To the point about work. Ou kids when theyre are ten and 12 and 16. We dont need him them economically. Thats really new in Human History. Most economic historians estimate 30 of the value of a household was added by preadolescent kids. Under 14 yearold kids added 30 of the value to the household. Until 150 years ago. That meant you had transition from eight to ten to 12 to 14 to 16. Where you were needed and learned to work. We dont now have in our kids bellies in their experience, they dont know the distinction between production and consumption. They mostly know a distinction between progression through years in school. Which can be useful. But its not an unmitigated good. School is not a sufficient substitute for all productive cat fwoirs that exist. We need to think of education as the end. And school as a tool. A really important tool. But a tool that we ought to be able to be reflective on. Our kids they have time in school and different consumption categories. They tepid to not know a real distinction between needs and wants. Were not serving them well. Onethird critique. Theres no blame laying in the book. But if there were its us. We havent reflected on a world where kids are coming of age without engagement with a productive environment. Thank you very much. And one of the themes that we constantly and our started out with this issue. You think you might be trying to solve a problem here, but it results in something else. So the extension of life the improvement of quality of life. Technology today. Has made a lot of challenges as a young adult grow up in the challenges and one we appreciate the path you have taken and we appreciate the History Lesson tonight. Thank you, very much. Okay i think all of you know doctor kim. Who changed the world in so many ways. But lets just take a look. A physician, an throe poll gist. President of the world bank. Since 2012. President of dart mouth college. World Health Organization head for hiv and aids efforts. Cofounder of partners in health. 1987. Its an honor to have you with us tonight. Thanks so much for having me. So i read. By the way the wyoming answer. Part of it is the absence of Healthcare Centers relatively speaking. Right . Massachusetts would never win it. As a result. Victor. This is strategy. Next time you want to sit at the same table with dr. Kim. Three Global Crisis that you spoke about. Conflict, impact on people being forcibly displaced. Countries and nearly every region turning inward. Home grown terrorism. As you thought about what you want to speak at the meetings, why did you pick these three crisis to start with . You know one of the things that i have noticed everywhere that i go is that this is a good thing. Aspirations everywhere are going up. And we have actually done a study that showed that when communities get access to broad band and smart phones. And they start being able to see on their smart phones how everybody else is living in the world. Their reference income to which they compare their own actually goes up. Theres no question that aspirations do rise when wrou get access to broad band and access is something thats just going to happen. If you listen to jeff. He thinks that within two or three years all of african could have broad band. Through a system of low flying satellite. So this is happening everywhere. And as i was born in 1959 in korea. It was one of the poorest in the world. And it had lower gtd than ghana or kenya. My parents were among the few who had gone over seas. They had High Aspirations. Most of korea didnt. So coming from that background its great that everybody has High Aspirations. The problem is, that if you have High Aspirations and its linked to opportunity, then you get the kind of Dynamic Growth you can have in cry. If its linked to frustration. You get the thing i worry most about is that so many countries as aspirations grow, and opportunities are not there, it can turn countries into a places where conflict, violence eventually extremism and migration are going to be a final common path way. It worries me every day. And so the question is isnt how do you create the situation that there is truly equality of opportunity. We kind of now have all decided that the grand project the project that i studied as a graduate student that we thought still had promise in the 70s and 80s the notion of creating equality of out come. We now have all agreed that project failed. And no clear you couldnt hear the message anymore clearly than the past january when president ping said im the head of the largest communist party in the world. And then said the global system is the ocean we all swim in. And any effort to turn it back into lakes or creeks will fail. We need freer trade, freer flow of idea, the freer flow of capitol, when you get that kind of endorsement of the system as it exists today the question for us is, we have given up on equality of opportunity. Now we have to be committed. Given up in the equality of out come. We have to be fully committed to opportunity. Whats that going to take. Obviously as we have discussed over the years. I went from being a math physics major to finance. Because of the watts riots and the concept of american dream. For the world. For a chance to succeed based on your ability. So you told them at these events the first pillar of strategy to end poverty and boost shared prosperity is accelerate and inclusive, sustainable, Economic Growth. Tell us what you meant by that. Well, probably still to this day one of the greatest achievements in Human History in terms of the notion of equality of opportunity was the lifting of 800 Million People out of extreme poverty in china. If you ask them how did you do that, they wont say we em brags capitalism. Theyll say we adjusted the incentive to make the economy more dynamic. Really what it meant it was they embrace the market. And i think theres never been anything like that before. So how do you create that kind of opportunity for everyone in the world is this and so its the classic thing we have worked on by boosting Economic Growth. What we realize is especially when you understand that so many countries are prefragile. If they dont spread the benefit of Economic Growth. We begin asking ourselves the question how do you grow an economy in way thats more inclusive. But also takes into account things like the rising temperatures in climate change. How do you do those things at the same time . We started locking around and realize theres a huge opportunity. We talk about it in los angeles. This huge opportunity where right now theres more than 10 trillion in negative Interest Rate bonds. In order you give your money to the European Central bank and pay them to keep it for you. Same thing with the Japanese Central bank. Same with the german central bank. 10 trillion in negative Interest Rate. 24 trillion in very low yielding. Less than 1 . Another 5 trillion literally sitting in peoples saves at home. Mostly. They want higher return and we thought, its not that we thought. Were now working as creating situations where they can earn a higher return on the capitol and at the same time have a huge impact on inclusive Sustainable Growth and developing countries. Were setting up the deals all over the world right now. And at your global conference we made the call. I just cant tell you how many deals are in the works now from meeting. I want to make sure we get a chance at some of those. Absolutely. So many doles are going. Theres dormant capitol everywhere. People didnt understand that working with government and the private sector and developing countries were creating situations where we lessen the risk enough so that people who would never normally invest in a road or in energy or in telecommunication. In africa. Are now seriously thinking about it because we have enough weve got enough tools to derisk those investments. Thats our role. We have to use the tools of the rich to move this capital to create more opportunities for the poorest people. So lets go back [ applause ] your wisdom is infectious. Lets go back 50 years. Im at berkeley and i scribble down this formula that prosperity, world job opportunity, et cetera, that you need access to Financial Capital to serve as the Multiplier Effect on the Worlds Largest asset, Human Capital. And i want to get into your Human Capital initiative, social capital, which has many, many different issues, rule of law, property assets. But when i think about your work today, Human Capital, how do i increate Human Capital, improve the quality of life. Most of the people in this room have focused, your career has focused on that area, education, et cetera. I want to transition to one of your quotes. For most of my adult life i worked to provide care to people suffering from terrible diseases. In some of the poorest parts of the world and for most of my adult life my colleagues and i have been advocating more investments in people. I. E. Human capital. Take us to today. You know, its you were prescient, mike, in putting that formula together. One of the things that was difficult for us to do is to really calculate Human Capital. Our chief economist has come close to winning a nobel prize every year because he came up with a notion of the endodge nous theory of growth meaning Economic Growth happens not because of external factors but internal factors, productivity, Human Capital. So he developed a very interesting formula. But we actually didnt know much about the contribution of Human Capital to overall wealth. So were now doing and this is the graph. Were doing a new volume thats going to come up in a couple of months called the changing wealth of nations. And for the first time, can you believe it, for the first time in the history of the World Bank Group were the ones that do these calculations, were including Human Capital in assessing wealth. It turns out about 65 of all wealth in the world is Human Capital. It wasnt too long ago that the only kind of capital we looked at was produced capital, roads, energy, infrastructure that was built but about ten years ago we started including Natural Capital which we have to take into consideration. Natural sources, water, air, et cetera. But now that we look at Human Capital at 65 , if we can look at the next slide it turns out that the percentage of overall capital that per capita highIncome Countries have huge amounts of wealth per capita and again, most of it is human. But if you look at middle and low Income Countries there is just so much catching up to do to get anywhere near the kind of wealth per capita, especially Human Capital per capita that there is in the wealthy countries. So we asked a pretty straightforward question i thought. The question was, have things changed enough so that we have more mout come data, functional Health Outcome data. Because the way we measured before in developing countries was what percentage of your budget do you spend on health or education and really that doesnt tell us much. So now that we have so much more now the come data and another very interesting change is countries are much more transparent about sharing their data. And i have to take my hat off to bob zoellick my predecessor. Bob was the greatest champion in the history of the bank on open data. And i think that has led to now an openness thats just stunning. Heres what we did. We took the best data we have on Health Outcomes, educational outcomes and years of schooling. Years of schooling is usually not such a great measure because effective years of schooling is what you really want. But if you took those three things together and then looked back 25 years and asked the question, so if you look at the top 25 of countries that have improved their Human Capital and compared them to the bottom 25 of countries that have not improved their Human Capital, whats the difference in Economic Growth . And the number we found was stunning to us. 1. 25 of gdp per year for 25 years. And so when our chief economist paul roemer saw this and said is this what explains the middle income trap, is this what explains the Natural Resource curve, all these things weve been observing over the years, that even as gdp grows that the inclusiveness of it doesnt get better, schooling outcomes dont get better. And so when you see this kind of relationsh relationship you then can ask a whole new set of questions. Which is if the investment in human beings, and health and education is so powerful, why is it that in most developing countries heads and state and ministers of finance leave it to the end . And its not to blame them because at the world bank we used to say first get rich and then later invest in your people. And people like amartia sen, a good friend of ours, victors and mine, for many years, nobel prizewinning economist, has been saying but we know that the countries that have invested in their people, in their health and their education before institutions like the world bank thought they could afford to, theyre the ones whove done the best. And east asia was a great example. This is taking outcome data and using basian methods, the methods google and alibaba use taking huge amounts of data and looking for relationships, were finding connections to Economic Growth thats just profound. Now, just showing that theres a connection between investing in people and Economic Growth is not enough because theres got to be some way where it becomes irresistible to invest more in your own people. And so were going to do a ranking. Were going to rank the countries from 1 down to 190. Its going to be incredibly, incredibly controversial because anytime you do a ranking from the world bank what happens is the countries that are very high in the ranking, they love your ranking. The countries that are low in your ranking critique your method ol skri. Right . So we know this is going to happen. But it feels like its my moral responsibility to show this connection between your investments in people and growth. I think it could directly affect Foreign Investment in those countries. I recently had a conversation with ratings agencies and i said if we could convince you that this relationship is powerful enough would that actually affect the way you rate their bonds . And they said of course it will. It has to. So the one thing i know will get heads of state and ministers of finance to invest in Health Education is if Foreign Direct Investment drops and their bond spreads go up. In other words, their cost of capital goes up. That affects even the richest people. If you turn this around and say how could you do this to us and not give us any options to improve investments, what i would say is no, you have a lot of options. First, if you remove your very regressionive fossil fuel subsis you can reduce your Carbon Footprint and at the same time have lots of money left over to invest in health and education. Egypt has done that very courageously. Theyve done that recently. And the other thing you can do is you can put you can apply a tobacco tax. Another intervention thats very progressive, in other words, the ones who slow down their smoking the most are the poorest people, so their health gets better, and the vast majority of the benefits of tobacco tax can be structured so that they go to the poor. And there are other things too like actually collecting taxes. We have been fighting for years to help countries collect more taxes, especially from the rich. In so many countries the only people who pay taxes are the poor because theyre the ones who are too weak to refuse to pay their taxes. So if your Foreign Direct Investment drops and your bond spreads go up, then everyone has a motivation. But if it were just inputs it would be too easy. Thats why these new rankings are going to be so powerful. Its ininputs. Its actually outcomes. So they have to come to us. [ applause ] and what will we say . What well say is actually, you know, dont take your lessons from the United States that spend so much on curative care. Invest in prevention and do it with Community Health workers. Okay . [ applause ] but its incentives. Its all about incentives. What and i kept i was racking my brain for the last five years thinking what could we do that would fundamentally shift the incentives for the people who actually make the decisions in these developing countries . You know, theres not a single head of a developing country that cant wax poetic about health and education. They just dont put any money into it. So many african countries that have terrible Health Outcomes, they spend less than 1 of gdp on their health. So lets take a look at jim kim, dr. Kim over time. So lets look at this quote here, jim. Over the past year weve done seven several different analysis and were finding that investments in human beings, especially in health, education, social protection, are far more powerful powerfully correlated with Economic Growth. So gary becker, some of you, was very close to the institute, was with us. Unfortunately passed away in 14. He won the nobel prize for this concept of Human Capital. And he had estimated, and we did work back in the late 80s, that it was 75 . What did he say . Its a different type of capital. Its not a road. Its not a bridge. A different type. And one of the key elements and the central core to our conference here is if we can accelerate prevention and wellness, one, we can substantially reduce health care costs. But we can greatly add to the growth of Human Capital from that standpoint. So we step back and just think about it. Is it the chicken or the egg . What is going to drive Economic Growth . Is it an investment . Natural resources . Not really. Because it doesnt create that many jobs. Is it investment in the people . And then when you think about the 21st century it is competition for talent. And capital as dr. Kim has pointed out will flow to that area. So weve discussed the fact that Economic Growth is tied to the education of your population and this focus on Human Capital from the world bank is going to change the world in so many ways when we think about it and the Multiplier Effect of access to Financial Capital that you spoke about, lets look at dr. Kim, at our global conference this year. I was with a group that we work with, faithbased organizations, and i was telling them about how important finances is, about how important it is to crowd in capital, about how the tremendous potential of Creative Finance to solve the problem of poverty in the world. And you know, some of the faithbased organizations push back and say when you talk about swaps and hedges we go to sleep. Heres what i say, because the archbishop representing the vatican to the u. N. And the world bank was there. And i said, you know, archbishop, with great respect, and i admire the pope so much, but i would say this. I would say that for me my first 25 years of working in development i didnt know anything about finance. And the last five ive been steeped in it. Right . And i said, please tell the pope this. I think that my ignorance of finance in the first 25 years was actually sinful. Because theres no way that were going to be able to lift everyone out of extreme poverty unless we get much more creative about how we use the capital in the world to create good outcomes. [ applause ] so the most educated country in the world produced dr. Kim, korea. No Natural Resources, a pretty tough neighborhood for all those years. And when we step back and say okay, how does the middle class allocate its funds . If we look at the 11 Asian Countries that have risen up starting with korea youll see the number two expenditure by the middle class in asia is education of their children. So the average middleclass family in korea today spends 8,000 per child on supplemental education. With that enormous investment today and in many areas today, korea leads the world. I want to, dr. Kim, see if we could just jump over the social capital for a moment and talk about examples of social capital and how the world bank is looking at these issues and whether its universal suffrage, whether its the rule of law, education, health care, weve spoken about. And these different issues of social capital. Youve spoken about Human Capital, merely driven heavily by education, improving the length and quality of life, the food chain, et cetera. How do you think about social capital . Because in many ways you are the judge of this issue in the world today. You know, were in a very specific place because the founders of the breton woods institutions actually built it into the articles of agreement of the World Bank Group that we cannot get involved in the internal Political Affairs of countries. So we walk a fine line. And every time we have data we present it. So this is why i feel free to present the Human Capital data. Theres a tremendous amount of data showing that rule of law is critically important. And the way wed been approaching the social capital issues is that you know, rather than saying your Voting System should look like this we can say look, these are the things, many of them on the list that you showed, that are directly connected with faster, more inclusive Economic Growth. So we can have opinions along those lines but its very difficult for us to navigate the sort of nonpolitical piece of it. But can i just show you one slide . This is whats going to be i think very interesting. Were not going to publish this. But the university of washington that we do this with. If you can show the slide about the u. S. Situation. Weve actually begun to look at differences in Human Capital and Economic Growth in the United States. And this is on the basis of states. So if you look at the slide, this is literally a graph that was made for me by chris murray, my colleague and old friend, i think the greatest medical economist in the world today. He just made this slide for me today, and it showed just what youd expect, that theres a linear relationship between improvements in Human Capital and Economic Growth. State by state in the United States. Hes going to take this and go to the county level. What i hope to do is whether its social capital or Human Capital there has to be a different sense of how important it make those investments. I dont know if this will work. But i have some inkling that it could work because even though all ive done is give a speech saying that we are going to do these calculations of Human Capital, in a year were going to consult with everybody but in a year were going to publish your ranking. Im getting governments coming to me saying i better not do that because it will cause the opposition parties to get mischievous. So as long as weve got the data and as long as we can make the case i think that we have no choice but to do it and then we have to be ready with all the different both financial tools but evidencebased interventions like focusing on Public Health interventions, focusing on Community Health workers like you just showed. In fact, were making the case in rwanda were going to do a major experiment on this. We think that as automation gets rid of a lot of jobs many of the jobs that will be left will be in what tom friedman calls the stempathy professions, empathy linked to science, technology, engineering and math. Were going to formalize the Community Health volunteers as an actual wrkforce, pay them about as much as beginning teachers, and then thats going to be their first step into the formal labor market and that could be where jobs grow going forward. And i have a lot of faith in doing that. Before we would think oh, thats just its expenditures and wed get all caught up in balance of payments and inflation. And not think about, well, wait a minute, this is better than building a road. This could be the one investment you make that will put you on the path to Economic Growth more than anything else. Weve got a plan, put the rankings out there, get rid of fossil fuel substance dpiz, progressive interventions like a tobacco tax. Because youve got to focus on outcomes focus on Public Health, focus on Community Health workers. And then watch as you do the right thing by your people. Youre also going to do the right thing for your economy. [ applause ] now, to be fair, i could lose my job over this. [ laughter ] but you know what . Its worth it. Its worth it. I will do this no matter what. [ applause ] so in closing tonight i want to go back to a slide youve seen many times when you join us. And that is that more than 50 of all the Economic Growth in the world in the last 200 years can be traced to Public Health and medical research. And youve heard today from dr. Kim really the basis here. And when we think about the chicken or the egg and the Technology World of the 21st century, educating your citizens, making them productive in the world we live in, improving their health, improving prevention and improving the length and quality of life is the driver of education and as dr. Kim has pointed out will drive investments in those parts of the world. So thank you for joining us and tha thanking you [ applause ] can i just while youre all here i just want to point out my good friend francis collins, head of the National Institutes for health, just put out a fantastic document on the return in investment for nih. Read that document. Its stunning and really, really important that investments in research have been among the best investments that have ever been made and francis, congratulations on continuing your work. Weve got to make sure that it happens. [ applause ] and so that was a perfect leadin tomorrow because early in the morning francis will join us in a session with bob human from cell gene and lynn goldman from gw school of Public Health. So thank you for joining us and thank you, on wednesday top officials from facebook, google and russiasill testify on use of social media and its influence in the 2016 elections. Ithey will testify before to committees, later at 2 0