MS. NOREYANA FERNANDO: Good morning, good afternoon, and good evening to those joining us online. Welcome to "The Way Forward," a conversation between World Bank Group President, David Malpass; and USAID Administrator, Samantha Power.
Our esteemed guests are here to talk about the impact of overlapping global crises on the poorest and most vulnerable people. We will then open it up to a Q&A with you, the audience.
So, without further ado, over to you, President Malpass and Administrator Power.
MR. DAVID MALPASS: Thanks very much, Noreyana, and thank you, Samantha Power, for joining today.
The world, as people know, is in a very complicated situation, especially for people in poorer countries and the poor worldwide. It has to do with inflation, with food, with conflict, fragility--issues that we work with every day at the World Bank and USAID does, too. Our goal today is to have a good conversation, talk about some of the issues that are going on. Sam has extensive experience in fragile situations. I'm sure that's going to come up. And I do want to discuss the immediate crisis in food and fertilizer that is plaguing various countries. As people know, the World Bank works on an array of development issues, and including and especially right now food and fertilizer. We have announced $30 billion of assistance in the food-related areas as part of our response to the current set of crises. And one of the challenges is, in specific country areas, to find the right program. And we work very, very closely with development assistance agencies around the world, including and especially USAID. So with that, I am going to begin to turn to Ukraine, to food and fertilizer, but Sam-- any opening comments? Welcome.
MS. SAMANTHA POWER: Thank you. Well, first, just let me thank all of you who are gathering around the world. If you're tuned in, you care, I guess, and that's half the battle, right, broadening the community of people who are seized with the kinds of issues we're going to be discussing.
I also want to thank you, David. I feel like even though USAID and the World Bank are just down the street from one another, the relationship over the 60 years that the USAID has existed with the World Bank has kind of ebbed and flowed in terms of its closeness. And in a world where the gap between the resources that we collectively need to bring to bear, and the public sector resources that are being brought to bear, is as large as it is--a gap that we seek, of course, to shrink every day to meet global needs--it would be a shame if we were not acting in lockstep, the World Bank andnot just USAID, but all development agencies. And I really think, thanks to you and your team, that we have done a great job shortening the distance down the street and brainstorming not just when each of us have a fixed idea about where our programs are going to take us, or where we want to expend our financing, but we're getting betterat doing more kind of ground-floor collaboration.
And of course, our Treasury Department, Secretary Yellen, and our Deputy Secretary are in constant touch with you, but given that the World Bank's own mission has evolved in ways that so align with the development agenda of USAID and certainly of the Biden administration, it's just really wonderful the way that I think we're thickening this connective tissue between us. And we need to do even more of it because, again, the crises are such that we just have to optimize. We don't have silver bullets, so God forbid we not be sufficiently coordinated. And again, I think we really have strengthened the bond. Even in the short time I've been there, I've seen really significant shifts and important shifts.
So, thank you.
MR. MALPASS: Thanks, super. And now, to the specifics. And everyone should read Sam Power's bio. She has extensive experience in many areas, and brings that to AID.
As we look at it, we've been working together on Ukraine and thinking about how that can play out, and then also on food and fertilizer. If we start with Ukraine, we have had the immediate challenge of how can government functions in Ukraine continue during the war. And, that has been a World Bank focus and we appreciate the working relationship with you and the U.S.
What we have done is two operations now, one in March and one just last week, that allow funding to continue for hospital workers, pensioners in Ukraine, and they have been sizable operations. But as we are doing that, we are also beginning to think about rebuilding efforts or what can be done, and that gets directly into food storage, into transportation, and I know these are areas you've been looking at. Any thoughts on that topic?
MS. POWER: Sure, sure. Well, first, just stepping back, really appreciate the shift that you've been instrumental in presiding over, in doing more work in conflict settings. I wish that Ukraine weren't one of them. I mean, Ukraine, notwithstanding the invasion of Crimea and eastern Ukraine back in 2014, obviously, we couldn't afford any more wars on February 23rd of this year; and yet, Putin gave us one where you not only see the weaponization of food and humanitarian access as a tool of warfare in Ukraine, but you see the weaponization of global hunger as Putin tries to use misinformation to convince developing countries that their food problems stem from sanctions rather than from the export controls that the Russian Government placed on fertilizer. And, of course, the very intentional, willful, and devastating blockade on Ukrainian grain, sunflower oils, and others, which are such huge sources of food and commodity in developing countries, particularly in Africa.
So, the direct budget support, which I'll focus on just for a second, is critical. I'll contrast it, David, with when I was last in government. So, I left U.S.--UN, where I was UN ambassador, on January 20th, 2017, a date I remember well. The contrast between the Ukraine that I would have seen at that time-- which benefitted a lot from your work, and benefitted a ton from USAID programs which had been there since 1992 but really picked up since the Revolution of Dignity in 2014. But as far along their journey as they were, the accelerated progress they have made since Russia's invasion of Crimea in 2014 up to February 24th-- is precisely what threatened Putin so much. And I think it is really important we bear that in mind how--the strides that have been taken toward integration into Europe's--toward penetrating different export markets. All of the former Soviet countries had been habituated over long periods of time to produce with one real market in mind, and that is the rest of what was the Soviet Union. The shifts economically in terms of competitiveness really are quite breathtaking. The shifts in terms of the anticorruption agenda which was, of course, not complete. We all know there are major challenges there which I'll come back to in the context of direct budget support. But nonetheless, again, the much more transparent procurement process, the building of anticorruption institutions within Ukraine, knowing--like, as all humans should do, we can't trust ourselves. We always have to have those checks and balances built into the wiring of our systems. And those checks and balances were getting sturdier by the day, which was what was so threatening to so many of the Russian-backed oligarchs within Ukraine.
So, in any event, there's a journey that Ukraine was on that we want to not lose sight of, even as we move into thinking about things that Ukrainians never wanted us to be thinking about, which is, food pallets and humanitarian assistance, and needing to supplement state financing of pensions and of support for vulnerable populations with international financing. That is not the road they were on. That's not--and nobody likes to be dependent on assistance, but certainly, given the strides that have been made, Ukraine was very much heading away from that kind of dependence and to a much more self-sufficient, independent nation of the kind that they have longed for, for so long.
So, back to the direct budget support, the burn rate for this government having to manage this war is, at last estimate, I think somewhere between $5- and $6 billion a month, and that is a staggering burn rate. And if you look at the ways in which-- you are more expert on than I am--but the measures that were taken under the martial law circumstance of dealing with an invasion, for example, to allow more traffic to flow across so that humanitarian assistance could get to people who are being bombarded and displaced, you see the Treasury taking in far less income. And of course, with so much private sector industry destroyed, so many hospitals destroyed, so much of the lifeblood of the Ukrainian economy so vulnerable and so devastated by this conflict, again, the indigenous revenue from what had been a very effective economy is way down. And so, all of us have to think through, how do we make up the difference?
And USAID was part of President Biden's commitment in disbursing a billion dollars to the World Bank trust fund. We now, thanks to Congress and rare bipartisanship in this town, have $7.5 billion more direct budget support that we wish to be providing to Ukraine and we're--I think, have come to agreement for some share of that—but we are looking for how do we create a pass-through that is nimble, but also one that is accountable, because that is a lot of money. And that is money that we know is not going to be enough. We know that more direct budget support is going to be needed down the line. We all want to be able to go to our friends on Capitol Hill, go to the American people and say, this was money well spent.
So, I think this deep dialogue that we, the Treasury Department, you are having on what the right arrangement is toward accountability where the Ukrainian Government is being transparent about what those expenditures are in a manner that then offers assurances to those donors—and it isn't just the United States, as you say, that is funding this trust fund—but I think this couldn't be a more important frontend investment in a kind of architecture of sustainability. I think that is--sustainability of the Ukrainian Government and it's the sustainability of the architecture itself by ensuring that sufficient guardrails are in place for us to feel good about how that money is going to good use.
MR. MALPASS: I was interested in the historical--Ukraine was changing and, in many ways, other developing countries are also going through the effort to have a structure that can really generate more growth and raise median incomes, reduce the poverty levels. We were working with Ukraine quite a bit on the regulatory environment. How do you have some independence within regulators in a country that had been dominated by the Soviet system? The land reform was important, and we are still working to have other parts of that-- the ability of people to sell their land and to buy land as farmers create more productivity is important. And I think that will be an important part of the rebuilding effort down the line. And then-- energy transformation and also the transport systems within Ukraine, they were all organized toward supplying the Soviet Union and going the other way, and building systems that help Ukraine reach markets in Europe is important.
I will just have one more issue on Ukraine and then I want to look at fragile and conflict situations elsewhere. The storage of grain is proving problematic in Ukraine. For one, Russia is conducting a war; and not making it easy to store the grain that is there. I was just in Copenhagen last week where, interestingly, Denmark is as people know a very agricultural economy, and it is very involved in agriculture in Eastern Europe. And one of the problems that was brought to my attention is the lack of dryers, drying equipment in Ukraine. As the grain comes out of the fields it needs to be dried and then stored. The logistics problems of actually preparing the grain and then putting it in giant bags or warehouses or silos to store it for the future is proving problematic.
I think as we turn then to the Africa food crisis, the amount of grain being lost in Ukraine is a compelling issue.
MS. POWER: Yes, I'd love to speak, if I could, just of the linkage between the two andstart by noting that there is no amount--well, I suppose there is, you know, conceptually--an amount of humanitarian assistance that would meet global food needs as we project them. But there is, realistically, not a sufficient amount of humanitarian assistance or resources being dedicated to humanitarian assistance that is going to allow merely meeting the symptoms of these interlocking crises, of COVID, climate, conflict, and then compounded again by Putin's manmade conflict most recently.
We need this sort of toolkit that includes everything from a mad scramble to enhance fertilizer production on the fly. And that's why Tom Vilsack, our Secretary of Agriculture here, with President Biden's support, is making an additional $500 million available to enhance domestic fertilizer supply so we can add more fertilizer to the global pool to try to bring down prices because already you're seeing not only the practical effects of that on planting and on harvesting, but also the social unrest associated with farmers not being able to afford fertilizer in a manner that is risking instability everywhere from Sri Lanka, to Lebanon, to Ethiopia, to even further in southern Africa.
So, I am mentioning this because I do think, like you, we at USAID have these programs in regulatory reform, we have these agricultural--longstanding agricultural relationships. And then we have--we, USAID, unlike you, we do humanitarian assistance, which is, these days, in a country like Ukraine and many of the countries in Africa that are vulnerable, about putting money in people's bank accounts and letting markets work. It is actually just giving them cash to be able to buy food, as food especially becomes more out of price reach. But it also involves, of course, the provision of commodities, depending on where we're talking about.
So, we have the humanitarian, and World Food Programme and UNICEF and UNHCR and others in the international system with donor backing contributing to that. But what is unusual, I think, is that we have to refashion our tools in the regulatory space as it relates to deterring export bans and restrictions, as it relates to preexisting agricultural programming, drawing on these relationships, this trust, but a kind of--you know, a methodical pace. We now have to bring an emergency mindset to these really significant conversations about how we pivot.
And if I can just say one word on the Ukraine storage/blockade issue, it really is important in those countries where the World Bank has programs--I'll just take Sub-Saharan Africa as one example, because you're so present there and doing such important work. But the voices of those governments, it need not be a condemnation or anything along the lines of what the United States does, but the advocacy by those governments to let the grains go, to let that wheat and oil and corn supply back out on the global market, and the advocacy for Russia itself to lift the export controls that it has put on its fertilizer supplies, which predated this war. Of course, Putin is trying to blame the fertilizer crisis on sanctions, but Russian fertilizer is exempt from sanctions, but I do think that we can't give up--not least for the reason you alluded to--but we can't give up, actually, on what the Secretary-General is doing now--the UN Secretary-General--which is trying to actually create a pathway for blue corridors to move the harvests that have been gathered already out of Ukraine. If it doesn't happen, we are going to need more storage facilities. So, how do we team up with the rest of the international community to make sure--because otherwise, where are farmers going to put the next crop they harvest, never mind the question of how would they be incentivized to keep planting when they haven't made money off the prior supply. And that's where, again, this question of direct budget support or social safety nets or subsidies or incentives of some kind come in.
But the point is, like, we're on this--everyone has long talked about this humanitarian-to-development continuum, and the World Bank has moved into conflict areas more and more to be a vital player in this space. But here, again, it's almost a different point, which is how do we ‘emergency-ify’, right, the more structural discussions that we're having, and such that we could end up three or four years from now saying that was the moment in which they learned how to use fertilizer more efficiently, in a manner that, even when fertilizer prices come down, ends up meaning a higher profit margin for the farmers themselves.
With regard to Africa, just briefly because I'm sure we--there's lots to say on that--or I should say the global food crisis, because it extends to our hemisphere, as well. We just announced more than $630 million at the Summit of the Americas for additional humanitarian assistance in this hemisphere. So, there's a lot of focus on 2.2 million dead livestock in Ethiopia, on the fact that 86 percent of Egypt's wheat comes from Ukraine; 81 percent of Lebanon's; the fact of Somali acute malnutrition, which is already killing children in Somalia which, again, is a set of preexisting conditions: four successive seasons of drought compounded now by these new shocks induced by Putin.
And here, again, the toolkit is more humanitarian assistance, unsatisfying though it is, because it's just--it's not actually dealing with the structural issues that are longer term, but it's incredibly satisfying in the sense that it is what people desperately need, but combined with these structural interventions that allow for some optimization against the backdrop of the inputs and transport and other mechanisms these countries have for bringing food online. But you are going to see, out of this crisis, countries in Africa becoming larger exporters than they have ever been. So, there will actually even within vulnerable regions, be sectors--again, as you know better than I do--that will be able to pivot and benefit and meet some of the needs that have been identified, but only if we collectively hustle like we've never hustled before, and move money more quickly, whether that's safety net money, or money to allow the provision of drought-resistant seeds in communities we've never reached before as USAID or as the World Bank. But this is the exercise we are involved in now, is an emergency mindset of longstanding development programs that just need to pivot.
MR. MALPASS: Yes, the needs are immense. I am going to just recount a few of the engagements that you mentioned.
In Lebanon, we just did an operation. Lebanon found itself with no storage and with no ability to put in orders because their creditworthiness had declined. We're helping with that.
We have an operation coming on Egypt next week that will combine the need for more actual purchases, but also with better storage. Avoiding food waste is one of the systematic improvements that we can help countries make at this particular time as they begin to look to the future, or try to get through the immediate crisis.
In Sudan, I know we are working together on trying to find a way through because the military has taken over. It interfered with our social safety net systems, and we are looking for ways to get money directly to people. Some of the themes that we are doing--and we just this morning--our Board met and approved a program on East Africa that combines agricultural systems changes and actual aid going into countries in the Horn of Africa, which are devastated by drought.
We are trying to combine immediate aid with agricultural reforms and also with social safety nets. We have found that-- for people, even in the poorest countries, you can give them food, and we work with the World Food Programme, with USAID, and others to give food, but most valuable --and this is important to the women and vulnerable within the countries-- is actual money, because then they can buy what they want, not what is being received by the country from abroad, let's say.
One challenge that we are finding is in really improving the social safety nets. We are working in Ethiopia and Sudan. Sudan has a functioning social safety net. Somalia has some ability to do that through cell phones and other ways to actually get money to people. Ethiopia is still trying to develop that, and we're working with them on cell phone licensing systems that would allow people to have money.
We are coming out with our Findex report, and one of the interesting findings of that is that people now, even in the poorest countries, when they have a functioning social safety net that operates through the mobile phone providers, they can actually use it as a savings account. Now, savings for a poor person may mean $10 that they have saved for next month that they didn't have to have this month. In other words, even the smallest amount of savings that can be mobile-- that can be used oftentimes at the woman's discretion, when she needs it next month, is lifesaving -- we are pushing forward hard with trying to have digital social safety nets in more countries that are available because when you're distributing cash or in-kind goods--physical cash or in-kind goods, it's given to corruption, as you mentioned, to the man taking the savings away. And so-- having a digital system is important.
I didn't want to lose-- and I'll throw back to you, but you made a call on Russia to stop blocking the grain coming out of the Black Sea, and also to countries in Africa to make clear their objections to the war itself, to the invasion by Russia, and add their voices loudly to the call for an end to the war and a resumption to the flow of grain out of the Black Sea.
MS. POWER: But I also will say, David, the UN vote condemning the invasion was 141, and having had the job of ambassador--Thomas Greenfield--I just want to say that, by UN standards, that's an overwhelmingly lopsided vote. It's very unusual for particularly again developing countries who often want to duck--nothing good has happened over the years back in the day, right, in getting in the middle of great power tensions and rivalries, perceived rivalries or, in this case, you know, Russia's invasion and sticking their hands up. There's just a long tradition of not weighing in on country-specific issues of this nature, and weighing in on country-specific resolutions.
But many did, as you said. Many did just see this as such a fundamental violation of sovereignty and of international law that they had a national interest in standing up for that principle, which protects every country, in principle.
That said, there are a subset, for example, of countries -- many of whom are very vulnerable to the global food crisis and to the compounding effects of Putin's blockade -- that abstained on that condemnation and who have retained, by so doing and not doing in other venues, either, more of a channel, let's say, than those like us in the United States who are rallying global sanctions and accountability for this horrific war. Those channels, right now is the time to tap those channels. And again, even if you are not prepared to call out what is being done to a sovereign member state of the United Nations, surely, again, the welfare of vulnerable people within your own borders is grounds for démarcheing and just saying, blue corridor; let it happen. The logistics of it and the mechanics of how it would work are largely worked out. This is a question of one man's will and letting food go.
MR. MALPASS: We are going to turn to questions in a second, but I would be remiss not to talk about refugees. I know that World Refugee Day was yesterday or over the weekend, and you've been very involved in that.
Internally displaced persons are a very real issue in Ukraine, and also throughout Africa. People who can't live in their own community but are moving somewhere else and are displaced and need assistance. I was in Copenhagen; I visited the UNHCR Joint Data Center. The World Bank, with the UN, operates a data center in Copenhagen on refugees. It's an issue that's very important Europe, and we continue to work with Europe closely and with donors everywhere on the refugees that have come out of Ukraine into Romania. I just saw a Romanian delegation here, and I was in Romania and Poland in March, where they're receiving some of the refugees.
I know that the U.S. has the Fragility Act that has funding and you've pushed forward on that. Those are all big issues for us. The refugee flow--and I also want to mention the challenge throughout Africa is the flow of ammunition and weapons that keeps coming into countries and it is one of the causes of the refugee flow, is the sophistication of the weaponry that's being entered into the Region. I know the U.S. works hard on that with Europe. World Bank has efforts in countries but we feel staggered by the inability to deal with the flow of weapons that is coming in to Nigeria to the north side--in west Africa, those countries are inundated.
Am I supposed to go back, and then we can take questions on that? Sam, we'll come back to you on refugees, because I know how important that is.
Noreyana, what's our next step?
MS. FERNANDO: Thank you very much, President Malpass and Administrator Power. We are pleased that we have a few minutes of your time for audience Q&A. We are going to ask that you approach the microphone one person at a time, right there in the middle of the floor. In the interest of social distancing, please don't queue up and keep your questions succinct and head back to your seat.
While we get that started, we do have a question that's come in online on the question of resilience. And you did touch on this already. As we've seen, there's no rhyme or reason to crises; they can hit at any time.
What have we learned about resilience from these ongoing and recent crises? And let me turn this over to Administrator Power.
MS. POWER: Okay, great. Thank you. I will be brief. I am not seeing a crush of people going towards the microphone at this moment, but please do. We’d love this to be interactive.
So, I'd say a couple of things. When it comes to export and imports, you are seeing the need for redundancies. You are seeing the need for avoiding dependencies, reliance on single nations. It is sort of disheartening on one level that we learn the same lesson when the COVID pandemic struck about supply chain diversification, around the importance, for example, for the United States of near-shoring. And now, to see African countries, for example, suffering these horrific effects of the, again, compounding factors giving rise to the food crisis, but needing to think, similarly, about what are the variety of sources, you know, for example, fertilizer that we need to have so that we build in more of a capacity to withstand a shock that may take one or more offline.
One of the ways in which, for example, if you're Moldova and 98 percent of your apples in Moldova have gone to Russia -- dating back to habits that were formed and tastes that were formed and planting that was done back in the Soviet Union-- how, if you're Moldova, do you think about this crisis and developing a market for your apples now that just--even if there weren't issues--political issues around the war in Ukraine, just the logistics of getting your apples to Russia now are dealbreakers in and of themselves.
So, how do you diversify? You should never have that 98 percent dependence. There may always be a Russian market for Moldovan apples, one can hope, ultimately, again. And so, USAID is working, for example, with countries in North Africa to alert them to the fact that there are affordable, delicious apples that can be made available and that can be transported so that those apples don't spoil, but so that out of this crisis, again, it's more like a stock portfolio that's diversified and has more variety in it.
MS. FERNANDO: Thank you very much, Administrator Power. I see we do have a question from the audience. Please state your name and your question. Thank you.
MS. KUGLER: I am Adriana Kugler. I am the U.S. Executive Director here. Thank you, Sam; and thank you, David, for the very enlightening conversation.
I have a two-part question on food security. I am very, very glad that we're taking steps here at the Bank with the 30 billion commitment to fight food insecurity. I know USAID has been a key partner in Africa, in Sub-Saharan Africa, and in the Horn of Africa to address these issues. I guess we have seen this picture before. We can go all the way to the 1970s and more recently to the 2007-2008 food crisis. So, the first part of the question is more with regards to how we can make a true medium- and longer-term commitment. As you said, there is some real urgency to this, not only because of the pandemic and the supply chain constraints that came our way but then the economic crisis, and this compounded by the Russian invasion of Ukraine.
So, I think we have known that this is very important to step up in terms of safety nets, providing food, providing cash transfers, but we do need to make sure that, ten years from now, we're not back in the same situation again, that we do take steps to increase food production--especially in Sub-Saharan Africa, and that we make fertilizers, including biofertilizers not chemical fertilizers that we know are also damaging to environment, and that we make longer-term commitments towards sustainable agriculture and better usage of arable land and also water usage. So, I would like to see that we--this time around we do not find ourselves back again in a decade from now in the same situation.
The second part of the question has more of a gender focus. We know that the gender gap in terms of food insecurity is very big. Women and girls tend to suffer from food insecurity by about 10 percentage points more than men and boys. And again, I think we just do not know enough whether this is because of lack of financial and land market resources or because of household and community-based decisions. And I think we need to make efforts this time around to close this gap. Thank you.
MS. FERNANDO: Thank you very much for this question.
Administrator Power, over to you.
MS. POWER: Yes, I will be brief in the hopes that we can squeeze in more.
Maybe just building on the prior answer around resilience because that's fundamentally your question, is about how do we build more resilience now in this response that sets us up better for some version of this happening again.
I mean, if you look back to 2011, 260,000 people died in a single country in Sub-Saharan Africa by virtue of famine, and what grew out of that for USAID was Feed the Future Program, which was this idea of making long-term investments in agriculture. I think that kind of thing is the right response, but every infusion of resources to programs like that, or the kind that the World Bank is doing, matters. The Feed the Future is only in a select number of countries. It is only in a select number of communities within a select number of countries.
Now, we try to work through and with ministries so that the innovations of drought-resistant seeds or precision fertilizer targeting or soil mapping or space-to-place, you know, using geo satellite imagery to help farmers plant. I mean, every community reached by this know-how and knowledge, in principle, can be graduated out of that, as long as, again, the flow of access to inputs continues. And so, what we would love is more countries, I think, to be a part of those kinds of medium- and long-term investments in a core recognition that maybe people globally didn't really have the same way in 2011, which is climate change is here to stay. And having too much water and too little water, it's one or the other everywhere; right? We have no excuse this time to not embed in our programming an understanding that, even absent a gratuitous, reckless, devastating invasion like Putin's, we were going to be dealing with an arguably unprecedented food crisis.
And let me say also, life expectancy is down now globally for the first time in more than a century. And if that is not a wakeup call that we have not built enough resilience into all of the sectors that each of us are working in and that donors are trying to contribute to collectively, I don't know what is. I mean, that is the ultimate measure of our worth, and the worth of what we do is, are people living longer? Are they living healthier lives?
I think that's a challenge for us all to scale. I don't think we need any help thinking through what the right model is; it's how do we scale it. And part of the right model--and I won't belabor it, because you made the points--but it is about using the leverage that we have now. I think you have, David, something like $30 billion that you're bringing to bear using--drawing on different pools of money to help with food security and resilience. We have an additional 760 million on top of our Feed the Future Program, which is $5 billion over 5 years.
When you have new money, that gives you leverage, even in a crisis, over how that money is spent. And to David's point and your point about women and just the better--the more efficient use of a dollar when it goes to a woman de facto head of household, even if not titular head of household--it's night and day. I mean, the studies are there and getting buy-in at the national level for that kind filter for how we think about our programming or that kind of heuristic, we just know it's more effective. And at a time when countries want the most effective, optimal use of resources, this is a time to actually move the ball on gender, rather than just where we are now, which is seeing that it is women and other marginalized communities that are disparately negatively impacted. But this is a moment for us to take the knowledge that we have about the utility of putting women at the forefront of the solutions and, again, using the leverage of our resources to get that done in communities we haven't succeeded before.
MR. MALPASS: Exactly. And one of our thrusts is also with the business climate, to have women be fully part of that and able to do that. We have a major push on business-enabling in countries. It forms in a way resilience because smaller businesses are able to bounce back or able to be more nimble within a changing environment.
If it's climate change, you want some small businesses that see that and buy the seeds that will be most relevant. And also, the fertilizer-- the matching of that for local agriculture becomes an important part. The World Bank, within the climate change space, we have targets, and fully 18 percent of total World Bank funding is for adaptation. That’s half of our climate change target. It goes to helping explicitly the resilience of countries in the changing environment that they're facing.
I wanted to mention--just come back to this, I have two more points. One is I think there were mistakes made to the question in allowing the dependency of the world on the Black Sea and the exports that were coming out of Ukraine and Russia. They were the low-cost providers of the marginal grain, and I think more could have been done to have the World Food Programme, with the development programs of the world, buying locally produced products in Africa, even if they are really in the developing world--even if they cost more. You know, there's the tendency to say, well, I can get more for a dollar, more bang for the buck, if I buy from the cheapest provider. Well that may be true in bushels, but what we really need is resilience in terms of the providers.
Final point, I want to come back to digitalization. It turns out to be the flow of information-- that one of the best things I think we can do from a resilience standpoint is have people, even in rural areas, have information about what's going on because then they can adjust. They can either change the crops that they are growing, or they can move to another spot that's safer. Pushing forward with the digitalization helps with the social safety net, with the education system, ability to have children be educated even in conflict environments. I really hope that we--and this is a major thrust for the World Bank --it is a major thrust within the IDA replenishment to try to have both more access to digital information, but also more usage, and that has to do with the engagement of software. I will be speaking, actually, we are putting out the Findex index today.[i]
I will be speaking with Bill Gates this afternoon on this topic[ii] of what technology advances are making it possible to have people even in the poorest countries have access to digital information on their cell phone. Even a 2G or a 3G cell phone becomes a lifesaving device for people in a crisis.
MS. FERNANDO: Excellent, excellent cross-cutting responses. Thank you very much. And we do have time for one more question. We're going to ask that you keep your question brief. Thank you.
MS. HIGO: Yes, thank you very much for this enriching discussion. My name is Jasmin Higo. I'm a graduate student at Cornell, and I work here as a consultant with the agriculture and food unit.
My question is, you mentioned that--sorry, more African countries can become exporters, as a consequence of this war. So, what support or what role can the World Bank and USAID play in helping these countries leveraging their resources? And also, what do you think can be the role of the African Free Continental Trade Agreement in supporting these countries to become exporters and more self-sufficient? Thank you.
MS. POWER: Thank you so much. Well, I will let David speak for the World Bank. God forbid I would speak for the World Bank while sitting next to the head of the World Bank.
But I will say that this is a really-- against the backdrop of such bad news-- it's an exciting part of this moment. I mean, it sounds very anomalous to say that. There are heartbreaking, searing things happening in communities around the world right now, really cannot overstate how devastating this crisis is right now and is likely to be. If the World Bank's numbers are accurate, that every single percentage increase in global food prices throws an additional 10 million people into poverty and food insecurity[iii], whoa, right?
But it is an opportunity. There is a level of political attention from leaders in many of the parts of the world that we've alluded to, including Sub-Saharan Africa, where heads of state are now desk officers for agricultural production, and there are desk officers for regional trade and even trade further afield, for example, from Sub-Saharan Africa to parts of the Middle East and well beyond. I think to your question of what we can do, we've been very fortunate alongside the $4.3 billion in additional humanitarian assistance that we will be able to fund, because of the Ukraine supplemental, as I mentioned earlier, we were granted $760 million in food security programming. I think it will run the gamut from-- we sort of sound like each other--but social safety net support, which is more stopgap, more like emergency food assistance, to actually taking programming that has worked in one part of the country on these programs that I've mentioned, like soil mapping, like getting earlier access via digital or other means to information, seasonal information so that farmers know what is coming at them.
David mentioned earlier storage. You know, given the massive amounts of food wastage--I read that 40 percent of Nigeria's food, some estimates are, is wasted. It's not only a storage issue, there are other issues, as well. But the investment that USAID is making catalytically in cold storage supply, trying to scale the work that certain companies, private sector actors are doing. We are able to provide grant funding. We're able to lower the risk for other investors. We'll say, hey, we'll bear first loss if we can crowd in private sector financing. We're doing things like this.
And then, there are drought-resistant seeds. They are usually very well-tailored to the community in which they are working. But there are inputs that are out there that a lot of farmers don't have access to. There is knowhow about how to target fertilizer in a more efficient way. We have a program in Ethiopia that we ran for three years that decreased by 80 percent the amount of fertilizer that was expended in planting, and increased yields by 200 percent. If there's ever a time where people are going to be interested in that kind of programming, it is now.
And so, $760 million is a drop in the bucket next to global needs, but that's why I really hope we can increase this collaboration so that we're sharing knowhow and that if maybe a program of ours, of USAID's, has worked, that we make sure that that information, that knowhow has made its way into the kind of capillaries of the World Bank ecosystem, since you have this funding that you have rightly made available and that, likewise, all that your teams know from the field, from where these programs are tested and iterated, that we are not having to reinvent the wheel, but that we are gleaning that knowledge and using our missions in 80 countries around the world, our programs in more than 100 countries, to scale what you have found works. And that's where we just can't afford not to be in lockstep as we go forward.
MR. MALPASS: That's a great point. We try to work through country platforms. Country by country, if the various organizations that are very interested, along with the government ministries and the private sectors and civil society of that country come together and actually talk about what seeds are working or what new technology might be available that reduces food waste, that helps preserve.
The question was also on import and export, so I do want to mention the importance of trade finance. We have tried--the World Bank and International Finance Corporation, the private sector arm of the World Bank, has been instrumental in trying to keep open the trade lines, which are under so much pressure from the corresponding banking system and from the efforts through the banking systems-- to know your customers, AML/CFT issues --are really problematic for small exporters from these countries.
I think also the push--and Sam mentioned it earlier, of having countries not put in export bans is really important. And I will make a pitch also for countries not to have import constraints. While we have the U.S. here, we need to talk about the peanut quotas and the sugar quotas and the residual limits that the U.S. has on imports into its markets. Those could be opened with big benefit. I think also really thinking about the ethanol program which chews up so much of the world's corn is something that can be at least studied and thought about as we face the food crisis.
What I really wanted to put forward is: information and knowledge are critical and I think we're doing-- compared to 2008-2009 --the world's doing better in some respects. There's fewer of these export constraints that were so problematic in 2008 and 2009. There's more focus on improving immediately the storage and the quality of the crops that are being fed or pushed into the world food markets.
But on the negative side, the big jump in energy price and the shortage of natural gas, as Europe buys up the world's supply of divertible natural gas, that's putting a giant bind on the fertilizer markets worldwide. I'm worried about next year, as well as the immediate this-year crises.
What do we do now?
MS. FERNANDO: Thank you very much, President Malpass; and thank you very much, Administrator Power. Unfortunately, we have run out of time. Let's give our esteemed speakers a round of applause.
[Applause]
MR. MALPASS: Thank you to Samantha Power, Administrator of USAID. And from the World Bank, we've been very happy to have the audience. Thanks for the great questions on--this is a vital topic for us and we're very concerned about it, as we expressed. And we appreciate all the work that people do in both our agencies on this.
MS. POWER: We have great teams. We are each, I think, very blessed by that, above all. So, we are fit for this moment; we are fit for purpose. We just need to, again, leave no stone unturned to support people at an hour of great vulnerability.
So, thank you all.
MR. MALPASS: Thanks. Thank you.
MS. FERNANDO: Thank you. If we didn’t get a chance to get your questions, we encourage you to continue the conversation online at live.worldbank.org.
Thank you.
----------------------------------------
[i] The Findex report will be launching on June 29.
[ii] This conversation was pre-recorded for the launch event of the Findex report.
[iii] It should read percent instead of percentage.
