stress
10:27 or quickly approaching at a high risk of debt distress,
10:31 which means that debt restructuring,
10:34 debt forgiveness will have to remain a very big issue
10:39 in the development agenda going forward.
10:42 [Michelle Fleury] Of course, the stress isn't just limited to governments.
10:44 I mean, we're looking at households, businesses or individuals.
10:48 [Carmen Reinhart] Absolutely.
10:50 In effect, our next World Development Report
10:53 focus is very much on the distress that's a legacy of COVID-19,
11:00 firms that are finding themselves unable to establish tourism, services.
11:08 All these industries are really impacted for the long haul.
11:12 They have a lot of debt distress.
11:14 Households were job losses and insufficient income support
11:20 has been unavailable means odds of debt distress increase collectively.
11:27 What we're seeing is governments, households, firms,
11:33 all facing the legacy of the income and wealth losses
11:39 associated with COVID-19.
11:41 Big question ahead of the big challenge is
11:45 moving forward to make sure that
11:49 the COVID-19 crisis doesn't morph into a financial crisis
11:54 where financial institutions are also impacted.
12:02 Such a negative outcome would be a big head wind
12:08 to a green, inclusive recovery, which is what we all want.
12:12 [Michelle Fleury] I mean, given the huge challenges you've just laid out there,
12:15 what role in that context can the World Bank play?
12:19 [Carmen Reinhart] First of all, I think the World Bank, as you know,
12:24 we've had a record in lending during the Pandemic.
12:32 157 billion in lending.
12:40 Since the start of the multilateral framework in World War Two,
12:46 we haven't seen such a cohesive outreach to over 100 countries.
12:52 [CARMEN REINHART ON GROWTH OPPORTUNITIES AFTER COVID-19]
12:53 I think going forward, the World Bank is working with countries
13:00 not only to continue on the vaccine front.
13:03 It's involvement in inclusive and financial inclusion
13:11 is a big agenda to temper the effects of,
13:17 as I noted earlier, inequality, rising poverty rates.
13:24 The World Bank has a fresh agenda on climate.
13:29 So these are all areas where the needs are great
13:34 and they're greater across a very broad array of countries
13:40 ranging from the middle-income to the lowest-income
13:44 that are so hard hit by the pandemic.
13:47 [Michelle Fleury] Thank you for that summary of some of the problems
13:48 but also some of the actions that can be taken.
13:52 The economic effects of the pandemic
13:54 have had a particularly devastating impact
13:56 on youth around the world.
13:57 [COMING NEXT: YOUTH PERSPECTIVES ON COVID-19 CHALLENGES]
13:58 We asked some young people to tell us about the impact of COVID-19.
14:01 on their economic wellbeing.
14:03 What needs to happen to ensure
14:05 young people aren't left out of this recovery?
14:11 [SANTA LUCIA] [KEITHLIN CAROO, ONE YOUNG WORLD AMBASSADOR]
14:11 Paradise is lost.
14:14 That is invariably how I feel as an islander living in the pandemic.
14:18 [PANAMA][MANUEL RAMOS NAVAS] COVID-19 has definitely affected
14:23 the health and economy of thousands of Panamanians.
14:26 [Keithlin Caroo] The lifeblood of our island which is tourism
14:30 came to a screeching halt.
14:32 [SOUTH KOREA] [SUNGHEE TARK]
14:32 Farming communities have been [inaudible speech] touched.
14:34 [OMAN] [RUMAITHA AL BUSAIDI]
14:35 It has exposed many of our systemic flaws
14:37 in our local and global systems.
14:39 [TOGO] [YOUSSAKA ESSODONG FIDELE] As a result, many young people lost their jobs
14:42 [NETHERLANDS] [SALAM AL-NUKTA] And had to skip almost half a year of education
14:45 due to lack of infrastructure.
14:47 [TURKEY] [ELIK KORKMAZ] For the students who were living in the rural areas
14:50 and who didn't have enough sources,
14:52 keeping up with online education was so hard,
14:54 [UGANDA] [GEROME KWILYAME] and have a negative impact on their health,
14:58 behavior and social development.
15:00 [BRAZIL][MARIANA LOZZI] It's very likely that someone
15:03 is going to ask you for help.
15:05 They are going to turn you for money, food, medicine.
15:09 [MALAYSIA] [JONATHAN CHU] Many had to take on
15:12 bank loans or extra jobs just to support their families.
15:16 [Youssaka Essodong Fidele] I found that most of the jobs offers
15:19 require a professional training in a specific field.
15:22 [Mariana Lozzi] A lot of people that had shifted
15:26 to middle-income lifestyle,
15:29 they are going back to poverty.
15:31 [Keithlin Caroo] Our country was scrambling to strengthen
15:33 alternative sectors while grappling with widespread unemployment
15:38 [Inaudible speech] raising levels of poverty and violence.
15:41 [Mariana Lozzi] The same challenges are hunting us back against:
15:44 hunger, food insecurity.
15:46 [Manuel Ramos Navas] It has helped in the increase of insecurity
15:50 [KAZAKHSTAN][DILNAZ KAMALOVA] This unsettling feeling of uncertainty.
15:52 [Keithlin Caroo] But in the midst of obstacles
15:54 always comes opportunities.
16:00 [Upbeat Music]
16:01 [KHARTOUM, SUDAN] Hi, I'm Anita Min in Khartoum, Sudan and you are watching
16:04 the World Bank Group and IMF's Annual Meetings.
16:11 [Michelle Fleury] Some really interesting ideas there.
16:12 We're going to be hearing more from young people
16:14 around the world and their thoughts
16:16 on future opportunities and hopes a little bit later.
16:19 There are lots of ways that you can share
16:22 your ideas and comments on this event.
16:24 I'm joining by Sri Sridhar who can tell us a little bit more.
16:27 [Sri Sridhar] Thanks Michelle.
16:28 There are a lot of ways for folks to take part today.
16:30 You can follow us on Facebook, Twitter and Instagram
16:33 and share your comments at any time
16:34 using the hashtag for today's event which is Growth for all.
16:37 You can also post your questions and comments
16:39 directly on live.worldbank.org.
16:42 Now the event is being streamed at
16:43 English, Spanish, French and Arabic.
16:46 We've actually got experts standing by in all four languages
16:48 to answer questions.
16:49 In fact, you can see some of them right here, which is pretty cool.
16:52 I believe some of the most popular questions
16:55 will be answered here or later today.
16:57 [Michelle Fleury] Yes, I think we're going to be rejoined by
16:58 by Carmen Reinhart, Chief Economist here at the Bank
17:00 and also by Susan Lund, who is the Vice President,
17:03 Economics and Private Sector Development at IFC,
17:06 a member of the World Bank Group focused on the private sector.
17:10 We also have a poll, right?
17:12 [Sri Sridhar] We do, the first or four polls for this week.
17:13 Today's poll asks
17:15 what is the best way to boost inclusive economic growth?
17:18 We've got four options here and is it going to be
17:21 by creating jobs and increasing private investments through policy reforms,
17:26 by expanding vaccine distribution,
17:28 or is it by investing in safety nets that focus on vulnerable populations
17:33 You can head on over to live.worldbank.org
17:35 and cast your vote before the pool closes.
17:38 [Michelle Fleury] So that's it. Get voting now.
17:40 We also want to bring you
17:41 some voices from leaders of the developing world,
17:44 heads of States from seven countries
17:46 that are supported by the International Development Association,
17:50 that's the World Bank's fund for the poorest.
17:52 And in these clips they share what they need
17:55 to bring their economies back to health.
18:00 [JULIUS MAADA BIO, PRESIDENT, SIERRA LEONE]
18:01 The unprecedented challenges of COVID-19
18:04 have further exposed nations to heightened vulnerabilities
18:09 and to rethink delivery on SDGs.
18:13 [MACKY SALL, PRESIDENT, SENEGAL] Of course, like most countries,
18:17 our economic activity ground almost to a complete halt.
18:22 [MOHAMED BAZOUM, PRESIDENT, NIGER]
18:23 We've gone from a projection of 6% annual growth to about 3%.
18:29 [DAVID KABUA, PRESIDENT, MARSHALL ISLANDS]
18:30 As a small island state, our country faces unique challenges
18:33 including geographic isolation, rising sea levels and climate change impact.
18:39 We have also faced the challenge of COVID-19.
18:42 [IRFAAN ALI, PRESIDENT, GUYANA]
18:43 The uneven global response to the pandemic has not helped.
18:46 Great attention must be paid to strengthen resilience,
18:50 particularly for the most vulnerable countries.
18:54 [FAURE ESSOZIMMA GNASSINGBÉ, PRESIDENT, TOGO]
18:55 Because we have seen that this is a crisis
18:57 that comes in waves or cycles,
18:59 it is key that we are able, like other regions,
19:04 to very quickly reactivate our economies.
19:06 [HAKAINDE HICHILEMA, PRESIDENT, ZAMBIA]
19:06 There's an urgent need to enhance Africa's capacity
19:09 for innovation and development of ICT infrastructure
19:13 to realize and enjoy the benefits arising from industry 4.0.
19:19 [Julius Maada Bio] Let me conclude by reiterating the call
19:22 for partnerships and corporation to deliver on SDGs
19:26 in order to achieve the future we want.
19:33 [Michelle Fleury] To really understand the urgency of the challenges
19:36 those leaders are facing, let's take a closer look at the data.
19:39 This pandemic has hit the world's poorest hardest.
19:43 Just take a look at the impact
19:45 on global income distribution over the last two years.
19:49 This is what happened in 2020.
19:52 You can see the richest 20% had incomes 5% lower than
19:56 pre-pandemic projections,
19:58 but for the poorest fifth that loss stood at 6.6%.
20:04 While the incomes of the richest have begun to recover in 2021,
20:07 this is not true for the poorest.
20:09 Let's show you the World Bank Group's latest data on income losses
20:13 and you can see that for the very poorest,
20:16 the loss is even greater, 6.7% lower than projected
20:20 before the pandemic.
20:21 But for the wealthier, there are clear signs of recovery
20:24 with average incomes now only 2.6% lower than
20:28 pre pandemic projections.
20:31 In addition to this rising inequality,
20:33 we're also witnessing a substantial increase in global poverty.
20:38 Now, let's take a look at the latest data on extreme poverty.
20:41 How many people live on less than $1.90 per day?
20:46 This line shows you how poverty was falling
20:51 and expected to continue to fall before this crisis,
20:54 and then the shocking impact of the pandemic
20:58 causing those projections to reverse.
21:01 In all, the World Bank Group now estimates
21:04 that 97 million additional people are living in extreme poverty
21:10 because of COVID-19.
21:13 New World Bank data released today also shows that
21:16 the external debt owed by low income countries
21:18 rose to a record 860 billion US dollars in 2020,
21:24 12% increase over the year before.
21:26 And that's that as you can see here,
21:28 5.3% is the external debt levels
21:31 of both low and middle-income countries.
21:34 It rose to that level to $8.7 trillion US dollars in 2020.
21:41 So how can we support inclusive growth
21:44 to reverse those negative impacts of the pandemic
21:47 on poverty and shared prosperity?
21:50 Low-income countries
21:51 and the poorer people within those countries
21:53 have suffered the most.
21:55 So how can we help them regain momentum?
21:57 That's the question I put to a distinguished panel of guests earlier.
22:02 I'm joined by the Honorable Felix Mlusu, Minister of Finance for Malawi,
22:08 Elliot Harris who is the United Nations Assistant Secretary-General
22:12 for Economic Development and Chief Economist.
22:14 And lastly, Husna Ahmad, CEO of Global One 2015,
22:19 a Muslim woman led international development NGO
22:23 that uses faith and culture as tools for change.
22:27 Minister, if I could turn to you first,
22:30 what do you see as the main barriers to economic growth
22:35 as a leader in a low-income country?
22:38 [Felix Mlusu] Thank you very much for that question.
22:42 The main barriers for economic growth
22:48 for low-income countries, obviously, are many.
22:53 Starting with limited in fiscal space.
22:58 For low-income countries, for them to find their [Inaudible speech] programs.
23:05 They obviously limited in financial resources,
23:07 therefore, they cannot fully fund the government problems.
23:15 There are other barriers, too.
23:17 Economic growth for low-income countries
23:20 that is unsustainable high levels of debt,
23:25 which they have contracted over the last couple of years.
23:31 High levels of debt.
23:32 They cannot really finance their programs.
23:39 There are other limitations or barriers.
23:44 Second to economic growth is the lack of infrastructure development
23:51 almost in all sectors of their economies.
23:56 You're talking about areas like energy, transport, social services,
24:03 in the areas of health, in the areas of education
24:09 and in almost all areas of their economies.
24:13 Really, there is a serious lack of infrastructure.
24:18 Also, technology is another area where there's also serious limitation
24:25 for these low income countries
24:28 in order to reach economic growth.
24:32 [Michelle Fleury] I mean, there was a lot there
24:33 that you've just talked about, but I want to pick up on two points.
24:36 In particular, you talked about sustainable debt.
24:38 You also talked about having the fiscal space.
24:41 This is where I want to bring in Mr. Harris,
24:43 because you work at the UN and at the IMF
24:46 developing policies to create sustainable growth.
24:49 What should governments be looking at during this difficult time
24:53 as the global economy recovers from the pandemic?
24:56 [Elliot Harris] Thank you, Michelle.
24:57 I think the first thing the most important thing is
24:59 for governments to ensure that their policies are consistent
25:01 that their policies are consistent
25:03 with the sustainable development agenda.
25:03 with the sustainable development agenda.
25:05 {\an8}It is, on the one hand with regard to the government budget.
25:08 {\an8}In particular, that we want to see a government budget
25:10 {\an8}that is aligned with the SDGs
25:11 and that ensures that the budget
25:13 is not encouraging anything that is unsustainable
25:16 and that it helps to set up the right sorts of incentives
25:19 for private sector activity that is sustainable.
25:22 More generally, I think governments need
25:24 to have an integrated approach to policy-making involving the whole
25:27 of the government so that the overall legislative
25:31 and regulatory framework
25:32 is conducive to sustainable development
25:35 and to growth that is sustainable
25:37 that is rational, evidence-based
25:39 and above all, that is stable and predictable
25:42 and that last element is very important
25:44 for setting up a conducive environment
25:46 for the private sector to invest, to invest in growth for the future.
25:49 Without that private sector investment,
25:51 our governments are not on their own
25:53 going to be able to achieve sustainable growth.
25:55 {\an8}Now, the other part of the question,
25:58 {\an8}the question of whether we can get inclusive growth
26:01 {\an8}requires governments to take positive steps
26:03 {\an8}to go beyond just facilitating overall growth processes.
26:07 {\an8}One is to make clear and to take steps to ensure
26:11 {\an8}that the growth process itself doesn't lead
26:13 {\an8}directly to an acceleration of inequalities
26:16 a widening of inequalities, and sometimes that can be
26:19 as complicated as setting up the right sorts of incentives
26:22 that investments are directed towards
26:24 job intensive types of activities.
26:27 But it also means dividing policies
26:30 that enhance the access to the opportunity
26:33 for people to gain the kinds of skills they will need
26:35 to compete on the job markets of the future
26:37 and in many respects, in this day and age,
26:39 that means digital skills.
26:41 So governments have to make sure
26:42 that the digital infrastructure is created
26:44 not necessarily by the government itself
26:46 but that the right regulations are in place
26:48 and that people have the skills to take advantage of it.
26:50 [Michelle Fleury] I mean, that's the perfect segue to our next guest
26:53 {\an8}doctor Ahmad, because we have seen how this pandemic
26:56 {\an8}has affected women and children
26:59 {\an8}more substantially than other groups
27:01 {\an8}What would you like to see done?
27:03 {\an8}What is your message to policy makers out there?
27:05 [Husna Ahmad, CEO, Global One 2015] Women are facing increased
27:07 {\an8}domestic violence, early marriages, trafficking,
27:11 {\an8}mental health issues, lack of access to antenatal care
27:15 and hospitals for pregnant women is putting lives in danger.
27:19 Schools have been closed
27:20 due to the pandemic, but we don't know when they'll be open.
27:24 Mental hygiene management is a huge issue.
27:27 {\an8}Do we buy-- Do women buy pads or food?
27:30 {\an8}Today, humanity is struggling with [inaudible].
27:34 {\an8}The UN's goal to leave no one behind
27:37 {\an8}can only happen if we ensure everyone has access
27:41 and to the vaccine.
27:43 Will that happen?
27:45 Women are the bedrock of every society.
27:49 If we don't ensure their well-being,
27:52 we will be responsible for a lost generation.
27:55 What needs to be done, Michelle?
27:58 You know as well as I, that women are incredibly resilient
28:02 and women of faith are even more so,
28:05 Two things need to be done.
28:07 The World Bank and the IMF need to become faith sensitive.
28:11 The Bretton Woods institutions have evolved a long way from the days
28:17 of structural adjustments and development partnerships.
28:20 They are much more transparent and accountable,
28:23 but they're still using the Western lens to find solutions.
28:28 And without diversity and inclusion, they will fail.
28:32 Number two, investment, investment, investment.
28:37 Investment in healthcare systems,
28:39 in education, green technology and digital transition,
28:43 investment in social protection, economic inclusion,
28:47 and decent terms
28:49 Thank you.
28:50 {\an8}[Michelle Fleury]I want to pick up there on...
28:54 {\an8}You talked about the role of international organizations
28:58 {\an8}like the World Bank.
29:00 Um, Mr. Harris, if I could bring you in there
29:03 to sort of weigh in what your thoughts are
29:05 {\an8}Do you agree with what Dr. Ahmad was saying?
29:07 {\an8}What more would you like to see international organizations play?
29:11 {\an8}[Elliott Harris] I think, Michelle, that one
29:13 {\an8}of the big challenges that governments face,
29:16 as I said a little bit earlier, is to make sure they get
29:18 {\an8}their policies as right as they can.
29:20 {\an8}And I think that's the first thing
29:22 {\an8}that international institutions can do.
29:23 {\an8}They can help governments to achieve
29:25 that quality, and consistency of policy.
29:27 And that, I think, is the most important bedrock
29:29 for future progress, for sustainable growth
29:32 and for social justice.
29:34 Now, part of that might be helping to build up capacities,
29:36 to formulate and implement the right sorts of policies.
29:39 But it can also involve providing information
29:41 about the overall global context, for example,
29:44 about what other countries have done,
29:45 what's worked in other countries, and why, what's not worked so well
29:49 as a way of building up sort of the evidence base,
29:52 if you will, for informed policy-making.
29:54 {\an8}The second thing.
29:55 {\an8}All governments, around the world, face
29:58 {\an8}global challenges, many of them common to all of us.
30:00 {\an8}Climate change is just the most well-known example.
30:04 {\an8}The international institutions can help deal with that
30:07 {\an8}by providing, for example, the framework for negotiations
30:09 {\an8}around some of these issues, by providing
30:11 {\an8}policy options for consideration by the government and above all,
30:15 {\an8}by providing analysis and the evidence base
30:17 {\an8}to inform the policies.
30:18 Now, some of the institutions are
30:20 financial ones, and they can provide resources to help
30:22 the government move forward on some of these issues.
30:25 But that basic function of providing the framework
30:27 for some of these policies of formulating exercise
30:31 is really critical.
30:32 But there's one last thing that I think
30:34 the international institutions can do.
30:36 They can raise issues that are politically or socially sensitive
30:40 in a given country-context and in doing so, they can help
30:45 to create the space for policy change.
30:47 And these can be things like strengthening
30:49 the institutions that help for greater accountability
30:51 or that help to combat corruption.
30:54 It can be raising the problem of inequalities because, very often
30:57 that speaks against some of the vested interests
31:00 in social structures.
31:01 It can be things like promoting gender equality.
31:04 But in any event.
31:05 Fostering the discussion around these things creates the space
31:08 for civil society and government to work together, where possible
31:12 to start making the kinds of changes that are needed.
31:14 {\an8}[Michelle Fleury] Minister, if I could turn to you
31:16 {\an8}for the last word, we've heard, sort of, what role
31:19 {\an8}international organizations can play and being able to say
31:23 {\an8}things that perhaps governments like yours cannot.
31:26 {\an8}What, specifically, what help would you like to see
31:29 {\an8}from the global community for a country like yours?
31:31 {\an8}[Felix Mlusu] Thank you very much.
31:33 I'm sure for that question.
31:36 {\an8}I think there's a lot that the international community
31:39 {\an8}you know, can do to help the low income countries.
31:43 I think for the start, issues of investment, um...
31:50 The international community or global community can do a lot
31:55 in terms of foreign direct investments,
31:58 partnering local investors,
32:01 {\an8}but also looking at various models of investing in an economy,
32:08 {\an8}whether through public-private partnerships
32:12 or BOT arrangements, or indeed,
32:16 any other, you know, models
32:18 that can be used to invest
32:21 in these low income countries.
32:25 I think one other thing, also, which, you know,
32:28 the international community can do
32:31 is to give easy access
32:35 to concessional loans, and, of course, grants as well.
32:40 These will help to boost up the local fiscal spaces,
32:46 which are lacking, seriously,
32:50 in the low-- you know, low income countries.
32:54 So, concessional loans, grants.
32:57 These would help quite a lot and also adding on to this.
33:02 You know, um, of course
33:05 we cannot forget to ask for date forgiveness.
33:10 This definitely is going to help countries
33:16 to manage their fiscal spaces well
33:20 and that'll also assist them to look at other areas
33:24 of how, even locally, they can generate revenues
33:29 for them to be able to run their local programs.
33:33 So indeed, there's a lot that the international community
33:36 can do, you know, to assist stronger growth
33:40 for the low income countries.
33:43 Thank you.
33:44 {\an8}[Michelle Fleury] Thank you very much.
33:45 {\an8}It seems like
33:47 there is certainly a huge role
33:48 to be played by the international community.
33:50 We're going to have to leave it there, though.
33:51 I would like to thank Minister Mlusu, Elliot Harris.
33:55 And lastly, Husna Ahmad, Thank you so much for your time.
33:59 [Upbeat Music] Hello. My name is John Rosino
34:03 In Athens, Greece, and you are watching
34:04 the World Bank Group-IMF Annual Meeting
34:09 [Michelle Fleury] And to join in the conversation,
34:11 you can use the hashtag #GrowthForAll
34:14 to share your thoughts on this event at any time.
34:16 Up next, let's take a look at how a ride hailing business
34:21 in Sri Lanka was able to pivot during the pandemic
34:23 supporting employees and connecting the community.
34:38 I wake up at 4:00 a.m.
34:41 and then I start to prepare our meals
34:45 It'll be 5:30 a.m. when I'm finished
34:49 I make sure to start my day worshipping the Lord Buddha.
34:52 After I give the meals to my mother,
34:54 we leave the house around 5:15 a.m. to drop my daughter at her school
34:58 After that, I turn the app and start my work with PickMe.
35:06 [Jiffry Zulfer, Founder CEO PickMe]
35:08 When the news struck that there is going to be a curfew tomorrow
35:13 obviously, it was scary because we're not sure what this virus is
35:17 Amidst the pandemic in 2020 and this year,
35:21 PickMe has expanded and the number of female drivers doubled
35:25 has doubled over the months on the platform
35:27 providing them with ample opportunities
35:30 COVID-19 has been undoubtedly a difficult time for all of us
35:35 but I'm delighted PickMe has been able to support our community
35:40 and essentially our country
35:41 from various lines of business.
35:44 [Podimanike Rathnayake, Driver Partner, PickMe]
35:45 We need to take care of ourselves.
35:47 If we stay home doing nothing due to COVID-19
35:50 we can't feed our children.
35:52 When I'm working for PickMe people ask,
35:56 'Aren't you afraid to do a job like this as a woman?'
36:01 I'm not afraid of anything, I like what I am doing.
36:07 [Jiffry Zulfer] For us as a company we were all working from home.
36:11 Everyone was basically running the country's transportation
36:15 in their bedrooms, right?
36:17 And then we spoke to the relevant authorities
36:19 and they gave us the green light
36:21 you know because there is so much demand
36:24 because people wanted these essential goods delivered.
36:27 [L.P. Lasanda Deepthi, Driver Partner PickMe] But the key was we focused on our safety measures.
36:29 We didn't focus on the fear but the safety.
36:32 [Jiffry Zulfer] So we consider them [our drivers] like superheroes.
36:35 In fact we went and changed the icon on the app to a superhero
36:42 [Podimanike Rathnayake] I'm happy that we did something during this unfortunate time.
36:52 [Michelle Fleury] True superheroes, inspiring to see stories
36:55 of success and empowerment during these challenging times.
36:59 But we've already heard from the World Bank Group
37:01 chief economists, youth entrepreneurs
37:03 and leaders of low income countries.
37:06 Now let's turn to the situation in middle income countries,
37:09 and the need for the private sector
37:11 to create and restore jobs.
37:13 First, let's see what central banks can do
37:15 and here's Reza Baqir, Governor of the State Bank of Pakistan.
37:22 [Reza Baqir, Governor, State Bank of Pakistan] I'd like to share my thoughts
37:24 about how central banks can help to spur job creation
37:27 and investment by dividing it in two parts.
37:30 The first is the usual role
37:32 that central banks play,
37:34 and that is price stability, financial stability.
37:38 And we have been taught, and rightly so,
37:40 that these are necessary conditions for growth.
37:44 I would also like to add, though,
37:46 that our experience through COVID has illustrated
37:50 that in times of crisis, central banks have to
37:53 step beyond this normal conventional role.
37:58 And when Pakistan went through COVID,
38:02 what are some of the key lessons
38:04 that the State Bank of Pakistan took away?
38:06 And there are three.
38:07 First, is that central banks in such situations
38:11 have to provide aggressive liquidity support
38:14 to help protect jobs and investment.
38:17 In the case of Pakistan, we provided support
38:20 worth about 5% of GDP in liquidity support,
38:24 and our goal was to try to ensure that liquidity problems
38:27 don't turn into solvency problems.
38:30 It is important to realize one cannot fully and perfectly
38:34 target it, but it is better to err on the side
38:38 of giving liquidity rather than not.
38:40 The second key lesson we took away was that such support
38:45 needs to be targeted and in our case,
38:48 we gave concessionary liquidity support in those cases where
38:52 the borrowing companies committed to not lay off workers
38:55 or they use those proceeds
38:58 directly for new investment, which we could assess
39:01 based upon the letter of credit that the borrower
39:04 had to submit to the banks.
39:05 And the third, and final, and very important point
39:09 is that such support needs to be time-bound.
39:11 In the case of Pakistan, we have reversed nearly all
39:15 of the measures that were introduced during COVID,
39:18 and the reason this is very important
39:19 is that, in normal times, central banks should just focus
39:24 on price stability and financial stability
39:27 as the necessary conditions for growth.
39:31 And though the crisis has shown us that it
39:33 is extremely important to have a wide arsenal of tools
39:37 available to central banks to provide such support in crisis,
39:41 it is equally important for central banks
39:44 in normal times to resist the temptation to use
39:48 this arsenal of tools, and to recognize that it is better
39:53 for the long term growth and stability of countries,
39:56 the central bank balance sheets and not compromise,
39:59 and that they stick to price and financial stability roles.
40:08 [Michelle Fleury] That's the perspective
40:10 of a central bank.
40:12 Earlier, I also spoke with a panel of guests
40:14 whom I asked the same question,
40:15 what is needed in middle income countries to get back on track?
40:22 I am joined by a truly distinguished panel,
40:26 Dr. Ali Allawi. He is both the Deputy Prime Minister
40:29 and Minister of Finance for Iraq.
40:32 Maya Chorengel is co-managing partner
40:35 at the Rise Fund, a 6 billion dollar fund
40:38 that invests in companies driving social and environmental impact,
40:43 and Pia Tayag is the Director of the Office
40:46 of the UN's Secretary-General's Special Advocate
40:49 for Inclusive Finance for Development.
40:52 Thank you all three of you for joining us.
40:54 If I could start, Dr. Allawi, with you
40:57 you are the leader of a middle income country
41:01 that is no stranger to conflict and fragility.
41:05 Talk to us about some of the barriers to economic recovery.
41:09 Obviously, the oil price is recovering and that is helping.
41:11 But what are some of the other roadblocks?
41:13 [Ali Allawi, Deputy Prime Minister, Iraq] I think the main barriers,
41:15 really, apart from having
41:16 the correct mix of strategies and policies, are more to do
41:21 with institutions,
41:23 leadership, continuity of programs
41:26 and policies, and making sure that governance standards
41:31 are up to the needs and requirements of the country
41:34 in the society as a whole, any mix of correct policies.
41:39 And I think this is an absolute essential
41:42 that you have to have the right strategic framework.
41:44 But without what I would call the underlying superstructure,
41:48 the underlying structures of institutions,
41:51 leadership that is committed to change, reform into
41:56 an economic progress and development
41:58 without some degree of ethical,
42:03 or high ethical standards in public administration.
42:08 Without all the full range of governance standards,
42:12 it's very difficult to see how even the best strategies
42:15 can be implemented in a post conflict environment.
42:20 So while we can come up with the funds
42:22 and we don't have a resource cap here,
42:25 the way that we utilize our resources effectively
42:28 and efficiently requires this base of governance
42:33 it requires a base of leadership, it requires a base
42:36 of institutional depth and integrity, and this, I think,
42:40 is becoming absolutely clear
42:43 that development, improving the standard of living of people
42:47 improving the environment for growth,
42:50 and achieving a form of income
42:54 or reducing income disparities and wealth disparities
42:57 requires this underlying base of governance broadly understood.
43:02 So I think I would put my bet on that, that governance
43:06 is absolutely essential for continuity of economic growth
43:09 [Michelle Fleury] Interesting point, that governance
43:12 and leadership, you say, is what is required, of course,
43:15 that can come from governments,
43:17 but it can also come from other sectors.
43:19 Maya Chorengel, your fund seeks to expand the reach
43:22 of commercial capital to help new generations of entrepreneurs.
43:26 I want to ask you, what role can the private sector play
43:29 in this notion of leadership and governance
43:32 that Dr. Allawi was just referring to.
43:34 [Maya Chorengel, Co-managing Partner, The Rise Fundl] Private capital,
43:35 commercial capital is more abundant than philanthropic capital.
43:39 It's more abundant than government aid.
43:41 So where there are places that private capital can play
43:45 it's important for us to step in and play a role.
43:47 That said, one of the limiting factors is that
43:51 we step into environments where governance, infrastructure
43:56 and rule of law and a basic level
43:59 of professionalization is established
44:01 because often private capital has a fiduciary responsibility
44:05 to produce return.
44:06 That said, funds like ours,
44:08 The Rise Fund within TPG are specialists at investing
44:12 in growth stage companies
44:14 and growth stage companies are often great drivers
44:17 of employment and economic growth.
44:20 So where we participate in a lot of emerging market countries,
44:26 Nigeria, Kenya,
44:29 multiple countries in South Asia, in Southeast Asia and in East Asia,
44:35 we've invested behind companies
44:36 that have been tremendous forces for job creation.
44:41 This is also a role that other organizations
44:44 like the IFC have played.
44:45 We, at The Rise Fund, are also specialists at investing
44:48 in companies that are creating some of the infrastructure
44:52 required for job creation and growth.
44:54 So we invest in education companies
44:56 in vocational training companies that are creating technical skills
45:01 and professional layers of leadership
45:04 to lead the next generation of companies.
45:06 So there are various ways in which we play
45:08 and we're very mindful and oriented towards that growth momentum
45:13 that really does create growth within different countries.
45:18 [Michelle Fleury] I think one of the things
45:20 we've all learned during the pandemic is, sort of,
45:22 our increased reliance on technology, and it goes back to
45:26 something that was just referred, to this idea
45:28 of investing in infrastructure.
45:31 Pia Tayag, if I could bring you in here,
45:33 you focus on financial infrastructure, on the digital.
45:39 What role can that play?
45:40 What would you like to say
45:41 to say to governments in terms of the significance of that?
45:44 [Pia Tayag, Director, Office of the UNSGSA] Now, thank you for that question.
45:45 We definitely want to see technology
45:48 enable more efficient delivery of products
45:50 and services to a range of cost effective channels,
45:54 enable better product design
45:56 that truly responds to the needs
45:57 and capacities of customers, and finally enable broader reach,
46:02 especially to segments of the population
46:04 that have been left out.
46:05 We saw it during the pandemic.
46:06 These segments that have been left out,
46:09 limited access to finance or the digital economy
46:12 suffered significantly and disproportionately.
46:15 Yet we also witness the power of digital financial services
46:19 and having in place the rails to deliver them.
46:21 The countries that invested in these digital public goods
46:25 have been better able to efficiently
46:26 roll out social payments, expand beneficiaries lists.
46:30 Consumers were also able to pivot to digital channels
46:33 for payments and even e-commerce.
46:35 So with this in mind,
46:36 I would share, maybe, three messages for policy makers.
46:40 One is invest or continue to invest in digital public goods.
46:43 You said it yourself.
46:45 Many are already seeing this imperative,
46:47 but there are still those who lag behind.
46:49 These digital public goods include digital IDs, connectivity
46:54 enabling regulatory frameworks like consumer protection
46:57 cybersecurity, digital [inaudible], among others.
47:01 So what is important is to emphasize
47:03 that these public goods need to be designed
47:06 for fair and equal access
47:08 and with the needs of consumers front and center.
47:10 For example, our payment channels, taking into consideration
47:13 the gender gap, the smartphone ownership
47:16 or do ID systems allow for offline authentication
47:19 for areas with limited connectivity.
47:22 Which leads me to the second message,
47:24 to ensure that digitization, innovation
47:27 close gaps rather than exacerbate existing divides or inequalities.
47:31 Rural-urban divide, gender gaps in access
47:34 the digital divide, among others
47:36 and ultimately lead to positive outcomes.
47:39 Digital payments' an example,
47:41 digital payments targeted to women with financial literacy
47:44 and a savings mechanism can actually help build buffers
47:47 and better prioritize household spending.
47:50 Finally, encourage innovation and work closely
47:53 across government and the private sector.
47:55 So happy to be in this panel and represent people.
47:58 We do not want innovation for innovation's sake.
48:00 but solutions and products that truly democratize access
48:04 to financial services but more importantly,
48:06 the opportunities that they bring.
48:08 [Michelle Fleury] It's interesting,
48:09 you offered some solutions there as ways to tackle
48:12 one of the things we've seen as a result of the pandemic,
48:14 and that is this growth in the gender gap,
48:17 the inequality as a result of the pandemic.
48:21 Dr. Allawi, how much focus is your government
48:24 putting on that?
48:26 What other fiscal policies are required
48:28 to ensure an inclusive growth that benefits everyone?
48:32 [Ali Allawi Deputy Prime Minister/Iraq]
48:33 The main problem that we face here
48:35 is an inadequate banking system,
48:38 the financial structure that is not able to cope
48:41 with the current demands and future expectations.
48:43 We need to have radical reforms here
48:46 to bring now the state dominated banking system
48:49 into something more an equilibrium
48:51 of the private sector.
48:52 We also need to improve greatly
48:55 the usage of technologies, digitization,
48:58 in order to reach our goals of financial inclusion,
49:03 which are now pretty poor.
49:06 It is critical to focus on the reform of the banking system,
49:12 open it up, create more opportunities
49:15 for new entrance into the system,
49:17 particularly digitally based financial institutions,
49:20 in order to reach the large number of our population
49:24 that is not only on the bank,
49:26 but they don't have access to financial services
49:29 without a properly functional financial system
49:32 that's rooted in up-to-date technologies,
49:35 is very difficult to have a focused fiscal policy
49:38 that involves transfers to targeted sectors.
49:41 So for us in Iraq,
49:44 it is absolutely a priority to reform the banking
49:47 and broadly the financial sector as a whole,
49:50 including insurance, nonbank financial services,
49:53 stock markets.
49:54 And we're pushing in that direction
49:56 by creating the necessary government support
50:00 for this shift.
50:01 We need to do that as a matter of urgency.
50:03 And I think also that most countries in our position
50:08 need to radically reorient their financial system
50:11 towards the technologies that are opening up the market.
50:15 [Michelle Fleury] Interestingly,
50:16 one of the things that, I guess,
50:18 in the middle of a crisis arising from the pandemic
50:21 is that the priority of climate change
50:24 seems to have fallen down the list.
50:27 Maya, if I could bring you in here,
50:29 I was curious how your fund is still focusing
50:33 on green investments to promote a sustainable future.
50:38 Has that slipped down the priority list,
50:40 given the current environment
50:42 and the recovery that we're facing?
50:44 [Maya Chorengel] I'm very lucky within TPG
50:47 to be able to work on both what we call
50:49 the social side and issues of equity, poverty,
50:53 education, health care, financial inclusion.
50:56 But we also have a very strong practice on the climate side.
50:59 And in addition to the $6 billion
51:01 that you mentioned within the [inaudible] complex,
51:05 we've just re recently raised the $7 billion climate fund,
51:09 and this is very much a priority for us
51:11 as we look at the emerging markets
51:12 because we see both great opportunity
51:16 and absolute almost what I'll call 'moral and ethical need'
51:19 to invest in climate solutions.
51:21 And this is everything
51:23 from looking at new technologies
51:25 to working with companies to mitigate and adapt
51:32 to a greener world.
51:34 We have great hope in a number of the entrepreneurs
51:38 in the emerging markets.
51:40 We have a fantastic company, for example,
51:42 in India called Fourth Partner Energy,
51:43 which is the leader in this sector.
51:45 So it's very much a priority for us
51:47 in addition to the social side.
51:49 And I think it is for many investors.
51:51 [Michelle Fleury] Do you think that the private sector
51:54 is placed to address this in a way
51:56 that governments with less fiscal space
51:58 are less able to right now?
52:00 [Maya Chorengel] We believe that there needs to be
52:03 a partnership between the private sector
52:06 and government.
52:07 So we need regulatory frameworks,
52:09 and we need support for green initiatives,
52:13 which many countries in the world,
52:15 including in the emerging markets, are stepping up to do.
52:19 But because they are more capital constrained,
52:21 the important part is for commercial capital
52:24 and private capital to step in
52:26 to actually fund the companies.
52:27 One of the interesting things that we have as a global fund
52:31 is we can also connect the dots between technologies
52:34 that are developing in the west that can move to...
52:37 Or the Global North that can move
52:39 to the Global South, and actually vice versa.
52:41 So there are interesting technologies
52:44 that can be imported and exported
52:46 to accelerate the climate solutions
52:49 that we need to green the planet.
52:52 [Michelle Fleury] One of the things that we keep
52:54 hearing again is how...
52:57 whether we're talking about climate change or the pandemic,
53:00 the burden falls disproportionately
53:02 on different groups.
53:03 Pia, last word to you.
53:07 What would you like to see
53:09 to help the underserved, the vulnerable,
53:12 to make sure that they aren't left behind?
53:14 [Pia Tayag] Definitely.
53:16 What we need to do is really build resilience.
53:18 The pandemic highlighted that,
53:20 it has exacerbated inequalities.
53:23 MSMEs could not stay afloat, and far more firms,
53:26 no access to credit,
53:27 women more likely to lose their jobs.
53:30 And even before the pandemic, there was already
53:32 this lack of resilience.
53:33 In the developing world,
53:35 only half of adults can access a lump sum of funds
53:38 during an emergency.
53:39 What I really like to see is that we go
53:41 beyond payments and account ownership.
53:43 When we talk about building
53:45 an inclusive financial system.
53:47 To see products that really help
53:48 build buffers and cushion against shocks,
53:51 savings and insurance, as well as those
53:53 that enable to cease economic opportunity,
53:56 such as credit and investments.
53:58 We are making progress, but much needs to be done,
54:01 work by both policymakers, providers,
54:03 investors, as we heard.
54:05 Technology is an important catalyst.
54:07 Increased digitization offers opportunities
54:10 to support important segments
54:11 such as micro, small and medium enterprises,
54:14 or the agriculture sector.
54:16 For example, a merchant or a farmer
54:18 can benefit from a range of services.
54:21 Digital payments [inaudible] solutions,
54:23 insurance against climate risks, credit,
54:25 all made possible by digitizing
54:27 the ecosystem in which that merchant
54:29 or farmer operates.
54:31 This will have a positive impact on employment
54:33 for it needed forward and backward linkages,
54:36 and really contribute to broad based growth.
54:38 But underlying all of this,
54:40 I'd like to emphasize that we need
54:42 to make sure we are deliberate
54:43 on working towards financial health.
54:45 For Majesty Queen Máxima of the Netherlands,
54:48 UNSGSA is really supporting
54:50 adopting a financial health perspective
54:53 that broadens attention
54:54 from just accessing usage to positive consumer outcomes
54:58 to make sure consumers and small businesses obtain the value
55:02 from the financial services that they received.
55:04 [Michelle Fleury] It seems like
55:05 governance and leadership
55:06 are sort of the core things
55:09 that all of you have called for to address
55:10 these huge challenges we face.
55:12 Thank you to all three of you for your time today.
55:19 [CJ] Hi, I'm CJ, in Abuja, Nigeria.
55:22 And you're watching
55:23 the World Bank-IMF Annual Meetings.
55:30 [Michelle Fleury] If you have just joined us,
55:31 a warm welcome. I'm Michelle Fleury.
55:33 We're discussing what it will take to spur economic growth
55:37 and an equitable recovery from the pandemic.
55:39 If you want to learn more,
55:41 we have pulled together lots of interesting stories and blogs.
55:44 Just scroll down the World Bank Live page.
55:47 And I'm back with Sri.
55:48 You've been monitoring the conversation
55:50 online and on social media.
55:51 Sri, give us a flavor of what people are saying.
55:53 [Sri Sridhar] Sure, Michelle.
55:54 Today's hashtag was #growth4All,
55:57 and we have comments from all over the world.
55:59 Let me give you a flavor of where we're hearing from folks.
56:02 They are talking to us from India,
56:04 Pakistan, Venezuela, Saudi Arabia,
56:07 the United States, the United Kingdom,
56:09 Rwanda, Uganda and Kenya,
56:11 and a lot of different themes emerging.
56:14 A lot of folks online are saying that
56:16 to achieve economic growth for all,
56:18 the private sector should play an important role,
56:21 that there needs to be support for small businesses,
56:24 as well as strong institutions and good policies.
56:27 And that there also needs to be opportunities
56:29 around AI and renewable energy.
56:31 So a lot of these emerging themes
56:34 coming by these four topics.
56:36 We also do have notable mentions
56:39 because we also have been monitoring the conversation
56:42 on Facebook, Twitter, and Instagram.
56:45 And on LinkedIn,
56:46 we have [inaudible] Resende who's saying
56:48 that the COVID-19 pandemic
56:50 has enrolled enormously affected countries in the Global South,
56:53 and this is why World Bank efforts are essential,
56:56 as millions of people have fallen back to extreme poverty.
56:59 And I think it is a pretty interesting point
57:02 here in terms of the COVID-19 pandemic.
57:04 [Michelle Fleury] It goes back to that data point.
57:07 The 97 million additional people living in extreme poverty
57:10 because of COVID-19?
57:11 [Sri Sridhar] Exactly. And on Facebook,
57:13 there's Ifiok Inyang,
57:15 who says that the shock prone zones,
57:17 like emerging markets or economies,
57:19 need strong institutions and good policies,
57:22 and that this is the first and best answer
57:25 to mitigate some of these challenges.
57:28 And finally across Instagram, Jaldip Parghi says
57:31 that countries can create jobs after the pandemic
57:34 through artificial intelligence and robotics,
57:36 along with renewable energy product.
57:39 So this kind of goes back
57:40 to the beginning where I was saying
57:41 there is some conversation around these areas of AI.
57:44 [Michelle Fleury] I know you're going to continue
57:46 to monitor the conversation,
57:47 but I've been waiting for,
57:48 and many people have been waiting for,
57:50 what is the results of our poll? Do we have it?
57:53 [Sri Sridhar] Yes, we do. Today's poll asked
57:55 what is the best way to boost inclusive economic growth?
57:59 And we had four options.
58:00 They were, is it by creating jobs
58:02 and increasing private investments?
58:05 Is it through policy reforms?
58:07 Is it by expanding vaccine distribution, or finally,
58:10 is it by investing in safety nets that focus
58:12 on vulnerable populations?
58:14 Now, before I review the results,
58:16 what would be your vote, Michelle?
58:18 [Michelle Fleury] You're putting me in the spot.
58:20 I'd have to say they're all pretty good options,
58:23 so tough to choose.
58:24 [Sri Sridhar] It is. Yeah, I voted myself for creating jobs
58:26 and increasing private investments,
58:28 but it's it's definitely a tough one.
58:30 But let's see how folks voted.
58:33 [Michelle Fleury] Drum roll.
58:34 [Sri Sridhar] Drum roll?
58:35 And with 55% of the votes,
58:38 creating jobs and increasing private investments wins.
58:43 19.9% of folks saying that it's by investing to policy reforms,
58:47 4.5% by expanding vaccine distribution,
58:51 and 26% say it's by investing in safety nets.
58:55 that focus on vulnerable populations.
58:57 [Michelle Fleury] So it goes back to that comment
58:59 you read about creating jobs.
59:00 [Sri Sridhar] It does.
59:01 [Michelle Fleury] Sri, thank you so much.
59:02 [Sri Sridhar] Thanks, Michelle.
59:04 [Man] Hi, I'm [inaudible],
59:05 from Dhaka, Bangladesh.
59:07 Welcome to World Bank-IMF Annual Meetings.
59:14 [Francisca] Hello, I'm Francisca in Viña del Mar, Chile.
59:17 And you're watching
59:18 the World Bank-IMF Annual Meetings.
59:24 [Michelle Fleury] Now to answer
59:25 some of the questions you've been asking,
59:26 I'm pleased to welcome back
59:28 Carmen Reinhart, chief economist at the World Bank.
59:30 We're also joined by Susan Lund,
59:32 vice president of Economics and Private Sector Development
59:35 at the International Finance Corporation,
59:38 a member of the World Bank Group focused
59:40 on the private sector command.
59:42 If I could start with you,
59:43 we have a question from [inaudible] of Tanzania,
59:47 who wants to know
59:48 one of the most popular questions from our audience.
59:52 What is the biggest economic problem
59:54 facing developing countries?
59:56 [Carmen Reinhart] Lack of growth.
01:00:00 Growth is essential for poverty reduction.
01:00:03 It's essential for having, creating revenues
01:00:06 for governments to have fiscal space and engage.
01:00:10 So better social safety nets
01:00:12 and the provision of public goods.
01:00:15 So I think we had a challenge
01:00:19 in many emerging markets in developing countries,
01:00:22 even before the pandemic,
01:00:24 growth started to slow down around 2015.
01:00:27 And with growth comes jobs.
01:00:31 With growth and jobs comes recovery, and it self-feeds.
01:00:38 So when we think about the challenges ahead
01:00:41 in terms of development,
01:00:43 in terms of all the objectives associated with development,
01:00:48 growth will be key.
01:00:49 [Michelle Fleury] Susan, if I could bring you,
01:00:51 this next one focuses on the rural parts
01:00:54 of the global economy.
01:00:55 It comes from [inaudible] from Sri Lanka.
01:01:00 And the question is,
01:01:02 how can we develop the rural economy sector
01:01:05 in the COVID-19 pandemic situation?
01:01:07 [Susan Lund] Well, the rural economy
01:01:09 is incredibly important.
01:01:11 70% of the world's people living in extreme poverty
01:01:14 are in rural areas.
01:01:16 They're subsistence farmers, and they're facing two problems.
01:01:20 First is a lack of productivity.
01:01:22 So for the level of inputs that they give,
01:01:24 they get only half of the yields
01:01:26 that you get in other parts of the world.
01:01:28 And then the second problem is that
01:01:30 when they do produce crops, there's huge spoilage,
01:01:34 because they don't have access
01:01:35 to markets and places to sell the crops.
01:01:38 In Africa alone,
01:01:40 it's estimated to be $4 billion a year is lost
01:01:43 to crop spoilage, and that could be somebody's income.
01:01:46 So the solution is really around...
01:01:48 First, providing finance and skills to raise productivity,
01:01:52 so farmers can learn how to use different types of seeds
01:01:56 and inputs to raise yields.
01:01:58 Secondly, giving them access to markets.
01:02:01 And that includes everything,
01:02:03 from road infrastructure to rural electrification.
01:02:06 We now have exciting new opportunities
01:02:09 with off-grid or mini-grid renewable electricity.
01:02:13 And then finally, the digital economy has some opportunity.
01:02:18 There's a startup, a very small business
01:02:22 called Twiga in Kenya and other African countries
01:02:25 that connects tens of thousands of farmers
01:02:28 with vendors in marketplaces.
01:02:30 This lets farmers know what is the price they can get,
01:02:34 what's in demand.
01:02:35 It's enabled many to shift out of subsistence crops
01:02:38 into things that will sell, thereby creating income.
01:02:41 So it's extremely important
01:02:43 that we do address the rural population.
01:02:46 [Michelle Fleury] Some truly practical tips there.
01:02:48 But I think our next question, which comes
01:02:50 from [inaudible] of Liberia,
01:02:52 which is our most popular,
01:02:54 goes to the idea of some of the roadblocks.
01:02:57 How can a low-income country experience growth
01:02:59 in a time of crisis
01:03:01 when there is systemic corruption
01:03:03 and a lack of accountability
01:03:04 within the governing structure in that economy?
01:03:07 [Carmen Reinhart] The first part's not to despair.
01:03:12 That is... Many of these issues, if not all,
01:03:18 predate the pandemic.
01:03:21 So...
01:03:24 Rule of law, establishing better institutions
01:03:28 is a well-regarded long-time way of fostering better decisions.
01:03:39 Better allocation of resources,
01:03:44 and, therefore, what the Pandemic does is
01:03:51 make it all the more important
01:03:55 that at a time of scarce resources.
01:03:57 Those are decisions
01:04:05 that will impact particularly the most vulnerable populations,
01:04:12 which at the moment,
01:04:15 apart from rural,
01:04:17 include the urban poor, women and children.
01:04:21 That's where a lot of the new poverty is concentrated.
01:04:24 Dealing with corruption,
01:04:26 dealing with governance issues is not a new problem.
01:04:29 Better institutions, better rule of law is critical.
01:04:35 And let me say that both of those,
01:04:38 better rule of law and better institutions,
01:04:40 are also key to attracting foreign capital,
01:04:44 which will be very much needed, is very much needed now
01:04:49 and will continue to be needed
01:04:51 as we go forward in the recovery phase.
01:04:54 But let me end on the allocation point that I made.
01:04:59 I think at a point in which we are stretched
01:05:02 in terms of growth and recovering,
01:05:05 those allocation decisions towards the neediest
01:05:09 are very important and require that rule of law.
01:05:12 [Michelle Fleury] I like that you started that
01:05:14 with "let's remain optimistic."
01:05:16 We have time for one final question, Susan.
01:05:19 This one is from [inaudible] in India,
01:05:21 who wants to know the middle class and the self-employed
01:05:25 are the ones worst or amongst
01:05:27 those worst hit by the pandemic.
01:05:29 Vendors, small traders.
01:05:30 So the private sector
01:05:31 that the people you're willing to help.
01:05:33 How can they be assisted
01:05:34 if the government doesn't give them loans?
01:05:36 [Susan Lund] Well, it's incredibly important.
01:05:38 In low-income countries,
01:05:40 80% of the population is self-employed.
01:05:43 And in lower middle-income countries, it's two thirds.
01:05:46 So providing finance skills and access to markets
01:05:50 are the three parts of the solution there.
01:05:53 First is access to finance.
01:05:55 A lot of banks find it very hard.
01:05:57 It's not profitable to lend to small vendors.
01:06:00 And so there's a lot of work that we're doing,
01:06:03 and many institutions around the world are,
01:06:05 to enable banks to actually direct credit
01:06:07 towards entrepreneurs,
01:06:09 especially women-owned businesses.
01:06:11 There's a whole new initiative called We-Fi:
01:06:13 Women Entrepreneurs for Financial Inclusiveness,
01:06:17 that the World Bank Group supports and other institutions.
01:06:21 In addition, I think I'll come back to digital connectivity.
01:06:25 One of the things that enables me to remain optimistic, Carmen,
01:06:29 and actually have hope
01:06:31 is the fact that digital platforms are really
01:06:34 transforming even these very traditional markets.
01:06:37 There are all sorts of different apps like Trade More,
01:06:42 that connects suppliers to people in the market.
01:06:47 There are new technologies in agriculture
01:06:50 like Appeal, in which farmers can coat their crops
01:06:53 with a vegetable based preservative
01:06:55 to enable produce to last longer when it's in the market.
01:06:59 What we need to do is build out the digital infrastructure.
01:07:02 In addition to the traditional infrastructure.
01:07:05 Right now, only 28% of the population of Africa
01:07:09 has access to mobile Internet,
01:07:11 and the median price they pay
01:07:13 is 75% higher than what you pay in the EU
01:07:16 and in some countries
01:07:18 it's many multiples times higher.
01:07:21 So completing the undersea cables that are now
01:07:23 under construction down along
01:07:25 both the West Coast and East Coast of Africa
01:07:27 is going to be incredibly important
01:07:29 to drive down data costs.
01:07:31 But already, even without that, the stories of startups
01:07:35 that are just transforming markets
01:07:37 and helping everyone,
01:07:39 from the smallest self-employed person
01:07:41 up to transforming the large companies
01:07:44 is really inspirational.
01:07:46 [Michelle Fleury] Well, thanks to both of you.
01:07:47 So some tips there on how to get to inclusive growth.
01:07:51 And also thanks to those of you from around the world
01:07:53 who sent in questions.
01:07:55 Now to finish off our program on a high note,
01:07:57 we've asked youth from around the world
01:07:59 to tell us what gives them hope for the future.
01:08:01 Here's what they said.
01:08:05 [Rumaitha Al Busaidi] We have a collective duty
01:08:07 to reflect and envision
01:08:09 of a company that is more inclusive.
01:08:11 [Marko Sofranac] Innovation and creativity are key
01:08:13 for our community challenges during and after the pandemic.
01:08:17 [Lyubov Artemenko] Sustainable mobility
01:08:18 should be at the heart
01:08:20 of the COVID-19 recovery strategy.
01:08:22 [Salam Al-Nukta] It is time to realize
01:08:24 their challenges ignite new business ideas.
01:08:28 [Aravinth Panch] Future proof skills
01:08:29 should be interdisciplinary
01:08:31 so that people can dynamically adapt.
01:08:33 [Jonathan Chu] What we need
01:08:34 is more accessibility to education,
01:08:36 to help young people to upskill themselves.
01:08:40 [Favour Omokhaiye] To bring on knowledge and skill base,
01:08:42 which will ensure that we recover
01:08:43 and even come out more empowered than before the pandemic.
01:08:46 [Salam Al-Nukta] Young people are not the most threatened.
01:08:50 In fact, they are the hope to exponential economic growth.
01:08:55 [Keithlin Caroo] The resilience of Caribbean youth
01:08:57 has shone through.
01:08:59 [Marko Sofranac] We are game changers.
01:09:00 [Rumaitha Al Busaidi] Pulls an existential risk
01:09:01 to institutions that are looking
01:09:03 at just simply reverting to business as usual.
01:09:06 [Keithlin Caroo] When traditional sectors
01:09:07 had blocked us out, we created a new one.
01:09:10 [Marko Sofranac] We are the driving force
01:09:12 recovering the whole country.
01:09:14 [Keithlin Caroo] Our strength truly lies
01:09:16 in our human capital.
01:09:18 [Rumaitha Al Busaidi] We should be
01:09:19 enabled and empowered enough
01:09:20 to have a seat on the table to make those decisions.
01:09:23 [Abhinac Khanal] Creating a path towards a sustainable future
01:09:26 for the youth and their entire families and communities.
01:09:34 [Michelle Fleury] The voice of the young.
01:09:35 This marks the end of the first public event
01:09:38 in our Annual Meetings.
01:09:39 But there is so much more to come,
01:09:41 including tomorrow's event on Ending the Pandemic.
01:09:45 Then on Thursday the focus turns to climate,
01:09:47 and trade will be the topic on Friday.
01:09:50 You can watch all of those,
01:09:52 as well as catch a replay of this great event
01:09:54 at World Bank Live.
01:09:55 And you can share your comments on these Meetings
01:09:58 using the hashtag #ResilientRecovery.
01:10:01 We hope you have enjoyed today's event.
01:10:04 Do keep those comments coming, and goodbye for now.

Live Chat

Dana Vorisek

Senior Economist, Prospects Group, World Bank
Tristan Reed

Economist, World Bank
@TristanReed_

Watch More Events

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).

Watch the World Bank Group public events:

Oct. 11: Growth in a Time of Crisis
Oct. 12: Civil Society Townhall
Oct. 12: Ending the Pandemic
Oct. 13: Opening Press Conference
Oct. 14: Making Climate Action Count
Oct. 15: Trade to the Rescue

Speakers

David R. Malpass

Former President, World Bank Group
@DavidMalpassWBG
Carmen M. Reinhart

Former Senior Vice President and World Bank Group Chief Economist, Development Economics
@carmenmreinhart
Susan Lund

Vice-President, Economics and Private Sector Development, IFC, World Bank Group
@SusanLund_DC
Husna Ahmad

CEO, Global One 2015
@DrHusnaAhmad
Ali Allawi

Minister of Finance of Iraq
@AliH_Allawi
Reza Baqir

Governor, State Bank of Pakistan
Maya Chorengel

Co-Managing Partner, The Rise Fund
@TheRiseFund
Elliott Harris

Assistant Secretary-General for Economic Development and Chief Economist, United Nations
@UN
Felix Mlusu

Minister of Finance, Malawi
Pia Roman Tayag

Director, Office of the UNSGSA
@PiaRomanTayag

Moderator

Michelle Fleury

Business Correspondent, BBC News
@BizFleury

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