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tv   World Bank President on Global Economic Trends  CSPAN  November 24, 2017 3:22am-4:27am EST

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this weekend on the c-span networks. saturday at 9:15 p.m. eastern. former presidential speechwriters from neck's into obama. sunday, how your zip code and packs her health. on book tv on c-span2. daily caller news foundation editor-in-chief christopher bedford on his book "the art of the donald." lower." "the mayf ,n american history tv saturday, penn state university history fest professor -- history professor on the u.s. capitol art and architecture. , the groundbreaking
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ceremony on the dwight d. eisenhower's are memorial in washington c. now the president of the world bank talks about recent trends in the global economy and some of the ways the private sector can help used financing for developing countries. from the national press club, this is an hour. >> good afternoon and welcome. i am a former president of the national press club. i am currently president of the society of american business editors and writers. the national press club is the world's leading professional organization for journalists committed to our professions future through our programming
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with events such as this, while working to foster a free press around the world. for more information about the club, three -- please visit the website at on behalf of our members, worldwide, i would like to welcome our speaker and those of you in the audience. him and our head table includes guests of our speaker as well as working journalists. constantly, we remind people that if you hear applause in the audience, we would like to note that general members -- members of the general public attend. we would also like to welcome our c-span and other audiences, today. you can follow the action live on twitter using #mpclive. after the speaker, we will have a question and answer period. i would ask each of you to stand briefly as your name is announced and hold off on the applause until afterward. welcoming the intern at weiner
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public news and a student at georgetown university, bravely studying journalism and government. we want to note that she is working with the headliners team member who organized today's luncheon. that is robert weiner, president of weiner public news. thank you for all of your work. gillian rich is a reporter at "investors business daily." the vice president for external and corporate relations with the world bank group. nancy chen, our local abc affiliate. chief executive officer at the world bank. skipping over the podium, to my right is betsy fischer martin, executive in residence at american university. skipping over our guest speaker, the senior economic adviser writer.
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the captain with the u.s. navy, retired, executive director of first global challenge. thank you for your service. a little sleight-of-hand and musical chairs. chairman and ceo of fi investment group. a round of applause for our head table group. thank you. [applause] now to our guest speaker, today. the world bank was created at the bretton woods conference in 1944 along with the international monetary fund, with which it is often confused. the world bank might be described as the biggest community bank on the planet. the main mission involves projects targeting local levels, projects like alleviating poverty and helping women to climb the economic ladder and those focusing on improving the
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health of those living in the developing world. this is the work of the world bank under the leadership of dr. jim young kim, its current president. he was born in south korea but spent most of his childhood growing up in iowa. a team leader going back to his youth, he was quarterback of his high school football team. hailing from a family of high achievers, his father taught dentistry and his mother got a phd in philosophy. he joins us to discuss the bank's outlook for the world economy and some of the key projects and goals for 2018 and beyond. he began his first term as president in 2012, was reappointed in 2016 to a second five-year term. the world bank is comprised of five institutions providing funding and technical assistance to countries and private organizations with the goal of
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reducing poverty and providing prosperity around the world. he did not come from the political or financial arenas. as background is in public health, medicine and academic leadership. he was one of several founders of partners health, providing community-based health care in poor countries. he would go on to lead the world health organizations -- world health organization's hiv program. by his own admission, a couple decades ago, he was part of a movement he described as sought to close the world bank, that he is glad that movement failed. under his leadership, the world bank is calling for the end of extreme poverty by 2030 and to brew -- boost shared prosperity. how to meet those goals? he gave a hint at a recent press conference when he referenced positive trends but also had
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words of caution. he said after several years of disappointing growth, the global economy has begun to accelerate. trade is picking up but investment remains weak. he noted concern about risk, including the rise in protectionism, policy uncertainty and potential financial market turbulence. as you can tell, we have plenty to discuss and think about. please give a warm welcome to dr. jim young kim. [applause] pres. kim: thank you so much. i will start with some comments but i look forward to the discussion. so glad to be here at the press club. in the midst of frantic new cycles and competition for our attention, i just want to step back and reflect on what we have
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been doing at the world bank group, to try to build what i have been calling the new foundation of human solidarity. this is at a time when these very foundations of solidarity are under question and sometimes even under attack. peace and stability are critical to our efforts to grow economies and help people lift themselves out of poverty. we recently launched a report that surveyed 750 multinational investors and corporate executives and we asked them, what is most important to you when you think about investing in a developing country? the top three issues where political stability, security and the right regulatory environment. all of which are key areas of focus for our work. some of the good news about the global economy. growth is robust worldwide. 2.7% this year and the second quarter of last year saw the highest quarterly growth rates
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since 2010. trade is picking up around the world. millions of people each year continue to lift themselves out of poverty. this is also a time when multiple crises are either in full bloom or looming on the horizon. conflict, pandemics, climate change and famine are impacting people around the world and contributed to a historic number of people who have been forced to migrate. countries in nearly every region are turning inward. international and homegrown terrorists now infect every corner of the world. it feels increasingly like the increasingly interconnected community is pulling away from each other. the world bank group was founded to tackle these kinds of challenges and if you read back in some of the historical documents, it is striking how much the language of that time could apply to today.
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we have some specific missions and goals which i will talk about. as a institution, we are part of the post-1945 world order that was predicated on the notion that what affects one city, one country, one region and have immediate and lasting impact on all of us. that is a notion that has driven our work and it drives the entire multilateral system. the global order that has helped ensure decades of relative peace and prosperity was, in many ways, an american vision. long before it was clear the allies would win world war ii, president franklin roosevelt began looking beyond the war. he knew that the existing institutions would not be enough to shape the post-world order. the united states had to build an entirely new system that would not just prevent wars but ensure a lasting peace.
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he knew that stable global financial systems were critical, so he cast his treasury secretary at the time, to design it. the treasury department's plan for a fund to oversee global financial stability and a bank to support reconstruction and development was the foundation for what became the imf and the world bank group. in the summer of 1944, and the mount washington resort in brentwood, a group of people met and at that time, the allied forces were fighting in normandy and the remarkable thing about the conference is it happened while the war was still going on. china had sent a representative. the u.k. and the 44 nations that attended spoke about the most critical issues. when the secretary opened the conference, he said that the goal was to create, a dynamic
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world economy in which the people of every nation will be able to realize their potentiality in peace. to raise their own standards of living and enjoying increasingly, the fruits of material progress. for freedom of opportunity is the foundation for all other freedoms. for the past 70 years, that world order has helped ensure relative peace and stability and from the very beginning, the mission of the world bank group has been to help ensure that everyone has opportunity. the world bank's first mission was to fund reconstruction in europe. the first loan they world bank ever made was to france. after the announcement of the marshall plan by general marshall, the focus of the world bank shifted to development in poverty reduction.
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institution grew and evolved into the world bank organization that exists today. five institutions that provide countries with specialized financial tools and global knowledge. we are the only global multilateral development institution and the value proposition is that we bring knowledge from every corner of the earth to every one of our clients. the very first institution formed is the international bank for reconstruction and development. they use their aaa rating to issue bonds and financial aid. we borrow at liable or -15 basis points which is not quite as good as the u.s. treasury, but close. we borrow money in the capital markets and provide loans to middle income countries. it is critical to invest in middle income countries because they represent about one third of global gdp.
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in addition to being major engines of global economic growth, more than two thirds of people living in poverty live in middle income countries. another arm of the bank is the international development association. it was founded at the request of president eisenhower. deep connections to the history of the united states. requested to provide concessional loans with maturity of about 40 years and grants to the world's poorest countries. we have about 75 countries that qualify for these low interest loans. also have a private sector arm that was founded 60 years ago. the international finance corporation invests in the private sector in developing countries. they make equity investments in companies, uses tools such as first loss guarantees to de-risk sectors and creates markets to bring in other private sector investment. the first loan ever provided by
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ifc was to the german company who wanted to invest in resilient at time when brazil was truly a frontier market. we have another agency, the multilateral verity agency that helps the rest project sectors in entire countries by providing political risk insurance and enhancement. they actually invented political risk insurance. if a company wants to invest in a country, once to purchase a company and they are worried about bad things happening like a change in regime and the regime nationalizes that company, you can buy insurance to protect you against that prop -- possibility. there are many companies that do it and it is sometimes the critical link to making a company invest or not invest. we have our international center for the settlement of investment disputes which facilitates
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arbitration between international investors. it has helped settle many disputes around the world, including several related to nafta. when world bank group staff walking our building, they pass a large sign that reads, our dream is a world free of poverty. that was put up my microcassette -- by my predecessor. each arm of the world bank group contributes to that dream of lifting people out of poverty. one of the great untold stories as we have made tremendous progress in the past three decades in reducing poverty. the percentage of people in the world living in extreme poverty which is living on less than one dollar 90 -- $1.90 per day has gone from 30% to less than 10%. nearly 1.1 billion people have lived themselves out of poverty
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since 1990. the majority of those were in china, which was responsible for lifting more than 700 million people out of extreme poverty. there is still work to do. 770 million people still leave -- still live in extreme poverty. to make that dream a reality, we are using powerful financial tools, the tools of the rich. rich people use these tools every day to make themselves more wealthy. we are using these tools on behalf of the poor. we have always innovated the swap where parties exchange cash flows to achieve positions that are more in line with their risk profile. we invented the swap. we use swaps to mitigate currency risk and interest rate risk and we are developing new derivative instruments to manage all kinds of risks such as commodity risk, disaster risk and even whether -- weather risk .
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as we use these tools of the rich, such as leverage swaps, derivatives and insurance, we are trying to create new ones, every day that specifically are focused on serving the poor. after i became president, i asked a simple question. we see that our dream is a world free of poverty, but why don't we put a deadline on that dream? we adopted two goals in the spring of 2013. that is to end extreme property by -- poverty by 2030 and to boost shared prosperity, to boost the bottom incomes -- the bot -- the income of the bottom 40% of developing countries. this was an effort to directly address the question of inequality. i outlined the three ways we are working to get there. the first is to accelerate
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inclusive sustainable economic growth. the second is to build resilience to shocks and threats like climate change, pandemics and refugees. finally, by investing more effectively in people. first pillar of the strategy is to accelerate inclusive sustainable economic growth. last spring, we called for a completely different approach so that we can maximize the amount of finance that countries could receive for the development purposes by systematically crowding in private sector investment. everywhere we operate, we are asking a simple question. how can we maximize resources? what can we do to minimize public debt? we answer the question by trying to find win-win solutions. countries utilize these resources to meet development goals.
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there has never been a better time to try to crowd in private sector investment. there is over $10 trillion sitting in negative interest rate bonds. for nonfinancial people, this means instead of giving your money to a bank and having them pay you interest, you give your money to a bank and you pay them to hold your money. that is what a negative interest rate bond is. the japanese central bank, european central bank, german central bank, many of these banks have negative interest rate bonds. another $24 trillion in very low yielding government securities and $5 trillion in cash. all of these holders of capital are waiting for higher returns and we think that we can create situations where they can get higher returns and we can achieve development goals. we feel that the only chance we have to meet the exploding aspirations of people over the
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world is to use these market-based approaches to development. when it came time to replace -- replenish our ida fund. a 40 year loan is not a sustainable business proposition unless countries donate every three years. what we did at our last replenishment was we got a rating and now we can borrow from capital markets with the equity that sits in ida. we were able to increase resources for africa and the poorest countries by 50%. the second pillar of our strategy is to build resilience to overlapping shocks in crises. we are funding countries by finding new ways to share risk with the capital market. i am a medical doctor and an anthropologist and i had not been trained in finance, but the last five years has been an intensive period of that kind of training. i was amazed at the tricks that
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will be companies and people use every day that are completely legal and turn out very well for them. we are committed to using those tools. when it comes to crises like pandemics, rather than sharing our risk with capital markets, the poor people often have to wait. you see it again and again. cycles panicked during the height of the epidemic and you know how kenneth we were in the middle of the ebola outbreak, and then neglect. we wanted to avoid that process and avoid what happens as people quickly forget about these pandemics after the threat subsides. we took a large step in breaking that cycle and we created something called the pandemic emergency financing facility. for the first time, we have actual pandemic insurance. a $450 million policy that will disperse funds to the poorest countries automatically when the
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epidemic reaches a crucial stage. we were the first to provide any financial support during the outbreak. i heard that this was the worst thing they had ever seen, so we may be first amendment of $400 million but it was 10 months too late. this new instrument will provide $50 million right away, out of a cash window. if the epidemic continues, once it reaches a certain size and crosses borders, it will automatically disperse as much as $450 million. we found that on a three-year bond, we thought is anyone going to buy this because they could lose -- it is called capital at risk. all the money could absolutely be gone and they would have
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no investment left. it turns out that in today's market, if you offer the right interest rate, they will buy it. we sold this on the capital markets at about 8.7% and for the first time ever, we have insurance. we can move faster to prevent pandemics and for the first time, this risk in low income countries is shared with the financial markets. we are asking if we can do this for other problems. why not famine, why not humanitarian crises? can we create famine insurance, catastrophe insurance? we are working on that now. the third pillar is to invest more effectively in people. last month, we announced a new accelerated effort. we are partnering with some of the worlds best health economist and we are using supercomputing power and new methods to analyze the quantity -- analyze and quantify the stock of human capital in the world and its impact on economic growth. we do that investing in people
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is the right thing to do. now we're learning that economically, it may be the smartest thing to do. over the past year, we have done several different analyses and we are finding that investment in human beings and social protection are more powerfully correlated with economic growth then we thought. too often, we see leaders of countries say first we will grow our economy and then we will invest in our people. it turns out investing in people is economic growth. i believe that we have a moral responsibility to reveal to our shareholders the powerful relationship between investing in people and economic growth and more importantly, we are ready to help every single country rapidly accelerate the quality and quantity of the human capital investments. some of you may wonder why i use the term human capital.
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i do so because i am communicating directly with ministers of finance. this is not about charity. it is about securing their country's economic future. all of these efforts, the three major efforts, inclusive growth, resilience to shock and investing in people, they are focused on in sharing -- ensuring quality of opportunity. president xi jinping made an important speech were he said the global market system is the ocean we all swim in. any effort to turn it back to streams or lakes will fail. he set forth this notion that the project of creating equality of outcomes has failed and now what we are trying to do is create equality of opportunity. what will that mean? how far would we have to go? aspirations are going up everywhere as people see the way
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everyone else lives on their smartphones. aspirations are going up. aspirations linked to opportunity can bring dynamism and inclusive growth. there is no opportunity to achieve when you have seen how everyone is already living. it can lead countries down the path to fertility, extremism and eventually migration. as we work to end poverty around the world, we play a role in maintaining stability and opening markets. this is the path we believe to ensuring economic growth. global stability and open markets are critical for the united states. i grew up in iowa. whatever people say i was a quarterback, they think that is cool, but we lost every single game. under my great leadership. only 10% of my graduating class went to college. of the 10%, 90% went to community college.
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the rest were -- went to work in factories, on family farms. as i talked to friends back home, they are going through difficult times. as the world bank group, the answer is not to turn inward. according to the u.s. chamber of commerce, international trade supports more than 41 million american jobs. our work helps support those jobs and create new ones. more than 50% of all u.s. exports are countries where the world bank has lending programs and we are helping open markets. crowding in the private sector in developing countries is the ultimate win-win. a critical driver of economic growth and one of the keys to reducing poverty for those countries. we are cultivating an economic and business climate that allows u.s. companies to sell and compete in the developing world. one example is the ivory coast where cocoa exports are a economic mainstay.
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-- where exports are -- where cocoa exports are an economic mainstay. they did not have access to vehicles. we teamed with the minnesota-based car company to start the co-op academy which trains farmers on business skills, financial management and the best agricultural practices. it made affordable credit available to farmer co-ops for new trucks and tractors. more than 120,000 farmers have received training. more than 66,000 farmers participated in the credit programs. they have a more dependable supply of cocoa. working on another joint venture train more than 50,000 farmers in cameroon. keeping markets open and creating new ones requires stability. we are focusing more of our work in areas of fragility, conflict and violence. this is critical to our goal of ending poverty. if current trends continue and
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instability continues, we estimate by 2030, almost 50% of the extreme poor will be living in fragile states. we created a private sector window for the poorest countries which will bring more investment to countries affected by fragility and conflict. we are working with partners like the united nations to prevent conflict in countries at risk of instability. in addition to the lives saved, if we can prevent conflict in countries that bear the direct cost, casualties and losses to economic growth, we would avoid over $34 billion of losses every year, just by preventing conflict and violence. this is not new work. world bank experts begin preparing for the postwar reconstruction, just days after the cease-fire when the serbian
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section was still in flames, a world bank team landed on the ground and began assessments. they finalize the emergency recovery project of $160 million and with the peace accords were signed, the bank had lined up $500 million from donor countries to accelerate reconstruction. america's military leaders are by necessity of development partners. earlier this year, more than 120 retired generals and admirals affirmed in a letter to congressional leaders, the military will lead the fight against terrorism on the battlefield. it needs strong civilian partners in the battle against drivers of extremism. lack of opportunity, insecurity, injustice, and helplessness. a world bank group is often that partner in places like iraq, for example, we are supporting the government and finding new ways to bring private investment into
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a country under the most difficult circumstances. years of war and neglect have damaged iraq's energy grid leading to daily blackouts likable the economy. we help the government bring in $375 million of private financing. this is why they conflict with isis was ongoing. not finding supported the also supported the completion of the first phase of the new power plant that will supply about half of baghdad's energy. we do this with exceptional value. over the last several decades, the international community has contributed $19 billion to capitalize our middle income fund and ifc. since 1945, the united states has contributed $2.5 billion. we have been able to take that $19 billion in overall investment to fund more than $900 million. we are getting close to $1 trillion in loans and financing in developing countries. we have also provided -- put $15
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billion in reserve and transferred $28 billion to ida, our fund for the poor. we support our own fund for the poorest. for every dollar we invest, we have an impact that his tens and even hundreds of times more powerful than if they put their money directly in the form of grants into budgets of developing countries. for most of my adult life, i have worked to provide health care for people in some of the poorest countries in the world. the organization i cofounded, partners and health, has worked for three decades around a principal we call making a preferential option for the poor, borrowing from latin american catholic theology. an option for the poor requires us to work to ensure that everyone in our community is the focus, had access to health care, nutrition, education, and a safe place to sleep. when i became president of the world bank group, i brought that
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philosophy with me. a moral obligation to provide everyone in our client countries with opportunities to achieve their highest aspiration. helping poor countries develop is not an exercise in charity, it is an investment in a stable, and more prosperous world. improving stability in countries emerging from conflict and investing in poor countries wracked by hopelessness and frustration are good for the entire world including the united states. as i said before, investors above all, are looking for stability. we are working toward that goal every year. let me make one other less obvious point. strong american participation in multilateral institutions and multilateral development is an opportunity to promote principles we value as a nation, respect for self reliance, equality of opportunity, openness and fairness, and are regard to the belief -- our regard to the belief of others. those principles are embedded in the institution.
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to go back to henry morgan bow, he told the delegates assembled in new hampshire that the new financial order would be based on an elementary economic axiom, he said austerity has no fixed limits. -- that prosperity has no fixed limits. it is not a finite substance to be diminished by division. the more of it that other nations enjoy, the more each nation will have for itself. for seven decades, we have helped billions lift themselves out of poverty. we have contributed to maintaining peace and stability around the world. if we have the right resources and commit to this effort, we can do the same for decades to come and help held the kind of world that we will be proud to leave to our children. thank you very much. [applause] >> thank you. we have a very engaged audience. we have had no shortage of questions.
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having been in this position a number of times where we got no questions, we are happy to have the audience participate. obviously, the world bank's largest shareholder is the u.s. this seems to be the point you ended your speech on about the engagement of the united states government on the global stage. the u.s. has long supported the mission and goals of the organization. do you worry that under the current administration the support for the world bank and related institutions will be cut back? mr. kim: for 70 years, under many different administrations, we have always valued and worked hard in maintaining the relationship with the united states. i have to tell you, we are working very closely with the u.s. government. with ivanka trump, with her advocacy, we were able to raise a huge amount, $350 million in four months which will be
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translated into, we hope, a multibillion-dollar fund for women entrepreneurs in developing countries. ivanka has promised me she will be involved herself and mentoring these young women entrepreneurial's. this is an innovation. we have never had this financing from women entrepreneurial's before. we have been in discussions with other parts of the administration as well. the treasury, the u.s. treasury, is the governor of the world bank group. we have been working very closely with them. the people in treasury have raised a number of very legitimate questions that we have to resolve as we are going through a process of trying to improve our capital position. that, we feel those questions are perfectly legitimate and that we have good answers for those questions. i remain optimistic. it is actually kind of rare that people from the white house
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would come to us with innovative ideas about what we could do. now that people in the white house know our business model so well, we are hoping they will -- there will be more joint work. i'm glad you mentioned ivanka trump. could you talk about what her current involvement is in this project? -- mr. kim: the world bank, the financing will be provided to countries and individual orioles based on the rules. ivanka will not have any role in deciding when the money goes. her role has been an advocate for the idea. her role will be to mentor the people who were given these grants. the process of deciding where it goes is going to go through the standard world bank process the process of deciding where which includes all the different countries that have contributed to the fund which has been 15 countries that have contributed to the fund.
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what will she do? t was critically important for her to have championed this fund to begin with. we are creating a network. what often happens is that we provide women with tiny loans, and the women do very well. very few of them are able to go from those tiny loans to actually creating formal business. that fund access to an online virtual network. if they have a question, look, i am trying to do, but my hr system together, they would type it in or get on the phone. then there will be a network of entrepreneurs, most of them will be women entrepreneurs, who will provide them direct feedback on how to solve their problems. she has told us she will be part of that network. we will come back to the issue of women's participation in the global economy. let's stick on this theme of globalization and the would be reversal of it.
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even the waves of nationalism that have been seen around the world, how is that affecting your mission today and how concerned are you about it endangering the mission in the future? we are seeing lots of different political developments in different areas. we are by articles of agreement, we are prevented -- provision -- we re officially a nonpolitical rganization. of course, we have to watch carefully because things that happen on a political level have a huge impact on the economy. when we say policy uncertainty, we are not sure what will happen with a different trade agreement in the united states. we are not sure what will happen with brexit. our role is to follow these developments as close as we can and prepare countries for the various things that might happen under these different political decisions. our role is not to make any
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judgment on what happens politically, but to prepare for the fallout when they do happen. we understood from your speech that embarking on all these innovative financial strategies to take a bet against the worse case scenario, such as a pandemic, so that is placing a financial bet. if you are placing financial bets with the future of the pellicle -- political outlook come are you looking from backing away from globalization? figuratively peaking. i am an anthropologist. whenever someone uses a bunch of words like globalization, my first question is, what do you mean by that? i do not see trade decreasing right now. i see trade increasing. when you have someone like president xi who makes the kind of statement he did, he was essentially saying unless we have open borders, more trade, more movement i've ideas, capital,
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people, the world is in trouble. we are moving in that direction. the key is to make sure if you use his analogy, if it is the ocean we all swim in, you have to make sure everyone can swim. that is what we are doing. there is always and constantly a drumbeat of saying let's not do so much for other people, let's do things for ourselves. a different times, that has gone up and down. right before the united states joined britain in world war ii, that was exactly the conversation they were having in the united states. that kind of language goes up and down. i think it is very hard to imagine a world in which every country in the world will close up your the countries that close their border to trade will suffer because there is no talk of that in the african country that has seen latin america. the east asia, certainly. if one or two countries decide to stop
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trading, that will be a disaster for that country. ï. show less text let's talk about the role of women. how does the world bank promote women when women entrepreneurial's are a inority, what kind of role will it create the summer play in that? will it create the summer play in that? my first came to the bank and before i came to the bank, i heard a lot about gender data. gender informed prior -- progress. is that real? it turns out the first thing you have to do is know what impact your projects are having on women. we did not collect that information. we thought these projects are working or not working. when we took the next step to say, is it working for women? in in formed -- it informed the data in a powerful way. every single project efore it goes to the board, we
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have to know what the impact on women will be. whether women are included. we have also focused -- we have invested in some banks in developing countries and we have encouraged them to set up with -- set up specific branches for women. women will go into their traditional banks and be gnored. the data is absolutely overwhelming. the greater participation of women will lead to significant economic growth. these numbers are easily quantifiable. the message is very clear that creating situations where women can work, where women have, for example, child care so they can work, these are critical for economic growth. these are not issues of justice alone. they are very much issues of justice but they are also is -- issues of economic growth that is left on the table a cousin you have not taken the time to make access to finance, markets, for women.
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we tend to be u.s. centric in the united states. what are the challenging developing countries for women and where would you hope or expect to see progress over the coming ecade? there are great differences. let me give you some examples. there are places in the world where very strict laws restrict the movement of women. there are also places in the world that are very advanced economies where still women can't participate in the economy. korea, it is interesting, when i go to korea, because i was born there, i speak the language, i tend to be disinhibited. i say what i think to the koreans. what i said to them is sexism is one of the greatest challenges. korea has the lowest female participation in the workforce of any country. they are literally leaving many, many gdp growth points on the table by not making it possible. japan also has this issue. the prime minister has
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made it a priority. he is creating things like a professionalize childcare workforce. he is pushing so that women are on the boards of the major companies. he has made a part of his policy to bring women into the workforce. i think that is a very wise thing to do. it will be culturally difficult, but now korea has to focus on doing that. other east asian economies as well. we believe that the countries that will do he best of the countries -- do the best are the countries who understand the importance of women. there is the role of leadership in organizations such as yours and one of those leaders sitting to my left, the questioner says because there has been so much change in the world and that has been reflected in changes in the world bank, do you think the next president of the world bank should be a non-woman, perhaps from asia or elsewhere in the world? after all, these are the regions that still need the most from the world bank.
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doesn't having an american traditionally as the head of the organization hurt its standing around the world? a couple of points. first of all, when i leave the world bank, the good news is i will have no influence on who the next president of the world bank will be. for good or bad, the global system has a set of informal agreements. the head of unicef is always an american. the head of the world health organization is never an american. the head of the u.n. is never from the permanent five of the security council. americans have a few slots, one is the world food program, the other is unicef, and the other is the world bank group. i think the board of the world bank should choose whoever is the best candidate. there are
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candidates in this room that would be great. but, i think that is the issue that has to be resolved. there has been this informal dividing up of positions in the world. we will have to decide how that is going to work. are we going to go away from that and make every position open for everyone? maybe. but as they say, that is above my pay grade. in terms of deciding. i think leadership can come from anywhere. i will tell you one story. a leader of a great nation in asia who i have become friends with, he sked me about the election process last year. i said to him -- he said to me, what is the issue? i said, i think people are sensitive of an american having this job. he looked me in the eye and in trying to give me the highest
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possible complement, he said but jim, we have never thought of you as an american. you know, i have played football in high school, i am in so many ways an american, but i speak freely which is. i spend a lot of my time in africa. i think that no matter what your citizenship is, if you care about these issues, if you care enough to learn languages, if you care enough to spend time in africa and self asia, whatever your nationality, your ability to embrace the entire world should be the top criterion for becoming president of the world bank. a question about the relationship with a current administration. the treasury secretary rizzoli called on the banks to reduce lending to middle income countries that have developed significant resources of their own saying that the world bank program should be "tailored to help fully transition those ours off donor assistance." what do you think of that and are there plans to look into that
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suggestion? absolutely. we are looking into it now. it is a perfectly legitimate and important question for us to address. here is how it works. we are actually a bank. people have said you guys are like a bank with a brain, or a university with a lending arm. we are both of those things. i have 3000 phd's who work at the bank, the smartest people i have met in my life. it is a living, breathing, kind of an academic institution, but it is also a bank. the first rule of any bank is you have to have a diversity of investments. if we were to get outs of middle income countries, and some people say you should only work in fragile and conflict states, but if we did that, our aaa rating would no longer be a aaa rating. there is genius to 70 years of putting this institution together. it is a combination of less risky investments with very risky investments. we are not being
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asked to do riskier investments, but in order for us to do that, we have to have balance. more importantly, middle income countries is where the 70 plus percent of the extreme poor live. just because of their size. if we were to neglect metalico -- middle income countries, we would have to give up on this mission of extreme poverty. we do not want to do that. this is truly a cooperative. i can't stress enough, in 1945, they were looking backwards historically. they said wars in europe of currency fluctuation that went up and down, everyone, those of you who are in the financial world, the bigger thy neighbor approaches where you tried everything you could to devalue your on current tree -- currency, these things were happening every day. there was no place people could go to talk together if there was conflict. many would say that the post-1945 world
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order has led to great things, the european union, we have had not -- we have not had wars in europe. in the case of the world bank group, it is truly a cooperative. usually, we try to work by consensus. this is the place where despite the fact that countries will be actively at war with each other, they can get together, said at the table, and talk about how can we help somalia? how can we help the refugees? what can we do after the hurricanes in the caribbean? there is a place where whatever conflict is existing on a political realm, we can talk about things that we want to do for the poorest people in the world. i can't stress to you how important it is to have that. if we got rid of the interesting institutions we would have to invent them. again. this is a question about how things have evolved over the years. someone asked, do you partner with organizations like a -- like the gates foundation
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and other peer organizations and how does that relationship work and how does it change your work? one of the things i've tried to do in the last five years is to completely change the way we work with other organizations. sheila has been at the center of that. one of the things was that i came to this job, and the secretary of united nations -- my homeboy, from korea. we met, and we hit it off right away. do you call in the? -- hat? i call him something -- a term of someone who has come before ou. we got into culturally appropriate relationship with them where i used an honorific language with him. he did with me as well. there was one day where we were at an event and
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president clinton was there, and we were speaking to each other in korea. he says, what are you all talking about? you guys are going to take over the world! we would go to places and we traveled a lot together. we traveled to some of the most difficult places in the world. we would be there in a room full of military people, heads of state, and we would start speaking to each other in korean. it would be about what we are going to eat tonight for dinner. they always thought something was going on. what really was going on is that we have brought together the united nations and the world bank in a way it has never been before. when he and i traveled for the first time to africa, he landed on the ground and said the world bank president and the secretary general of united states had never traveled together before. so many years ago when these institutions were created, that was the idea. the person in the u.n.
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who really was most important in bringing the relationship together, was antonio guterres with the current secretary general. we think this relationship will continue. it will get even stronger. that is the u.n. with foundations. we have made lots of effort to do more with foundations and we worked on lots of specific issues. the other thing we are doing as we are saying to the foundations and to the donor ountries, we have this -- it is like a global public good, and that is our aaa rating. because we borrow at low interest rates, what we are telling everybody is you can give $10 million directly or you can take the $10 million and combine it with a loan, and instead of giving $10 million of grant and $40 million of relatively high interest loans, you can combine those two. get
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$50 million of 0% interest money they have to pay back in 20 years. that is a fantastic way of stretching resources which i think we will have to do more and more. you have talked about human capital investment. what is your view of potential impact of robotics, artificial intelligence, and automation? that has ramifications with respect to the workforce going forward. i should have known, you will ask me lots of tough questions. i talked about it a little bit in the speech. here is what worries me most. little children -- will everybody have access to high-speed internet? i have heard that the latest estimates are that all of africa will have access to 4g lte by 2020. not everyone will have a smart phone, but they will all know what someone -- they will all know someone who has a smartphone. what we know happens, and as we have been researching, is if you have
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access to the internet, you -- your aspirations go up. the income to which you compare your own goes up. you want a higher income, you have higher aspirations. i was born in one of the poorest countries in the world. i think having higher aspirations is great. in the context of the higher aspiration to come from looking at your smartphone, being on the internet, at the same time technology is eliminating a lot of tasks which will eliminate a lot of jobs. if you asked the question how many jobs currently exist which will be illuminated by automation? 66%. ethiopia, 85%. the jobs will disappear. will there be new jobs created? i think we have to look for completely different models for how countries will grow. the normal assumption is you go from agriculture to light manufacturing, and then to the
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industry. right now, there is not a single african country that has reached the level of efficiency of bangladesh in garments. when i hear from the printing companies is that printing will make all the garments and shoes soon. other people say well, maybe not so soon. this is why we are focused on human capital. the one thing we know will be valuable no matter what happens, no matter what direction the global economy goes, is healthy people with good minds have been educated. the reason we are creating this ranking and we will create this controversy is because unless everyone gets on board with trying to improve their human capital, we will see a lot of extremely unhappy people with high aspirations. thank you for that. we will bring this program for a soft landing. before we conclude, i
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would like to remind the audience about upcoming events. on december 12, we will have a book event with donna brazil. i believe she has been in the news lately. she is a former chair and longtime democratic strategist who shares her new book, the inside stories and breakdowns that the donald trump in the white house. december 18, we will have an nbc headliners breakfast with walter isaacson and he will talk about his new book about leonardo da vinci. before we ask the last question, we do have a traditional ceremony here at the national press club in which we truly do present a token of our appreciation. that is the iconic national press book coffee mug. there you go. thank you. and our last question, this is not necessarily one of the harder questions that we could have asked today, but also -- obviously you are the president of the world bank. who balances the checkbook and your family? not me. i can tell you for sure. my wife does. let me eave it at that.
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short and sweet. how about a round of applause for our guest speaker? we would short and sweet. how about a like to thank our national press club staff including the journalism institute and the broadcast center for organizing today's events or you can find more information about the national press club on our website. you can get a copy of oday's program. please visit with that, we are a joint. -- we are copyright national cable satellite corp. 2017] national captioning institute, which is responsible for its caption content and accuracy. visit]
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