Meke Okeke: Good morning everybody, and good day to those of you joining us virtually from different time zones around the world. My name is Meke Okeke. I'm the lead council for Global Knowledge and Research here at the World Bank. I'm very pleased to welcome you to the Law, Justice, and Development, LJD Week 2023, on behalf of the organizing team of this event. This is the third edition of the annual LJD Week and the first to be held in person since the outbreak of the COVID-19 pandemic. As you already know, the theme of this year's event is “Partnering for Impact, Enabling and Mobilizing the Private Sector for Sustainable Development.” As the saying goes, if you want to go fast, you go alone, but if you want to go far, you go with someone. The issue is no longer whether international development partners such as the public sector, multilateral development banks, international financial institutions, and the private sector should partner, but how they should partner. The goal of this conference is therefore not only to discuss ideas, but also, to discuss how to implement those ideas. We are very excited about these three days of sharing knowledge, exchanging ideas, and fostering partnerships. As you will see from the agenda, the format of this year's event is a bit different. In the past, we used to have two or three parallel sessions, which meant that a good many of you could not attend some of the sessions of interest because they could not be at two or three places at the same time. This year we have made sure that no one will have to deal with such a trilemma or dilemma. Instead of parallel sessions, we will have only plenary sessions. We hope you will enjoy the sessions. One important housekeeping note, because of the hybrid nature of this event, we intend to start on time for every session because people will be joining us virtually. Another is that for fire and safety reasons, no one should be standing around this room. We have an overflow room, MC2800, and we have colleagues around that might take you there when we have an overflow. To kick off the event, I'm very pleased to introduce the host of LJD Week 2023, Christopher Stephens, Senior Vice President and Group General Council of the World Bank to give his opening remarks. Chris, the podium is all yours.

Christopher Stephens: Thank you, Meke. Thank you everyone, and it's my great pleasure on behalf of the World Bank Group to welcome all of you to the LJD Week 2023. We've worked together with our colleagues across the World Bank, our development partners, international organizations, academics, civil society, and the private sector to deliver to you some of the most prominent thinkers, leaders and doers in the international development. We'll discuss with you some of the challenges faced and the urgencies faced by the world in the development agenda these days, particularly as they result from pandemic crises and the particular needs of countries and vulnerable people. The renewed mission of the World Bank is the eradication of poverty on a livable planet. We're enhancing our financial capacity to deliver more and better results, outcomes, solutions and to do so at scale. We're thinking more broadly to support the strengthening of national systems and policies and capacity to meet the sustainable development goals, as well as the challenges brought on by economic strains, pandemics, food crises, and the challenges of fragility, violence and conflict. We'll try to produce better and more effective and resilient outcomes working together with partners like all of you. As partners it's critical, as Meke indicated, that we identify solutions together and harness our collective resources and knowledge and energies, and deliver better, more coordinated, and ultimately, more effective results on the ground. Throughout our discussions, we'll be emphasizing the role of the rule of law in development. The rule of law as an ecosystem of legislation and laws and the institutions of the regulators and judiciaries that can implement and apply those laws and regulations fairly, effectively, predictably, transparently and ethically, the rule of law as an indispensable part of the development agenda and the critical link between the policy agenda and the policy dialogue and the results on the ground. We'll be focusing from the outside in to deliver more effective solutions identified by our client countries and private sector partners in the achievement of their goals and our common objectives. This effort is going to require trillions of dollars of investment well beyond the capacity of our enhanced financial capacity and all of the official development assistance that our generous members might provide. It's going to require a substantially scaled up engagement in investment of the private sector, which is why we have themed this conference, “Partnering for Impact: the Enabling and Engagement of the Private Sector in the Development Agenda.” We'll consider how laws and regulatory frameworks will facilitate the development agenda and the engagement of the private sector by creating that predictability and minimizing the risk of private sector investment. We'll discuss how judiciaries and regulatory agencies can improve their efficiency and effectiveness to apply laws and regulations more efficiently in order to instill investor confidence, reduce risk, and facilitate that investment. And we'll discuss the role of MDBs, international organizations and our other development partners on their role in enhancing the role of law in development. So, we look forward to working with you over these next few days on the exchange of ideas and hope we'll inspire some dialogue and further solutions that we might affect together to deliver on our vital mission to eradicate poverty on a livable planet. I'm also honored to be able to turn things over now to our next segment on the exchange of ideas between World Bank President, Ajay Banga, and our Deputy General Counsel, Sheila Musiime, who is remotely... I think Ajay is on his way to Singapore, but he wanted to make sure that he could participate in kicking off this event so that we can frame our discussions around some of the critical ideas on the multi-development landscape today. So, Ajay joins us from New York and Sheila is over at the studio. Thank you both for joining us. President Banga, thank you. And Sheila, over to you.

Sheila Braka Musiime: Thank you, Chris. Hi everyone, my name is Sheila Braka Musiime and I'm delighted. Welcome, Ajay to a conversation on unlocking private finance for the future. Our time is short and we have a lot of ground to cover. So let me ask you the first question, Ajay, let's talk about the current landscape, you are six months in at this job, how would you characterize the broader context in which the World Bank is operating? What do you see as the main challenges the World Bank must address?

Ajay Banga: Yes, thank you very much Sheila, and I'm sorry I can't be with you all in person, but I am headed off to Singapore as Chris just mentioned. The question's a great one. I would say from the time that I became a nominee and started traveling, I had a chance to visit about 93 different sets of countries in different ways and met civil society and some asset managers and operators in various parts of the private sector. And between then and now, all those meetings have led to a clarity around two or three things. And the first one is that we don't have the luxury of dealing with separate little neat compartmentalized boxes of problems, thinking that we can solve poverty, separately from shared prosperity, separately from climate change, separately from fragility, conflict and violence, separately from food insecurity, separately from pandemics, these don't unfortunately operate in separate neat boxes. And so, the intertwined nature of these crises where they feed off each other, and you can see that happening and unfolding even now in the tragic war in the Middle East, you saw that over the last couple of years with the war in Ukraine and all the conflicts in Africa that have been going on for a while, the pandemic, climate issues, water availability, these are all intertwined with poverty. And trying to segregate them is not going to work easily; and therefore, you have to amend the vision of the Bank to not only focus on poverty and sharing prosperity, but on getting engaged and involved with the intertwined nature of these crises. That's one big first learning. The second one has been the growing mistrust, and I use that word carefully, between the Global South and the Global North. And what I mean by that is that the developing world feels that the manner in which development has worked thus far, is now the consequences of that heavy emissions, heavy growth is now being borne by them, those who contribute the least to it being one example. But then they also feel that the rules of energy access don't apply equally to them. So, if you were to go to Africa, and there are 600 million people without any form of energy access and there's over a billion people in the world, billion and a half or close to it, with intermittent forms of energy access, and they feel that they're being told that they cannot use natural gas as a transition to getting energy is a challenge for them. Now remember, there's good arguments on both sides. I'm not getting into that right now, I'm just telling you what I saw and heard. And then, of course, they feel that the reconstruction of Ukraine, when it does come about, as well as now for that matter, what will be required is a heavy injection of capital into Palestine and Gaza one day when this war comes to an end, all this will take away from their ability to do the right thing for their citizens. And so, there is a fear and a concern that they will not get a chance or a fair shake at the till. So that leads to a growing distrust and a gap between them. And I think what I'm seeing the Bank as an institution do, and need to do, is its role is even more critical, it cannot do it alone, because there's not enough money in the Bank's coffers or in the coffers of governments, so you need the right partnerships and so on. But at the end of the day, we are dealing with a far more complicated world with these crises that are intertwined and with this mistrust than we were in the past. That to me is the real context of it.

Sheila Braka Musiime: Ajay, you were clearly mindful of this dynamic when you walked into the Bank, these intertwined challenges, the mistrust between the Global North and the Global South. One of the first things that you did was to try and reorient this 78-year-old institution with a new vision statement. This is to create a world free of poverty on a livable planet, and I do hope all our guests in the room who are from several multilateral development banks, IFIs, government have walked through our front door and see this new vision and mission right there, which inspires us each day to remember what we are working towards. But what are you trying to achieve with this new mission and vision?

Ajay Banga: I think the first thing is that to move past poverty and not forget that eradicating poverty, eradicating inequality is a mission-critical issue for humanity, forget just the Bank, for all of us. Everybody deserves a fair opportunity in their life to lead it to the fullness of what they're capable. And to me; therefore, you can't get away from that issue of inequality. Inequality to me is a problem that gets manifested in education, in health access, in financial access and opportunity, but inequality is reflected in the way genders are treated, it's reflected in the way ethnicity is handled, it's reflected in the way religious differences, sexual orientation differences, or frankly just your bad luck to be born on the wrong side of the tracks are handled. And to me; therefore, inequality has to be worked really hard on. And that's why the eradication of poverty is part of the first part of that vision. The problem, as I said, is you can't do that without the other intertwined challenges. The idea of introducing a livable planet is that if you cannot breathe clean air, if you cannot drink clean water, what kind of a life do you actually have? If you basically spend your life on the run, as a refugee, today, refugees are in a refugee mindset, on the average, for 16 years at a time. From the time they start thinking of leaving their home to take dangerous journeys to go elsewhere and live a life that is still very difficult to the time they actually settle down, on the average it's 16 years, that's a lifetime. You will have children, parents will die, kids will go to school. A whole life goes by in those 16 years. If you're unsettled for those 16 years, that's not a productive individual in society. It's really hard for them. And so, I think you have to realize the fact that a livable planet, meaning a planet that is worth living in that gives people the right of a good life is very important. That's the idea of merging those two into one vision statement so we can expand the aperture by which the Bank looks at a challenge and then tries to organize itself to actually fight those challenges in this fuller holistic context. That's the first thing. The second thing we've done is to specifically incorporate the needs of women and young people. That does not mean that we don't appreciate other smaller marginalized issues and communities, don't get me wrong, they're all important. Remember, we start with removing inequality caused by different biases, but the fact of picking women, first of all, is half the population is women. And the reality of even the developed world is that women do not get all the opportunities that they deserve to get. In fact, I would argue that if they were to get, they would make the world a better place. And therefore, to me, trying to ignore that in the developing world is actually not an appropriate thing to do. I want to bring the cause of giving women the right and opportunity to win and succeed and lead good lives, important for women and girls, therefore, an important part of our mission. The second part of that is young people, the Global South, which is where we are focused in terms of our developmental efforts has a very large percentage of its population in young people. The world often speaks to that as a demographic dividend in the sense that as that goes through the pipe, it'll lead to greater productivity, greater jobs and so on and so forth. That only works if these young people actually have quality of life when they're growing up, meaning clean air, clean water, education, health, that kind of thing. And then, once they're grown up, they must get access to jobs. Jobs are what gives them dignity. Jobs are what give them a desire to live and work every day. And jobs are what keep them socially correctly active. If you don't do that, you run the risk of demographic challenges, not demographic dividends. And so, in our revised vision and mission, we're trying to broaden the approach to include the idea of a livable planet beyond poverty and inequality, but we are also trying to ensure that women and young people get the right focus from the Bank and its efforts.

Sheila Braka Musiime: Now all those really resonate and these are issues we are hoping to cover over the next few days to try and unpack how that means in the whole rule of law sector. But just going back to what you've been talking about for the last few months, and particularly at the Annual Meetings in the brilliant speech that you gave, you talked about a better Bank. To be able to deliver on this, you talked about a better Bank. You talked about fixing the plumbing, and I think all those in the room who work for governments or who work for MDBs can kind of identify with that. But I just want to drill down a little bit, what does that mean for us here at the World Bank? How do you see that and how do you see that fixing the plumbing contributing to driving change?

Ajay Banga: So, the idea of the better bank and fixing the plumbing is all intertwined. In my way of thinking, these challenges are now so big and so complex that all of us in this room, multilateral banks, governments, the private sector, we're going to have to play at the top of our game if they're going to be able to move the needle on the level of issues they are facing. I have optimism about it, don't get me wrong. I believe it can be done, but I believe it has to be done the right way. One of the first things you have to do is to make sure that the Bank, the World Bank, operates in the best possible way that it can. And what I mean by that is everything ranging from efficiency and effectiveness, meaning it takes us 27 months on the average from the time a project starts getting worked upon to the time that the first dollar gets disbursed. It could take up to 10 years, of course, for a project to be fully active and its full results and outcomes to be visible. But in those 27 months at the beginning, there are many steps that we've got to look at again and see whether we in collaboration with the governments we are working with and the other partners we're working with, can we reduce that timeframe by just a third to start with. It's harder in some cases from the time the project is approved to the time the first dollar goes because there you've got governments and parliaments involved, but that doesn't mean that it's a topic we must not take on, we must. Because at the end of the day, development delayed is development denied and 27 months is a very long time. And so, trying to get that to work better by operating differently ourselves is the first starting point of this. A second point in there is the idea of outcomes rather than input. So yes, we need to measure dollars disbursed and number of projects financed in different things, but I think outcomes as in number of girls who went to school, people who got a better job because of the skilling institute we helped to open or the area around the bus rapid transit system that developed better because of that BRT or carbon emissions avoided, that kind of thing to me is equally important; and therefore, losing sight of the outcome measurement would not be a good move. I want to get us to that along with the other MDBs and a number of things that are in the process on that front. A third topic of that type has to do with partnerships. As I said right at the beginning, I don't think there's enough money or effort that can be done out of just us or the other MDBs or governments. We need the private sector. We need its energy, we need its capital, we need its innovation, we need its people, its technology to come to the party, particularly when there is a rational business model that they can work upon. Can the World Bank and other institutions help to reduce some of the risk that the private sector is not trained to handle or incapable of factoring into their way of thinking about their return on capital, things that are outside of their control in such a way that prevents them from investing in these markets even when the technology and scale is ready? And so, getting to that and trying to see ourselves as the builder of the rail-track on which the private sector can run a railroad is kind of important. And so, thinking of these various steps on how we can be better partners with our other multilateral development banks, the kind of thing we're doing with the Inter-American Development Bank with Ilan [Goldfajn] or with the Islamic Development Bank and hopefully soon the African Development Bank, the AAIB, these are all partners who we need to work much closer with. And I think the last part I'd touch on is the knowledge bank. I believe our institution is both a money bank and a knowledge bank. A lot of countries really appreciate us not just for the money we provide, that's important, particularly if you're a poorer country, the IDA grants and concessional financing, longer term financing is very helpful, but the reality is we are a knowledge bank as well, and I think we're going to organize our knowledge bank into these verticals of people, prosperity, planet, infrastructure and digital. These will then apply across where we work and we'll measure outcomes across all of these and put that into our revised corporate scorecard. Our current corporate scorecard has 153 items in it, and anybody in the private sector will tell you that that's about 130 too many. So, we're going to try and come down to 20 odd so we can actually focus on outcomes in that corporate scorecard that come from these five knowledge verticals working closely and tightly with the implementation teams in the field, whether they be IDA, IBRD, IFC or MIGA or ICSID teams, and that's the kind of vision of the World Bank, if it’s a better Bank that I want to get out there. The reason I talk about plumbing, and then I'm going to stop discussing this, is that the only way to explain that to people is that what I don't want to do is to build another house on top of a dysfunctional plumbing, meaning plumbing, which is either leaking or the taps don't work or the pipes are not working. We've got to fix that, because you fix it well and you can build an amazing house on top of these and I want to make sure that some of the inefficiencies and ineffectiveness that has crept into our system and across the multilateral system is engaged in and discussed and tried to be fixed so we can make ourselves all much more purpose-fit for these challenges that we're discussing.

Sheila Braka Musiime: It's great and it just segues right into what we are trying to do this week, Ajay. This conference that we've convened is really about partnering for impact. It's about enabling and mobilizing the private sector. And so, we also have in the room private sector partners, general councils from different private sector companies and entities. And so, I just want to segue into that and to keep your thoughts flowing on this whole topic of partnering and the private sector. You've talked about the challenges that are immense, climate change, poverty, inequality, fragility, and analysts have put a cost to this and they're talking about a trillion US dollars, and that's a trillion each and every year, it sounds mind-boggling. It's really clear that we can't do this alone and you have big plans obviously, and we are all with you in this, to make sure that development in emerging markets can happen, but really, Ajay, our balance sheet is limited and you're the first to acknowledge that, we'll need help from the private sector as we will from other public sector institutions. And so, really, it's critical that we align ourselves to what the private sector wants and you've come from a private sector background and you know what that can look like. I want you to try and help us as we get into this week to try and see how we can maximize the impact of all these initiatives that we are starting together as the World Bank. How can we bring together the private sector and align them with this vision and mission?

Ajay Banga: First of all, I want to make sure that you don't get the impression that it's only about the private sector. I think they're a key part of this and that we don't end up with thinking that the trillions that are required for everything, which are numbers put out by various bodies, should not frighten us because I think that leads to the wrong answers. First of all, not everything requires trillions. To give you an example in climate, to me methane is a very big issue. Methane, the emissions of methane from say farming from rice patty can be altered fairly substantially, close to eight or nine percent of methane emissions in the world come from that, and that can be reduced by 40-odd percent by following different rice growing practices, which require less amount of water to be flooding the field all the time through the period, you need periodic irrigation and so on. These are not as expensive as say, setting up capacity in solar and wind energy, which is where the trillion start being spoken about. I think we shouldn't lose sight of the fact that many things can be done with lower resources as well and they must be done, and we shouldn't only focus on the big dollars and the big zeros at the end of every number. That's kind of important. The second part is I do not believe that this institution can be a good partner for the private sector and other MDBs without also becoming a bigger Bank, once we get through the better Bank stage. These are very interconnected and important issues, and the bigger Bank not only requires adequacy of capital from current things that we're doing with hybrid and portfolio guarantees and the like, but eventually will require capital increases. We are finally the voice of the ambition of our shareholders and the ambition of our shareholders needs to be reflected in the way in which the Bank gets capitalized for the challenges we see ahead. Even to be a good partner for the private sector to help manage some of the risks for the political risks, or foreign exchange risks or other risks that they feel are outside their ambit of influence, even to do that would require us to have a stronger balance sheet than we would have today to meet the aspirations they have. think both these points are important. Don't only think of dollars and don't only think of the private sector, think also us becoming a bigger Bank and tackling the things that don't always require large sums of money. Now, the point about lots of sources of money as well, there's subsidies we could look at. There's a trillion plus dollars of subsidies that go out into the world every year on fossil fuels and agriculture and fisheries, and if you look at the harmful environmental impact of some of those, it adds up to six-odd trillion in a year. That's 7.25 trillion a year. I'm not saying you divert all of that. A lot of those subsidies are very important for people at the lower end of the spectrum on earnings, so don't do that, but you can repurpose them. The European Union repurposed 60 billion of the subsidies that used to go into incremental fertilizer use with all the drain off and problems associated, the same 60 billion goes to farmers to encourage them to reduce fertilizing. That's an intelligent way to repurpose subsidies in a smart way to change behavior and to change environmental impact. There are many ways to think about subsidies. The wrong way to think about them is we can't change them. In the same way, there is much we can do with voluntary carbon markets. Yes, there's criticism about greenwashing and the like, that is fair, we need to do it better, but not doing it is also not an answer because eventually hoping that somehow taxes will work, where rich countries will tax their citizens to send money to the Global South far away to change something there is not a likely circumstance in democracies; and therefore, we're going to have to find a way to create voluntary movements of money, one of the best ways of doing that is to continue to invest in voluntary carbon markets and ensure that they're done in a way that avoids criticism and in fact, is seen as constructive over the years to come. Backing away from them, being scared of doing them would also be a mistake. Doing them the right way and improving all the time is the only correct way to approach that topic. All those are important. And then there's the role of the private sector, which I know is what you want to get to. To me, that role is really important. As I said, most private sector investors, right now, if you ask someone, "Are you willing to invest in renewable energy projects in Indonesia?" There would be enough private sector investors, operators, as well as long-term asset managers who would consider that to be a relatively attractive thing to do. Solar and wind and geothermal and the like have now got proven technology, and proven technology at scale where the per unit cost of these technologies is lower than the per unit cost of fossil fuel. Yes, there is a longer gestation period, a higher capital investment and a time period required before those lines cross over. So, the question is can we reduce some of the risks that hold the private sector back from investing in that particular country to change and bend the arc of emissions and emission-heavy growth in the future? And I think there you come to political risk and regulatory risk. The first question there is, does the country have a clear roadmap on where it's going with renewable energy? A 10-year roadmap gives a lot of reassurance to investors. They understand it might change, but it shows vision and a purpose. You combine that; therefore, with the right regulatory policies on the ground that relate with tariff policy or the policy around those energies and the policy around transmission and distribution. Once you lay those out with the right approach for an investor to feel that there are legal protections in place to enable them to get the right recourse in the event of challenges, that changes a lot. And even then, they may have political risk attached to it. That's what MIGA and the MIGA guarantee system can help to do. Then there is the issue of foreign exchange risk, which is still a very difficult one. But if you're investing in dollars, euros and yen and your repayment in terms of being paid by utility, I'm still on renewable energy, is in local currency, clearly there is an issue there for you to hedge. In some countries, those hedges are available. In other countries, neither the depth nor width of the hedging market of those currencies is adequate to do so. So, the question is can we help create something which could help do that? TCX does some of this in frontier markets, but can TCX also expand its scale and size into other markets? And then how do you fund it? What do you fund it from? What should philanthropy dollars be contributing to? What should MDB dollars go to? What should government dollars go to? All of this aimed at not giving the private sector outsized returns but taking away the risk that they do not know how to manage because it's outside their ability to influence, control, operationalize, or succeed with. That's the kind of thing we need to get our head and mind wrapped around. That's what our private sector lab is trying to do. That's what IFC has been trying to do. We have much more to do together with others like IDB invest and the like, but there's a lot of work to be done in this space.

Sheila Braka Musiime: Clearly a lot of work. I think all through that response, it's really about partnerships. Private sector can't alone, we can't alone, governments can't alone, so it's really, really about partnerships. Let me bring it to the legal community, Ajay. We have a lot of colleagues from the legal community here in this room today, and I just want you to share some reflections on the role of the rule of law. How can it help us in this endeavor?

Ajay Banga: Yeah, well listen, this whole idea of regulatory policy and of clarity on the rule of what and how an investor knows what they're signing up for when they're investing, some degree of clarity there, that's where it helps. So, the rule of law is critical, policymaking combined with the right implementation of that policy so you can get recourse as an investor requires the partnership of policymakers and the legal system in a country. I think that's kind of what this can really be helpful too. In a way, it plays some of that role because of providing the ability to, if you get into a dispute with a sovereign, the ability to try and find a way to have a settlement there. There are similar bodies that do it with two private sector parties that get into disputes like my old association with the International Chamber of Commerce. But you need to be able to find a way for investors to feel that they have a sense of being able to address a challenge on what they were told they could take as the terms of a transaction when they entered. I think that's where the rule of law becomes really important. It's very reassuring to them. I do not believe that you can live in a fool's paradise and hope somehow that this will all change in every country in the world, it's not going to happen. Even policies don't change in every country in the world. It's a very long hard slog. I do believe that our knowledge bank and our legal team can be good partners for the other MDBs and the private sector in how we approach this challenge across countries because of bringing forward what kind of experiences we have where the right policies and the right legal structure can lead to increases in investment from the private sector in certain kinds of areas. Along with this, by the way, is the aspect of not every investment has to come from overseas. If you can build and develop local capital markets and local and domestic resources in the right way, that can be very helpful as well in creating the right investment atmosphere. Again, that requires policy and the rule of law to operate. So, it's not just overseas investors we are discussing, it's also domestic capital markets, domestic investments and domestic resource mobilization, all of which are facilitated by this partnership of policy and law.

Sheila Braka Musiime: Great. Ajay, you've been really generous with your time, but I have to ask you one last question. I mean I feel both the urgency as well as the optimism in what you've said. I just want to give you the opportunity to share, as you close today, what gives you hope and why should we feel hopeful?

Ajay Banga: I have two sources of hope. One has to do with the people at the Bank where I work. I believe that if you want to get development done, you need subject matter experts with the kind of experiences in complicated, difficult geographies that many people in this institution have had. I never ceased to be amazed when I travel and meet even young people in the institution with their knowledge, their dedication and their set of experiences that have brought them to the institution. That's an invaluable asset. It's a very important arrow in your quiver, and I believe that if you don't have the right teams, you can't succeed in such a difficult task. So that's one set of optimism. The credibility of the Bank to me that everybody talks about, our convening power and so on, is all connected to how well we enable these people to execute and do what they're capable of doing, hence the need for the efficiency and effectiveness, our people have to be allowed to do what they're capable of doing. The second part of my optimism has to do with the audience we are dealing with out there in the countries, and that's young people. As I started out by saying that young people are a large proportion in the Global South, I believe that it is their optimism, their dynamism, their desire for improvement, their hyperconnectivity, technology is enabling some of that, technology harnessed the right way can be the biggest asset multiplier for young people. So that to me, this young people technology combination is my second big source of optimism and I'm kind of hoping that these two things together make a magic mantra.

Sheila Braka Musiime: Brilliant. And we do have some young people here, some law students who also are attending this. I hope they do feel that your heart for young people. Ajay, thank you so much. Thank you for joining us. I've really enjoyed this conversation on unlocking private finance, on not just the challenges, but the opportunities and the reasons for hope that we have. You've really given us a lot to think about over the next few days that we have together here. And again, I just want to thank you for joining us and I wish you a safe and productive trip. Thank you.

Ajay Banga: Thank you, and thank you everybody for joining. Bye-Bye.

Sheila Braka Musiime: Over to joining with Chris and Stevan on stage to unpack Ajay's insightful and helpful comments on all it means for the agenda ahead.

Stevan Jackson: Well thank you, Ajay, and thank you Sheila. It's a fascinating conversation. I want to encourage everybody to follow us in social media and use the hashtag, #LJDWeek2023 and post your comments and questions. So, as Sheila said, Ajay made several essential points about unlocking finance for the future. Chris, the World Bank Vice Presidency, legal vice presidency is working across a wide range of areas to advance the rule of law and development. How does the World Bank determine which programs are needed in which countries and how would the Bank determine which law reforms are needed in those countries?

Christopher Stephens: Well, thank you Stevan and hello again everyone. I think to that point, it's very important to underscore that the World Bank doesn't determine, that we are country-led in our development agenda and it's very important that the country identifies for itself its development agenda and the priorities in which it pursues that agenda, and then we determine through dialogue with them what ways in which we can help them establish priorities, what ways we can engage, what are the roles for the Bank, other multilaterals, domestic resource mobilization, and the rest. For our part, we have to work through the Country Management Unit, or CMU, in the context of the regional vice presidency because they're the ones who are on the ground and have that dialogue and are charged with the responsibility of being most familiar with the needs of the country and their priorities. And so, they work together supported by the Equitable Growth and Finance Institutions Group, global practices, development and economics, and of course, the lawyers and others in the Bank to help make sure that we deliver that support to them. As we're suggesting now, better coordination and collaboration with development partners.

Stevan Jackson: Yes, and I appreciated Ajay mentioning that as well, that the MDBs and private sector can partner with your vice presidency. So, how specifically do or would lawyers advance the development agenda in the way Ajay noted?

Christopher Stephens: Well, I think there's an expansive role for lawyers. Obviously, we have the traditional role of making sure that our programming and the operations that we initiate comply with the articles and the rules in the country partnership framework. But increasingly, I think lawyers are perceived to have that range of experience. It may be the only department in these institutions that's engaged in the full arc of a project from its inception and concept, its embodiment and country partnership framework through implementation, disbursements, monitoring, compliance, post-disbursement and problems when they arise. And that gives us a perspective and an accumulation of knowledge that I think we can usefully deploy in moving the agenda forward, in programming generally and in other projects. But most importantly, I think lawyers can be involved in some of the law reforms work that strengthen institutions to mitigate risks and to advance the development agenda. They can be involved in capacity building both among government officials, government lawyers, regulators and judiciaries and in the creation of model laws or law reforms. We're working on some model law reforms, one is the Model Forest Act Initiative led by Justice Antonio Benjamin in Brazil, and organized by the Asian Development Bank with UNDP and others to try to design a model forest act that would set out the best way to preserve and manage forests, which is an essential component to managing carbon sinks and otherwise preserving forests for future generations in the face of the threat of massive deforestation, and yet the continuing need for merchants to continue to use the forest as they have for thousands of years. And so, there's that sensitive balance. Lawyers can do surveys and find out what are the trends and what are the successes, and try to bring that knowledge together, together with partners to put out a model act. We can do that in gender, in agriculture, the energy transition not only has to be an energy transition, but it has to be a just energy transition because the transition can obviously be very disruptive to people and we need to make sure that their lives and the impact on them is looked after, regulated and then managed appropriately and fairly. So, there's almost an infinite capacity for lawyers' engagement in the development agenda.

Stevan Jackson: Sure. I would like to bring Sheila into the conversation too in a minute, but I want to know, how can you measure success of a law reform or capacity building with technical assistance or advisory service?

Christopher Stephens: Well, it's tough because as challenging as Ajay just mentioned, with respect to traditional operations, infrastructure, energy, agriculture, where we might have a 27-month development timeline in 10 years before we can see and measure impact on the ground, law reforms can be at least as long, including where... It’s not the change you're seeking to affect is not just a question of changing the rules and the laws, but changing mindsets and the way people have behaved or their cultural approaches to issues, particularly on human capital, gender equality, engagement. It takes a more holistic and longer timeline to be able to get that done. But we start with programs that are supported by sound economic and evidence-based data analytics so that we have specific goals in mind and design a program, just as we do for operations, that is targeted to achieve specifically identified and measurable outcomes. So that at the end of that, when the project is implemented, we can go back and assess whether or not those outcomes were actually achieved. In part because we're fiduciaries, we're spending other people's money, taxpayer's money, and for you here, it's your money and we have an obligation to invest it responsibly. And so, we have to have measurable outcomes to make sure we're doing the job properly and prudently. And it’s the key now I think is the extent to which we can increasingly work with our knowledge, and not just the knowledge that Ajay referred to, but the data analytics that I mentioned earlier. Two important respects are that our development economics group under our Chief Economist generates a number of very important reports and diagnoses. One is the “Country Climate and Development Report” or CCDRs. So, for each country, they're producing a report that analyzes the progress that each country is making towards its own climate development plans and the extent to which it's falling short. And in many cases, the shortfalls are attributable to deficits in regulation, inefficiencies in judicial frameworks or inadequacy in laws that are hindering their development. And so, there's an opportunity for lawyers to come in and provide technical assistance and advisory services to help countries achieve their own country development and climate development programs. Another example, and there are many, is “Women, Business and the Law,” which the Development Economics Group has put out for many years. And this report assesses for every country where it stands across eight key metrics of engaging women in the economy and the ways in which each country is ranked and any deficits or shortfalls that could be enhanced to improve their ranking through law reforms or the efficacy of the enforcement of laws. It's also a good example of the changing of mindsets. Every country who's a member of the World Bank Group appoints a principal liaison to the Bank. And for most countries it's the Minister of Finance. The Minister of Finance has an enormous task and many, many things on her agenda. She's got agriculture, and infrastructure, energy, healthcare, education. How do you elevate the need for investment of human capital, the achievement of the engagement of women in the economy? Beyond the moral and human rights drivers, it's helpful to have an economic imperative to give a more granular sense of the benefits to the economy and job creation by engaging women in the economy. So those are just a couple of examples of the way in which not only lawyers can engage, but working with other departments and the CMUs and the vice presidencies, development, economics and global practices, and partners.

Stevan Jackson: Sure. And the CCDRs are really important and the “Women, Business and the Law” is a very, not only informative report, but very important to our work. Sheila, you're the Deputy GC for Operations. Do you have any reflections on how we measure the success of law reforms and capacity building? Anything you want to add to what Chris said?

Sheila Braka Musiime: Sure. I mean, Chris has covered it very well and we've struggled over the years as development practitioners to try and demonstrate the impact that legal judiciary reform projects bring. A lot has to do with data, but a lot also has to do with power structures in countries, and I think that's where partnerships are very critical here. A roads project, people see the road, a judicial project, they'll see the court and they'll be happy, but the impact that it has on the lives of that young woman or that girl is not as obvious. And so, we really have to shift the way we think about measuring results when it comes to legal and judiciary reform projects. We want to do that together in partnership with not just our colleagues within the Bank Group who do this work on a daily basis, but also, with legal teams across the world, and I'm also eager to hear how they're doing this, because when you don't have results, then the next project is not guaranteed and the Minister of Finance is impatient and doesn't think this is something that is worth doing. But Stevan, it really leads us to this whole issue about systems versus projects, and I think that's really, really critical. We've typically been institutions that go to do projects and measure the results of a project and leave. But take for instance the environment and social sector. We are shifting from doing environment and social safeguards in a project to really looking at a country's systems holistically and looking at the laws, looking at the implementation, and then looking at the results. I think that's how we've got to shift the mindset of all of us to think about law reform and how we make impact in countries.

Stevan Jackson: So, a lot of this seems to relate to E&S. So, Chris, I'll come back to you. How has the role of environmental and social safeguards evolved?

Christopher Stephens: Well, I think, as Sheila described, in the '80s and '90s, for those of you old enough to, or who are not embarrassed enough to remember how long you've been around, the environmental and social standards were often seen to be burdensome requirements imposed by lenders like the multilateral organizations in projects. A good reason back then why many of our private sector legal counsel were advising their clients to avoid institutions like this, but they were a very project specific. If you wanted to borrow from an MDB, you would have to comply with their environmental and social standards. And to that extent, those standards would be applied in that project, as Sheila mentioned. Better yet, if we can extend and expand the application of higher and better environmental and social standards across the country so that they're applying them universally and ultimately perhaps even embedded in their legal framework for general applicability. And so, we're working with other development partners, and have been for many years, to try to see how we can do that. One of the problems that we create though is because there's an absence of harmonization or even insufficient coordination that the poor borrower is trying to deal with different standards from different institutions and at the same time suffering from limited capacity. So, the borrower can't really perceive where and how these differences arise because they may look very similar from the borrower's perspective, but yet the borrower's got two sets of compliance requirements, two sets of reporting requirements, and we're making the borrower's life very difficult. And yet, harmonization hasn't been successful largely across the board. There's a lot more we can do to make this more effective. And so, that I think is going to be the future, is how we can get together and try to determine some set of more harmonization, and not just environmental and social, but in procurement, anti-corruption and other standards, particularly as the countries suffer some of the urgencies they have, we need to get the money out there, we need to work together, but working together doesn't mean delivering more inconsistent and burdensome requirements on clients.

Stevan Jackson: Sheila and Chris, how specifically would the World Bank work with development partners in these collaborative efforts as Ajay and you've been talking about?

Christopher Stephens: Well, I'll let Sheila speak, but my thoughts would be, conferences like these are nice to get together and network and brainstorm and hear lots of nice thoughts from lots of nice and smart people, whenever they come up in the agenda, in the latter parts of the agenda, but seriously to be able to listen to each other and really think about how we can work together and deliver respective knowledge and systems and expertise more efficiently; and therefore, more effectively. Because if we bring a confusing set of objectives and requirements to the market, we're going to not only confuse and burden clients, we're going to be working against their own ability to achieve their development agenda and ultimately our own goals. So, we have to figure out a way to work together to bring better solutions to clients. I think part of that is capacity building. We can do capacity building with the government officials, with judiciaries. We can do work with judiciaries to further their own, most of them have strategic agendas and plans about their own efficiencies and effectiveness. We can help with gap analyses and determining what roles in facilitating their journey each of us might play. So, the partnership part of the theme of this Group I think is very important.

Stevan Jackson: Sheila, what say you?

Sheila Braka Musiime: Yeah, so conferences like this are incredible, but I want to say also that it doesn't just stop here. So many of the colleagues in the room have been involved with each other in different ways. Some of them have been informal networks of lawyers across MDBs, and this is incredibly useful. And a shout-out to a [inaudible], which we just joined a few months ago, bringing together legal practitioners from across our institutions to discuss topics of interest. But we've also worked together, for instance, in the establishment of AAIB and that partnership that we had to align our policies and procedures to make sure, as Chris says, when we show up in a country, we are not each coming with our thick policies, but we actually have a very aligned way of working. And we are trying to do that with more and more MDBs across the board, and not just in specific projects. But talking about the things that happen after LJD Week. We also have the Global Forum and The Compact and Forum, which is a very useful tool to keep on bringing people together, practitioners around the world on specific topics, to dive deeper outside this week into what needs to shift. That all will inform then the projects that we do, the operations that we do. This link between knowledge and lending, I think just has to be very seamless, and that's what we want to promote.

Christopher Stephens: I think that's very important, just to underscore what Sheila said about the value, not only of the lawyers who are in other institutions, but private sector lawyers who might engage through their law societies, through The Compact and Forum, through the Global Forum on Law, Justice and Development, these are great organizations to try to harness those energies and knowledge and to work with us to figure out the best way in which we can work together with our contacts and ability to help on the ground defining the direction and the needs, then working with them to develop effective solutions, and then back to the CMU to deliver those into countries.

Stevan Jackson: Chris, I have a really important question for you. So, how specifically, and does the law matter for the private sector? Is this an urgent conversation that we must be having at this moment? What do you think about that?

Christopher Stephens: Sorry, I have to turn my ringer off, I think.

Stevan Jackson: I was worried about the same thing.

Christopher Stephens: My mother is telling me to speak more clearly.

Stevan Jackson: I'm sure my mom's probably called three times by now.

Christopher Stephens: I think there's a critical role for the link between the legal function and the private sector because the private sector needs to be familiar with the... It has to be able to identify the risks and then needs sufficient risk mitigation, as Ajay mentioned, in order to gain the confidence to make investments. In private sector investment, it's all about risks and rewards. It has to have an understanding of what those risks are, it doesn't have to eliminate them, but it needs to be able to mitigate them to an acceptable level of residual risk. And then, we need to know on the benefits side and the reward side that we have sufficient systems for capital markets, currency, repatriation, and then a judiciary and regulatory agencies that are going to enforce all this in a predictable way. Predictability is critical to build investor confidence and so these legal systems supported by the legal function, I think are critical to engaging the private sector. And that's what we mean by private sector enabling. We have to enable an investor friendly environment before the private sector can come in and do a proper assessment and invest its capital with some degree of certainty about that risk and the ability to earn a return.

Stevan Jackson: Sheila, is this an urgent conversation in your mind that needs to happen now? And what are your thoughts about it?

Sheila Braka Musiime: Absolutely, it's urgent. As Ajay said, these trillions are not going to be found in one place, we need the bigger Bank, but we also need the private sector. It's really urgent that we as legal practitioners are ahead of this conversation because it all boils down to those agreements, those understandings that are reached. I think the worst thing that can happen for us is that decisions are made at a top level on how to partner without the lawyers really figuring out what this actually means in terms of rights and responsibilities and in terms of the history of our organizations and where our organizations should go. So, it is critically urgent that we discuss this now before the conversation goes too far, then we have to try and catch up. I just want to emphasize the urgency of this.

Stevan Jackson: I believe you said, Sheila, that there are a lot of general counsels both at MDBs, but also in the private sector, and I think you mentioned this as well, so I have to ask, what are the top two or three legal considerations, GCs or lawyers working in the private sector must consider for an investment to be viable or bankable? And how can they work with the World Bank and other MDBs in this endeavor? Sheila? Sheila, you go first.

Sheila Braka Musiime: I'm happy to go first. I think I'll just reiterate that whole issue of risk and risk sharing. We're going into highly fragile environments, this is where our focus is as an institution, and even in our middle income countries, there are high pockets of fragility. We're seeing that now in the world right now, the big wars that are being fought are not necessarily in our poorest countries, but also in our middle-income countries. And so, how to identify the risks, not overblow them, but also not underplay them and agree on how this risk sharing will happen. Some of this is going to need MDBs like ours to shoulder some of the risk, but there's going to be some risk that needs to be shouldered by the private sector. So, we have players like MIGA, and I believe Aradhana [Kumar-Capoor] should be in the room. We have IFC, Ramit [Nagpal] should be in the room who are dealing with this on a daily basis and can help us in how we identify those risks and how we manage them across the board.

Stevan Jackson: So, Chris, what are your thoughts?

Christopher Stephens: Yeah, I think that's right and I think too, we don't have to work isolation. To bang the old drum, there's so many ideas from here in this room and among our development partners that we would be foolish to try to invent the wheel in each institution or in each circumstance. We have to do a better job working with each other. The feedback that we get in the field, quite frankly, is that the World Bank has not always been as collaborative and effective a partner as it could be. And so, we need to change and we need to look more ambitiously and collaboratively at our partners and try to really draw them out. And for general counsels in private companies who are increasingly trying to encourage their lawyers to get involved in community, support and things of this nature, in my experience, lawyers that work on these reform efforts, lawmaking, capacity building, look back on their career and think that these projects were the most rewarding things that they'd worked on in their career. So, I would encourage more people to get involved in this kind of work for their own edification and enjoyment. I think it can be inspiring, it's invigorating, and it enables the lawyers to step to the fore and engage directly to bring their skills and knowledge to bear in a really needed and vitally urgent way.

Stevan Jackson: I also want to end on a high note as we bring this session one to a close. I'm going to ask you first Chris, and then Sheila. What gives you hope? The needs are massive, the challenges are enormous, what gives you hope that we could hopefully turn a corner?

Christopher Stephens: For me, I think it's the energy that we draw from events like this, and I hope that we see this as an opportunity to network with each other, but we really use this opportunity to inspire each other and to create that energy. I hope too then when it comes time to adjourn, we don't just go back to our desks and forget what we've heard over these two days until we reconvene next year and say much of the same thing, but that we actually find ways to work together to actually deliver. Because I think achieving some of these results is going to just further inspire and energize us. You get into a virtuous cycle where we'll end up being more effective in delivery. And really the world is not in a good state now, and particularly in the developing world and so this really is the time to step up and shed some of the old concerns we might have about the risks of compromising in collaboration or working in silos or fiefdoms and really focusing on the goal of delivering.

Stevan Jackson: Sheila, you have the last word. What gives you hope?

Sheila Braka Musiime: I echo everything Chris said, but I want to also add, and drawing on what Ajay said, it really is the people and the staff that we work with, the staff who are behind the scenes also who've put up this conference. It's been a lot of work and who work every day both in the field, we have several lawyers who are based in country offices and those who are based in headquarters at different levels. It's not just Chris, myself, the leadership of the legal team, it's every single person is contributing blood, sweat, and tears to this mission. That gives me a lot of hope and energy. And again, borrowing from Ajay, it's young people, it's women. I've been privileged, as has Chris to visit our country offices and visit staff and projects and you see the impact that is being made on the ground to the lives of people. And that does also renew our energy. We come back and we wake up every morning knowing that we're working for these people.

Stevan Jackson: Thank you for joining us for session one on Unlocking Private Finance for the Future. Please join us on the LJD Week 2023 session at 10:30. There'll be a short coffee break. And for the next session titled, “Financing Energy Transition, Crowding in the Next Generation of Private Investment.” We look forward to seeing you there, so thank you for joining us.

Christopher Stephens: Thank you.

Session 2 | Financing Energy Transition: Crowding in The Next Generation of Private Investment 

Session 3 | Innovative Solutions to Meet Development Finance Needs

Session 4 | Catalyzing Private Investment for Sustainable Infrastructure: The Role for MDBs

Session 6 | Role of Gender in the Judiciary

Session 7 | Leveraging Finance for Climate Change

Session 8 | The Role of Data in Enabling and Mobilizing the Private Sector

Session 9 | Law, Justice, and Development: Judges’ Perspectives

Session 10 | Partnering for Impact: General Counsel Roundtable