COMMENTARY

Peter Burgess

World Bank Group President, Robert B. Zoellick Addresses the Annual Meetings 2011 Plenary Session DAR Constitution Hall

World Bank Managing Director Ms. Sri Mulyani Indrawati: 'My sister gave birth when she was 14, and died.'

World Bank Vice President Ms. Inger Andersen: 'I was married at 10 and had a child at 15. I was too young. A woman should not have a child until she is old enough to know the difference between right and wrong.'

World Bank Vice President Ms. Isabel Guerreo: 'The man's family decides how many children a woman will have. If a woman's first child is a girl, the in‑laws will ask the woman to continue to have children until a son is born.'

World Bank Vice President Ms. Obiageli Ezekwesili:'When I was a girl, I didn't go to school, because there was no school in my village. Not a single girl was educated in our area. It was believed that educating a girl is a shameful thing.'

World Bank Vice President Mr. Hasan Tuluy: 'By the time they found the vehicle to go to the hospital, by the time the midwife was called and finished eating, by the time the husband went and bought gloves for the midwife, by the time the midwife examined the woman.'

World Bank Vice President Ms. Tamar Atinc: 'We want our daughters to go to school and know more than we do. We want them to be happier than we are. We don't want our daughters to be cut. We want them to have good jobs, and to live better lives than we have.'

Ms. Sri Mulyani Indrawati: 'Educated women do not sit around and wait for men to provide for them. They do not need a man to buy things for them.'

Ms. Inger Andersen: 'I have seven children, three girls and four boys. All of my daughters started school, but only one has passed the 4th grade and continues to study.'

Mr. Hasan Tuluy: 'By the time the doctor was called, by the time the husband went out to buy drugs, by the time the husband went round to look for blood bags around town, by the time the husband begged the pharmacist to reduce the prices.'

Ms. Isabel Guerreo: 'These days, for a woman to be rated as a good wife, one has to be a super woman, working very hard, both at home and in the office, fulfilling every demand of your family members, as if we didn't have any rights to enjoy.'

Ms. Obiageli Ezekwesili: 'Some working women don't even know how much they get paid for their job, because their husband's cash their salary for them.'

Ms. Tamar Atinc: 'When divorced women return to their parents' home, they're not paid alimony, or any share of their former husband's property. They also don't have any rights to their parents' property. In some cases, divorced women are forced to marry an older man to support themselves.'

Mr. Hasan Tuluy: 'By the time the day and night nurses changed duty, by the time the doctor came, by the time the husband had signed a consent form, the woman had died. Today, the husband wanted to sell the drugs and all the other things they never used to be able to carry the body of his wife back to their village. But he could never find the body in the hospital.'

Ms. Sri Mulyani Indrawati: 'There is no such thing as equality between men and women in this community. Maybe in town, and over an area, but not here. A man is always above the woman.'

Ms. Inger Andersen: 'Now, it is an obligation to have women among the candidates on the ballot. Women can be part of the local counsel, not like before when they couldn't. We even have a female judge, and that gives me more trust in justice. And, she also provides better advice.'

Ms. Isabel Guerreo: 'Child marriages have stopped, and even the poorest of us send our daughters to school.'

Ms. Obiageli Ezekwesili: 'We know about labor laws, about the protection of pregnancy, about hiring. Women are better today because of such laws.'

Mr. Robert B. Zoellick: What you just heard are stories from the some 4,000 voices that we collected from around the world on the challenge of gender equality. What are the implications? Four million women are missing in the developing world compared to their counterparts in the developed countries. Never born, dying as children, or in the reproductive years. That is like missing a Los Angeles or Johannesburg or Yokohama.

According to UNDP, women own only 1 percent of the world's wealth. Eliminating discrimination could increase worker productivity by 25 percent. No country can afford to overlook 50 percent of its talent. So gender equality is key to democratizing development. We can reduce deaths of girls and women through clean water, better sanitation, and maternal care. We can shrink educational gaps through incentives like those in the conditional cash transfer programs. We can close earnings and productivity gaps with access to credit, property, jobs, and basic infrastructure to help with time constraints.

We should diminish gender differences in voice. And, we need to collect data on gender so we can assess the policies and the results.

Democratizing development is about openness, too. Not just a program, but a way of doing business, interconnect transparency, effectiveness, support governance, information and learning from experience, and innovation.

Consider our Open Data Knowledge and Solutions Initiative. We have started by opening up over 7,000 data sets with multilingual access, and using technology for easy access, for example through IPhones. We have moved on to start to open up our Independent Evaluation Group's project ratings database, to make information on trade barriers and aid easily accessible. And, we now have a pilot to improve transparency and accountability in construction projects. 'Publish What You Fund' ranks the World Bank No. 1 among 30 international and aid agencies.

We want to open up information to become a way of life in work at the Bank, not just an add‑on.

Democratizing development is about new approaches to research and knowledge. Sharing research tools to empower researchers from around the world; building knowledge platforms so we can engage outside the World Bank on topics such as urbanization and jobs, food security, fertility and green growth, and others; open source publications and a new knowledge report to take stock and eventually measure the impact of our work.

Democratizing development is about new approaches to results. We now have a scorecard to assess performance with enhanced results measures. We have instituted geomapping which offers a deep dive into individual projects and we want to look to interface with beneficiaries in real time. And we have new instruments such as the program for results which will have disbursements based on achievements while also building institutions and governance.

Democratizing development is about engaging civil society groups. Communications technology is transforming how we interact. And, CSOs can contribute in many ways. They provide information and feedback. Some of them provide services. They help us with accountability. And importantly, they build local ownership.

So we're developing a CSO facility to assist, and all this will contribute to social accountability.

Now, to succeed we need these seeds to grow outside the World Bank Group, and they are. Kenya's Open Data Initiative was launched on July 8th. The eTransform project has started in Africa and Moldova, which can help governments modernize their provision of public services. And we had a community Mapathon in South Sudan that used crowd sources to map locations and infrastructure, and this involved Astra, Google and our UN partners.

Let us turn to our financials and capital because that is the foundation of our work ahead.

This next slide shows our group commitments since July of ‘07. This involves the IBRD, IDA, IFC, as well as MIGA. You can see that we reached a high of 73 billion dollars of commitments in FY 10, and we had 57 to 58 billion or so in the prior year 09, and in the most recent year 11.

Now, if you treat July of '08, which was the start of our FY 09, as the real beginning of the financial crisis, you can see that our total commitments have reached 196 billion dollars. And of that, the total disbursements were at about 126 billion dollars, faster during the most heated period of the downturn.

Now, we need a strong IBRD capital base to perform these roles. I can report to you today that we're making significant progress on the financial package to strengthen IBRD capital that all of you recently approved. We have the 86 billion dollar general and special capital increase for IBRD approved, and I want to thank Japan and Australia who not only have done the approval, but started the subscriptions. We still have a few others to authorize but we're well on our way.

Our loan maturity reform is implemented. We have reached consensus on income allocation and pricing principles, and we have been able to release over 1.2 billion dollars of national currency paid‑in capital that has been agreed with almost all the significant developing country shareholders.

And, we have been able to maintain a flat real budget now for seven years through tighter budget discipline, even though we have had a much more demanding work program and a much higher loan volume, by trying to increase our productivity.

Now, the financial strength has given us an important resilience over past years. We have a AAA rating. At the Executive Board of the June fiscal year, the IBRD equity‑to‑loan ratio stood at 29 percent, although we will expect this to come down because we want to make the most efficient use of that capital.

Our net income from IBRD was nearly a billion dollars, and most of this was plowed right back to the IDA Fund. Our IFC FY 11 net income was 1.6 billion dollars, also an impressive number. And again, a good portion of that has been transferred back to IDA.

On top of this, very importantly, IFC has been able to mobilize 6.5 billion more dollars of investment, and that was 1 billion dollars over the prior year.

Our new IFC asset management corporation attracted another 4.1 billion dollars to invest in developing countries. And thanks to all of you, as the Chairman mentioned, as well as through a healthy World Bank Group contribution, we have raised a record IDA 16 of 49.3 billion dollars for fiscal years 12 to 14 for the 79 poorest countries. And we know we have to keep improving and testing our risk management. We have appointed a new chief risk officer to try to make sure we better understand the interactions among risks, try to ask additional questions as we learn more, and of course consider the uncertainties of the environment in which we're now operating.

So let me now highlight some of the priority issues we have been focusing.

We have been urging the world and the G‑20 to put food first. And I'm very glad we've done so because as you can see in this chart, the prices remain near their peak of 2008. Unfortunately, the stocks of the basic grains remain very tight. Even over the past month or so rice, which had actually not risen as much, jumped 5 percent in the course of one month. Now, we have a range of actions to support this. The World Bank Group itself is investing about 6 to 8 billion dollars a year to build productivity and production. So developing countries can take advantage of the higher prices. Our global food crisis response program is reaching some 40 million people in 44 different countries. The GAFSP, the special food security program that came out of the L’Aquila Summit has had almost a billion dollars pledged, about 600 million dollars received. That is the good news. But, the unfortunate news is some 11 other countries have responded to this call, they prepared requests. We still don't have the funds to meet them, because we have to make sure that countries fulfill their commitments.

We're also starting to get the very first proposals for the private sector window where Canada has helped us develop that opportunity.

The Consultative Group For Internal Agricultural Research has been restructured, moving ahead. This is going to be extremely important for this effort over time. As all of you know, research and seeds and varieties have huge payoffs particularly in an environment of climate change, so I urge all of you as you consider your agricultural resources to look to see how we can interconnect and support these 15 centers, most of which are in developing countries.

The private sector is going to be very important for us to succeed, and IFC has a program to invest all across the value chain, from property rights to seeds, irrigation, fertilizers and the critical storage facilities.

We have been developing risk management tools, from crop insurance for individual farmers, to IFC's Agricultural Risk Management Program, to help farmers and businesses lock in costs and prices like you can do in developed countries. I'm pleased that France, as the G‑20 chair, and the other G‑20 countries have agreed to highlight these topics.

Now, we have learned a lot since the crisis of the 1990s, and how effective economic safety nets can cushion the most vulnerable when a crisis comes, and critically prevent the loss of a generation. One of the best models, the conditional cash transfer program, came out of Mexico and Brazil. And the World Bank Group has now helped to make this a global program, expanded to over 40 other countries. Now, some low‑income countries don't yet have the capacity to run one of these CCG programs. But, they do have school feeding programs and other basic safety nets that helped a lot during this downturn.

I would like to see the World Bank Group as one of its key priorities help every country have some type of effective safety net that doesn't bust their budget. But to do so, we have got to focus more intensively on helping the low‑income countries prepare, and make the safety net systematic as opposed to ad hoc, and focus those most in need.

In the area of climate change and biodiversity, we have continued the active efforts. We have been supporting South Africa as we did with Mexico as the host of the conference of parties on climate change. And, working with South Africa at these meetings in particular we're trying to highlight a potential triple win involving soil carbons. Soil carbons could be the next avoided deforestation in terms of effect on mitigation, but also having the benefit of higher yields, greater resilience for farmers, and the mitigation through absorbing the soil carbon. This could be a huge boost to both African agriculture and carbon mitigation. Our climate investment funds have been the best financial innovation in this area. We have leveraged some 6.4 billion dollars, almost 9 to 1. About 30 percent of that money comes from the private sector. We brought these projects together with some 45 developing countries. But, all the money we have is already committed. We have many, many more proposals, good proposals that are brought to us. For those of looking at investments in climate funds, I hope you take a close look at this one.

IFC has been innovating through the climate business group, its clean tech venture, a carbon facility. And, we have been innovating with the idea of green and natural wealth accounting to go beyond the GDP measure and include biodiversity.

We would like to try to boost the effective financing of hydropower programs, with care for safeguards, because we think they offer big low‑carbon opportunities while providing electricity to people who need it.

And, we're doing some innovation on the idea of combining wildlife premiums with the avoided deforestation program of REDD.

Our fragile and conflict states World Development Report has had global resonance. We have now opened our new center of excellence on conflict security and development in Nairobi. We have, with your support, a new IDA crisis facility that has given us a valuable new tool which we're already using in the Horn of Africa, and we're trying to put this work to good use in Afghanistan, Cote d'Ivoire, Libya, South Sudan and others. And here I want to thank in particular the U.K. and DFID and Andrew Mitchell, who really played a leadership role in helping us move this forward.

Our governance and anticorruption push is now moving to a second phase. We have had some very good high‑level successes, working with governments to prosecute fraud and corruption, put some people behind bars. At the same time, we know we have a lot to do to build state capabilities. We need to strengthen governance sector by sector. We have put a particular road review together to help countries because this is an area of particularly susceptible to cartel behavior. And we're trying to focus on the health and education areas. This is an area where we can get some great help from civil society groups and the private sector if we combine this with strengthening transparency, accountability, and voice.

To be successful we have to be able to catalyze global action on corruption. We now have more effective debarments for those that try to cheat the World Bank. And with our regional development bank partners, we have had a good program of cross debarment, so you steal from one, you get caught, you are thrown out from all.

We also have developed a corruption hunters alliance, because in many countries the people who investigate these crimes and prosecute them, put them at risk so we're trying to provide support.

Infrastructure in developing countries can also be a key element of global growth. Infrastructure can provide jobs today, it can provide productivity in the future, and it is a big user of developed country exports of equipment and services. I am hopeful the new infrastructure finance center of excellence we created in Singapore will help us unlock in particular the public/private partnership agenda, while generating projects, experience. And, we're working to see if we can also create some new investment funds.

In particular, we need to focus on Africa's infrastructure needs, because this can be a device that can do all those points, but on top of it can help with regional integration, particularly in the areas of energy and transportation.

The biggest bottleneck we've discovered in sub‑Saharan Africa is the high upfront costs to develop projects, sometimes up to 10 percent or more of the overall capital costs. So we're working with the G‑20 to see how we can create the support to try to breakthrough that bottleneck.

Events across the Middle East and north Africa continue to necessitate flexible, multidimensional responses. Policies will matter as much as money. The progress has varied, understandably, because these are linked to critical political transitions. Our colleagues in Tunisia have offered some particularly encouraging experience.

But also the Arab World Initiative that we launched in 2007 has positioned us quite well to work with Arab funds and institutions on a series of cross‑border interests. Some are micro and small and medium‑sized enterprises, some are water, some are solar, infrastructure, trade, education, and social accountability.

The role of middle income countries in a new multipolar economy, as well as their own special development needs, has been a particular interest of mine since I began at the Bank. We can see the benefits now of these countries as new engines of growth, but we also have to help them avoid the particular problem of middle income traps. One major example of our effort is a project we've been working on with China over the past year, the China 2030 project, looking at the challenge of structural transformation. Moving China to a different growth model to help achieve the goals that China has set for itself in the Twelfth Five‑Year Plan. We aim to complete this report in December. I was just in Beijing and we think that we will have lessons from this report that will be of great interest and applicability to many other countries.

We also see that middle income countries can assist others, so they can combine their development with international voice, roles, and responsibilities.

Now, let me close with a few of the issues we see on the horizon.

Of course, first and foremost we have to start at home. We're going to have to continue this modernization agenda to make the Bank Group more flexible, focused on clients, open, accountable, and always driven with attention to results.

The uncertainties of financial markets pose real risks to the recovery we're facing. We're looking very closely at the effects of this, particularly on developing countries. We have already started to work with the European Bank of Reconstruction Development and others on the particular dangers that we can see in Central and Eastern Europe and the Balkan countries.

I think we're going to need, more generally, to recognize that we're at a stage that will pose new challenges in the nature of the multi‑speed recovery. Up to July or August most of the developing countries were focused on the challenges of overheating inflation, because they have grown quite well. And as you can see, food prices still pose a serious risk. But now we may encounter new risks on the demand side. So, we're going to have to watch closely the implications for the World Bank Group's financial support, and look at how we can leverage our resources most effectively.

The new World Development Report 2013 will be on jobs. This is a central issue for all our shareholders. And it moves beyond the traditional discussions of labor economics and markets. We're taking a perspective that views issues of productivity, living standards, how jobs relate to social change and social cohesion; part of the discussion we hope to get early input on through these meetings and beyond.

And then there is the blue economy: Supporting the world's oceans. It is hard to be the World Bank if we don't focus enough attention on 70 percent of the world's surface. Not surprisingly, our country‑based model tends to overlook this area. So in 2012 we'll be working with many other groups to try to highlight the biodiversity and development issues related to the world's oceans.

Finally, I would like to give some thanks to the World Bank Group staff that has put in a tremendous effort over the past year for all of you. They're committed, they're expert, they're hard working, and if we create the proper enabling environment, they're also innovative and problem solvers. I want to thank our strong management team that reflects the very best of diverse cultures and experience, brought together with a common purpose. I want to thank our Board of Executive Directors who are working to modernize multilateralism beyond old north‑south patters. And, I want to thank all of you for your interest and support.

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