[Rose Kimeu Craigue]
Good afternoon, everyone. Welcome to this town hall with the World Bank president, Ajay Banga. It is an absolute pleasure to see each and every one of you here in person. A warm welcome to everyone that is joining us online. My name is Rose Craigue, and I am the Lead for Stakeholder Engagement at the World Bank. Before we begin, I would like to ask us to all stand up, please, and observe a moment of silence to commemorate the lives that were lost due to the earthquake that occurred here a few weeks ago. Thank you, colleagues. You may sit. Now, before we begin this very exciting event, I'd like to just start with a few housekeeping guidelines. The first is when we get to the Q&A part and you would like to ask a question, please, raise your hand. We have several roving mics, and the mic will come to you. Secondly, before you ask a question, please, introduce yourself. Tell us about yourself, specifically your organization and where you're based. And thirdly, most importantly, because we want to get to as many questions as possible, please be brief. If you're not brief, I will have to interrupt you again so we can get to as many questions as possible. Now, lastly, this is not the right forum to make a lengthy statement. Again, because we want to get to as many questions as possible. But I will be very happy to receive your written petitions, your letters. I'll be very happy to receive them and to pass them on to the President. Please, keep everything brief. Last comment I'd like to make is that this session is being recorded and we have it available in several languages. English Channel One, Arabic Channel Four, French Channel Three. Now, it is my absolute pleasure to welcome the President of the World Bank, Mr. Ajay.
[Audience applauds]
[Ajay Banga]
What I'm going to do is to speak for a little while and then we'll do the Q&A part of it. Right? First of all, good evening, everybody. And for those of you who've traveled to Morocco to be with us, thank you for making the trip, thank you for being here. And most importantly, thank you for showing solidarity to the Moroccan people who have tried really hard, despite what they've just been through, to be able to demonstrate that they can do more than one thing at a time and do it well. And I think you should congratulate them for that.
[Audience applauds] I had a chance yesterday to spend time with the Prime Minister, the finance minister, a few others, go and see a school in the morning. They say adversity brings out the best in people. You can see that they are really trying hard to put the country back on a good footing, and in fact, use this opportunity, never let a crisis go to waste, use the opportunity to try and reconstruct some of the aspects in the Atlas Mountains, particularly in the rural areas, to be fit for the future. I think everything we can do to help them, we should be willing to do. And for those of you, therefore, who are here from Morocco, count on us. We've been your friends for 65 years, we will be here for another 65. Thank you for that.
[Audience applauds] As I said yesterday at dinner with the Prime Minister, I'm 63 going on 64, as Mercy reminded me, and so I probably was brought on Earth to be able to celebrate the 65 years together. Back to the serious business of why we're here. Soon after I was nominated, I set out to a world tour of sorts. I went to about eight countries, four continents. In the 129 days, 130 days since I've formally started, I've been to nine more. Along the way, I've met with government officials, I've met with business leaders, I've met with experts in climate, and development, and finance. I've met with people in civil society, advocacy, not for profits, foundations. Hundreds in total, including many of you who are in this room, whose faces I recognize. I see today's discussion as a continuation that began these months ago. I want to focus on three things right now. One, I want to share a little bit with you, what I've learned and what my vision is for the Bank going forward and what our early work is showing. I want to talk a little bit about my desire to find a new impactful way for us to work together, and also how to do that. And three, never allow a meeting to go by without selling something. I need to recruit you to help us with IDA. I believe that we have very urgent needs and we need your voices at the table with us. We are all too familiar with the global community's challenges, declining progress in our fight against poverty, a fledgling pandemic recovery, wars that have impacted life well beyond the front lines, and an existential climate crisis. Each of you see this every day in your work. You may approach it from different angles, but you all see these things. This moment requires the World Bank to adopt a new vision and a mission that is worthy of our shared aspirations. In our view, that, very simply put, is to create a world free of poverty on a livable planet. Time is of the essence. That urgency has motivated us to write a new playbook that I believe should lead to a better quality of life and jobs. One that is inclusive of everyone, resilient to shocks and sustainable. At the center of this must be women and young people. Without a focus on both, we are fighting with a hand tied up behind our backs. Globally, women have not seen their meager participation in the labor force improve since 1990. And when they do get a seat at the table, they are not paid equally. We cannot defeat poverty with half the world's population watching us from the sidelines. And young people whom we all call the demographic dividend of tomorrow, yes, they can be the engine of our future, but only if we provide them with a quality of life. Clean air, clean water, health care, education. The kind of things that we would take for granted when they're growing up. And once they're grown up, a job. With a job comes dignity, with a job comes pride and the ability to provide for yourself and your family. Vision is one part, part two is working to stretch every dollar while trying to preserve our AAA credit rating. That's what some people call the Capital Adequacy Framework. Ultimately, my belief is that it allows us to take more risk and maximize the impact of every dollar that comes through our door. We have found a little more than 40 billion over the ten years period by adjusting our loan to equity ratio back in the Spring Meetings. Since then, we have created a portfolio guarantee mechanism for risk sharing. We've developed a hybrid capital instrument, including to open to the possibility of using STR, something that other multilateral banks have also been trying to do and which allows us all to get resources to flow in quickly. These instruments allow us to leverage every dollar that comes in the door to the Bank, six to eight times over a decade. If you put all that together, we believe that gets us somewhere to, if all goes well, 150 billion dollars or more of lending over this coming decade, which compared to what we are doing currently, is somewhere between 15% and 20% of the kind of number we're doing currently. It's not enough, so keep that thought. We're still working on ways to find ways to leverage callable capital. And once complete, we believe that this lending capacity will be important. But we're not stopping there because as we work to become a better Bank, we are also working to become a faster Bank, identifying new efficiencies that allows us to do more in less time, and most importantly, incentivizing output, not input. Ensuring that our focus is not limited to money out the door or the number of projects financed, but girls in school, jobs created, people getting better pay because they went to our skilling institutes, emissions avoided, and private sector dollars mobilized for every dollar that we put in. But after we deliver a better Bank, we will need a bigger Bank. Bigger than what the Capital Adequacy Framework will produce by itself. Ultimately, the challenge is that there just isn't enough money in the multilateral banks or governments to take on the multiple crises we face, but the bigger Bank is what allows us to increase our financing capacity, take on more risks to encourage investment, and support the replicability and scalability that the World Bank is preparing to deliver. We are driving this effort forward by doing what is right, not what is convenient. And similarly, we must realize that done is better than perfect, because urgency is of the biggest single priority. Time is of the essence. If we fail or we take too long to come together, we all lose. And that requires the World Bank to reimagine partnerships with an eye towards impact, and that is where all of you come in again. Fundamentally, I believe there is more we can do together. We share an abundance of challenges, a scarcity of time and of resources. It only makes sense that we should work together every which way we can so we can find common ground. In this room you have a range of perspectives, expertise, skill sets. Some of you will disagree with each other and with us on the right way forward. Some of you may take issue with how the Bank approaches certain challenges. That's okay, that's healthy. Disputes and discussion are healthy. I value you because you make us better, you make us stronger, you push us. That's a good thing. That doesn't mean that I have to agree with you all the time, but I promise I will always listen and I'll approach these conversations with the decency they demand and the fairness you deserve. The ideas we received during the consultation process are an example of collaboration done right. We dug in on poverty, climate inclusivity and accountability. It is clear from those discussions, and my time with people and communities we serve that the aspirations of people around the world are universal, but they're very hard earned. We work in many challenging environments. Our fundamental principle is to maintain access to operational solutions and to stay engaged. This approach has enabled us to keep delivering for people in Sudan through the World Food Program and people in Lebanon through a partnership with the International Rescue Committee. It's also allowed us to keep a toehold in Afghanistan, in Myanmar, in Yemen, which we do with the help of the International Red Cross, Save the Children and many others whom I've had the privilege of working with for many years in my prior life as well. But we can be more strategic in these partnerships, and we must seek out new ones. Finding creative avenues are important because there is a cost to sitting on the sidelines. It basically means that people don't get opportunities. While we've had a mandate to focus on poverty, as I said, we are widening the aperture to include poverty and livability. I think the road to that moment began long ago. In the last ten years, I was looking at some statistics for this Meeting. World Bank's climate finances tripled from 11 to 39 billion, while we have slashed fossil fuel direct investments to only 180 million, which, by the way, is 0.2% of our total commitments last year. Meanwhile, we worked hard to systemically increase adaptation financing, and today that is equal to mitigation financing in that 39 billion you just heard. We invested 23 billion last year in countries dealing with fragility and conflict. That's almost a quarter of our total commitments. In the last four years, we've extended education access to 400 million children and recruited and trained 18 million teachers. The point I'm making is the changes we are driving take time. They won't happen overnight. This is not 100-day agenda because I just don't believe in those, nor is it a one-year agenda. This is an effort that is a constant agenda with constant pushing. I am not interested in flashy, early achievements. I am interested in staying the course because I planned the Bank to be here for decades to come. But if you like the direction we are moving in, keep encouraging us. We are building masts, we are stitching sails. We need you to be the wind in our sail. The harder you blow, the faster we go. So, with that, let me come to that request. IDA. IDA is a major area of focus for this institution. If we really want to incentivize change, we cannot just wish it, we need to fight for it. We are pushing the limits of this important concessional resource. No amount of creative financial engineering will compensate for the very simple fact we need more funding for IDA. Later this week, we will make clear that the next replenishment of IDA must be the largest of all time. We need donors, we need shareholders, we need philanthropies to step up, to join us, to bring their ambition to this fight, and we need you to add your voice and help us. We have a lot of work to do. Our mission and our vision will guide our way. Our interest is to reimagine partnerships, to find ways to work together. I hope today we can kind of chat about some of these ideas. Before I give it back to Rose to help with the Q&A, I want to quickly acknowledge some members of the World Bank management team who are here today. I see some in the front, I see some other senior leaders in the back. They're here so that they can also hear directly from you as to what interests you and what bothers you. Thank you very much. I also want them to answer the difficult questions. Thanks a lot. Hi, Rose.
[Audience applauds]
[Rose Kimeu Craigue]
And now the moment I'm sure you've been waiting for anxiously. We are opening up to Q&A. If you have a question, raise your hand, and we will start with three questions. I see the first question, the lady with a green and red, please stand up, a mic will come to you. Then we'll take a question from this side. I see your hand, gentleman, please stand up. Yes. A mic will come to you, so go ahead.
[Audience member]
Thank you. First of all, welcome to Africa. You were here again before I was born. Maybe you were really young when the last time the World Bank was here. But we hope that it's a turn of many things. You're on the continent, you're a new President, so we are hoping that it's also a time for the Bank to pivot and move away from the problematic history it has had. Will you step away from the cascade approach, from the insistence that you can put public funds in private, whether it's health or education, particularly because our continent has been grappling and is still grappling right now with the lack of public services? I love what you said about young people deserving clean air and water and electricity and healthcare and education, because for a continent that is full of young people, we risk having an uneducated workforce and one that just is not fit for future, simply because we are lacking public services. The Africa group has a manifesto, it's over there in the corner. I was not allowed to show it to you, but what we're saying in terms of the Africa we want is we do want to make sure that there are quality public services, and the Bank and all its groups must make every effort possible to make sure that we are financing public services. Thank you.
[Audience applauds]
[Rose Kimeu Craigue]
Thank you for your question. We'll take your question. A mic for him, please.
[Mustafa Nasr]
Thank you. Mustafa Nasr from Studies and Economic Media Center from Yemen. I will ask in Arabic.
[interpreter]
The World Bank has exerted great efforts in Yemen and in various developing countries. Before 2015, there was a partnership with the civil society, and we achieved much. However, when the war started in 2015, the World Bank withdrew from Yemen and left for years, came back recently to work. But this part of the partnership has ended. There are restrictions on the civil society, and the World Bank is working far from partnership with the civil society. Thank you.
[Rose Kimeu Craigue]
Okay. Over to you, President.
[Ajay Banga]
Okay, so first your question. When I joined the Bank, I got exposed to this word called cascade. I don't subscribe easily to buzzwords about how to do things. A very simple approach should do what's practical and what's possible. There are some places where it makes sense for the private sector to come in and be a co-investor or a solitary investor where we can help them by creating the right infrastructure or the right risk takeout that they don't understand. The risks they do understand, they should take. But the ones they don't understand, we can help with. That's possible. But there are plenty of places where that doesn't work very well because either the environment is not ready for it or the circumstances are not ready, or they don't know how to make a business case for what they could do. There, there is no substitute for the role of some form of public financing or philanthropy financing or a combination of all of those. And that's generally my view. The question always is how much appetite can we fund and what kind of projects can we find on the ground that are produced in a way that is good enough for us to be able to be confident that the money will be used well? For that second part, I believe that what we call the Knowledge Bank in our Bank can be used even better. I believe there's a money bank and a Knowledge Bank. Frankly, if we do our job well in countries over time, the money bank should become less and less relevant to that country over time, but the Knowledge Bank should remain relevant, and in, fact may become even more relevant over time. In fact, the learnings from that country may be useful in another country. That Knowledge Bank, what Axel now runs, is to me, very importantly, to be organized in verticals that make sense for clients to use. We are talking about five verticals. The first one is People, the second one is Prosperity, the third one is Planet, the fourth one is Infrastructure, and the fifth one is Digital. They are relatively simple to understand, they are not in development language. Anybody can understand in people, what do I want? I want to develop human capital, health, education, social payments. In prosperity, I care about jobs, economic policy, credit enhancements, money available for small businesses, financial inclusion, microfinance institutions, that kind of stuff. In planet, mitigation, adaptation, biodiversity, water, forestry, other such things. In infrastructure, that one everybody knows. Then digital also now people think they understand, but what we are saying is all being digital from governance to financial inclusion, so that citizens are also aware through the transparency of what their governments are doing. Then I want to have a horizontal measure across all five. That is the impact of what we do. You heard me speak about output, not input. That would be girls employed or women employed, it would be girls who went to school, it would be skilling institutes, carbon emissions and so on. All these eight global challenges you're hearing us talk about are all subsumed inside this. To me, the job of the people in the Knowledge Bank first is to help a country manager in the World Bank sit with the clients and local society in that country, and develop the idea of what should that country be investing in for the next three years? What's the priority that we can help with? Agree on that. Second, bankable projects. Third, help in implementation, because if every country had the resources to implement these projects, they wouldn't be in trouble. And finally, produce the research reports and thought leadership that enables this conversation to happen on fact and logic. That's kind of where I'm going. I believe there's a role for both. I don't subscribe to buzzwords, whether it's cascade or others. If that doesn't answer your question, it's where I am. I'm going to try and do my best with both, public and private, and philanthropy, okay? To you, sir. In my prior life in the company I worked for, we were very active in Yemen when the war happened. I ran Mastercard and we stayed active to help with money to be reaching people in an offline environment. It became very difficult. When the conflict became worse, we had to pull people out and we had to shut down for some time. And then we came back in partnership with Save the Children and others. It's pretty similar to what the World Bank is trying to do. I'm not aware of what you said, that we are actually closing down the partnership. If we are, we will try and figure out a way to stay safe, have the right partners on the ground who may have a better distribution, better network, better execution capability than we might have, and stay active. I have no interest in not being active in Yemen.
[Rose Kimeu Craigue]
Thank you very much. We are actually going to take one question from our virtual audience and then we'll come back to the room. So, President Ajay, we have a lot we have a lot of interest in climate change. We've received a lot of questions online about climate change and fossil fuel. I'll read one question that is representative of what most people are asking. “You say that climate change is a priority, but why do you invest in fossil fuel? How can you ensure that World Bank meets its climate change commitment and follows just transition to renewable energy sources?” Over to you.
[Ajay Banga]
Fair question. As I said, we invest in fossil fuel, yes. We invested 170 million. I'm glad you're clapping, but the facts are important. We invested 170 million in direct fossil fuels last year, out of 120 billion that the Bank committed. The investment was in natural gas, where there is a pathway to transition from that. I will remind you that if you invest only in renewable energy and you don't invest in the ability to create base loads or the ability for natural gas to be there, that solution does not work. The developed world uses natural gas every day. All we're trying to do is to reduce the investment in fossil fuels. We have not invested in a coal plant directly since 2010, for example. But even from 2019 today, our investment, this is before my time of joining, our investment has come down in fossil fuels very dramatically. The bigger and more important question is what can we keep doing on renewable energy? That I completely believe in. I believe that we have to do two things. We have to find a way to figure out the top few countries where the growth of their income, their per capita consumption, is likely to take away all the benefits of reducing fossil fuel heavy emissions, heavy growth in the developed world. If we don't mitigate the growth of some of these countries, we run out of the headroom that we need to build to get through for the next 20 and 30 years. That's a smaller group of countries, there is work to be done there. Then there is work to be done in all the others as well so that they don't end up going through the same process and the same stranded assets later in their lives. The reality is the private sector, which is today, in the case of renewable energy, has a relatively proven cost per unit technology and business model. They would be interested in some of the first category of countries. The overseas private sector's interest in the second category of countries is lower. I think there we have to play a bigger role, so we have to play a different role in the two, but we need a role in both. I think that's where our real effort and energy has to be. That's kind of what I'm focused on.
[Rose Kimeu Craigue]
Thank you. We will take questions from the back of the room. We took the last questions from the front, so from the back, I see you with your hand up. Yes, shaking your hand, stand up. Mic. Go ahead.
[Max Lawson]
Hello. My name is Max Lawson, I'm from Oxfam. I had a question about inequality. In the midst of the evolution roadmap, we're seeing an explosion worldwide in the gap between the very rich and the rest. What will the Bank do to target a reduction in inequality across the world, which undermines your goals on poverty and on climate? Thank you.
[Ajay Banga]
It's a great question. I think inequality is the result, not the only issue. It's what comes out of a lot of the things that are happening. Fighting inequality requires many things to work well. That's why I talked about the basics. You have to get, first of all, jobs for people. Those jobs don't come without education and skilling and knowledge base, and they don't come if people, when they're growing up, don't get access to health care and education the right way, clean air, clean water. I believe in that. I believe that you cannot just tackle inequality by itself. You have to tackle the root causes and work your way through them. Another little cause of inequality to me is, and this is something we have to figure out how to help with, is how do you help countries that are going through their development phase? Think very carefully about what kind of economy do they want to look like five and ten years later? How do you help them at the starting point to build it such that a few companies or a few individuals do not control assets in that country, and that leads to further inequality? I think that there, we can help because with countries I meet, they're all interested in our ability to bring that Knowledge Bank to the table. In prosperity is included the idea of inclusion. I think that's really an important part of dealing with inequality. Then there's the whole issue of microfinance and enabling small micro merchants to get access to credit and insurance. Digitization helps in that as well. That's, again, one of the verticals we're looking at. You will see across those five verticals in the Knowledge Bank many different aspects that impact inequality and that horizontal should be used to measure the results, including the derived result of inequality. That's a great question, and thank you for that.
[Rose Kimeu Craigue]
Thank you. We'll take another question from this side of the room. Gentleman with a blue shirt waving a piece of paper. Just to remind everyone, please keep your questions brief. If it's a written petition, we'll be happy to receive it. Otherwise, keep your question brief. Go ahead.
[Aaron Pedrosa]
Hello. I'm Aaron Pedrosa from the Philippine Movement for Climate Justice. With all the World Bank's enthusiasm in heralding its evolution roadmap and playbook to make the World Bank a better Bank, those of us assisting project-affected communities, like the 19 coal-affected communities across the Philippines privately funded by the World Bank through a financial intermediary can only wonder what this means when remedies for harms done are not part of the conversation. How, then, will the World Bank, under your leadership, assure remediation for the direct, indirect and cumulative impacts now being suffered by project-affected communities?
[Ajay Banga]
Thank you for that question. Honestly, I don't know enough about the answer to that. In my 130 days, that's not the first problem I've dealt with. I'm drinking from a hosepipe on all the issues I'm trying to take on. I will study that more. I will tell you this. In my prior life, I've had to deal with such situations. They are very difficult, very challenging. But if we get diverted into taking our eye off the ball of doing the next thing that's important and taking the right risk for the future, then we will achieve the wrong result of what you're looking for, which is both justice, but also growth and development. We have to find a way to work together to thread that needle. I promise you, I will call you and ask you more. Just remind me to call him.
[Audience applauds]
[Rose Kimeu Craigue]
Okay, so we'll take one question from this side. The lady by the aisle? Yes, in the white blouse, go ahead.
[Aubrey Manahan]
Hello? Okay, great. Thank you so much. My name is Aubrey Manahan, I'm from the Center for International Environmental Law. As we can see here, there's been a lot of excitement about your appointment, your commitment to meeting with civil society, and, of course, the mission and vision as part of the evolution roadmap. My question is, how are you prioritizing and incorporating transparency and accountability, including what my colleague Aaron said about remedy and responsible exit for communities in your vision for a bigger and better World Bank? In June, earlier this year, myself, along with many of my CSO colleagues, sent a letter to your office expressing an interest to schedule a meeting to discuss these topics critical to the World Bank fulfilling its aspirations of contributing to truly meaningful, successful development outcomes. We haven't heard a response yet about scheduling a meeting, but I also wanted to take this time to express our ongoing commitment to meet at your earliest convenience. Thank you.
[Audience applauds]
[Ajay Banga]
If I could meet everybody who's asked to meet me, I would be 104 years old. But I take your point. First of all, accountability and transparency are extremely important. I want to make sure I do it in a way that also allows us to keep our focus on speed and efficiency. I will tell you that if you look at a lot of the work done in the Bank, some of the things that take very long can be done in much shorter periods of time if done sensibly. That doesn't mean you have to evade issues of quality or you have to evade issues of doing the right thing, but you can apply logical ways of reducing the time taken. That's all part of what I'm working my way through. I would be delighted to catch up with you, I don't know that I can do it one by one. Since you both have the same concern, maybe you can both show up together with a baseball bat and come talk to me.
[Rose Kimeu Craigue]
Thank you. We'll take a question on this side. A lady with a green dress. Please, stand up.
[Audience member]
Thank you. Thank you all for showing support to Morocco and thank you for having Meetings in the same dates for the event. I'm
[unintelligible] from Morocco. I'm an ecofeminist and climate activist. Actually, I want to raise an issue about the PforR. Our programs, the World Bank programs in Morocco, PforR, this doesn't allow us to get the access to grievance mechanism of the Bank. For an issue, it takes time using the local grievance mechanism. Yes, this is how it works, PforR. We had this experience with the projects of development of Casablanca. Some of the local communities wanted to raise some issues and they were asked to use the local grievance mechanism that didn't exist at the first part of the project. This one, decarbonation. As we have a European market, as Africans, we are asked to decarbonize our activities as a private sector. Small and medium enterprises cannot access to finance the same way as the biggest companies. They are asked to contract loans. These loans are investment not in solar plants or batteries, but most of the investment goes to the studies. This is an issue for small and medium enterprises. Also, the law doesn't allow them to sell the excess of energy. They are only allowed to sell 20%, which is a barrier for people to decarbonize their activity. Last one, civil society engagement. We are a few representatives of the civil society of Morocco and we have been engaged with the World Bank, with the Group since it has been announced that the event will be in Marrakesh. Because of COVID-19 we had three years to prepare. But as we are here since two days, I didn't meet that many people. There is a problem, there's a real problem to reaching out to local civil society. We are the same, we know each other and we haven't seen new people, and new people who have the knowledge enough to monitor such huge programs as yours. Thank you.
[Ajay Banga]
I have no idea about the third question, to be completely honest. I don't know what the issue is. But if there are the laws, the laws’ part and the selling of energy back into the system, I actually believe that one of the best regulatory reforms that are required when you want to encourage renewable energy is to set out a clear pathway on a number of topics. One of those topics is the reselling of energy into the grid so that people are incented to get involved with the grid. The country here has made many reforms. Every country is on a different stage of reforms. That's a perfectly sensible one for us to discuss with them. I'm going to take that away to have that conversation. But I'm sorry, I don't know the answer to the third one. Why you and many others, you should hang around with all these people. I don't know why you're not hanging around with them.
[Audience laughs] Okay? All right, fair enough.
[Rose Kimeu Craigue]
We'll move to this side of the room. If you have a question, okay, we'll take a question from you, who's right at the front. Mic at the front please, and then we'll come to the back.
[Ajay Banga]
There are two hands over there.
[Rose Kimeu Craigue]
Okay, we'll take your question. Please, yes, go ahead.
[Fitsum Lakew]
Thank you very much. My name is Fitsum Lakew from WACI Health. I have one question for you. Where does health fit in your priorities? To be more specific, how will you address issues of pandemic preparedness and response? And more so, looking into universal health coverage? You mentioned about measurable outcomes. For example, looking into those, to what extent would you work to increase the number of people receiving health services? According to the World Bank, out of pocket expenditure, anything greater than 20% is catastrophic. Looking at the African continent significantly, we have out of pocket expenditure to health higher than 20%. To what extent will you address and helping you make it World Bank, as you've mentioned, a bigger Bank? Thank you.
[Ajay Banga]
I mean, health is if you when you are speaking, you heard me talk about those five verticals. The first vertical is people, that's health, education and social systems. It's very important there. You heard me speak to it earlier when I was in my prepared remarks talking about young people, if they don't get access to clean air, clean water, health care and education, they are not a demographic dividend, they will actually become a demographic challenge. Healthcare ranks in many places. Healthcare has many aspects. One part of it is pandemic preparedness. In fact, I was telling some minister yesterday or today in another country that, again, back to my prior job, the Mastercard Foundation is the only foundation that gave 2 billion dollars to Africa for COVID-19 vaccines, including 600 million to the Africa CDC to build capacity. Nobody else did. They all talked, nobody brought the money. The issue with pandemic preparedness is not the money you get to buy the vaccines. We have to make medicines in Africa for Africa. That's what we have to do.
[Audience applauds] We don't have that today. There is a lady I met yesterday, I don't remember her name, she's Moroccan. She has three factories in Morocco. She's looking to open one in a close-by country, and she makes generic drugs. Her father was either a pharmacy or pharmaceutical company guy or a doctor who understood the importance of medical research to develop generics and got inspired by some of the Indian generic manufacturers and studied them and has opened that. The issue is that's one country. We need to have this in five, seven, eight countries. We then need to figure out how to move things within Africa, which, by the way, is a pain big time, because it's easier to move things from Africa to Shanghai to bring it back to Africa than it is to move it within three countries. There are many problems in Africa that relate to this simple question of just medicine availability. But that does not mean we shouldn't take it on. In my opinion, you should find us being active on every aspect of healthcare, not just pandemics, not just medicines. We're active in other countries on stunting for children. I was in Indonesia and I visited what is today our single largest healthcare program in the world. We are funding close to a billion and a half dollars into Indonesia to reduce childhood stunting from 30 something percent to in the low teens. They're halfway through it. They're halfway through the numbers as well. We learned how to do that from the work we did in Peru. Healthcare is a very important part of this Bank's work. You cannot kill inequality with unhealthy children. It's not going to happen. Everything is intertwined, and that's the point I've been trying to make since the day I came into this role. This idea that you can segregate little buckets of things that you can put money to work on makes no sense to me. The world is full of intertwined challenges. I grew up in India. I understand that if a farmer was able to have two crops in a year because of rainfall, and then they had money, so they kept a cow, the cow gave them milk, so they were able to hire a farm laborer, and they sent their children including the girl to school. Four years of no rainfall in Kenya. President William Ruto told me that, four years of no rainfall. His fifth year coming, what do you think will happen? Sooner or later there won't be those two and three crops a year. Sooner or later the cow will or the cattle will have gone. Sooner or later the dairy money will go away. Sooner or later the girl child will be pulled out of school first. That is the ultimate reversal of poverty movement. For people to argue that somehow these things are neat little buckets just irritates me and it's not correct. Hopefully we'll get it right.
[Rose Kimeu Craigue]
Okay, we'll take one more question from this side, from the back. Gentleman in a blue suit at the back. Yes, go ahead. Please use the mic, thank you.
[Tunde Adetunji]
Thank you, Mr. President, we are so much…
[Ajay Banga]
Ajay.
[Tunde Adetunji]
Ajay. My name is Ambassador Tunde Adetunji. I'm the CEO of the Africa Heritage Foundation. We've been working to make Africa great since the 18th century. Now, the slogan is “Africa matters. Africa is the future.” Without Africa, the world is a vacuum. When I was growing up, I grew up in Nigeria. My currency is stronger than the dollar is. One dollar to fifty-three cents. Now, it’s 1 dollar to 800 naira. In Zimbabwe, they were buying a loaf of bread for 1 million Zimbabwe dollars. All other African nations, their currencies are devalued. We are saying the resources of the world are coming from Africa. Actually, the growth of any economy is predicated on the proper interplay between the human creative abilities and natural resources.
[Rose Kimeu Craigue]
If I could just interrupt, please. Focus on your question, please.
[Tunde Adetunji]
The question is, in your position now, what will you do to remedy the devaluation of currency in Africa?
[Ajay Banga]
You got to be kidding me.
[Audience laughs] If I knew how to fix the devaluation of currencies, I would not be doing this job. I'd be making money in the foreign exchange market. I'm sorry, with all due respect, I can't answer that question. What I will tell you is that it's very easy for everyone to think that somebody else has caused the problem. When I grew up, when I was a young boy, I learned that if you point one finger, three fingers point back at you. We need to think about policy and governance and long-term thinking in Africa, for Africa, for the people of Africa. We need to rely on the right kind of resources from the world that can afford to give them. You should count on us as being a real partner for Africa. 50% of our lending last year is in Africa. A large part of that from IDA, which is all grants, and the rest of it is highly discounted. We believe in longer-term money. I would like to make the money even longer term as part of concessional financing, but I need to agree with countries on priorities and they have to show us the determination that they will implement those priorities. Because otherwise, other countries can use that money in Africa better than some. I don't want to be in the position of picking winners and losers. I want to be in the position of helping people who show the determination to help also and push. You should count on us for that, but you should also count on us to ask for good, predictable policies. It's really important.
[Rose Kimeu Craigue]
Okay, so we'll take questions on this side. Just a kind reminder to everyone, please be brief. We only have a few minutes left, and we want to cover as many questions as possible, please be brief. I'll start with a gentleman with a hat. Please, stand up. Right at the front, white hat.
[Ajay Banga]
Oh, you got a hat too. There you go.
[Audience member]
[speaking foreign language]
[interpreter]
Thank you for giving me the floor, sir. Mr. President, thank you for this wonderful opportunity. I will introduce myself,
[unintelligible]. I am Moroccan. I have no association for solidarity in the Middle East and I also have a collective association for the environment. Sir, you said something very strong, fight poverty, improving the conditions of living for the poorest in the population. This is a statement that is quite noble. I think that nobody here would be against it or would oppose themselves to what you said. But there is ambiguity in the policy of the World Bank, which is privatizing, encouraging the private sector, mobilizing it. But I think that some sector that you should look back when we think about privatization of health or education, then it is against the poor that you do so. We have developed clinics that have excellent results, where the poor cannot get access. Women that are pregnant, given that they are poor, they had to give birth in front of the door.
[Audience applauds]
[Ajay Banga]
In healthcare, there are many aspects of healthcare that have got innovation and delivery and cost reduction that do come from the private sector. I agree that it's easier to think of healthcare as a public and socially delivered need. But the reality is, in most countries around the world, that doesn't work very well. Even in countries that have been claiming that somehow their public sector delivery of health care is perfect, invariably go through their cycles. I don't know the right answer. I'm not a healthcare expert. I'm beginning to understand about drug manufacturing and pandemics because of my prior life. But one thing I do know is that finding a way to find the right balance between what is delivered by the state versus what's delivered through the private sector being involved is kind of important. Maybe we've all not figured out the right balance and we need help to figure that out, but the answer is not to go to zero private sector. There is not enough money in government budgets or in other budgets to provide for universal health care through merely a government budget. There are no governments in the world that are capable of doing that today. I think we need to just think through the ramifications of going to either zero or full one. Somewhere in between is the right answer. I don't know the right answer. I know many in our team have worked hard to find that in each country. What we have to do is to keep working on that to make it better. If you have some ideas, you should feel free to raise it to our team. I would be delighted to listen. If you figured out a good way to reach communities with healthcare that we can help to finance, to multiply it in a larger scale, talk to us.
[Rose Kimeu Craigue]
Okay, so we'll take a question from this side. Our last speaker was a man, so we will take a question from a lady. Please, stand up. Black, yes, black sweater. Mic, please, quickly. If we can move the mics very quickly so we can get as many questions as possible. Go ahead.
[Audience member]
My question will be in French. Yes, sorry.
[interpreter]
Thank you, President. We did follow your campaign at the World Bank, at the head of the World Bank. You talked about introducing the private sector for better transition in power or energy. Are you going to monitor the human rights with the private companies, or is it only financing with a cascade? Then will the Bank model commit itself in a dialogue for transferring the SDRs for the developing countries, from developed countries? Thank you.
[Ajay Banga]
Separate questions, the SDRs. There's a lot of misconception that the Bank is not interested in using SDRs. Please, take the word from me, that is complete nonsense. I don't know how and why this keeps being told to people. Here is the issue. Our board has actually approved the use of SDRs in the hybrid capital instrument that we have been talking about. The challenge is not us. The challenge is the use of SDRs is not as simple as people have made it out to look in articles they have written. What is the challenge with that? SDRs are given to central banks of countries as a completely liquid instrument. To be able to use that instrument and give it not to the IMF, to the IMF you can give it back, if you give it to anybody else, first of all, institutions like the European Central Bank prohibit that in their charter, just so you know. Secondly, if it is available to be used, it has to remain a completely liquid asset. That requires maybe five to eight other central banks to agree to come together to back up that one country that is donating the SDRs. This is not easy. This will not happen because somebody wrote an article saying that, voilà, let's use SDRs. That's my problem with this. I find this kind of misconception not helpful. What we need to focus on is how to raise money for that Capital Adequacy Framework and not chase rabbits down rabbit holes. If you're lucky, SDRs will turn out not to be a rabbit hole and will turn out to be a gold mine. But it's hard work and it won't get done by simply ticking the box. My friend Akin, who runs the African Development Bank, educated me on how they are trying to find a way to use SDRs for raising money. They have still not got anyone to do it, but they are trying their very best to persuade and work with different central banks. We actually used his ideas and those of the Inter-American Development Bank, and we put those into our board approval saying if they can do it, we can do it too. The question is, will it get done? I don't know. Your first question about using the private sector and renewable energy. If you back up a minute, my whole logic is it all goes back to the fact that if we have to make this renewable energy transition, it is not going to happen with public money because there's not enough. If you listen to all the estimates just in the developing world, we need to invest a trillion dollars a year. I don't know if a trillion is right. There are too many zeros in that, it could be less. Some number, it's a large number. There is not enough money in the public world to do that. Our entire lending last year, not because we didn't want to lend more, but that's kind of what we can do, was 120 million. If I do all the work I'm doing with the Capital Adequacy Framework, maybe I can get another 10, 15, 20 billion a year. We're talking trillions versus 120 billion. We have to involve the private sector. The question is how and what's the fair way to do so. One of the things we are saying is that a private sector that wants to go into renewable energy must be willing to absorb the risks that it should understand, operating risks, certain kinds of forex depreciation. If they're investing in India and they know that the average depreciation of the Indian rupee is 5% to 7% a year over the last 30 years, then in their spreadsheet and model, they should be willing to absorb 7% to 10%. But what if it's 25%? Then which investor will bring dollars and euros into the country and absorb that risk of foreign exchange depreciation? Can we help with that kind of thing? I don't know yet. Can we help with guarantees on political risk, things of that nature? After we do that, how do you make sure that that company invests and produces and delivers what it's supposed to do? If we are investors in it, we can help, because if we're investors, we have access to them and we can help track them. If we're not investors and somebody else is an investor, you've got to ask somebody else.
[Rose Kimeu Craigue]
Thank you, Ajay. We'll take a question from the very back of the room. I see the gentleman standing. I think you have a black shirt.
[Ajay Banga]
Well, now he does.
[Celestine Odo]
Thank you very much. My question is just very simple. I'm Celestine from Nigeria ActionAid. With regards to… you said last year loan to Africa was about 50%, I'm just wondering so far to Africa, the loan given to Africa, what are the measures that the World Bank used to ascertain so that these loans are actually achieving the milestones that they are meant for? If you look at it now, even the loans that these countries are having, they are not even able to, their revenues are no longer able to service these debts. Some of them more than 100% of their revenues. So, please, in concrete terms, what are the measures being used to ascertain the viability and what are these loans are actually achieving?
[Ajay Banga]
I just want to be clear. The reason that some of those countries may have a challenge on revenues versus debt repayment is not because of our loans. Just let's be clear. Remember that IDA is grants and concessional lending. What you're raising is a more important topic, which I think is really critical, which is the issue of how do you measure the results of the loans and the things you do? That's back to where I went. I want to move the institution and all frankly, most multilateral banks, all of us measure number of projects and dollars lent out. I want to go to what was the result of that money. How many girls went to school? How many people earned more because of that skilling institute? How many carbon emissions we avoided? How many private sector dollars we brought in for every dollar we put in? We are not there yet. We're going to change our corporate scorecard. We have measured against it and publicly transparently disclosed. It'll take us a year or two to get all the measures done. There are 158 measures in the corporate scorecard right now because we have catered to everybody who stood up and said, why aren't you measuring this? Okay, we'll add it. Now, we have 158. For those of you who run any people who work for you, when a corporate scorecard is 158 items, you can't be measured. You will always be excellent on 40 of them. I'm going to bring it down to 20, and we will be measured on those 20, and they will connect to our vision and our mission in a transparent way that will be published, and you will be able to see it. That's the idea.
[Rose Kimeu Craigue]
Okay, so we'll take questions from this side of the room. The lady in a light green dress and glasses.
[Ajay Banga]
You're the lady who stood up with the…
[Basani Baloyi]
Yes. I'm not a threat. Thank you very much, Mr. Banga, for taking my question.
[Ajay Banga]
Ajay. All you guys call me President now. Don't do that.
[Basani Baloyi]
It’s cultural.
[Ajay Banga]
Don’t. The formality is part of the problem.
[Basani Baloyi]
Okay, thank you, point taken. My name is Basani Baloyi. I'm from the Institute for Economic Justice in Johannesburg, South Africa. I wanted to just ask you a big favor, which is to please… Basically, the World Bank has committed to the acceleration investment. Basically, it's a loan for the closure of coal fire plants in South Africa as part of the JET-IP. Basically, what has happened there is that there's great speed. You were speaking about the efficiency to ensure that we have a better Bank, but there's great speed at which the IPG is pushing to conclude various items as part of the agenda to the point where it's actually excluding civil society in the process in South Africa. There are a number of issues that we have that, because of the speed of the process, we are not part of the key discussions. For instance, in a meeting that I participated in two weeks ago, we were told about the plans that are contained in the implementation plan. However, things like human rights impact assessments for the closure of those coal plants are not part the regulatory...
[Rose Kimeu Craigue]
Please, summarize your question.
[Basani Baloyi]
Are not part of the procedure. My worry is the speed at which everything is taking place is not taking account of the transparency and accountability for civil society. I know that JET-IP in South Africa is almost used as this exemplary case of getting everyone else, every other country involved. My favor is just to request that you give us a chance to actually be part of the process within South Africa so that we can actually have a just transition and not just a transition.
[Audience applauds]
[Ajay Banga]
I like your closing, it was very good. Again, I don't know about this specific thing. I do know that there is a JET-IP in South Africa along with a few other countries. I didn't know about the specifics of this, I will find out. Anna, who's sitting here, will check for you. In fact, before you leave, just give her your phone number. For those of you who don't know, Anna, please stand up for a minute. Anna runs all our operations for the Bank, for the IBRD and IDA around the world. The gentleman sitting next to her, this very handsome young man, you, Axel, I'm coming to the other guy, Axel. Axel runs our Knowledge Bank. And that extremely handsome, very tall Senegalese boy, this is Mr. Makhtar Diop. Makhtar runs IFC, and all three of them are my colleagues and very much a part of my future.
[Rose Kimeu Craigue]
We'll take one question from the very back. Gentleman with the… no, we'll take it from a lady. Okay, let's take the gentleman in a black suit. Yes, you with your hand up.
[Bright Hlongwane]
Thank you, thank you. I was about to complain. My name is Bright Hlongwane. I'm the Secretary General of Youth in Business South Africa. Thank you, Mr. President, unfortunately….
[Ajay Banga]
Ajay. By the time you leave, I will get you
[unintelligible].
[Bright Hlongwane]
For making Mr. Makhtar stand up. My question is about the World's Bank job or work talking to the lack of funding for young entrepreneurs across Africa. We know that there's a huge funding gap in the continent. I want to know if the Bank is willing to venture into ensuring that all these underfunded young people across the continent get the necessary funding to scale their business up risk capital and without the availability of all these economic or stringent barriers for them to accessing capital.
[Ajay Banga]
Philosophically, yes. Here's the problem. Do you know that even in the United States, just to make you feel really irritated about this topic, in the United States, in the case of women, how much money do you think the venture capital industry gives to women venture capitalists who’re starting a new venture every year? What percentage do you think of their funding? Two, 2%. Not only is it a problem that young people don't get it, there is another problem, even in the developed world of gender access to financing for the desire to open businesses and the ability to then create jobs through that process. In that vertical that I'm talking about, which is the prosperity vertical where we’re focusing on jobs, this is very much a part of the discussion as to how do you get money there. In the past, the banks we were approaching, it has been, like in IFC in particular, we fund a great deal of what I call microfinance institutions and smaller banks. They are effectively the ones who in turn lend further into such entrepreneurs or provide startup capital into them. But nowhere is it enough, and I don't yet know how to answer you that. Will I be able to fund everybody? I have no clue. But I do think that we need to do more of that as part of that vertical. For sure.
[Rose Kimeu Craigue]
Okay, so we'll take our question from you briefly. Please, proceed. We can hear you.
[Bayan Yazdani]
Okay. Ajay, thank you so much. My name is Bayan. I'm a policy fellow at an organization called Global Voices from Australia. You've mentioned earlier this holistic approach we need to take to development and you also alluded at the start to conflict, which is rising around the world. Now, I'm sure you would agree that all the projects the World Bank funds are dependent, their success is dependent on peace and unity in countries. Unfortunately, the multilateral institutions we have to promote peace are failing in their mission and we're seeing war on the rise. Do you think it's time for the World Bank to play a more active role in peace building? If so, what can it do?
[Ajay Banga]
No, no. I don't think the World Bank's charter or its mission can extend into that. I just don't believe we have either the credibility or the necessary status or acceptability in the world. Honestly, we don't have the people of the right experience or background for that. Frankly, I can barely get this done. You want me to take that on? No chance. No chance.
[Rose Kimeu Craigue]
Okay, one question from this side. The lady in a white T-shirt, please stand up. Mic, quickly.
[Audience laughs]
[Audience member]
Hello, Ajay. Thank you so much for welcoming us to this meeting.
[Ajay Banga]
You said Ajay. I heard you.
[Audience member]
I did. I've been practicing. I really appreciate the informality also. I just wanted to raise a question about the 0.2% of finance or direct finance to fossil fuels. I do appreciate the effort that the World Bank has made to reduce its exposure to fossil fuels. It's very, very warmly welcome. But there are many, many other means by which the World Bank Group is continuing to support the expansion of fossil fuels. I would like to give you two examples, specific examples. One is that the IFC has recently, in June, agreed technical assistance for LNG port infrastructure development in Morocco, right here on our doorstep. Morocco, obviously, we know, has got a lot of potential for renewable energy and solar and it’s doing spectacularly well on that front. Is it really appropriate to support Morocco or become more and more dependent on LNG at this stage? I think probably not. Another example is that MIGA has recently provided a significant guarantee to the Bhola combined gas fired power station in Bangladesh, which was a project previously supported by AIIB, but they withdrew from that project. I'm just saying that there's technical assistance, there's MIGA, there's IFC, here's private finance facilitated through the IFC that is still pouring into the expansion of gas and LNG and other fossil fuels.
[Ajay Banga]
I get your question. The fact that there are indirect ways, if you notice, they're all back to natural gas. The real challenge, which has to be discussed in a more tangible way, is what role does natural gas play in the energy transition? That's the conversation to be had. We are in the belief that it plays a role, but a very small role. If you look at the total percentage of what we're doing, frankly, there's even trade finance we do in IFC to certain people who do get involved in the import and export of natural gas, where that is really critical to that country. We do that. Even if you add all that number together, it's small, it's 0.6 instead of 0.2. That's not the point. The point is the role of natural gas in that transition. My belief is, the Bank's belief has been that it's very small. We're down to a very small amount. A project here, a project there. But if you look at where all our energy is going, no pun intended, it's all going into renewable energy. To give you an example again, numbers, last year, about 4 billion dollars went into directly renewable energy out of the IBRD and IDA. You can compare that to the 170 million dollars in natural gas. If you look at the number of technical assistant projects that would go into renewable energy, it would be many multiples. You're asking the right question. I don't know the answer. Should it be cut off to zero? When I traveled all over the Global South during my nomination, the one thing I heard from every government was that “You cannot apply different rules to us for the use of natural gas compared to the developed world.” That actually is becoming a very serious issue of mistrust. Part of it is purely being able to exploit the resources they now think they were fortunate enough to have. Part of it is the issue of just sheer accessibility to power. 600 million people in this continent don't have power. There's that issue. Part of it is the baseload issue. You have to create baseload either through natural gas or through hydroelectric or through, God forbid, coal in the old days or stuff of that nature. It's a really complex equation, like a Rubik's Cube that you'll try to solve for. If you don't look at it in its totality, it kind of sounds weird, but that's the thing I'm struggling with to even learn for myself right now.
[Rose Kimeu Craigue]
Thank you, colleagues. That's all the time we have for questions today. Thank you so very much, Ajay, for hosting this meeting. Thank you so very much, civil society.
[Audience applauds] Thank you. It has been a pleasure to host this session. I just want to say that we are committed to working with every civil society to end poverty on a livable planet. Thank you, everyone.
