2023 Annual Meetings Plenary
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2023 Annual Meetings Plenary
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Annual Meetings Chairman, Sergii Marchenko, Minister of Finance of Ukraine, World Bank President Ajay Banga, and Managing Director of the International Monetary Fund Kristalina Georgieva speak at the October 13th plenary session of the Annual Meetings in Marrakech, Morocco.
> Remarks by World Bank Group President Ajay Banga at the 2023 Annual Meetings Plenary.
[Sergii Marchenko] Please rise to greet Mr. Omar Kabbaj, advisor to His Majesty, King Mohammed VI of Morocco, and Mr. Aziz Akhannouch, Head of Government of Morocco, to the plenary. [Applause] Please, remain standing as we observe a moment of silence in honor of the lives tragically lost in the recent earthquake. [Silence] Governors, ladies and gentlemen, it's my pleasure to call to order the 2023 Annual Meetings of the Board of Governors of the World Bank and the International Monetary Fund. I welcome governors representing all our member countries. On behalf of all participants, I would like to extend my deep gratitude To His Majesty, King Mohammed VI, for hosting us and to people of Morocco for their warm, welcome, and gracious hospitality. At this time, I would like to call on Mr. Omar Kabbaj, advisor to His Majesty, the King of Morocco, to deliver the royal address to governors. Please. [Applause]
[Omar Kabbaj] Praise be to God and peace and blessings be upon the Prophet and his kith and kin, Your Excellencies, ladies and gentlemen. It gives me great pleasure to welcome you to Morocco and to the city of Marrakesh, this time-honored city which has a rich history and a distinctive cultural heritage. It has become a destination for tourism. It has been the venue for major international events, some of which have shaped our modern history. I am referring in particular to the GATT Summit held here in 1994, which saw the birth of the World Trade Organization and more recently the COP22 in 2016. I am sure these Annual Meetings of the World Bank and the International Monetary Fund will be just as successful. I should like to thank you for the friendship and confidence you have shown by attending these Annual Meetings in Marrakesh shortly after the devastating earthquake which struck my country. I also wish to thank the states and institutions which expressed their readiness to assist Morocco, particularly in the reconstruction phase. Your Excellencies, ladies and gentlemen, we are pleased today, after a two-year postponement due to the pandemic, to see the prestigious forum back here in the African continent half a century and in the MENA region 20 years after the Annual Meetings held in Dubai in 2003. It goes without saying that given the exceptional circumstances the world is facing today and the geopolitical, economic and environmental challenges we have experienced in recent years, high expectations are pinned on these Annual Meetings at the time our planet is facing climate disruptions, which have created a new reality on the ground, a reality corroborated by data on a daily basis, the world is sinking into problems which we thought had been largely resolved thanks to the rules established and multilateral institutions set up in the aftermath of the Second World War. Today, geoeconomic fragmentation and the rise of sovereignty-driven sentiment, which can be explained in part by the desire to readjust the balance of both economic and political power at the global level are jeopardizing the significant progress multilateralism has enabled us to make over the last few decades. Globalization, which has prevailed since the 1980s, has helped reduce production costs and expand global trades. It has contributed in part to mitigating inflation and improving purchasing power across the world despite aggressive monetary policies, which, although they have been largely synchronized, have not been without consequences for the economic activity. Globalization has led to tangible improvements in living standards, enabling large swathes of the world's population to escape poverty. However, globalization has not been without adverse effects, especially in terms of growing inequalities. Your Excellencies, ladies and gentlemen. The economic, social, and political development witnessed in recent years call for reforming the institutions and rules governing multilateralism. However, the basic principles underlying it ought to be consolidated and the spirit that drives multilateralism revitalized. Those principles remain necessary to preserve stability and world peace and to boost synergies in order to meet the common challenges our planet and our peoples are facing. However, and as we all know, global challenges call for global solutions. They can only be devised within a framework of unity and mutual respect between nations. A framework in which diversity is a valued component, a source of wealth rather than conflict, and in which the intrinsic characteristics of each state and each region are duly taken into account. Similarly, it is essential to revisit and improve the global financial architecture to make it more equitable and inclusive. I see these Annual Meetings as the best forum for dialogue and constructive debates on the proposed overhaul. Since it is our common destiny to live on this planet, there is no way for any country to shape its future without taking into account that of other countries. Your Excellencies, ladies and gentlemen, that is the spirit guiding our perception of development in Morocco, our assets in this regard include our history, which goes back thousands of years and our status as a land of peace, of cultural cross-fertilization, and co-existence between different faiths and cultures, not to mention a geographical position at the crossroads of Africa, the Middle East, and Europe. Our approach focuses on economic openness and cooperation. We are committed to different agendas in the international community, whether they concern economic development, the fight against climate change, combating terrorism and money laundering, or addressing the growing cybersecurity threat brought about by the digital revolution. It should be pointed in this regard that I have made South-South cooperation a priority in our open door policy, pursuing in this regard an approach based on co-development with our sister nations and friends on the continent, on the African continent, at the domestic level. And since the early 2000s, we have implemented major social and economic reforms in Morocco, as well as a large-scale infrastructure program. Concurrently with this, we have made sure to preserve macroeconomic balance because we consider that this guarantees economic sovereignty and resilience. Ours is a balanced approach in which our economic policy serves human development. I have made the latter a foremost priority since I ascended the throne. And this policy has been reinforced since the COVID-19 pandemic. In this regard, I have launched an unprecedented project to achieve universal access to social protection in our country. The benefits of this policy have already been tangible. Our economy has shown remarkable resilience in a complex, uncertain global environment, marked by a succession of inconceivable shocks in recent years. My country has also strengthened its position as a haven of peace, security and stability, as a credible partner and a regional and continental economic and financial hub. For me, the convening of your Annual Meetings in Morocco is the result of a long-standing partnership with the I have made the latter a foremost priority Institutions and a sign of confidence in the robustness of our institutional framework, our infrastructure, and our commitment to stronger international relations. Your Excellencies, ladies and gentlemen, Morocco, as an African nation, fervently hopes that the continent, which now has a voice within the G20 through the African Union and will be able to hold its rightful place in other international bodies and thus, push forward its economic and social agendas. As you know, African countries are among the nations that are suffering the most from the consequences of climate change, even though they are among countries whose activities contribute the least to global warming. The rules and frameworks governing that should be readapted to take better account of the constraints which affect the ability of the most indebted, low-income countries to be proactive and tackle fluctuations. Therefore, Africa will be the home to a quarter of the world's population by 2050. It should benefit today from conditions that enable it to broaden its room to maneuver and harness the potential to meet the needs of African populations in an increasingly uncertain, unsettled world marked by profound paradigm shifts. Your Excellencies, ladies and gentlemen, during the COVID-19 pandemic, the International Monetary Fund and the World Bank, together with international agencies and institutions, forming the pillars of the global multilateral system, showed great diligence and responsiveness. They provided crucial support to many member countries trying to mitigate the economic and social impacts of the pandemic. I am convinced that the World Bank and the IMF will spare no effort to ensure these Annual Meetings achieve tangible progress. I personally hope that differences between major economies will be reduced and that efforts and synergies can be more effectively mastered to serve global peace and prosperity in a spirit of solidarity with the most vulnerable countries. It is through frank, constructive, balanced dialogue regarding economic and financial issues on the one hand, and human considerations on the other hand, that we can, for the sake of our planet, build together the kind of common future each one of us wants for our children. At the end, I ask God Almighty to grant you success and crown your efforts with success. Peace be upon you. Mohammed VI, King of Morocco.
[Sergii Marchenko] Thank you. We are grateful to Mr. Kabbaj for his encouraging words. It's customary in these Meetings to hear from the Chair, and I shall proceed in the same way. Governors, ladies and gentlemen, it's a great honor and pleasure to welcome you all to the 2023 Annual Meeting Plenary of the Boards of Governors of the World Bank and the International Monetary Fund. I would like to begin by expressing our condolences to the victims of last month's earthquake and our collective solidarity with the Moroccan people. I would also like to pay tribute to the response of the Moroccan authorities and convey our gratitude to His Majesty, King Mohammed VI of Morocco. Let me also express our sympathy to the people and authorities in Libya who continue to suffer from the devastating impacts of Storm Daniel, as well as those in Afghanistan suffering from the impact of the recent earthquake. When our members face a crisis, the World Bank and the IMF are at their side. They are there in solidarity with knowledge and finance to bring to the table. They are as an old friend and as economists, project managers, advisors, ready to roll up their sleeves and get to work. It's in moments like this that is plain to see why the world needs the World Bank and the IMF. The challenges facing our membership continue to intensify. Growth is below the historical average inflation, while declining in some parts of the world, still remains stubbornly high. Climate shocks and geo-fragmentation threaten to create more food and energy price spikes and complicate the flow of communities across borders. More than half of low-income countries and some middle-income countries are at the higher risk of death, distress. Medium term growth is forecast to be at a slow pace in the case. Policymakers have a little room for maneuver. Of all of the global challenges facing our membership, there is none greater than countering the destructive force of war. None greater than repairing the trails of devastation of human tragedy and disruption of economies across the world. Violence and conflict have spiked dramatically since 2010, doubling in the past decade with setbacks to stability in regions across the world. Poverty reduction efforts are delayed in fragility, conflict, and violence. Gender-based violence increases during war, making it critical to protect women and girls. War cuts across all our development objects. Conflict drives population from their homes and livelihoods. Thanks to the strong partnership with the World Bank and the IMF, as well as generous donors, countries facing fragile situations are better able to provide basic services and avoid further economic downturn. The people we most need to reach are growing in numbers. Nearly a third of the world's population did not have regular access to food last year. Severe food insecurity is twice as prevalent in FCV countries and non-FCV countries. Nonetheless, countries such as my own are resilient. For Ukraine, war today is a matter of the life and death as we suffer from Russia's invasion. Thanks to timely support from the World Bank and the IMF, we have been able to stabilize our economy and provide critical basic service to our citizens. We have also been able to play a central role in maintaining food supplies by ensuring that ships carrying much needed grain continue to sail from our Black Sea ports. This helps to constrain price rises and provides significant support to food security across the world. Other challenges are evolving and transcend borders: climate change, the energy transition and digitalization. These words were not yet in the dictionary when the Bretton Woods Institutions were founded. New challenges require new tools such as IMF, resilience and sustainability facility, which was introduced to help countries build resilience, including against climate shocks. Demand has been strong and Morocco has just benefited from this facility. The evolution roadmap is painting a picture of what is a bigger, better, and more effective World Bank will look like. The strengthening of collaboration between the World Bank and the IMF, particularly on climate change, is to be welcomed. Then there is a dead burden, which remains elevated in emerging markets and developing countries. Not to mention the financial squeeze for low-income countries. The World Bank and the IMF continue to work together in supporting the G20's Common Framework and the Global Sovereign Debt Roundtable. I hope we see further progress during these Meetings. My fellow governors, the global policy agenda is daunting. We will spend a lot of time in Marrakesh discussing policy priorities and trade-off, but let us not forget that the world has enough money to solve the global challenges. The question is how to leverage this. Part of the answer is through new mechanism such as hybrid capital instruments and the portfolio guarantee platform being launched by the World Bank. Alongside this welcome enhancement to the financial model, let's also unlock cross-border flows and turbocharge the mobilization of private capital. This is how we will close a funding gap that we see in countries across the world. This is how we will direct private finance and expertise to the projects that need it the most, including in low and middle-income countries facing severe constraints on their ability to finance their development and climate priorities. My fellow governors, it is fitting that we are meeting in the shadow of the Atlas Mountains. The place where, according to the myth, Zeus sentenced Atlas to hold the sky on his shoulder for eternity. Our burden is not so heavy, but the world is looking to us. The world is looking to us because our institutions have proven that they can transform chaos into stability. They can transform despair into hope. The world is looking to us because if solutions can be found anywhere, they can be found here. And so, as custodians of these institutions, we need to ask ourselves what we can do to help renew them from our times. Renew them so that we can rise to the new challenges because renewal is the path forward. Thank you. [Applause] At this time, I would like to call on the President of the World Bank to address the governors.
[Ajay Banga] Good morning. Chair Marchenko, thank you for chairing this plenary. Mr. Kabbaj, Prime Minister Akhannouch, thank you for hosting these Annual Meetings. The road to Marrakesh was not an easy one, delayed by the pandemic and persevering after an earthquake. Yet the warmth and hospitality we’ve received from your government and all Moroccans has been humbling. Kristalina – it is a privilege to host these Annual Meetings together. I would like to thank my predecessor, David. Those of us in this room are fortunate. We are custodians of an institution with a tremendous responsibility at a time of uncertainty and great consequence. The world is fraught with profound forces and rapid changes. We face declining progress in our fight against poverty, an existential climate crisis, food insecurity, fragility, a fledgling pandemic recovery, and are feeling the effects of conflicts beyond the front. A perfect storm of intertwined challenges and geopolitical complexity that taken together exacerbate inequality. Economic growth in much of the developing world is retreating. Falling from 6 percent to 5 percent in two decades, and on track for just 4 percent over the next 7 years. With each lost percent, 100 million people are pulled into poverty and another 50 million people are pushed into extreme poverty. Dig deeper and you’ll find people struggling to provide for themselves and their families as incomes have stagnated. In Sub-Saharan Africa per capita income is the same as it was 14 years ago. Meanwhile, debt has increased throughout emerging markets – doubling in Africa – shackling countries to the ground just as they’re trying to rise. We are living in a world with alarming challenges but at a time of intensifying polarization and extremes. Beneath the surface, a growing mistrust is pulling the Global North and South apart, complicating the prospect of progress. The Global South’s frustration is understandable. In many ways they are paying the price for the prosperity of others. When they should be ascendant, they’re concerned promised resources will never manifest, they feel energy rules aren’t applied universally, and they’re worried a burgeoning generation will be locked into a prison of poverty. But the truth is: We cannot endure another period of emission heavy growth. We must find a way to finance a different world where our climate is protected, pandemics are manageable – if not preventable – food is abundant, and fragility and poverty are defeated. Our task is great. Looking across the world it is easy to be consumed by a sense of despair. Yet – in all corners of the globe, people are eager to go to work, and to create with their own hands. They want a better life for their children and grandchildren. I have felt that yearning among entrepreneurs in Nigeria, seen it in the proud eyes of artists in Indonesia, and touched it on the worn hands of farmers in Jamaica. The Bank has an obligation – a duty – to match their energy with a fierce determination. We must be the hand on the back – moving people forward. We must be an institution that exports optimism and impact. But we must change to make good on that promise and deliver on what is being demanded. The World Bank is turning to face the wind. That evolution began months ago, and today there is a new vision and mission for the World Bank. To create a world free of poverty – on a livable planet. But time is of the essence. This urgency motivated us to write a new playbook – a new mission. One that will drive impactful development and lead to a better quality of life – access to clean air, clean water, education and decent health care. It is a mission that is inclusive of everyone, including women and young people; Resilient to shocks, including against climate and biodiversity crises, pandemics and fragility; And sustainable, through growth and job creation, human development, fiscal and debt management, food security and access to clean air, water, and affordable energy. With this vision, we are widening the aperture of the World Bank, reflecting a reality that the luxury of choice was for the last generation. To confront the intertwined challenges, our only option is to respond aggressively, simultaneously, and comprehensively. We cannot make adequate progress on public health while rising temperatures change the patterns of infectious diseases and breed pandemics. We can’t help farmers expand crop yields and feed growing populations using techniques that were not designed for years long droughts. And we will never reliably connect entrepreneurs with markets if the roads they rely on for shipping get washed away every year in a flood. This is why we need a new playbook. At the center must be women and young people. Without a focus on both we are fighting with a hand behind our back. Globally, women have not seen their participation in the labor force improve since 1990. And when they do get a seat at the table they aren’t paid equally. We cannot defeat poverty with half the world’s population on the sideline. And young people, they can be the engine of our future; but only if we provide quality of life when they’re growing up – and then a job. With a job comes dignity, pride, the ability to provide for yourself and your family. Without a job – or the hope of one – human despair turns to anger, in those moments people grasp for any hand that offers a way out. Those costs can deliver irreparable harm on a society – or – on entire generations. The urgency and importance cannot be overstated. Our own estimates project that in the next 10 years, 1.1 billion young people across the Global South will become working age adults. Yet, in the same period and same countries, we are only expected to create 325 million jobs. The cost of inaction is unimaginable – this demographic dividend must not be allowed to become a demographic challenge. This vision and mission will test the sincerity of our ambition – it sets us on a journey that will require reimagined partnerships, a new way of working and thinking, an innovative plan to scale and replicate, additional resources, and optimism for what could be possible. That is the new direction of the World Bank and what I am excited to share with you today. We took our first steps on this journey in April, squeezing $40 billion over 10 years from our balance sheet by adjusting our loan to equity ratio. And over the last few months, we dug even deeper, creating a portfolio guarantee mechanism and launching a hybrid capital instrument. These new tools enable us to take more risks and boost our lending capacity further – all while preserving our AAA rating. Taken together we could provide $157 billion more in lending capacity over a decade. Our work has been met with enthusiasm – and generosity. Germany moved first to support hybrid capital, their contribution will give us €2.4 billion in additional IBRD lending over the next 10 years. While the United States’ early support for portfolio guarantees could unlock roughly $25 billion in new IBRD lending – and we expect others to join in soon. What makes these tools unique – and a good investment – is their ability to leverage every dollar six to eight times over 10 years. But we are not stopping there. With other multilateral development banks, we are exploring ways to better utilize callable capital and SDRs. Both are complicated but achievable. Unlocking their potential will take time and requires action from shareholders and central banks. We see other opportunities. Our Global Public Goods Fund was designed to incentivize cooperation across borders and tackle shared challenges. But, in the past, the funding came only from IBRD’s income, holding back its potential. Now, we’re opening the door to governments and philanthropies, which could grow concessional resources. With this bigger ambition and ability to deliver on our new mission we believe this will be a true Livable Planet Fund. We know this model can work. In a big step forward, Uruguay became the first country to take advantage of reduced interest rates as a direct result of meeting climate performance targets. An innovative approach that we aim to scale. And we are continuing to test other ideas across our ecosystem of incentives. We’re exploring maturities of 35 to 40 years to help countries navigate longer term horizons for social and human capital investments. We’re investigating if we can reduce interest rates to incentivize exiting from coal as part of energy transitions. And in countries that utilize both IDA and IBRD, we’re looking to find ways to encourage a renewable energy transition by increasing concessional finance in the mix. This spirit of innovation and exploration is comprehensive. The World Bank stepped forward to support the most vulnerable when compounding challenges – the War in Ukraine, effects of the pandemic, and inflation – hit. But the need was so great that we allocated the majority of our three-year Crisis Response Window in the first year. So now, we need to replenish it. Our objective is to raise $4 billion for the Crisis Response Window Plus. The United States is requesting $1 billion from Congress. And other countries – like the Nordics – are pledging donations. Still, we are a long way from our goal and time is short. We are looking for others to step forward. We need our donors’ help to reload this fund and carry us through our next IDA cycle. If we really want to incentivize change – we can’t just wish it – we need to fight for it. Nowhere is this truer than IDA. We are pushing the limits of this important concessional resource and no amount of creative financial engineering will compensate for the fact that we need more funding. This must drive each of us to make the next replenishment of IDA the largest of all time. We need donors, shareholders, and philanthropies to step up, join us, and bring their ambition to this fight, otherwise these instruments are just theoretical. Meanwhile, we aren’t waiting. We are recruiting new partners and reimagining partnerships. We are joining with others, working alongside multilateral development banks to coordinate global action, catalyze change, and multiply impact. During my first trip, Ilan Goldfajn from the Inter-American Development Bank and I visited Peru and Jamaica to make purposeful what too often has been accidental – collaboration. Our partnership focuses on three objectives: attack deforestation the Amazon, strengthen the Caribbean’s resilience to natural disasters, and bridge the digital-access gap across Latin America and the Caribbean. We will not deliver results overnight but together our impact will be greater than it would be on our own. That is why the World Bank is reaching out to other institutions in hopes of establishing similar partnerships. That spirit of common cause is shared among multilateral development banks. We are oriented toward impact and the competition of the past has begun to give way. We recognize there is much we can do together, but in these early days we are focusing our energy on four areas that will lift us all. One, we are working with credit rating agencies to help improve their understanding of our work and risks. They are integral to unlocking capital and pricing. Without progress, ideas like callable capital will be out of reach. Two, we are expanding collaboration on joint financing. Establishing a Co-Financing Platform to facilitate coordination across global and regional priorities. Three, we are standardizing our processes, reducing transaction costs, and freeing up technical capacity. Already we are making progress on procurement and streamlining environmental and social frameworks. And finally, we are developing a new approach to track climate outcomes based on impact. We plan to share more about our progress at COP28 in Dubai. This unified approach could greatly benefit the governments we serve, making it easier for them to access resources from a diverse set of multilateral development banks, focusing lending through a single country platform. But the World Bank – and my friends in the other multilateral development banks – don’t have a monopoly on good ideas. We should steal shamelessly – and share seamlessly. And we must do it with – and among – think tanks, the private sector, civil society, and – anyone who is moving the needle. There is much we can do together but this commitment to impact begins with ourselves. The World Bank has launched an ambitious program to quicken our pace, increase our efficiency, and simplify our processes. Knowing that when development is delayed – development is denied. By the numbers, one year without education reduces a person’s future income by 10 percent annually. Depriving a child of proper nutrition in their first 1,000 days, decreases their income by around 17 percent every year – for the rest of their life. Yet, at the World Bank, we are spending the same amount of time on a difficult project, like a 2,000-mile transmission line that traverses conflict zones and critical environments, as we do constructing a small solar grid or new school. Our teams spend months preparing reports that evaluate risk from every angle – 4,880 days of staff time each year just on duplicative internal reviews and clearances. And when a project works that should be expanded, our processes require teams to start fresh – telling communities to wait patiently while children grow, poverty deepens, untreated illnesses worsen, and the worn path to clean water is packed harder step, by step, by step. Currently, a World Bank project takes 27 months – on average – before a single dollar gets out the door. This is followed by a lengthy implementation process and project construction. Too often it’s longer than 10 years before the first benefits are felt. That is a lifetime. We must do better. And there is precious time we can save. We have the entire process in our crosshairs, initially working to dramatically reduce the project review and approval time by one-third. But with ambition to do more. Our plan calls for simplifying approvals, proportionately adjusting reviews, and combining intelligent technology with shorter timelines to drive speed. And we will do it without making a single change to our environmental and social standards that protect the communities we work for and give peace of mind to our partners and shareholders. We do not believe quality conflicts with speed; we believe we can deliver both quality and speed. This is important progress but there’s more we can do and are developing a plan to better support governments with implementation. If we can build technical assistance into our projects from the start and help countries develop capacity – we can give time back. Not only are we streamlining our approach and encouraging our teams to work faster – we are exploring ways to incentivize speed and collaboration throughout the World Bank. That need for collaboration, demand for impact, and belief that there is elegance in simplicity has inspired us to think about a potentially transformational program. Our hope is to refocus the World Bank to confront challenges not just as a funding mechanism, but as a knowledge mechanism. That’s what governments are calling for – our knowledge. The World Bank has long been celebrated for approaching the thorniest problems to find solutions and change lives. In my brief time at the Bank, I have seen that impact with my own eyes. In India, technology is used to track student attendance and performance in real time. Education experts spot problems, take quick action, and get kids back on track. As a result, student and teacher attendance, and enrollment have all increased. In Peru, free legal centers are changing – and saving – lives. Every day there are lines out the door. Women pursuing unpaid pensions and child support, others seeking justice for domestic and sexual violence. Stories that aren’t unique to women in Peru. It’s not just India and Peru that are trying to improve education outcomes or create more equitable societies. So, why haven’t we exported this success? The World Bank has enjoyed many successes. Knowledge gained with each. In the last five years alone, we helped 100 million people find jobs, we expanded healthcare access to over 1 billion people, we’ve helped nearly 500 million kids get an education, and we’ve reduced carbon emissions by over 230 million tons annually. And despite this progress – too many still haven't felt the impact of what we have done. Too many are still unable to enjoy the dignity of work. Too many still live without access to electricity, quality education, decent health care. And too many of our most impactful projects go no further than a report on a shelf. To reverse the trend and extend the hand of good fortune further, we must scale and replicate the impactful solutions we have worked so hard to find. And we will do this in way that makes the World Bank more approachable, accessible, and understandable. First, bringing our knowledge to the forefront of our country driven model – and Country Partnership Frameworks. Sitting as partners with governments, working to craft a focused development plan that is a marriage of their ambition and our expertise. Second, helping to create and cultivate bankable projects and implement them. Our knowledge teams, working with our country teams to bring all the World Bank offers to bear – being a force multiplier for governments when additional capacity is needed. And finally, driving thought leadership that moves the Bank, the world, and big ideas forward through our research, reports, and broader engagement. Our knowledge work – the country partnership frameworks, cultivating bankable projects, and our thought leadership – will be organized into five simple verticals: People – health, education, social protection Prosperity – jobs, tax policy, economic policy, financial inclusion, small business Planet – air, water, soil health, biodiversity, forests, adaptation and mitigation Infrastructure – roads, bridges, energy Digital – because that’s transforming our world and will make everything else possible. And across those five verticals – holding our feet to the fire – we will measure our impact on gender equality, jobs for young people, and climate impacts. Embedded within the vault of the knowledge bank are our eight global challenges – Adaptation and Mitigation; Fragility and Conflict; Pandemic Prevention and Preparedness; Energy Access; Food and Nutrition Security; Water Security and Access; Enabling Digitalization; and Protecting Biodiversity and Nature. All organized in a way that ensures impact at scale. But even with a better Bank. Even with governments, multilateral institutions, and philanthropies all working together we will still fall short. We need the scale, resources, and ingenuity of the private sector. Thus far, IFC has worked with the private sector using just $5.6 billion of shareholder capital to mobilize $162 billion of private sector investments. But truly meaningful, sustainable progress has evaded us. To help solve this riddle, we launched the Private Sector Investment Lab and recruited fifteen of the world’s leading CEOs – across asset management companies, banks, as well as operators. We are exploring opportunities for the World Bank to help mitigate risk, drive policy actions to entice new entrants, and ensure projects become bankable. We are trying to make systemic change. The Lab is initially focused on increasing private investment in renewable energy and the energy transition in developing countries – searching for actionable ideas that will bend the curve on emissions heavy growth. There are already signs of hope. In the first meeting, we identified a set of markets, each with potential for private capital investments, but each with challenges that we must address. We identified early ideas for how the Bank can better mobilize private finance. Among those was to unify guarantee issuance across the institution, simplifying access to them and supporting an ambitious growth plan for MIGA over the next few years. Seeing the strong demand for this effective tool, we are already acting and exploring ways to deliver. We are asking a lot of the private sector. We are asking them to operate in places and in situations that their algorithms and expertise may not extend, on roads the World Bank has traveled for years. And if we are asking others to follow – we should be willing to share our map. That means giving private sector investors and rating agencies usable data from our Global Emerging Markets Risk Database, originally developed to inform our own investing. We believe transparency will inspire confidence and will lead to more informed decision making, risk taking, and ultimately investing in emerging markets. Our plan is to release this data in a matter of months. We are working now, in concert with other multilateral development banks, to reconstruct and clean the database to ensure its quality. This is a first step; we are continuing to explore what more we can do with our data to mobilize private capital. But our devotion is not just reflected in our words, it should be measured in action. We are becoming more efficient – incentivizing output, not input, and ensuring we focus less on money out the door and more on how many girls are in school, how many jobs are created, how many tons of carbon dioxide emissions are avoided, and how many private sector dollars are mobilized. That is why we are reconstructing our corporate scorecard from the ground up. Pointing it toward outcomes and evidence – bringing it down from 153 items to around 20. This scorecard will be our yardstick of accountability and a guidepost that our teams can rally around and work toward. But by any measure, the World Bank is better today than it was yesterday. We have a new vision and mission, we are asking all we can from our balance sheet, we are unleashing the potential of our Livable Planet Fund, and giving IDA the attention it deserves. We are becoming faster and more efficient; we have new ways to respond to crises, we are focusing our knowledge bank on scale, and driving thought leadership. We are collaborating with partners to maximize impact, and we are working side-by-side with the private sector. And though we are making a difference, though we are evolving, though we are operating with urgency – our work has just begun. The ambition of the Evolution Roadmap should not be the end of our ambition for the World Bank. Though we don’t have all the answers now, and those we are working toward will take time, we do have desire, energy, and focus. There are new frontiers to explore – like moving from small, bespoke loans to large, standardized investments that can be packaged. If done right, we could draw in institutional investors – pension funds, insurance companies, sovereign wealth funds – and put their $70 trillion to work in developing countries. This has been the thing of fantasy for years, but hope isn’t a strategy. We are in early days of building such a platform. But by doing the hard work now, we will be in a position later for success. Success that could be further multiplied across multilateral development banks to mobilize much greater amounts of private capital than ever before. But let us not forget, we aren’t starting at square one. Every day, millions of people do their best to be part of the solution. There are real examples of action. In Nigeria, shopkeepers are using solar power to keep their shops open late into the evening. In Indonesia, mangrove rehabilitation efforts are reducing carbon emissions, creating sustainable employment for women, and protecting communities from floods. In Vietnam, rice farmers are embracing new techniques that slash methane emissions, while increasing incomes. We do not suffer from a shortage of solutions; we are paralyzed by a persistent lack of courage to pursue them. The good news is that we have solutions like these within reach, and resources at our disposal to scale them. For example, we can spend better. Every year $1.25 trillion are spent on subsidies for fossil fuels, agriculture, and fisheries. Some of these are very important and needed, but in other cases we can do better. The economic costs of fertilizer runoff, unnecessary air pollution, and overfishing is $6 trillion – every – single – year. By repurposing some of this money to incentivize sustainable practices – we can protect, air, water, and forests – while continuing to support those most in need. We’ve seen this work. Europe worked for years to repurpose subsidies that once encouraged excessive fertilizer use. Now, the same amount of money goes to the same farmer to reduce fertilizer use – leading to a climate positive impact. But not all solutions are years away. We are in the final stages of a 20-year effort to build sound, transparent voluntary carbon markets. This effort learns from the past to protect against greenwashing and ensure the integrity of emission reduction credits. This assurance is a crucial piece of a complex puzzle. Validation is the backbone of healthy markets, it feeds investor confidence and generates better prices – enabling countries blessed with natural resources to see the value of monetizing these assets and protecting them. Most importantly, they generate income for families and communities. If successful, voluntary carbon markets could become more liquid, transparent and a better deal for developing countries. Our ambition is to grow this platform to finance emissions reductions in developing countries and benefit local communities. Our aspirations are limitless. Driving our work to deliver a better bank because eventually we will need a bigger bank. That will be the acid test of ambition. Nearly all estimates make clear adequate progress requires trillions annually; far more than what the capital adequacy framework will produce by itself. The private sector can help. But we will need a bigger bank to increase our financing capacity, take on more risk to encourage investment, and support the replicability and scalability that the World Bank is preparing to deliver. The World Bank is merely an instrument that reflects the ambition of our shareholders, the progress we aspire to achieve requires our resources and capital to be commensurate with our vision and the demands upon us. But if there is wisdom in our origins, it is that we can do big things together. Every generation believes that the set of challenges laid before them are the most difficult, consequential, and intractable. But never has humanity stared down a set of problems so complex and severe – that our very existence is in question. However, as the leader of an institution founded on the principals of peace and cooperation, I wanted the first time I spoke with you to be with a message of impact and optimism. There is nothing that gives me more hope than our capacity to work together in common purpose. But too often we look to the ground and fail to lift our gaze. But if one thing is clear today, it should be that the eyes of the World Bank are fixed on the horizon. We have inherited decades of knowledge and benefitted from the generosity of every nation, now we are being called upon to lead, and we have never been better positioned to deliver the progress that is demanded. Our financing is an attractive resource but not more than the World Bank’s devotion, creativity, people, and innovation. Those are the attributes that will carry us forward on this journey. Thank you. [Applause]
[Sergii Marchenko] Thank you. At this time, I would like to call on the Managing Director of the International Monetary Fund to address the governors.
[Kristalina Georgieva] Mr. Kabbaj, Advisor to the King. Prime Minister Akhannouch, Chair Marchenko. Mr. Ajay Banga, welcome to the family of the Bretton Woods Institutions and all the best to you at the helm of the World Bank. [Applause] Governors, ministers, distinguished guests, mesdames et messieurs, bonjour. Ladies and gentlemen, good day. Salaam alaykum! Let me begin by expressing my heartfelt sympathies to all those who have been affected by recent devastating disasters, including here in Morocco and those who suffer in wars and conflicts everywhere. We hope and pray for peace. [Applause] I would like to pay tribute to our hosts, His Majesty, King Mohammed VI, the government, and the people of the Kingdom of Morocco. You have shown the world the meaning of courage and resilience, as well as your exceptional culture, hospitality, and warm hearts. Marrakesh. Yes, thank you. [Applause] Marrakesh marks the return of our Annual Meetings to the Arab world after 20 years and the first time in 50 years since we gathered on the African continent. Back in 1973 in Nairobi, our host, President Kenyatta, spoke of the need to find a cure for the sickness of inflation and instability that had afflicted the world. Sounds familiar, doesn't it? These challenges in so many ways are the same, and yet our modern world is vastly different. It is a bigger world. There are many more people. Population has more than doubled from 4 to 8 billion. It is a richer world. Since 1973, global GDP per capita has more than doubled. It is a more diverse world. There are many more countries and the Fund's membership has grown from 125 nations in 1973 to 190 today. There have been breathtaking advances in health, education and technology. Amazing developments, but not everyone has benefited from them. While global economic integration has helped billions of people become wealthier, healthier and more productive, for too many it has coincided with dislocation, poverty and inequality. For too many, a path of progress has been rough. We have seen periods of turmoil, oil shocks in the 70s, the Latin American death crisis, the Asian financial crisis, the global financial crisis. Just in the past three years, we have seen a global pandemic, war in Europe, and a cost-of-living crisis. The past 50 years is a story of extraordinary but disrupted progress, also massive shifts in the world economy. What will be the story of the next 50 years? I don't have a crystal ball, so as an experiment, I asked Artificial Intelligence. “What might the world look like in 2073?” Here is one prediction. [Artificial Intelligence Speaker] In 2073, a sustainable global economy will thrive, propelled by renewable energy and AI-driven industries. Space exploration could open economic frontiers while enhanced global connectivity reshapes work dynamic. [Background music] Digital currencies may become mainstream, replacing traditional financial systems. Revolutionary healthcare and cultural fusion might define the era with efforts toward economic inclusivity. The vision embraces technological progress, environmental consciousness, and a connected equitable world. Remember, this is all speculative.
[Kristalina laughs] Reality has the way of surprising us. [Music ends]
[Kristalina Georgieva] Yes, I think it is safe to say [Applause] there will be surprises. The bigger question is how we will capture the benefits of transformation and manage the risks it will bring. Our starting point is not easy. As indicated in our world economic outlook a few days ago, the world has slowed down in terms of growth. Yes, tremendous resilience, but the recovery from the shocks is slow and uneven. Slow because at 3% growth is currently well below the average of the last two decades before the Pandemic, and medium-term growth prospects are also the weakest in decades. Uneven because the economic scarring from the recent shock is vastly different across countries, with emerging markets and developing countries clearly the hardest hit. After a long period of economic convergence, a dangerous divergence between countries and regions has emerged, made worse by fragmentation, climate change, and fragility, which has left many countries at the breaking point. This is especially the case here on the African continent, home of the world's youngest population. Progress in closing the income gap with more advanced economies and generating job-rich growth will be vital over the next 50 years. In this moment of radical uncertainty, what are the no regrets actions that will help us write a better story for the next 50 years? I will place them in two groups, investment in strong economic foundations and investment in international cooperation These are captured in the Marrakesh Principles that the World Bank and the government of Morocco, together with the Fund, announced earlier this week. First, investment in strong economic foundations. In an environment with weak medium-term growth prospects, the right policies and reforms are essential. Here in Morocco, in the areas devastated by the earthquake, it was the buildings with strong foundations and a solid structure which sustained the shocks best. The lesson is, even if faced with very different economic settings, policymakers everywhere need to build strong economic foundations through sound policies. What does that mean? Price stability is key. It is a prerequisite for growth and it protects people, especially the poor. This means the fight against inflation remains paramount. So is safeguarding financial stability. Clearly, we are facing a higher for longer era in terms of interest rates, but the sharp, further tightening of financial conditions can happen and it can hit markets, banks, and non-banks. Therefore, strong supervision is essential. Prudent fiscal policy is more important than ever. Why? Because debt and deficits are well above pre-pandemic levels. The time has come to restore fiscal space. This means tough decisions for governments. By prioritizing spending, and with credible medium term fiscal frameworks, it can be done. Contemplating these foundational policies, we have to also think of transformational reforms to boost medium-term growth. Think of improved governance helping to fight corruption, streamlined regulations making it easier to open and run business, reforms to boost trade and improve access to capital and increasing labor force participation, especially for women. The right package of reforms could boost output levels by up to 8% in four years. But the highest return of all comes from investing in people, especially education to ready the young people, including those right here in Africa for the jobs of tomorrow. Where will the money come from for these investments? Ajay talked a lot about that. If I had the magic wand, I would move capital from the wealthy world where population is aging to the developing world, the world of the young. But I don't. The good news is that domestic resource mobilization holds huge potential. Our research shows that tax reforms could add up to 5% of GDP in revenue for emerging markets and up to 9% for low-income countries. The Fund is working with the Bank, is prioritizing work in this area. External financing, of course, remains critical. The advanced economies have a shared responsibility, as well as shared interest, in supporting the emerging markets and developing countries. This brings me to my second overarching priority, investing investment in global cooperation. A story of inclusive and sustainable growth for the next 50 years is only possible if we work together, again, in the spirit of the Marrakesh Principles. Climate and trade are obvious examples. Let me highlight two other major areas for global cooperation where the IMF is already playing an active role, again, working with the Bank. First, debt. More than half of low-income countries remain in or at high risk of debt distress. About the fifth of emerging economies face default-like spreads. Yes, the Common Framework is starting to deliver on debt restructuring, but it is slow. We need to speed up. The more recent Global Sovereign Debt Roundtable established by the Indian G20 presidency, the IMF, and the World Bank is bringing all relevant creditors and debtors together. It is showing results and promise for the future. Second, the global financial safety net, the lifeline for so many countries in their time of need. At the center, it says the IMF, our role is to insure the uninsured, and it has been prominent in the past three years. What have we done? Since the outset of the Pandemic, we have provided about 1 trillion dollars in liquidity and reserves. This came via the 650 billion dollars SDR allocation and 320 billion dollars in lending to 96 countries since the Pandemic. So how did we do this? First, we advanced our programs, activated our programs to provide debt relief to all these countries you see on the map. Then we mobilized in record time emergency financing during the Pandemic. All those countries benefited, but the shocks kept coming and our members turned to us for full-fledged programs. All these countries have programs with the Fund. We tailored our support to stronger members through precautionary credit lines. These are the countries, including Morocco, the first and only on the African continent, eligible for this instrument. We also launched our newest instrument, the Resilience and Sustainability Trust that Chairman Marchenko mentioned. For the first time in the Fund's history, we provide long-term affordable resources to vulnerable, low and middle-income countries. These are the first countries, 11 of them, six on the continent of Africa, and we have a queue of about 40. The interest is very strong. In addition, we work with our economically stronger members to channel a significant share of their SDRs to more vulnerable members. This has so far generated around 100 billion dollars in new financing through our trust funds, the Poverty Reduction and Growth Trust, and the RST. So, the Fund has responded to recent shocks in an agile and unprecedented way. But with countries likely to face larger and more complex future crises to continue to play our role at the center of the global financial safety net, we need to urgently be strengthened on two fronts. First, by boosting our permanent quota resources, which will bolster our capacity to support our members. Second, by replenishing the subsidies and enable the PRGT, the Poverty Reduction and Growth Trust, to provide zero-interest rate loans to our poorest members. And at the same time, we must continue to work towards adapting our governance structure to better represent you, our membership, as changes in the economy, in the global economy take place. We now have a possibility to adapt to add a third Chair for Africa from two to three, on our executive board, and it is a welcoming step. I heard Mr. Kabbaj about more representation for Africa. I'm very hopeful. Tomorrow, we have our meeting, IMFC meeting, I'm very hopeful for support for this very important development. We, the IMF, have strength that is fundamentally based on your trust, on the trust of our 190 members. How do we gain your trust? With the work of the magnificent staff of the Fund. I'm asking staff of the Fund to stand up. They work tirelessly, day and night, in the office and at home to repay this trust. [Applause] I could not be more proud of them. My deepest appreciation to my colleagues in the senior management team. Everybody sits, only senior management stands. Okay, senior management, a round of applause for them. [Applause] And to our executive board, our executive board members are somewhere in the room. I don't want to embarrass them because they may be running with delegations to meetings, not going to ask you to stand up. We draw tremendous strength from our partnership with our sister institution, the World Bank. I want to thank Ajay and the staff of the Bank for it. Thank you. [Applause] We are working together for you and for a better future for our people. I want to conclude by quoting some lines from a Malhoun poem, which I saw during my visit to the Museum of Jemaa el-Fna Square. “Go and contemplate the Wall of Marrakesh the Red. Your heart will find peace. There is then no closed door to which you will not find the key”. [Applause] Our Meetings here in Marrakesh the Red, leave me in no doubt that together we will unlock the door to opportunities for the next generation. Merci. Shukran.
[Sergii Marchenko] Thank you. Let us now turn to the formal business of the institutions. We have before us the reports and recommendations of the Joint Procedure Committee. Report one covers the business of the IBRD, IFC, and IDA. Report two covers the business of the Fund. And report three concerns matters of common interest of all organizations. We also have the report of the Procedures Committee of the Multilateral Investment and Guarantee Agency. On the recommendations of the Joint Procedures Committee and the MIGA Procedures Committee, I propose the adoption of these reports and the recommendations contained therein. [Applause] As there is no objection, the reports and recommendations are adopted. [Applause] On matters related to the International Centre for Settlement of Investment Disputes, I ask Mr. Ajay Banga and Chair of ICSID Administrative Council to take the floor.
[Ajay Banga] Thank you very much. The Annual Meeting of the Exit Administrative Council is now open. Ms. Mercy Tembon will introduce the items for consideration by the Council. [Mercy Tembon] Thank you, Chair. There are two items on the exit agenda this year that call for the adoption of resolutions by the Council. First, to approve the 2023 exit annual report, and second, to adopt the Administrative Budget for fiscal year 2024. The draft resolutions have been distributed to members earlier. It is proposed that the draft resolutions on the ICSID 2023 Annual Report and the ICSID Administrative Budget for Fiscal Year 2024 be adopted.
[Ajay Banga] I take it that the two resolutions are adopted. The 2023 Annual Meeting of ICSID Administrative Council is adjourned. [Applause]
[Sergii Marchenko] I thank Mr. Banga. I would like to take this opportunity to thank the governors of the World Bank and the Fund for the honor to have served as a Chair of this joint session. And I thank you for your support and cooperation. Allow me also to express my deep appreciation to Mr. Banga, and Mrs. Georgieva for their leadership of our two institutions. I also appreciate the commitment of the staff of the World Bank and the Fund for carrying out the vital work of this institution. I would like to thank Ms. Tembon and Mr. Ogada, as well as the staff of the Secretariat of both institutions for the successful organization of the Meetings. I would also like to thank the two vice Chairs, the Governors for Singapore and South Africa. I wish to congratulate the governor for the Maldives, who has been selected to chair for the coming year. I wish all the Governors and Delegates fruitful and productive Meetings over the next few days and safe journey home after the completion of your work. look forward to seeing you next year in Washington, D.C. I will now ask you to please stand and allow our Guest of Honor to leave the hall first before you start exiting. I hereby adjourn this meeting for the 2023 Annual Meetings of the Boards of Governors and the IBRD, IDA, IFC, and MIGA, and the IMF. [Applause]
03:35 Remarks by Omar Kabbaj, Advisor to His Majesty the King Mohammed VI
18:14 Remarks by Sergii Marchenko, 2023 Annual Meetings Chairman and Minister of Finance of Ukraine
27:13 Remarks by Ajay Banga, President, World Bank Group
1:02:06 Remarks by Kristalina Georgieva, Managing Director, International Monetary Fund