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Spring Meetings 2024: From Vision to Impact | The Development Podcast
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Foreign hello and welcome to the development podcast from the World Bank Group Spring Meetings edition. I'm Sarah Treenor. The latest World Bank IMF Spring meetings have recently wrapped up and while the world continues to face intertwined challenges, including conflict, food insecurity and of course climate change, we'll be exploring how the World bank is adapting. We'll hear what it means to talk about a better bank from Ajay Banga, World Bank Group President.
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We need a better bank to address all these challenges, but also a better bank for the challenges of tomorrow.
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We'll be getting perspectives from the private sector about why Africa's energy gap needs to be tackled and urgently.
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In Africa, we're still thinking of of how we can bring electricity access. That's not acceptable. We cannot have economic development, social development, education, access, healthcare without electricity.
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And we turn our attention to the International Development association as it heads towards its latest funding round at the end of this year. Why does IDA matter and how does it work to support the world's poorest countries? We get the view from politicians and partners, including Zambia's Finance Minister.
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We are focusing our eyes on getting the economy to grow. As the economy grows, we still need the support of ida.
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The development podcast at the Spring meetings coming to you from the World Bank Group. How can the World Bank Group turn its vision creating a world free of poverty on a livable planet into impact? This was one of the big talking points for World Bank Group President Ajay Bunga who got the event started. Let's take a listen to some of what he had to say about modernization, the Bank's mission and its new scorecard.
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The world is facing a set of intertwined challenges. There's the climate crisis, debt, food insecurity, pandemics, fragility. And there is clearly a need to accelerate access to clean air, water and energy. But we cannot tackle poverty without this broader view and hence our early step to widen the aperture of the bank with a fit for purpose mission and a vision. And that is to create a world free from poverty on a livable planet. Nearly all estimates make clear that adequate progress requires trillions annually. Time is of the essence. In the next 10 years, 1.1 billion young people across the global south will become working age adults. But in the same period and the same countries, we are currently expected to create 325 million jobs. We need a better bank to address all these challenges, but also a better bank for the challenges of tomorrow. The G20 leaders challenged the World Bank Group to change and to be a bigger part of the solution. They gave us a roadmap to evolve an ambition for speed, simplicity, better leveraging our balance sheet by engaging partners and the private sector. So let's talk about speed building a faster, quicker bank. A few months ago, the average World bank project approval process took 19 months. That's far too long. So our stated goal is we're going to reduce the approval time by one third by the middle of next year. Now we're about halfway to that goal. We've knocked off about three months out of those six odd months we need to do. But there's clearly more to come. Now let's talk about the capital adequacy of what we are trying to do with our balance sheet. In April a year ago, we squeezed $40 billion over 10 years from our balance sheet by adjusting our loan to equity ratio. And since then we have launched a portfolio guarantee mechanism, launched a hybrid capital instrument. And these new tools will enable us to take more risks, boost our lending capacity further, all while preserving our AAA rating.
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Ajay also had this to add.
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So faster, simpler, more effective, more efficient. We can't do it alone. Over the last several months we have worked among and across multilateral development groups to deepen and amplify our ability to make change happen. And across the MDVs we have a working group that is working through a plan to first, work with credit rating agencies to help improve their understanding of our work and our risks. They are integral to unlocking the full potential of callable capital. Second, very soon we will announce a new CO financing platform that I think can be a game changer for clients and for the MDBs to work together. Third, we are standardizing our processes such as procurement. I think that will help to save clients time and money. And finally, we are continuing to develop a new approach to track climate outcomes based on impact. But we know that governments and multilateral institutions and philanthropies all working together will still fall short of providing the trillions that we will require annually for climate, for fragility, for inequality in the world. We therefore need the private sector. And in June we launched the Private Sector Investment Lab and recruited 15 CEOs across asset management companies, banks as well as operators to identify barriers and potential solutions to investment the emerging markets.
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He said that while progress has been made that there is still work to be done.
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And that's the idea. Refocusing the World bank not just as a funding mechanism, but also as a knowledge mechanism. It's also a change in how we will work. But it's anchored in the hard Earned expertise that some outstanding World bank staff throughout the world deploy to help countries develop. Now, let's talk about the scorecard, because underpinning all of this, as I just mentioned, holding our feet to the fire, is accountability and focus. So you followed our work to be more efficient and scale for impact. And a cornerstone of this is to incentivize output, not just input, ensuring that we focus not only on money out the door, but also on how many girls are in school, how many jobs are created, how many tons of carbon dioxide emissions are avoided and how many private sector dollars are are mobilized. That scorecard is our yardstick of accountability. It's a guidepost that our teams can rally around and work toward. It also allows our shareholders and taxpayers to clearly see the impact that we are making with the trust that they're placing in us by giving us their capital. All this sort of adds up to a better functioning machine that we hope can take on bigger and more ambitious projects.
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Well, during the week of the spring meetings, we heard some brilliant panel discussions focusing on global health and energy. There was also some big news. A new partnership between the World Bank Group and the African Development bank to provide electricity access to at least 300 million people across Africa by 2030 was announced during the week. It's a big deal, potentially halving the number of people living without electricity access. Actually at the moment, scaling up energy solutions and investments was the focus of one of the sessions. And there was a passionate contribution from one private sector voice. Let's hear from Hasanin Hiraji, CEO of Axion Group.
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Are we really serious? We're today in 2024, whereas when we listen in Europe, United States, developed countries, we're talking about AI, the effect of artificial intelligence throughout the economies in Africa. We're still thinking of how we can bring electricity access. That's not acceptable. That's terrible. We know absolutely that today we cannot have economic development, social development, education, access, health care without electricity. And you're asking me my motivation, but it's my responsibility as part of the African private sector to build infrastructure for Africans, by Africans, and with the support of all of your institutions. We need you badly. We need you. Let's take the synergies, the inspiration for what happened in telecommunication, liberalization of the sector. Secondly, what happened? Access to financing. Third, innovation. And we can do exactly the same one in electricity access. We have created a company in my home country, Madagascar, called Welight. Welight today is providing to 150 villages. We're talking about 30,000 households, quarter million people that would have never thought to have access to energy with bringing them mini grids but not only engaging them with mini grids, we've got other use cases bringing them mobile money, other use case bringing them access to digital inclusion. And this is working. We need a support from the government. We need a clear action. Let's stop and talk. Let's walk the talk. We can do this. I mean we've done 150 village Madagascar 15 village in Mali and we're continuing. So I mean the solution is there.
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Another big piece of news from the spring meetings was a new and ambitious target outlined by World Bank Group President Ajay Banga and to expand quality and affordable healthcare services to 1.5 billion people by 2030. Let's get some insights from Dr. Tedros Adhanom Ghebreyesas, Director General of the World Health Organization. And then we'll hear the thoughts of Dr. Mohammad Pate, Nigeria's Minister of Health.
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Health is well on the status of UHC. 140 countries have recognized health as a fundamental right in their constitution. This is very important because it's recognizing health as a fundamental human right which is a political choice that can help us to do the rest, financing or everything. So that's good. And then the second part is since the, since the birth of WHO, that's 76 years ago, life expectancy has increased from 46 to now 74 average. And this is good progress. Of course this is living condition, improved improvements in medicine, improvements in public health, its overall development. It shows overall development. But if you see the SDG goals directly we, if you compare it with the SDG goals, we're off track.
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Yeah, very.
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And I don't think without a very serious catch up we may even reach the SDGs. So we have to work harder. And that's why we're partnering with the World bank and other partners, the whole UN, with countries, especially countries at the center, to push forward to achieve the SDG goals.
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Let's hear now about Nigeria's plans for health care.
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We are a young and fast growing country and our health outcomes have been improving over time. But there are other elements like non communicable diseases that are arising as the fastest growing segment for morbidity and mortality. Under the President's Health Sector Renewal Investment Initiative, we're expanding access to quality basic health care through the primary health care system, expanding the primary health care centers that are functional from 8,800 to 7,10,000, retraining 120,000 frontline health workers and enabling them with digital technology to function, Expanding the affordability through the Vulnerable Groups Fund to ensure the poorest and most vulnerable are able to afford support the services that they need to improve maternal and child health immunization as well as deal with other elements of the evolving epidemiology that we are seeing of hypertension, diabetes and other diseases. Over time we expect that Nigeria's health outcomes trajectory will improve, that life expectancy can improve and that maternal mobility and mortality will reduce because many of the diseases are actually preventable with simple things that can be delivered at the primary health care centers. So on our path to uhc, these reforms are getting us closer to saving more lives, reducing physical and financial pain producing health and to do it for all Nigerians so that we don't leave.
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Anyone behind Well, a lot of the discussions during the week of the meetings reference the International development association or IDA. It's the World Bank's fund working across 75 countries, investing in people's and planet. IDA's low cost financing is crucial for the world's poorest countries and at the end of this year, IDA21, its 21st funding round takes place. Let's hear from Zambia's Minister of Finance Situmbeko Musikatwani who spoke about the significance of IDA for his country's economy and his ambitious plans for growth.
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IDA for Zambia and most African countries has been very important in the many years of economic stagnation. IDA was there to provide investment into human capital, education, health, infrastructure like roads, power and so forth. We are very grateful for that. Now we are moving on to the next phase. I was telling some colleagues this morning that the development process in our countries can no longer be based on begging. Begging with a bone and somebody gives. There may be elements of that, but that role must be going down, down, down, down. It's very clear that those who have managed to get rid of poverty successfully have done so because they managed to get their economies to grow. The Taiwan of this world, Mauritius of this world, Singapore, Malaysia, they fought poverty successfully because of growth. So we are focusing our eyes on getting the economy to grow. As the economy grows, we still need the support of ida. We still need money to invest into infrastructure that can attract the private sector to come and invest. So I see ida, apart from investment into human capital to leverage private sector initiatives so that we get the economies to grow sustainably 10, 15, 20 years as the Asians have done. I believe we did that, we'll be on the way to fighting poverty.
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Reverend Eugene Choir, President and CEO of Bread for the World, added this about the importance of ida. When we are talking about critical issues such as ending hunger, everyone needs to.
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Do better and needs to do more. But some of the reasons why Bread for the World supports IDA is because we know that it works, we know that it's effective, and we know that during a time when some of the most challenged nations around the world, they need lifelines, they need real resources. And so IDA specifically focuses on making sure that these loans and grants are available for nations that are especially challenged during this time. But in addition to a robust replenishment during this time, you know, we have to also acknowledge that IDA needs to get better. And by that, we mean that we need to really center and name, in our opinion, the important importance of food and nutrition during this time. You know, maybe 20 plus years ago, I think many of us that do this work, there was sort of an obsession or infatuation with calories. And we know that it's important, but we have to also focus on the critical nature of nutrition. One of the reasons why I think IDA is such an important personal story for me is, you know, I am the youngest son of my father who was born in what is now called North Korea. The stories that he shares are just hard to believe. The sad part about these stories are that they're not just stories from 60 years ago. They're stories that are happening in the world right now. And as you know, because Korea has often been shared as a story of success, but 1962 received its first first loan, and about 15 years later, they became the first nation that received a grant to be contributing back. We would love to envision a time. We know there's no overnight success, but we would love to envision in the future a world where these nations who are receiving grants are able to flourish and be able to give back so that the rest of the world can fly.
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Flourish away from ida, Germany's Svenja Schulze, Minister of Economic Cooperation and Development, had this to say about the World Bank's reforms and its vision.
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We have different challenges now than 10 or 20 years ago. Seeing what the pandemic makes with the world, seeing what climate change means for the people. That needs to be also reflected here in the World bank groups and with the evolution process. We bring that forward together. We see what is changed and what that means for us. And I'm really happy with the speed of the process. I know it's hard for the whole World bank, for the whole group, but it is important that things are seen now. With this new scorecard, we can it is more transparent what we reached in the World bank. And now we are in the steps to a better bank, what we can do to make it a bigger bank. With these new course, I want to give a signal to the other ones that that needs also money with this hybrid capital. That is a really good opportunity for us to bring the money into the banking system. And I want to send a signal to the others, to G7, to the EU, that they also need to bring the money on the table. And they do so. And so we are successful in that, creating not just a better bank, but also a bigger bank. I think seeing all the problems in the world, seeing where the money is needed, that is something that is needed. So fighting against climate change, fighting against biodiversity loss, being prepared for the next pandemic, fighting against hunger and poverty, that is what the bank is doing. And therefore we need all the money.
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We're nearly at the end of another race around the spring meetings, and thanks for sticking with us. But first, let's get some thoughts from Raj Kumar, president and editor in chief at devex, about his take on the World Bank's reform agenda and also on the importance of ida. He spoke to Andrea Tapia.
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Well, first of all, I've been coming to a lot of spring meetings for a lot of years. I think there's more attention than ever on the World bank, in part because now it's at the center of both the development agenda and the climate action agenda agenda. And that's something new that came out of Marrakesh. So I think there's a lot of attention, there's a lot of focus, and people are looking at the different levels and layers of what the World bank has been doing since Marrakesh. I think there has been real progress. I talk to a lot of people and get different perspectives. So some are advocates who say it's not going as fast as it should. Some are. Others say, look, these reforms, they might seem internal, but they are really significant. They're going to change the culture and the DNA of this institution. So I've never seen as much debate and conversation, not pessimism, but a sense that the bank is more needed than it ever was before and that actually its leadership is not about just what the bank does, but it's about aligning all of the other MDBs and the DFIs, really the whole global development finance architecture, toward addressing the dual challenges of development and climate.
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So, as you mentioned, a big part of becoming a better bank has to do with also being better position to serve the countries that need it the most and to work together to ensure that that happens. With the spring meetings now wrapping up, our attention will pivot toward the IDA 21 replenishments in December. And as you know, half of the world's 75 most vulnerable countries are facing a widening income gap with the wealthiest economies for the first time this century. I would like to know, where do you think we should be placing our energy to ensure IDA's most effective and addressing this gap, but also supporting countries in the process of achieving their sustainable development goals?
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Yeah, I think IDA is essential. It is concessional money, right? It's cheaper money. And one of the things we learned this week was that the volume of funding coming from low and middle income countries back to wealthy countries is actually comparable to the amount of aid going to those countries. And that's because of all of the debt that has been accumulated over the years, somewhat high interest rates that has to be paid back. IDA is different in the sense it's highly concessional, it's cheaper money. And so for countries that are really stretched, which is a lot of countries at the low income scale in the world, it is essential. And it's essential across issues. It could be health, it could be energy. As we talked about, those are two of the big announcements this week. It is sort of key. It's hard to see a way that a country gets out onto a growth path that's more inclusive without IDA now, what should they actually do? How do they close those gaps? I think the health announcement this week was interesting, which is really looking at how do you take some of the changes in technology and innovation and bring them to the places that need the most. So in most countries in lower income, there's just nowhere near enough of a health workforce. You're not going to very quickly or magically train enough nurses and doctors to serve the needs that are there. But telemedicine provides a lot of opportunity. And it's the kind of issue, just like electrification, where it's not just we need this one widget or this one technology. You need to align all of these actors. And that's what the World bank is so good at doing with IDA money. IDA money being a key ingredient there. And the bank made this big visionary announcement. They want to reach one and a half billion people with healthcare services. It's a big, bold announcement. It's one of those things that we of course track a lot of dev exercises. How is it actually going to work between now and 2030? But there's no way it gets there without Ida.
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That's all for this special spring meeting edition of the Development Podcast. I'm Sarah Treanor. Please do get in touch with any thoughts, comments, suggestions. We love to hear from you. Our email is thedevelopmentpodcastorldbank.org we'll be back very soon and thanks for listening. SA.