[Lively music]
[Master of Ceremonies]
Good afternoon, and welcome to “Jobs – The Path to Prosperity.” Please, welcome to the stage our host for today’s program, Julia Chatterley.
[Lively music]
[Julia Chatterley]
Hello, everyone, and thank you for joining us in the room and online for the World Bank Group Spring Meetings event, “Jobs – The Path to Prosperity.” I’m Julia Chatterley. First and foremost, we would love to hear from you, so please share your thoughts at any time using the hashtag #WBGMeetings. We also have plenty of experts in multiple languages ready to answer your questions online at live.worldbank.org. You can also submit your questions to us in the live chat or via the QR codes that are in your programs that were on your seats. Why jobs and why now? Well, over the next decade, 1.2 billion young people will reach working age across developing and emerging markets. The problem is the World Bank believes that just 420 million jobs will be created during that period. So, as you can see, that is a huge gap. The challenge is ensuring that these young people have access to jobs in the future, but also in the communities that they call home. Failure, of course, to close that gap will have stark consequences for all. And yet, if done right, we can collectively help deliver those jobs. We can build strong economies. We can increase demand, for goods and services, and at the same time, address the root causes of conflict and fragility. Now, recognizing the enormity of the challenge, the World Bank Group has made job creation core to everything it does. Today is a jobs-focused tale in three acts. Act one, we’ll hear from a number of leaders, including a young lawyer, fighting for change. Act two, we’ll be picking the brains of policymakers and investors on what’s required for job creation and ultimately for economies to thrive. Act three, we have President Tharman Shanmugaratnam from Singapore, we have former Chilean President, Michelle Bachelet, and our very own World Bank Group President, Ajay Banga, in conversation with young people from around the world. Now, in our first act, you’re going to hear three stories, and we begin with Nonkululeko Nyembezi, Chair of Standard Bank Group. The second, Anthony Tan, Group CEO and Co-Founder of the tech giant, Grab. And the third, Christina Williams, a lawyer from Jamaica. So please, let’s begin, and join me in welcoming Nonkululeko Nyembezi. Nice to meet you.
[Nonkululeko Nyembezi]
Good afternoon, everyone. My name is Nonkululeko Nyembezi. I’m South African, and I currently chair the Board of the Standard Bank Group. It is an absolute joy and pleasure to be here and spend a few minutes with you. For a nice change for a topic like this, I’m going to tell you a success story. This is a story that will touch on all three pillars of the World Bank’s jobs’ agenda, namely, foundational infrastructure, a more predictable regulatory and business environment, and most importantly, from where I stand, a dynamic private sector. Now, I know most of you have heard about South Africa, and what you may think is that my country’s main exports are movie and music stars, maybe a lot of, I don’t know, lovely wine, a fine glass of Pinotage. But the actual truth is our exports are rather boring. We mainly export precious, industrial, and energy minerals as well as manufactured goods. That should give you a clue that this economy depends heavily on reliable and cheap electricity, which we’ve been able to do and generate for decades since the ‘60s. But just recently, our sole public utility deteriorated to a point where, in fact, electricity in South Africa became anything but predictable. When I was CEO of ArcelorMittal South Africa, the largest steel producer on the African continent, we could literally be given just a few hours of warning of an impending blackout before it actually happened. And so, you can imagine the implications of running a steel manufacturing company under those conditions, or indeed, any company at all. So, what happened? Well, the country asked itself two but critical questions. The first one was the following: could we think of a smarter, more sustainable way to generate electricity? Secondly, we thought that we could, in fact, look at the endowments of the country: sun, wind. Could renewable sources provide an answer? Another aspect of South African society or economy is the fact that we have quite a well-developed private sector as well as deep financial markets. What could they bring to the party? Could they, in fact, help make the electricity sector more robust and efficient without breaking the bank? So, the government set about changing the country’s regulations, firstly, to introduce a renewable power program called rather awkwardly, what is it called again? The Renewable Energy Independent Power Producer program, awkward even to remember, let alone to say it, but actually hiding quite an elegant idea. This was that they would crowd in the private sector to generate electricity from renewable sources and sell that back to the grid, something that actually was not lawful at the time, hence the change of legislation. They also changed legislation to allow the government to procure from power producers using auctions that would prioritize the lowest cost producers, which can be quite tricky for a government in our particular part of the world, which I won’t go into right now. And third, but just as critical, to also put guarantees behind this program so that those very, very long-term purchase agreements had government guarantees sitting behind them to make the investments viable. The result? 13 years later for this program, we’ve seen in excess of 13 billion dollars flow into the program from the private sector. We have now over 6,000 megawatts of green power and counting. There’s more to come, in fact, to 2030. And all of this without taking even a penny or a cent, given where we are, from National Treasury, which you have to really say is rather remarkable and rather unusual. To keep all of that, South Africa today, in its renewable power program, boasts some of the lowest energy costs in the world at some three US cents per kilowatt hour. Well, if some of you are scratching their heads thinking, why is she talking about energy at a jobs function? Well, what you would also know is millions of Africans today struggle to access electricity with anything like the reliability that is required for a business or indeed an entrepreneur, but also that it is not cheap when it is available. In this modern era, without electricity, you cannot really deliver education, no health care, no digital tools in order to be an actor and have agency in in our times. And therefore, even the entrepreneurs that we want to catalyze and stimulate in order to create jobs can’t get going if you don’t have what is a basic foundational infrastructure, namely power. But what about jobs themselves? Well, in the energy program alone, we have created over 82,000 job years across just this energy program, and that encompasses construction, operations, maintenance. And this also gave the country, the wherewithal, to start again to train apprentices in order to provide services to this particular program. Government was also very, very cautious to make sure that it crowds in local ownership and equity into the program, given that it had been open to producers from wherever in the world. South Africa, at that point, did not have the know-how and skills in the renewable energy space. We had a lot in coal-fired part generation. This program was open to producers from around the world, but crowded in local ownership. Standing here now in 2025, it is very clear that electricity has been and will continue to be the underpin to keep our lights on and our economy running and growing. And so, when we look beyond ‘25 and say, what is actually next. The numbers indicate that we should expect by 2030 to see 40%, upwards of 40%, in fact, of power in South Africa generated from renewable sources from something like 90%, 95%, 10, 20 years ago. Over 200,000 jobs will have been created in the renewable energy industry alone. But I suppose if I step back and say, what have we really learned? At least at a personal level, what have we learned from this process? It is that giving the private sector the space to have leadership, to take leadership within a supportive and an enabling environment, both regulatorily and otherwise, really does unlock innovation. It boosts productivity and competitiveness, and ultimately creates a durable foundation for more jobs in the economy. If we get it right, we’ll be better prepared to seize opportunities that for a long time felt like they were just over the horizon, and it feels today like they’ve actually arrived on our shores. It might be just a little bit on the nose to say this at a World Bank event, with absolute apologies to Ajay and co., but as the intelligence age takes root, it is very clear that energy will be its true currency. And where will this energy come from? I hear you ask. Welcome to sunny and windy South Africa. Thank you.
[Applause]
[Anthony Tan]
Hi, everyone. I’m Anthony. In Southeast Asia, where I’m from, people often say, “I’ll Grab.” That’s shorthand for getting a ride or having a meal delivered, but for millions of people, Grab has also come to mean something more. It’s a partnership, to earn a living, to earn a real livelihood, to grow a business, to support a family. We started Grab 13 years ago to make taxi rides safer, especially for women and children. By tapping into mobile cloud and location-based technologies, we didn’t just match drivers and passengers, but we also made ride details shareable for greater peace of mind. The latter was an industry first 13 years ago. We couldn’t imagine how impactful and empowering our services would be. Passengers could pursue options like attend class or take on jobs further away. Drivers could spend less time looking for passengers, becoming much more productive. That was our first up-close glimpse into the power of the digital economy and how access to the right digital tools can unlock new possibilities for everyday people. We saw this again during the pandemic. There was a growing gap between businesses that were online and those that were not. So, we worked closely with governments to bring MSMEs or micro, small, medium enterprises online, giving them a way to reach customers, and digital tools and data to run much more efficient and resilient businesses. Emily’s Chicken Noodles is an example. I had a chance to meet them last week in Bangkok. The owners, Pep and Pat, started selling noodles on Grab when they had to shut down their tea house during the pandemic. Data insights from our platform have helped them strategically operate and grow their business. Now, they have 170 employees operating five cloud kitchens in Bangkok, locations that we use our data to help them set up correctly. The world is entering an inflection point with AI, and we’ll focus on channeling these breakthroughs into applications to deliver positive impact. Across Southeast Asia, women’s workforce participation generally lags behind men’s. When we spoke to women about being driver partners, many liked their flexibility, but were concerned that driving would be unsafe for them. Lily from Kuala Lumpur is a mother and grandmother. She became a Grab driver partner for the flexible work hours. She often works late in the evening, sometimes until 1:00 AM, and naturally, her children worry. We hear them. Even though 99.9% of all rides on Grab take place with no safety incidents, we know that even one incident is one too many. So, we continue to double down on safety innovations. Today, large language models can analyze audio and send it in real time. We are leveraging this capability to improve how we detect signs of danger, whether it’s a heated dispute, screeching tires, or a cry of distress, so that we can respond quicker. Here, by making jobs safer, we make them more accessible. Grab’s mission is to drive Southeast Asia forward by creating economic empowerment for everyone. It’s the right thing to do, and it makes good business sense. We have seen firsthand how access to income and business options doesn’t just put food on the table, but it restores dignity, builds confidence, and sparks hope. And when people and communities thrive, businesses thrive too. While Grab is rooted in Southeast Asia, we hope our journey can help to contribute ideas on how technology and the digital economy can uplift lives and livelihoods all around the world.
[Lively music]
[Christina Williams]
Good afternoon. My name is Christina Williams, and I was born and raised in rural Jamaica by my father and grandmother. Both of them did not graduate primary school, and to date, my father does not know how to read. But my dad, in his infinite wisdom, possibly the smartest person I know, taught me the value of my voice. As soon as I knew how to read, he introduced me to the newspapers. We would discuss social issues and from there, I developed my love for the law, my thirst for justice, and my desire to inspire and impact positive change. However, in my community, there were not many opportunities for affordable quality education or for meaningful employment. I watched my brother for almost four years, worked at numerous odd jobs to save enough for college. At the end of these four years, he still had to take loans, and he still had to migrate from home. I watched my grandmother, for many years and for many miles, travel from my community to the city, to sell products from our small farm. I watched my father, brave harsh cold winters in Canada, pursuing strenuous agricultural work to make ends meet. A lot of movement in my family in the pursuit for opportunity. At age 18, I also had to move 100 miles across my country to pursue my career dream to become a lawyer. Imagine. Physical and mental toll. A lot of anxieties about leaving my 10 years of community service behind and my aging family members. Today, as I stand before you, I still carry that anxiety. Will I ever access meaningful opportunity that will take my family out of poverty permanently? To add insult to injury, almost, it took a number of years for me to achieve my dream as I was deferred because of financial challenges. But fortunately, in 2022, I graduated with my law degree, and I made…
[Applause]
[Christina Williams]
And I made a commitment that I would support unattached youth. Those are the young people that are not enrolled in education, employment, entrepreneurship, or even voluntary service. So far, my story may sound profound, but it is not unique. This is the story of many of our young people across the world who do not have access to opportunities, which is why when we think about education, we must think beyond tuition. We must consider students’ access to housing, transportation, food in their bellies so they can learn. When we think about employment, we must consider livable wages. That’s how young professionals can afford insurance, housing, pension benefits, that they can reinvest in their communities, and if they wish to, they can stay at home. The questions we tend to ask, “What do young people want?” “What do young professionals require?” The answer is sustainable careers. The kinds that allow us to be independent, self-sufficient, have pride and dignity, that we can take our families and ourselves out of poverty. One way to achieve this is through remote and flexible work environments because after years of deferral, I was finally able to achieve my dream of becoming a lawyer because I was able to learn and to earn. What do we think is the opposite of poverty? It’s not wealth. It is justice. And this is fundamental to the work I do as a lawyer and as an advocate. It is my hope that today and onwards, we will make a commitment to consider the complexity of the issues regarding education and employment. And in response to that, we will implement comprehensive solutions because that is the only way we can truly declare that jobs are a path to prosperity. Thank you.
[Applause]
[Lively music]
[Julia Chatterley]
Wow. Passionate and powerful. In fact, three clearly very powerful voices. We also heard plenty of reasons left for optimism, of course, too; but I think particularly in what you heard there with Christina, underscoring the challenges that young people face without action. If you’ll permit me, my three takeaways. One, health, education, and local opportunities are critical. Two, the right government policy is essential to unlock capital flows. Then three, where money, ideas, and good policy meet, entrepreneurship, competition, and jobs will come. Let’s explore this further with our first panel. Please, allow me to welcome our panelists, our panel moderator, first and foremost, Nicola Galombik, Founder of the Harambee Youth Employment Accelerator, Dilhan Pillay
[Sandrasegara]
, Executive Director and CEO of Temasek Holdings, Rania Al-Mashat, Egypt’s Minister of Planning, Economic Development and International Cooperation, and Doug
[Douglas L.]
Peterson, Senior Advisor of S&P Global.
[Applause]
[Julia Chatterley]
Nicola, the floor is yours. Sorry, that was a bit quick. You had to run on stage there.
[Nicola Galombik]
Thank you. Good afternoon. It’s great to be here. Coming from South Africa, where we have one of the highest youth unemployment rates in the world, I have, personally, a tremendous sense of urgency for us to create as many jobs as we possibly can. Ajay and a recent piece in the Financial Times, drew attention to the fact that development is not just going to happen without the enabling conditions in place. We have a fantastic panel here today to guide us on how are we going to unlock these jobs, and as many of them as we possibly can. Rani, I’m going to start with you. This is a homecoming, having been an advisor to the Chief Economist at the IMF, now a Minister in Egypt. Share with us your experience, your view on what are the foundational infrastructures that are required to drive a job creation agenda.
[Rania Al-Mashat]
Well, thank you very much. First, let me congratulate Ajay, the President of the World Bank and all the team here, bringing us back to the basics. Development is all about growth, is all about jobs, bringing everything that we’re discussing in meetings back to the people. When we talk about infrastructure, I can think of economic infrastructure, physical infrastructure, and the human infrastructure. If it’s the economic infrastructure, it’s very important for governments to have macroeconomic stability, predictability with respect to policies so that the private sector can thrive because all of us know that the government is not enough to generate jobs. The jobs have to be generated by firms, or people need to be able to create their own firms through entrepreneurial opportunities so that they can run businesses. So macroeconomic stability, coupled with structure reforms that actually allow for dismantling barriers to entry more competition. The green transition is very important. So, continuing and sustaining macroeconomic stability through structure reform. So, that’s the first important infrastructure that policy makers need to have in mind. The second one is the physical infrastructure. If you want to have firms, if you want to have manufacturing hubs, clusters, you need to have the roads, the bridges, the connectivity, the grids for energy. You cannot have development, you cannot have private sector coming into a country if energy is not available. And then, third is the human infrastructure. There comes equipping the youth with skills, with coping with all the new trends that are coming out, and how to tie this skill also with the needs of the private sector. In our case, there are many vocational schools which are tied to private sector in different industries. So again, if we’re talking about infrastructure, I just want to say economic infrastructure, physical infrastructure, and then the human infrastructure.
[Nicola Galombik]
Fantastic. Doug, I’m going to turn to you. You led S&P Global for over a decade. You know about the power of data to create transparency, to measure impact. What is the data and the signals that investors are looking for? When they look to deploying capital in emerging developing markets, how will they know whether these infrastructures exist?
[Douglas L. Peterson]
Well, thank you for having me here. Following on what Rania just said about infrastructure, let me talk about financial infrastructure, market infrastructure. And as we know, there’s capital, which is global. It’s fungible. It can travel around the globe. And that capital, whether it’s for a trader or a long-term capital strategic investor, it needs to have data. They need to have analytics to help them make an informed decision about where they’re going to invest. Regulatory environment is probably one of the first places people stop to make a decision about where they’re going to go next. And so, you think about that regulatory infrastructure, there’s pricing, there’s price discovery, there’s liquidity. You want to see how you can value securities or investments that are not liquid. You have the independent providers of opinions and information. You have the news, you have rating agencies, you have independent providers of equity research, and you have your auditors. So, you have these independent views of organizations to provide this information to investors. As part of that financial and regulatory infrastructure, I know sometimes this isn’t the fun part of it, but it’s so important that there’s a way to have solvency or bankruptcy, that there’s an orderly way for a company to fail. Failure can actually be quite good because failure allows you to move on, and the quicker you can do that, the better. So, these are the types of things that investors are looking at for that financial infrastructure.
[Nicola Galombik]
Really interesting. Rania, back to you. What we do also know is that investors really hate regulatory uncertainty. Can you share some of the examples of governance framework you’ve put in place that have created success in Egypt to drive investment?
[Rania Al-Mashat]
Let me maybe think of renewables because it’s not just about a green transition only. It’s also about productivity, about skills, jobs. In our case, in 2014, our journey started with a very important change, which was the feed-in tariffs, allowing the private sector to be in that space. And since then, the amount of concessional finance that goes to the private sector, the different partnerships that have happened, the FDI that has come in, it’s been the private-public partnership. So, this is one very important structural reform that has actually allowed an open space for one of the most important sectors where we are blessed, but also are able to push green hydrogen now and actually push manufacturing as well.
[Nicola Galombik]
Dilhan, let me come to you. We’re talking about the importance of creating a vibrant, dynamic private sector. We’re talking about countries in emerging and developing markets that have fiscal constraints, not enough private capital deployed, in many cases, projects that are marginally bankable. How has Temasek been bridging that funding gap? What are the ways in which you have unlocked investment by doing that?
[Dilhan Pillay Sandrasegara]
Well, thank you for that question. I think the first thing I should say is that we at Temasek feel that we have three roles. As an investor, we should do well. As an institution, we should look forward and try to do right. And as a steward, we should try to do good. So, it’s really about bringing all these three things together in the wide range of activities that we have been undertaking. One of the things that we are very cognizant about is that in our neighborhood, there is a real issue about bankability and marginal bankability of projects, and in particular, infrastructure projects. So, if you think about what you need to do to scale capital, you need to have things in place like infrastructure. And infrastructure is not just hard infrastructure, it’s not just economic infrastructure, but it’s also social infrastructure. You need to make sure those are in place in order to mobilize capital to where they should go to uplift communities in the neighborhood. There’s a simple reason why we believe that’s the case because for us to thrive as a company and for our country to thrive within our region, you’ve got to make sure that the whole region is able to thrive because there’s so much connectivity between all of us in one particular region. That’s the same whether you’re in Africa, Middle East, the US, and elsewhere. Now, coming back to what we have been doing. So, one of the things we’ve been trying to do is set up platforms over the years to address a gap in the marketplace that could provide the financing for these objectives. And so, we started financial inclusion back in 2004, 2005. More recently, we’ve been looking at energy transition. And that’s a very simple issue, and it’s linked to the energy trilemma. You have on one hand energy security, but in emerging markets and developing economies, the more important things are energy affordability. So, before you even think about green energy, you have to address the issue of energy affordability. What we realized for that is to get the solutions out into the marketplace, whether it’s a transition to green energy, whether it’s to develop green energy infrastructure, you need to put in place a financial structure that actually plugs the gap that allows you to catalyze further funding to come in. And so, we’ve set up an entity together with HSBC called Pentagreen, which set up one objective in mind: to make marginally bankable projects in our region bankable. Roughly about 10% of green infrastructure projects in my part of the world is actually bankable, 35% is marginally bankable, and the rest is unbankable. The question is, how do we unlock that marginal bankability into bankability? And that means that’s how you bring the senior lending in and you bring down the cost of capital to allow for these projects to be not just bankable, but actually profitable, because you do want capital to find its way back into the marketplace. So, you have to have a catalytic approach to this, and that’s what we’ve been trying to do. We do a number of other things, too. For example, we invest in things like food, water, waste, energy, materials, clean transportation, built environment, because it’s all linked to our portfolio. We own an airline, so we have to figure out whether sustainable aviation fuel is something we should support. So, there are many things we do, either because we think it’s right for the region so that we can actually thrive or because it’s right for our portfolio.
[Nicola Galombik]
Now, you and Doug are both part of the World Bank’s Private Sector Investment Lab. Inspire us. Tell us some of the big ideas that are coming out of the Lab that you think are going to be real dial movers.
[Douglas L. Peterson]
Well, first, let me start and just say, what is the Private Sector Investment Lab? Ajay has a history of understanding the needs of the public sector and the private sector in this public-private partnership and how much power you can get from that. There’s a need globally for trillions of dollars of investments. Depending on what the source is, I could say it’s 1.5 trillion, 4.2 trillion, 5 trillion dollars a year for investments in infrastructure and social infrastructure. And so, the Private Sector Investment Lab is a group of private sector companies who have come together with different projects to help try to fill that gap, to build capacity and build scale for financial capital to meet the needs of all of these different gaps. So, let me talk quickly about one of the projects that I’m directly working with the World Bank team on, and that’s what we call originate to distribute. When you think about a loan being made in the emerging markets, many times that loan is made, and it’s a very long-term loan, it’s been sitting with the World Bank for many years. And so, we’re looking at ways how can you build the capacity for the World Bank to get velocity from its balance sheet by originating loans that can be distributed, that’s the originate to distribute part, to private sector investors? So, you can see that that loan being turned over many times, and you’re creating that capacity and that scale. We’re looking at what are some of the ways in the needs of the markets to have that origination to distribute, that standardization, things that the World Bank was working and now we can accelerate that work. It has to do with the distribution. What are the needs of the investors from the private sector for those long-term assets? Maybe they might need a guarantee. Maybe they need to see somebody that’s taking a subordinated tranche. If there was a loss, maybe there’s somebody else who will take the first loss before they take it. Can we think about structures of putting them in pools or warehousing them so somebody can get a distribution of a diversified pool? And one of the goals of the originate to distribute is to create an asset class of infrastructure because we’re not the only ones looking at infrastructure investment. But if the World Bank, with their power to distribute the relationships they have around the world, with the window they have on the needs, this is one of the best places in the world to start that change of thinking to create a new asset class of infrastructure.
[Nicola Galombik]
Thank you. Dilhan, do you want to?
[Dilhan Pillay Sandrasegara]
I think it’s an interesting exercise that Ajay is putting us through because the World Bank Group has significant capabilities there, but the private sector’s capabilities as well. It’s really a question of how we bring our respective capabilities to work in the things which are seen as chokepoints to mobilize capital, to mobilize tools available for what’s out there for economic development. I will put that as how I see this Lab working. That means we have to come up with solutions together and see how they’re workable in actual fact. Now, what I’m quite excited is the mobilization of capital and the scalability of capital, and that capital has to be catalytic. So, every dollar should be able to result in the raising of a multiplier of that, a multitude of that. I think that’s what the equity capital piece with the junior capital sleeve is important, especially when you think about marginal bankability, if you think about unbankability, if you think about energy transition in particular because you need to bring the cost of capital down to where it becomes a commercial reality, not immediately, but over a period of time so that it can be underwritable, that there is also frameworks in place to allow for the predictability of these instruments that we are trying to bring out into the marketplace. That’s actually gone much further than I would have expected it to go. The World Bank is itself looking at the availability of concessionary capital, just as we have made available concessionary capital as well because if we don’t, it’s difficult to actually bring in mezzanine capital, equity capital, senior bank financing into the projects where you need to get things going. So, that’s one element. The second thing, of course, is that whenever we invest in emerging markets and developing economies, one of the biggest risks you take is foreign exchange volatility. And so therefore, it’s very important to see how we can negate that as much as possible. The World Bank has certain tools. The private sector has been thinking about how to use those tools. And so therefore, things like local currency mobilization facilities are critical to that because then you provide an opportunity where local institutions can have the backing in order to do what we call credit enhancement wraps to ensure bankability and a predictable set of returns to investors who are prepared to invest in those countries. They actually eventually lead to the very same instruments which will get securitized by Doug’s stream. It’s actually quite hand in glove some of the solutions that we’ve come up with. So, these are just some of them which have come about. I don’t want to go through the list of it because I think we won’t have enough time, but what I’m really, I think, pleasantly surprised is the progress that we’ve made over for the last one and a half years since I’ve been on it. I think it’s because we’ve all decided that this is worthwhile doing. None of us are letting ourselves off the hook. We all have something to offer. If we don’t do it now, when are we ever going to do it? It’s like the coalition of the willing, hopefully.
[Nicola Galombik]
Okay, that is going to be the theme of the day, the coalition of the willing, but a piece of the puzzle we haven’t mentioned, Rania, which perhaps we can return to you on is just the complementary role of domestic capital mobilization and the role that it plays in driving these solutions. Perhaps you can reflect on that.
[Rania Al-Mashat]
Well, first, it’s very timely what’s happening because if we’re thinking about countries today wanting to increase their productivity and create the jobs, the private sector needs to find the financing, and it needs to find the financing at a competitive rate, given the increased risks that are taking place. I think it cannot be a better moment to actually bring many of these initiatives forward so that the private sector can benefit from these windows. This is also happening at a time when concessional windows in general are coming under pressure. For any country, an integrated financing framework is important. The FDI side, the domestic resource mobilization, debt swaps if they are available, guarantees which are being discussed, but as you mentioned, domestic resource mobilization is also linked to what you do on your capital market. So, some of these tools for countries to benefit from need to also deepen their capital markets. Just looking at the partnership we have with the World Bank, and IFC, and MIGA, and many other institutions, a lot of the work we do is not just on financing, but it’s also on policy. This policy dialog has been very, very important and critical in helping us take recommendations into action, operationalize many of the successful examples that happened elsewhere in our countries, so that we are able to be ready, if you will, to endorse these initiatives because if the market is not ready, if the government is not ready, you miss an opportunity. This is another aspect. Today as well, the speed by which governments need to act fast is much needed, more than any time before.
[Nicola Galombik]
Okay, so we have a coalition of the willing, we have the frameworks we need, we have a sense of urgency, and let’s talk about where we should focus, where we should focus our effort if we’re looking to create the most jobs we can. The World Bank has identified five sectors that it believes have the greatest potential to unlock jobs, and those include energy and infrastructure, agribusiness, healthcare, tourism, and manufacturing. I’m going to give you, Dilhan, the first bite to say, which of these excites you the most? Why? Feel free to disagree with each other or agree with each other, preferably robustly, but please tell us, what excites you most as the zone of opportunity for us to act swiftly, effectively, and where we can get the biggest bang for buck?
[Dilhan Pillay Sandrasegara]
I think I’d like to start by saying all five excite me. Okay, I’ll tell you why because these five areas are absolutely necessary to address, not just by a single country, but actually globally. There is a reliance that all of us have on these sectors, even if we’re not directly involved in it. I’m talking about as an individual country, but I’m going to take one which my country doesn’t have as a sector, which is agrifood because we import largely all our food into Singapore. We’re only 730 square kilometers, so it’s not much land for us to till for our own food, but we are farmers there, too. I think that we have to be mindful of the fact that today in the agricultural sector, the farmer takes the biggest risk of it all, especially smallholder farmers, and that we have this issue of wastage of production because they don’t have the right tools available in order to ameliorate the effects of that. Their own harvests are also, to some extent, impacted by what they have in terms of their own infrastructure, their own tools to generate as much income and yield as they can. On the other hand, on the consumption level in the developed markets, there’s so much of wastage. I think we need to figure out how we can address the issues in agri, both from the perspective of ensuring that smallholder farmers and those involved in the agricultural sector have the opportunity of derisking themselves in the context of the harvest, in the context of climate change and all the other issues that come about. To also use sustainable farming practices, using better seeds so you can get better productivity, better yield, using data in order to ensure that you have the right information as you grow your crops, as you decide to put it through the supply chain. To ensure that data is there for transparency so that there’s pricing transparency for the farmers as they go through the supply chain. I think that even more importantly is the issue of ensuring that there’s financing for them. We own a drip irrigation company. As you know, one of the important features of drip irrigation is water resource management. So much of our water is used in the context of agriculture, 70% of fresh water is used in agriculture. Water is a precious resource, but the reality is the cost of installing the equipment is not a low one for the smallholder farmers. And so, if you can bring the combination of the equipment, data analytics, and therefore the ability to bring financing solutions to the farmer to take it, and then add to that, microinsurance for the farmers as well to protect themselves against the harvest and the consequences of the harvest. You’ve got a better outcome for the farmers. If you’ve got a better outcome for farmers, you’ve got a better outcome for global food security. That means for all of us who sit in the comfort of our own economies when we need to rely so much on the EMDEs for that.
[Nicola Galombik]
Fantastic. Certainly coming from an African context, livelihoods in agriculture is certainly one of our biggest opportunities. Rania, let me give you the second bite of the cherry.
[Rania Al-Mashat]
Well, I think I agree that the five sectors are not mutually exclusive. If we think of global public goods, any country doing their own thing, I’m sure, contributes to the outcome, but being from Egypt and being a former Minister of Tourism, I would say that when you take a look at the statistics around the tourism sector, there’s an employment multiplier, one to four. Every direct job in tourism generates four indirect jobs. So, that is a sector which, if we’re thinking about peace in the world, mobility, creating openness, I think tourism is one sector. And also, when you take a look at the statistics, everybody’s talking about exports of services. This is an export, productivity gains. You need to have good infrastructure for tourism. It’s hotels, it’s construction material, hospitality. It’s a lot of things related to that sector. There’s a gender element as well when we talk about tourism. I cannot be from Egypt and not advertise that our Grand Egyptian Museum is going to open on July third. So, there’s plenty of opportunity for tourism there. But honestly, it is... But of course, the sector itself has lots of vulnerabilities given any risks that are related to it, but investing in tourism is really investing in people, skills, and the value chain across is quite significant.
[Nicola Galombik]
Fantastic. I don’t want to be competing with you for tourists, but I do know that in South Africa, for every 12 visitors to the country, a job is created. That’s an incredibly direct correlation. Doug, over to you.
[Douglas L. Peterson]
Well, I’m the same. I believe all five are very interrelated, but let me give a long answer about infrastructure, and why I think infrastructure and energy infrastructure, especially energy transition, infrastructure is so important. But the long way I’m going to get there is just for one second to go back to the question earlier about domestic capital markets. One of the values of developing domestic capital markets is when you go from banking to fiduciary, which creates savings, you go from the banking market to the insurance market to the pension market. As you go through that transition, you start building institutional investors that have a very long-term view, and it starts developing that domestic capital you need for infrastructure investment. Infrastructure investment, like you talked about, has a multiplier effect. For every dollar that you spend on infrastructure, you get another 1.4 to 1.6 dollars of additional investment. Just think about what happens when you build an airport. When you build an airport, you get hotels, you get rental cars, you get stations to refuel or to recharge your vehicle, you build a bridge, you get businesses on both sides of the bridge. You also, in many types of infrastructure, things like bridges, you actually also reduce your carbon footprint because people might have been driving very long ways around, and now they can get to and from something much quicker. Same happens with rail and light rail. I think infrastructure is one of those enablers that allows you to have the tourism, it allows you to have the manufacturing. If you put a manufacturing plant somewhere, you don’t have the roads and the rail and the ports to export it or to deliver it, you have a problem. Infrastructure, for me, is going to be such a critical part of any development plan of any country. Along with that, as you know me, being a financial guy, I think the financial markets also needs to go along with that.
[Dilhan Pillay Sandrasegara]
If I just may add to what Doug said, I think digital infrastructure is so critical. It will actually enable many new businesses to be created. It will also allow for people to be plugged in as entrepreneurs, even small entrepreneurs, social entrepreneurs and the like, and that will create much more opportunity than we would see otherwise.
[Nicola Galombik]
I couldn’t agree more. I sense the excitement, I sense the opportunity. I wholeheartedly agree that the young people especially need that digital infrastructure so that they can participate as quickly as possible in this new economy. I think we have the marching orders, we have the blueprints. I just hope that we can take this moment from this panel, turn it into a movement, and really get our act together quickly, effectively, and together. So, thanks.
[Dilhan Pillay Sandrasegara]
Thank you.
[Douglas L. Peterson]
Thank you.
[Applause]
[Lively music]
[Julia Chatterley]
Thank you once again to our panel there. The reality is, though, that the people most affected by this issue, those with the most to gain or to lose, are the young people, standing on the cusp of adulthood, about to join the workforce, and simply imagining what their lives may be. Well, it’s with that in mind that we’ve invited young people from all around the world to pose questions to the three leaders who are just about to join me on stage. Please, join me in welcoming World Bank Group President, Ajay Banga, the former Chilean President, Michelle Bachelet, and President Tharman Shanmugaratnam of Singapore.
[Applause]
[Julia Chatterley]
Welcome, everybody. I hope you’re prepared for some really difficult questions because that’s what we’re asking for. If you’re watching online and you want to ask a particularly tough question, get them in now because there is still time. First question, I’m looking for a difficult question from the studio audience, please. Does somebody have a question for us? Oh, gentleman there, sixth row, I can see you. Please, make it tough. No pressure.
[Marco]
My name is Marco. I’m French and Nigerian, and I had a question for Ajay. Ajay, you’ve been at the Bank for two years now. As you reflect on your tenure, can you tell us something that you found easier than expected and something that you found harder than expected? When you look to the future, what gives you confidence that the Bank is well positioned to tackle this jobs’ agenda?
[Ajay Banga]
Yeah, so thanks, Julia.
[Julia Chatterley]
He’s being a little ageist about the Bank there with the 80 years old.
[Ajay Banga]
What surprised me on the positive side is the depth and width of the kind of people in the Bank because when you want to learn about drinking water, for example, while you can learn a lot from Singapore, which is where we’ve set up a Knowledge Bank on water, the reality is here in the Bank, you can call for people and in an hour, you will have a conversation that educates you about a topic on which you may have known very little, but at the end of the hour, you will be knowing enough to be dangerous in a conversation. That quality of person who is not just an academic expert, but has also had the chance to live and work in different countries around the world, that’s a pretty rare asset and not something I completely understood before I joined. The part that’s very difficult is to get all this to work together in a way that you can unlock the multiplier effect or the synergy caused by the different parts of the World Bank Group operating as one well-oiled machine. We have the public side of our Bank, we have the private side of our Bank. In the private side, we have a capital side, we have a guarantee side, and we have a settlement of investment dispute side. Over time, these have grown in ways that have created silos between them. As any of you who work in an organization, you know that silos come with human nature. Our attempt to break that silo down, the Private Sector Lab is a way to break that silo down. The Jobs’ Council is a way to break the silo down by using outside-in input. That’s hard. It’s not easy, but it’s progress that we are making. Why do I feel confident about being able to do something about jobs? Because this is the time to bring the different resources we have together to make those jobs possibilities come through. We have the ability to provide the public side of what’s required, the enabling infrastructure, with our public side of the Bank, IBRD and IDA. We have the ability, through our Knowledge Bank, to provide help on regulatory policy, from land reform to labor reform to mobile collateral laws to bankruptcy laws. We have the private sector part of the Bank, IFC, MIGA, and ICSID, the settlement of investment disputes. When you bring those together, very few organizations have the ability to do this the way we have in one place in-house. That’s where my confidence and my ambition come from.
[Julia Chatterley]
Dangerous in a good way is how you described it.
[Ajay Banga]
Always a good way.
[Julia Chatterley]
Always a good way. Okay, we’re going to go to our next question now, and I believe it’s online, and it’s for President Bachelet. Sophia from Moldova. Thank you so much for your question. I’ll read it out. Despite progress, women still face barriers to economic opportunities. What bold actions do you believe are most urgently needed to close the gender gap in the labor market? President Bachelet.
[Michelle Bachelet]
Thank you, Julia. I always receive questions on women issues. I can’t imagine why.
[Julia Chatterley]
Don’t worry, we’re not going to be sexist. Someone else is going to answer as well.
[Michelle Bachelet]
But also because it’s one of my concerns throughout my life.
[Julia Chatterley]
It’s also personal, yeah.
[Michelle Bachelet]
I, too, believe that it’s completely true. I mean, even though women have more access to work, usually they are the ones hitting... If there’s an economic crisis, for example, a pandemic or an economic crisis, women are the first who lost jobs and are the last who recover it. Also, they have the more precarious jobs, and many are in the informal work. Of course, their salaries are less than men. And many have a lot of discrimination by laws. So, it’s urgent because we know that women are half of the population. We don’t give women all the opportunities to thrive, while we are losing half of the potential of the world to thrive. And so, we need to act bold and urgently. What things I think can be done? The first is we need to acknowledge and give attention to the unpaid care work that do all over the world. It’s so important, which society can live without care? Think of children, elder people, or people living with disabilities, or people with diseases, are women, usually, in the whole world, who take care of them. It’s so important, but we treat it as it is invisible. Nobody thinks on that. And it’s free of pay. In my country, the Central Bank, and I’m saying that because it’s not the Ministry of Women, it’s the Central Bank who did a study and calculated which was the, I would say, the importance of the unpaid care work. If you look at it and you calculate it as part of the expanded GDP, it was 25.6%, while mining sector was 14.8%. And of course, if you think of mining sector contributing to other industries, it came to 20%, but the other ones was 25.6%.
[Julia Chatterley]
But it’s a quarter of the economy that’s simply not accounted for.
[Michelle Bachelet]
It’s not accounted for.
[Julia Chatterley]
So important.
[Michelle Bachelet]
If you have women taking care of everyone and not having a support, women cannot work, cannot earn money, cannot bring income to the families. So, governments should pay attention to that and should work to think on childcare facilities or care facilities for people living with disabilities. In my country, we have done it. We have worked with municipalities, creating all these centers. Of course, not enough yet because it’s pretty costly, but I think it will be very important. And also, because you need only to professionalize them, to know exactly what you have to do, how to care and work with conditions for people, but also taking care of their mental health, because it’s very difficult to be with children who are disabled children all the time at home, and it’s very difficult. So, we need to take care. One thing is, acknowledge the unpaid care and look solutions for that. Second, I think it’s very important to think on how we ensure that women have the same salary for the same work. This is something that doesn’t happen in the world. I don’t know in the World Bank, but in the world, it’s not happening. When I was my first time
[being a]
candidate, one of my campaign slogan was, “Should I receive less salary than a man president?” No. Why should women with the same work receive less salary? And we need to work on that. The private sector needs to supervise that, see how it works, have to
[have]
laws that ensure that, because in many places you have the law, but it’s not implemented, because nobody’s looking after that. The third thing I think will be very important, visibility. In that sense, it’s really important you have more women on boards, on the companies, private and public sector. While I was the president. I started with the state companies because that was what I could really decide and then give the example for many others. So, that was really important because we have seen when women are on boards, those companies have a very good performance, and we saw it during the economic crisis also. I think many of these things can be done and should be done. I think that everybody will win and will be in better conditions. And of course, we know when a woman has an income, she dedicates 80% of the income to the family, education, health, etc. If that happens, everybody wins. The society wins, the world wins, and men also win because women are happier.
[Applause]
[Julia Chatterley]
Nice. I’m going to very naughtily go rogue now. You spend one more minute on this for gender equality and for balance. Who would like to weigh in for one minute on their views on this? Ajay or President Tharman. He’s pretending to ignore me. Ajay, it’s you.
[Ajay Banga]
No, I’ve known him a long time and he’s a champion for this.
[Julia Chatterley]
One minute, if you’d like to weigh in on this subject.
[Tharman Shanmugaratnam]
Let’s put it this way. I think Michelle has given us an extremely articulate case for women, for humanity, and for economies. The fact is, the underutilization of women’s talents and capabilities and the undertraining of women, starting from a very young age, is the largest potential loss of economic growth that the world has today. Much of it is in the developing world, but I would say there are also problems in the advanced countries, but that is the largest potential loss of income and growth that we have today. So, Michelle’s final point, men also benefit not just because women are happy, etcetera.
[Julia Chatterley]
Appropriate.
[Tharman Shanmugaratnam]
But everyone just ends up better off. We are growing the pie.
[Julia Chatterley]
President Bachelet also asked how you’re doing at the World Bank. Will I be told off for asking that question?
[Laughs]
I’ve not got the data to hand.
[Ajay Banga]
No, we’re actually people here. I’ve been studying the idea of looking at our own compensation, basically, of women to men, equal pay for equal work. I think that’s a really important thing. I saw this in my prior private sector life as well. It is not easy to do it. The challenges are plenty, but doing it is the most important thing you can do to change the culture of an organization. To go from saying that you have to do something to advantage people to saying, you don’t need to do anything, it’s just the way it should be. Getting this right, the fact that it’s just the way it should be, is an important aspect of what Michelle is saying.
[Julia Chatterley]
It’s just the way it should be. Okay, let’s move on and get another question. This time, President Tharman, it’s for you, and it’s online again. Henry from Kenya, thank you so much for submitting your question. Oh, and it just disappeared. So good news. I’ve got a backup here. Oh, no, it’s back. Fantastic. I’m going to trust my paper. We live in a world where the intelligence age is booming. Automation is rising, alliances are shifting, and the economic order is changing, and then some. How should countries think about job creation amid such uncertainty? That’s a tough one.
[Tharman Shanmugaratnam]
Okay, so we live in a world where we’re all talking about who’s taking my slice of the pie. How can I get back a slice that I believe is mine?
[Julia Chatterley]
Or the whole cake.
[Tharman Shanmugaratnam]
Or the whole cake. If that’s the only game in town, there’s a way in which the pie gets a little smaller over time. So, let’s take a step back. Our largest problem is that starting from the global financial crisis through the 2010s, and even more so in the 2020s, the pie has been growing very slowly. It’s natural that when the pie grows slowly, that the arguments get a little sharper as to who’s taking a larger slice of the pie. Our challenge and our ambition has to be to grow the pie. Our challenge and ambition has to be to grow the global middle class. And we can. In fact, we have the prospect of growing the global middle class by a billion people in the next five years. The answer for that is largely in the developing world. It’s not just a rhetorical goal. It’s a very real possibility. We’ve got 600 million young people entering the workforce in the next five years, 800 million until 2035, but in the next five years, 600 million young people, better trained than their predecessors were. We have people who are already in the workforce, eking out a living, or in the lower middle-income group who are desperate to become middle income, but there’s a very real possibility now of adding a billion people to the global middle class. Imagine what that does to the global consumption pie. It grows the pie for everyone. We can achieve it, which is what we’ve been talking about on this Council and what the World Bank is now obsessed with. How do we grow the pie? How do we grow jobs, allow people to get on a ladder of skills and a ladder of incomes that eventually benefits everyone, rich country and poor country alike? I would say, and again, this may sound a little counterintuitive in this day and age, there’s still a lot of legs left in the game of exporting. There’s a lot of legs left in the game of exporting. There’s a lot of legs left in manufacturing-exporting within global value chains. I’ll just give you an illustration. The big story, really, of the last 15 years is the evolution of the Chinese economy. It’s moving up the value curve, it’s losing competitiveness and low skills, low wage work. It’s becoming more sophisticated. They’re even developing technologies at the frontier. This is all pre-tariff wars. This has been happening over 15 years. In just five years, China shifted 25% of clothing manufacturing out of China into Southeast Asia, some of it into Nigeria, Ethiopia. It shifted 15% of shoe manufacturing out of China. So, just imagine if China were to shift just another 10% of manufacturing to sub-Saharan Africa in the next five years. Not at all crazy, because if they could shift 25% of clothing, 15% of shoes in just five years previously, they could shift just another 10% into the sub-Saharan Africa. That will mean a doubling of the manufacturing workforce in sub-Saharan Africa and a more than doubling of manufacturing GDP in sub-Saharan Africa. Likewise for South Asia, somewhat less than sub-Saharan Africa, but a substantial boost. That’s what it takes. It’s not because of conflict between nations. It’s the natural evolution of a developing economy that’s succeeding, and it starts shedding some parts of what it’s doing to the benefit of other countries. They used to call it the flying geese pattern. I think the Chinese have another term for it, dragon something. What’s it called? Someone had a term for it, but something to do with dragons. Geese was Japanese. Dragons are Chinese.
[Julia Chatterley]
No fire involved.
[Tharman Shanmugaratnam]
But that’s a big story. Manufacturing has higher productivity growth, more of a skills ladder, and it is still at the core of economic development. Secondly, agro-business. I had a very light lunch just now. I had a packet of cashew nuts. I love cashew nuts. By the way, it’s very healthy. Serotonins, everything.
[Ajay Banga]
They’re from Cote d’Ivoire.
[Tharman Shanmugaratnam]
Exactly. That’s my point. Chances are it’s from Cote d’Ivoire, but Cote d’Ivoire exports the raw cashews. It exports it halfway across the world to be processed. And then it’s again exported to one of the developed countries where it’s repackaged and rebranded and made to look very good, with margins added all along the way. Very little of the price of that packet of cashews that I ate over lunch accrues to the producer in Cote d’Ivoire. The World Bank is now working with Cote d’Ivoire to build up that processing capability and allow them to earn their fair share of what is theirs. It is honestly criminal how little has changed since independence in Africa from the days when they were resource extracting, when it was a game of resource extraction. Very little has changed. Very little downstream processing, but the number of jobs, the amount of profits, and the amount of reinvestment of profits in those economies that can come from agro-business is very substantial. Final point.
[Julia Chatterley]
Quick one.
[Tharman Shanmugaratnam]
Regionalization has again escaped Africa. It’s a Southeast Asian specialization with ASEAN, with CPTPP, with RCEP. South Asia has been a little slow, and I know they’ve got some problems at their boundaries, but again, has significant potential. We have the African
[Continental]
Free Trade Zone, which has barely taken off. The cost of transporting goods within Africa is much higher than it is within East Asia. That’s a huge potential. Think of it as an opportunity because with the scale that comes from a regional market, you can afford to invest in specialization. You can afford to invest in specialization that puts you on a learning curve that’s very similar to what East Asia went through. So, exploit the potential of regionalization, and exploit the potential of regionalization leading to links between regional blocks, between Africa and the EU, between Africa and ASEAN, between the CPTPP and the EU. These links between the blocks are again going to be about growing the pie because it’s lowering trade barriers so that we can trade more freely with each other and we can exploit the maximum possibility to grow the global middle class.
[Julia Chatterley]
What you’re saying is the antithesis of where the world feels like it’s headed at this moment. But actually, to the point that you’re making, do you think more inter-regional trade is likely a result of actually what the world economy is facing at this moment with the risks of fundamentally higher tariffs, at least based in the United States? I apologize because I want to get back to some of these other young people questions, but just very quickly on that.
[Ajay Banga]
I think that I said this at the press conference or the opener of these Spring Meetings that I believe that lower tariffs are good for everybody. In fact, the developed world tends to have lower tariffs than the developing world, so we need to figure that out, but then inter-regional trade, and bilateral, and regional trade is where it will go. Look, for the last 10 years, if you look at the number of bilateral and regional trade deals being signed in the world, they are way in excess of what most people are paying attention to. All the acronyms that just now President Tharman was using, CPTPP, RCEP. These are all deals involving groups of nations in the last decade. It has changed the way trade is working in those countries. It’s coming.
[Julia Chatterley]
It brings us full circle back to the question because the point ultimately is the uncertainty is caused by a shrinking pie or a pie that’s not growing too quickly. If you can increase that inter-regional trade, you’ll create the jobs that we’re talking about.
[Michelle Bachelet]
A little thing.
[Julia Chatterley]
Super fast.
[Michelle Bachelet]
Super fast, of course.
[Julia Chatterley]
Super fast.
[Michelle Bachelet]
I’ll speak for not so long. First of all, I think inter-regional is essential. For example, my country has, I think, the biggest numbers of MOUs and FTAs with a lot of people, but in a region, there are very little inter-regional trades. I think this is essential, but also in the current context, everybody’s looking at diversifying. Diversifying the buyers, the sellers, etcetera because they feel they need to not be dependable on one country. They need to think on many other countries.
[Julia Chatterley]
Absolutely. Thank you. That was very quick. Impressed. President Bachelet, the next question is for you, actually. This time it was submitted earlier and it’s a video. Victoria from Mexico has a message.
[Victoria Rodriguez Villareal]
Hello, President Bachelier. My name is Victoria Rodriguez Villarreal. I’m 21 years old, and I’m from Monterrey, Mexico. My question to you is about the Latin American region and how we can address the challenge of stimulating economic growth and ensure job stability. Informality’s still holding back real growth in Latin America. What do you think governments can do to create more stable jobs, especially in industries with low productivity?
[Julia Chatterley]
Okay, so just to clarify, shrinking the informal sector across Latin America and I think raising productivity away from the low productivity jobs, how?
[Michelle Bachelet]
Well, the first thing is true. In Latin America, in many countries, 70% of the jobs are in the informal sector. And of those, three quarters are women and young people. So, it’s a real important thing. It’s not only, I would say, holding back their growth, but also increasing inequality. We were always thinking on growing. We want that growth to benefit everyone. So, what can governments do? First of all, invest in people. That comes from education, from the early ages, I’m a fan of early childhood education and development because I think that will provide them all the possibilities, all their own potential for the future. Second, we need to develop a lot of plans in terms of training, higher education, but also training on skills and abilities so they can have... But those abilities on education needs to be matched with today’s and tomorrow’s labor markets opportunities because I’ve seen countries that have lots of tertiary education students, but they have no jobs afterwards because they didn’t match both things. So that, I think, is very important, and to be sure, because we’re running out of time. The second thing is how we support SMEs because SMEs, they are in Latin America, in particular, the ones who create more jobs. But they have so many obstacles to opening new SMEs. So, we need governments to help to facilitate the life of SMEs, to support them with looking at the regulation of laws for workers and also for their own activities to be easier for them to do what they do. And particularly, it has to be in all those areas where they have low productivity because we need to support them so they can... They are the ones like agribusiness and others that can really make more, achieve more. And third, we need to strengthen social protection systems because those social protection systems will permit, on one hand, that informal workers will be more interested in formalizing, in being part of the formal, because on the pandemic, we developed, in all Latin America, a lot of subsidies and support for people who had lost their jobs, but people who were in the informal sector, they couldn’t get any of those. So, we need to ensure that they have access to some of these benefits. We have to find also maybe some particular schemes for self-employment and others that pay closer the formal and informal sector. Finally, fighting informality, it’s also an economic issue because we will have more economic development when we have people more productive working in more formal places with SMEs, etc. But also, it’s a matter of dignity, of respect, and equality.
[Julia Chatterley]
And stability, to your point as well, and being able to plan for the future.
[Michelle Bachelet]
And stability as well, yes.
[Julia Chatterley]
Yes. Okay, I’m going to move on. Ajay, this is a question for you, Chris in the United States. Actually, we’ve touched on a few of these sectors over the last hour or so. The Bank has identified sectors that it believes have high potential for job creation. Can you help us understand why you’re prioritizing these sectors?
[Ajay Banga]
Yeah, so I mean, look, this is all part of our Jobs’ Council work, and these two are the leaders of our Jobs’ Council, and they do have day jobs, and they’re still willing to help us, for which I will be eternally grateful. The five sectors we’ve identified have one very key thing in common. They do not rely on the old model of only outsourcing OECD jobs to a developing country for growth. I think we have to move carefully past that model to go beyond it to think what locally relevant jobs can we help to create. The first sector being infrastructure, which Doug was speaking to as well, along with Dilhan, all kinds, physical and digital. Rania talked a little bit about it. This is all about making sure that schools, bridges, airports, digital, electricity, health, skilling is available. Because without that, nothing can grow, but with it, it’s the ultimate enabler. That’s the first one. The second one is agriculture as a business. President Tharman started talking about it, but Michelle has mentioned I think we heard it earlier as well. There, the topic is smallholder farmers, if you connect them to cooperatives, if you give them a chance to get access to better fertilizer, better seeds, better cropping techniques, better weather prediction, better markets for their produce, crop insurance, things of that type, you change their productivity, you no longer end up with young people in that family selling the plot of land and essentially ending up as urban poor, which happens in the emerging markets all the time. That’s the second part. The third is primary health care, not just because you’ll create better labor force, but because you create jobs for nurses, medical diagnostic technicians, for midwives, for PPE manufacturing, for farmer manufacturing. You’ll create better health, but you’ll also create jobs. The fourth is tourism that Rania spoke to better than I would, which is the idea of the multiplier effect that tourism has among the best multipliers per dollar invested are the jobs created in tourism. Then the final one is manufacturing. Here, President Tharman talked about the idea of how manufacturing can fit in both for local but also regional consumption. By this, I don’t mean extraction. I mean, local value-added jobs. If you look at the emerging markets, they have lots of minerals and metals that we all need for energy transition. Don’t just extract them and bring them elsewhere. Work on them there. Give people there a chance to do things with their hands and their brains, and get better value and earning. Then you will find the magic of all this comes together. That’s the purpose of these five. They’re chosen with that idea. They need other things to work. Early childhood development, skilling, the involvement of women in the workforce. There’ a series of things that need to happen, but that’s the logic of these five sectors.
[Julia Chatterley]
You can see where the jobs are created.
[Ajay Banga]
Absolutely.
[Julia Chatterley]
Where people are born, effectively.
[Ajay Banga]
Absolutely.
[Julia Chatterley]
Okay, President Tharman, next question for you. We have a very excitable young person from Mongolia for you.
[Naranzaya Batsaikhan]
Hello, President Tharman. My name is Naranzaya, and I’m from Ulaanbaatar, Mongolia. I’m 22 years old. My question to you is about artificial intelligence, AI. There are two possible futures ahead of us. One, where advances in AI upend labor markets and lead us to a world without work. And another one, where AI acts as a complement to labor, helping people become more productive. So, in your view, how will AI and advances in technology impact job creation? Thank you.
[Julia Chatterley]
Do you agree with the two scenarios?
[Tharman Shanmugaratnam]
Well, just give me 20 seconds to check ChatGPT to get the answer.
[Julia Chatterley]
[Laughs]
I can do it for you while you speak.
[Tharman Shanmugaratnam]
If I’m not allowed to do that, I’ll just say, the answer is we don’t know in advance whether the displacing effect of AI is going to be larger than the way it augments human skills and abilities. But how it works out will depend on what we do now, what we do in that whole stack of education and training, starting from the earliest years through a person’s career, what we do about the use of AI. I’d say, particularly for the developing world, let’s not get too caught up in the question of what’s going to be the leading large language model, who’s going to win at the frontier, which of those six or seven firms is going to end up as a winner. That’s an interesting game. A lot of money going into it, some overinflated stock prices that are recently corrected, but that’s not the main game. The main game is, how do we use AI? Everything that was discussed in the last panel, what Ajay just spoke about. Small AI used to improve productivity in every sector has tremendous potential in the developing world. Soil health, precision agriculture meaning precision irrigation, just the right amount of water at the right time, precision fertilization, the right type of fertilizer at the right time, tremendous boost to productivity. Because getting people out of the trap of low productivity agriculture is the way we get people jobs in all the sectors that Ajay was talking about. Higher value, higher skills, higher wages over time, but first get them out of that trap of low value agriculture. The technologies now, a little counterintuitively, allow us to do it far better than we were previously able to.
[Julia Chatterley]
It reminds me of when I asked you about this, Ajay, a year or so ago, and you said Mission 300, getting access to electricity for Africans, and then we can have the AI conversation when we’ve got the infrastructure layers in. There’re so many component pieces of this. Anybody want a quick word on AI and the impact? Or we’re going to wrap it up. Michelle?
[Michelle Bachelet]
I agree. We were just discussing yesterday this and how important could be not only the big data, but big AI, but also the small AI in so many other issues, but I think the big challenge is the lack of access in Africa and other parts of the world to AI, to cell phones, to so many. So, in theory, it’s fantastic, but how long it will take in some places. It will take much longer than in others. So, it’s really important to be how quickly, how can we support those countries, so they’re really given those opportunities.
[Julia Chatterley]
Love that. Ajay, final words?
[Ajay Banga]
About AI?
[Julia Chatterley]
About everything. Wrap it up, you’re going to put a bow on it.
[Ajay Banga]
I agree. A friend once said to me that poverty is both a state of being and a state of mind. What they meant was you have to have a job, you have to earn, but the dignity you get from a job is what really lifts you from poverty. We must understand that, internalize it, and care about jobs as the best North Star for this institution to make a difference for why it was created. That is what I’m focused on. We cannot do it with our money alone. We cannot do it with the money of rich governments like Singapore or other middle and lower-income countries because there is not enough money in fiscal budgets to do so by yourself. We need the private sector. We need its ingenuity. We need its capital. We need its innovation. We need its people. We need its orientation for urgency. Doing this the right way is what we have to do. If we do it that way, everybody wins. Governments win, political leaders win, the private sector wins, the World Bank and MDBs win. Most importantly, young people win. Somebody tell me what the heck is wrong with that idea?
[Julia Chatterley]
Nothing.
[Ajay Banga]
Okay, so let’s go.
[Julia Chatterley]
[Laughs]
Ladies and gentlemen, your panel.
[Applause]
[Julia Chatterley]
We really hope that this has been an informative and engaging session for you. You can watch the replay, by the way, and other events at live.worldbank.org. Please, continue sharing your comments online with the hashtag #WBGMeetings. Now I just want to quickly invite all our panelists and speakers onto the stage for a group hug. Actually, it’s a photo, but we’ll do both. Thank you so much to you, too.
[Lively music]
