Transcripts For CSPAN3 World Bank President On Global Economic Trends 20171128

Global development initiatives. From the National Press club, this is an hour. Good afternoon. And welcome. My name is mark hamrick. I am a former president of the National Press club. I am currently president of the society of American Business editors and writing and Washington Bureau chief with bank rate. Com. The National Press club is the worlds leading professional organization for journalists, committed to our professions future, through our programming with events such as this while working to foster a free press around the world. For more information about the club, please visit the website at press. Org. To donate to programs offered for the public through the Journalism Institute visit press. Org institute. On behalf of our members worldwide i would like to welcome our speaker to those in the audience. The head table includes guests of the speaker as well as working journalist, club members. If you hear applause in the audience, wed note that members of the general public attend, so its not necessarily evidence of a lack of journalistic objectivity. We would also like to welcome our cspan and other audiences here today. You can follow the action live on twitter using npclive. After our guest speech concludes well have a question and answer period and ill ask as many questions as time permits. Now its time to introduce the head table guests. I would ask you to each stand briefly as your name is announced and hold off on applause until afterward. Well begin on this end of the table welcoming paula hong, an intern at wiener public news and a student at georgetown university, bravely studying journalism and government. Good to have you here today. We want to note that she is working with the Headliners Team member who organized todays luncheon. Robert wiener, president of wiener public news and a member of your Headliners Team. Thank you for your work. Jillian rich is a reporter at investors business daily. Sheila redzepi, Vice President for external and corporate relations with the World Bank Group. Nancy chen, anchor at our local abc affiliate. Chief executive officer at the world bank. Good to have you. Skipping over the podium to my right, betsy fisher martin, executive in residence at American University and cochair of the npc Headliners Team. Skipping over our guest speaker, donna borak, senior Economics Writer at cnn money. Kevin wintsing, a captain with the u. S. Navy, retired. Executive director of first global challenge. Thank you for your service, kevin. Bob, i didnt realize you were back at the head table. Got you earlier. Weve got kevin. Frank islam, chairman and ceo of fi investment group. And now a round of applause for our head table. 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 its often confused. The world bank might be described as the Biggest Community bank on the planet. The main mission of the bank involves projects targeting the community at local levels. Projects like alleviating poverty and helping women climb the economic ladder and those focusing on improving the health of People Living in the developing world. This is the work of the world bank under the leadership of dr. Jim yong kim, its 12th president. Our guest speaker holds a ph. D. In anthropology and is a physician. He was born in seoul, South Carolina south korea but grew up in iowa. He was gb quarterback of his hi School Football team. His father taught dentistry and his mother got a ph. D. In philosophy. He is going to discuss the key projects and goals for 2018 and beyond. He began his first term in 2012 and was reappointed in september 2016 to a second fiveyear term. The world bank is comprised of five institutions providing both funding and Technical Assistance to countries and private organizations with the goal of reducing poverty and boosting prosperity around the world. In other words, it is an ambitious effort. Unlike his predecessors, dr. Kim did not come from the political or financial arenas, rather, his background is in public health, medicine and leadership. He was one of the founders of community health. He went on to lead the World Health Organizations hiv aids program. Immediately prior to being nominated and elected World Bank President he served four years as president of dartmouth college. He was part of a movement that he described that sought to close the world bank. He said he is glad that movement failed. Under his current leadership, the world bank is calling for the end of extreme poverty by 2030 and to boost shared prosperity, focusing on the bottom 40 of the population in developing countries. But how to meet those goals. At a recent press conference dr. Kim gave a hint when he referenced some positive trends but also had some 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 his concern about risks including the rise in protectionism, policy uncertainty or possible Financial Market turbulence which could derail the Global Economic recovery. As you can tell, we have plenty to discuss and think about today. Please give a warm National Press club welcome to dr. Jim yong kim. [ applause ] thank you so much, mark, for the introduction. I will start with some comments but then i would look forward to the discussion. So glad to be here at the National Press club. And all of us know that in the midst of frantic news cycles and competition for our attention, i just want to step back a bit and reflect on what we have been doing at the World Bank Group to try to build what i have been calling the new foundations of human solidarity. This is at a time when these very foundations of human 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. We asked them what is most important to you when you think about investing in a developing country. The top three issues were political stability, security, and the right regulatory environment. Of course, the policy environment. All of which are key areas of focus for our work. Now, ill start with the good news about the Global Economy. Growth is robust worldwide. We predict 2. 7 this year. In the Second Quarter of last year, so the highest quarterly growth rates since 2010. Trade is picking up. Around the world millions of people each year continue to lift themselves out of poverty. But 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 all over the world and contributing to an historic number of people who have had to who have been forced to migrate. Countries in nearly every region are turning inward. International and homegrown terrorism now affects every corner of the world. It often feels like increasingly the interconnected Global Community is pulling apart, pulling away from each other. The World Bank Group was founded exactly to tackle these kinds of challenges. And if you read back at some of the Historical Documents from the Bretton Woods conference its striking how much the language of that time could apply to today. We have a specific mission and goals, which i will talk about in a bit. As an institution we are part of the post1945 world order that was predicated on the notion that what affects one city, one country, one region, can have immediate and lasting impacts on all of us. Thats a notion that has driven our work, and it drives, in fact, the entire Multi Lateral system. The global order thats helped ensure decades of relatively peace and prosperity was, in many ways, an american vision. Long before it was clear that the allies would win world war ii, president Franklin Roosevelt began lookinghe ahead to the wod beyond the war. He knew that the existing institutions wouldnt be enough to shape the postwar order. The United States had to lead an effort to build an entirely new system that wouldnt just prevent world wars but would ensure a lasting peace. Roosevelt knew that stable Global Financial systems were critical. So he tasked his treasury secretary at the time, henry morganthau, to design it. The treasury departments 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, in the mt. Washington resort, in Bretton Woods, a group of people met, and at that time the allied forces were fighting in normandy. And so the remarkable thing about the Bretton Woods conference is it happened while the war was still going on. China had sent a representative, of course, the uk, under the leadership of John Maynard Keynes and the 44 nations spoke about the most critical issues. Secretary morgenthau said the goal was to create a Dynamic World economy in which the people of every nation will be able to realize their potentialities in peace. Raise their own standards of living and enjoy 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, the United Nations, nato, the world trade organization, the imf, the World Bank Group, oecd, has helped to 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, what morgenthau called freedom of opportunity. The world banks First Mission was to Fund Reconstruction in europe. In fact, the first loan the world bank ever made was to france. But after the marshal plan, after the announcement of the marshal plan at at commencement address at harvard in 1946 by general marshal, the focus shifted to development and poverty reduction. It evolved into the World Bank Group that exists today. As mark said, five institutions that provide our countries with specialized financial tools and global knowledge. And thats key. We are the only global Multi Lateral 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 in Bretton Woods is the International Bank for reconstruction and development, ibrd. It uses its aaa rating to issue bonds, and the financial people here, we have one of the best aaas in the world. We borrow at minus 15 basis points, not quite as good as u. S. Treasury but close. We borrow money in the Capital Markets and provide loans to middleIncome Countries. Its critical to invest in middle Income Countries. They represent about one third of global gdp. In i more than twothirds of People Living in poverty live in middleIncome Countries. Another arm of the bank is the International Development association, ida, as we call it. It was founded at the request of president eisenhower. Requested in 1960 by the president to provide concessional, in other words, close to zero interest loans with a maturity of about 40 years. And grants to the worlds poorest countries. Now we have about 75 countries that qualify for these lowinterest loans. We also have a private sector arm founded 60 years ago. The International Finance corporation, or ifc, invests in the private sector in developing countries. Ifc makes Equity Investments in companies, uses tools such as first loss guarantees, to rerisk sectors and create markets to bring in other private sector investment. The first loan provided was to the German Company seamans that wanted to invest in brazil when brazil was truly a frontier market. The Multi Lateral Investment Guarantee Agency helps to derisk projects, sectors and countries by providing Political Risk insurance and credit enhancement. It actually invented Political Risk insurance. If a Company Wants to invest in a country, wants to purchase a company, for example, and theyre worried about bad things happening like, for example, a change of regime and the regime nationalizes, that that company you can buy insurance to protect you against that possibility. We invented it. Now there are many, Many Companies that do it. Its sometimes the Critical Link to making a company invest or not invest. Finally, we have our International Center for the settlement of investment disputes, which facilitates arbitration between international investors. Over the past two decades it has helped settle many disputes around the world including several related to nafta. Every day when World Bank Group staff walk into our building, they pass a large sign that reads, our dream is a world free of poverty. That was put up there by my friend and predecessor. In different ways each arm of the World Bank Group contributes to that dream of lifting people out of poverty. You know, 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 by our definition is living on less than 1. 90 a day, has gone from 35 , 30 years ago, to less than 10 today. Nearly 1. 1 billion people have lifted themselves out of poverty since 1990. The majority of those, of course, were in china, that was responsible for lifting 700 Million People out of extreme poverty. But there is still a tremendous amount of work to do. Some 770 Million People still live in extreme poverty today. So to make the dream of a world free of poverty a reality, were using powerful financial tools. I like to say that we are using the tools of the rich. The rich people use these tools every day to make themselves wealthier. We are trying to use the tools now 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 now swaps to mitigate currency risk and Interest Rate risk. Were developing new derivative instruments to manage all kinds of risk. Commodity risk. Disaster risk and weather risk. Were developing new tools all the time. I will tell you about a few in just a bit. And so, 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 of the World Bank Group i asked a Pretty Simple question. We say that our dream is a world free of poverty but why dont we put a deadline on that dream. So we adopted two goals in the spring of 2013 about nine months into my first term. And that is to end extreme poverty by 2030 and to boost shared prosperity. In other words, to boost the incomes of the bottom 40 of developing countries faster than the growth of the economy. And this was our first effort to directly address the question of inequality. A year ago we i outlined the three ways that were working to get there. The first is to accelerate inclusive, sustainable Economic Growth. The second is to build resilience to shocks and threats like Climate Change, pandemics, refugees. And finally by investing more and more effectively in people. The first pillar of the strategy is to accelerate inclusive, sustainable Economic Growth. And last spring i we, along with our colleagues, we called for a completely different approach so that we could maximize the amount of finance that countries could receive for their Development Purposes by systematically crowding in private sector investment. Everywhere we operate were asking a Pretty Simple question. How can we maximize resources. And what can we do to minimize at the same time public debt. So we answer the question by trying to find Win Win Solutions where investors get a good return and countries utilize these resources to meet their development goals. There has never been a better time to try to crowd in private sector investment. Right now there is over 10 trillion sitting in negative Interest Rate bonds. For the nonfinancial people here, this means that, 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. Thats what a negative Interest Rate bond is. The Japanese Central bank, European Central bank, german central bank. Many others have negative Interest Rate bonds and 10 trillion are sitting in those bonds. Another 24 trillion in very lowyielding government securities, and 5 trillion in cash. Usually 1,000 year old bills sitting in peoples saves. All these holders of capital are waiting for higher returns, and we think we can create situations where they can both get higher returns and we can achieve development goals. We feel that the only chance we have to meet the exploding aspirations of people all over the world is to use these marketbased approaches to development. When it came time to replenish our ida fund, and the fund for the poorest, a 40year loan at 0 as you can imagine is not a Sustainable Business proposition unless countries donate every three years. And so what we did at our last replenishment was that we got a rating for ida. And now we can borrow from Capital Markets with the equity that sits in ida. We were able, in doing that, to increase resources for africa and the poorest countries by 50 . Now, second pillar of our strategy is to build resilience to overlapping shocks and crises. Were helping countries build resilience by finding new ways to share risk with the capital market. This is you know, i am a medical doctor and an anthropologist. I had not been trained in finance. The last five years has been an intensive period of that kind of training, and i was just amazed at the tricks that wealthy companies and wealthy people use every day that are completely legal and turn out very well for them. So we are committed to using those tools. And so, when it comes to crises like pandemics, rather than sharing our risk with Capital Markets, the poor people often have to wait. We saw that with ebola. You see it again and again. The cycle of panic during the height of the epidemic. You remember how panicked we were in the middle of the Ebola Outbreaks. Panic, neglect, panic, neglect. We wanted to avoid what happens as people quickly forget about the pandemics after the threat subsides. This year 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 an epidemic reefr epidemic reaches a crucial stage. I happened to be an Infectious Disease doctor and i called my friends during the Ebola Outbreak and we made the first commitment of 400 million but it was probably ten months to late. This new instrument now will provide 50 million as much as 50 million right away out of a cash window, but then, if the epidemic continues, once it reaches a certain size, once is crosses borders and there are a certain number of cases it will automatically disburse as much as 450 million. On a threeyear bond, pandemic bond, of 450 million we thought, gosh, will anyone buy this . They could lose all its called a capital at risk meaning the 450 million could be gone and theyd have no investment left. It turns out that in todays market if you offer the right Interest Rate, they will buy it. So we sold this on the Capital Markets at around 8. 7 total. For the First Time Ever we have insurance. We can move faster to prevent pandemics. For the first time this risk in low Income Countries is shared with the Financial Markets. So we are asking, can we do this for other problems. Why not famine, why not other humanitarian crises. Can we create a famine bond, famine insurance, can we create humanitarian disaster insurance . Last month we announced a new accelerated effort called the hupen capital project. Were partnering with the best Health Economists and using super Computing 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 always knew investing in people is the right thing to do. Now we are learning that economically it may well be the smartest thing to do. Over the past year weve done several different analyses and are finding that investments in human beings, especially in health and education and also social protection, are more powerfully correlated with Economic Growth than we ever thought. Too often we still hear from leaders in the developing world, first well grow our economies and then well invest in our people. Well, it turns out that investing in people is investing in Economic Growth the Human Capital project will eventually include a ranking, which will be very controversial, but i believe that we have a moral responsibility to reveal to our shareholders the powerful relationship between investing in people and Economic Growth. Were ready to help every country rapidly accelerate. I am communicating directly with ministers of finance and want them to know that this is not about charity. Its about securing their countrys economic future. Now, all of these efforts, the three major efforts, inclusive Economic Growth, resilience to the shocks, and investing in people, are focused on insuring equality of opportunity. You know, this year in january president xi jinping made an important speech in which he essentially said the Global Market system is the ocean we all swim in. Any effort to turn it back into streams or lakes will fail. He set forth this notion that the project of creating equality of outcomes had failed. And now what were trying to do is to create equality of opportunity. And what will that mean. How far would we have to go . What we know is that aspirations are going up everywhere. As people see the way everyone else lives on their smartphones, the aspirations go up. Aspirations linked to opportunity can bring dynamism and sustainable Economic Growth. If there is no opportunity to achieve when you have already seen how everyone else is living it can lead countries down the path of fragility, conflict, violence, extremism and eventually migration. As we work to end poverty around the world we play an Important Role in maintaining stability in opening markets. This is the path we believe to assuring Economic Growth. Global stability and open markets are critical for the United States. I grew up in iowa. Whenever people say i was quarterback of the Football Team they think thats cool, but we lost every single game, under my great leadership. [ laughter ] now, you know only 10 of my graduating class went to college. And most of the 10 , 90 went to community college. The rest went to work in factories, on family farms. And as i talk now to friends back home, they are going through some very difficult times. But we want to stress, 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 to countries where the world bank has lending programs and where we are helping to open markets. Crowding in the private sector in developing countries is the ultimate winwin. Growing in robust private sector is a critical driver of Economic Growth and one of the keys to reducing poverty for those countries. We are also 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 on economic mainstay. For years the farmers used dilapidated trucks because they couldnt buy new vehicles. So we started the Cargill Coop Academy to train farmers on business skills, Financial Management and best agricultural practices. The program made Affordable Credit available for new trucks and tractors. And now more than 120,000 farmers there have received training and participated in the credit programs. Cargill now has a more dependable supply of cocoa. Were working to train more than 50,000 farmers in cameroon. Keeping markets open and creating new ones requires stability. So we focus even 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 instability continues, we estimate that by 2030 almost 50 of the extreme poor will be living in fragile and conflict affected states. So we are innovating. We created a private sector window in our ida, our fund for the poorest countries, to bring more investment to countries affected by fragility and conflict. Were working with partners like the United Nations to prevent conflict in countries at risk of instability. In addition to the lives saved, if we could prevent conflict in countries that bear the direct cost, casualties like casualties to losses to Economic Growth wed avoid over 34 billion of losses every year just by preventing conflict and violence. This isnt new work for the bank. In 1995, as war raged in former yugoslavia, World Bank Experts began to prepare for the postwar reconstruction. Just days after the ceasefire, when the serbian section of sara yefo was still in flames they landed on the ground to finalize an emergency Recovery Project of 160 million. When the dayton peace accords were signed the bank had lined up 500 million from donor countries to accelerate reconstruction. Americas military leaders understand the necessity of development partners. Earlier this year, more than 120 retired generals and admiral affirms in a letter to congressional leaders that the military will lead the fight against terrorism on the battlealfield but it needs strong civilian partners in the battle of against drivers of extremism, lack of opportunity, insecurity, injustice and hopelessness. The World Bank Group is often that partner. In places like iraq, for example, were supporting the government in finding new ways to bring private investment into a country under the most difficult circumstances. Years of war and neglect have damaged iraqs energy grid. Leading to daily blackouts that cripple the economy. We help the government bring in 375 million of private financing this is while the conflict with isis was ongoing for the northern region. That funding also supported the completion of the first phase of a new power plant that will supply about half of bagdads energy. We do all of this, we think, with exceptional value. Over the last seven decades the International Community has contributed 19 billion to capitalize the fund ibrd and ifc. Since 1945 the United States has contributed 2. 5 billion. Now, we have been able to take that 19 billion in Overall Investment to fund more than 900 million. We are getting close to a trillion dollars in loans and financing in developing countries. We have also provided we have also put 50 billion in reserves and transferred 28 billion to ida, our fund for the poorest. So we actually support our own fund for the poorest. For every dollar that countries invest in the World Bank Group, we are able to have an impact thats 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. Now, for most of my adult life i have worked to provide health care to people in some of the poorest countries in the world. The organization that i cofounded that mark mentioned. Partners in health, has worked for three decades around a principle that we called making a preferential option for the poor. Borrowing from latin American Catholic theology, a preferential option for the poor requires us to work to ensure that everyone in our communities of 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 some of that philosophy with me, a moral obligation to provide everyone in our client countries with opportunities to achieve their highest aspirations. Helping poor countries develop is not an exercise in charity. Its an investment in a stable, secure, more prosperous world, improving stability in countries emerging from conflict and investing in poor countries racked 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. And we are working towards that goal every day. Let me make one other less obvious point. Strong american participation in Multi Lateral institutions and Multi Lateral development is an opportunity to promote principles that we value as a nation. Respect for selfreliance, equality of opportunity, openness and fairness, and our regard for the beliefs, dignity and aspirations of others. Those principles are embedded in the foundation of our institution. To go back to henry morgenthau, he told the delegates assembled in New Hampshire that the new financial order would be based on an elementary economic axiom. He said that prosperity has no fixed limits. Its not a finite substance to be diminished by division. On the contrary, the more of it that other nations enjoy, the more each nation will have for itself. For seven decades we have helped helped billions lift themselves out of poverty and have contributed to maintaining peace and stability around the world. If we have the right resources and fully commit to this effort we can do the same for decades to come and help build 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. So, having been in this position a number of times where we got no questions, were very happy to have the audience participate. So, obviously the world banks largest shareholder is the u. S. This seemed to have been the point that 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. So do you worry that, under the current administration, that support for the world bank and related institutions will be cut back . Well, you know, for 70 years under many different administrations we have always valued and worked very hard in maintaining the relationship with the United States. I have to tell you, we are working very closely with the u. S. Government. We just, with ivanka trump, started the womens entrepreneurship financing initiative. Really, with her advocacy we were able to raise 350 million in about four months, which will be translated into a, we hope, multibillion dollar fund for Women Entrepreneurs in developing countries. Ivanka promised me she will be involved herself in mentoring these young Women Entrepreneurs. This is an absolute innovation. We have never had this kind of financing from Women Entrepreneurs before. We have been in active discussions with other parts of the administration as well. Also, you know, the treasury, the u. S. Treasury is the governor of the World Bank Group, and we also have been working very closely with them. You know, the people in treasury have raised a number of very legitimate questions that we have to resolve as we are now going through a process of trying to improve our capital position. But we feel that those questions are perfectly legitimate and that we have good answers for those questions. So i remain optimistic. I mean, its actually kind of rare that people from the white house would come to us with innovative ideas about what we could do. And now that people in the white house know our Business Model so well, were hoping that there will be more joint work. I am glad you mentioned ivanka trump. Thats obviously been a headlinegenerating relationship. Could you talk about what her current involvement is in this project. This is a Standard World Bank project. The world bank, the financing will be provided to countries and individual Women Entrepreneurs based on the rules of the World Bank Group. Ivanka trump herself wont have a role in deciding where the money goes. Her role has been as an advocate for the idea and then her role will be to mentor the people who are given these grants. And so, there is the process of deciding where it goes is going to go through the Standard World Bank process which includes all the Different Countries that have contributed to the fund, by is 15. You said what she wont do. What will she do . First of all, it was critically important for her to have championed the fund to begin with. But so we are creating a network. What often happens is that we provide women with the microenterprise, the toiny loan. They do well but few are able to go from that to creating a formal business. This fund will help them create that business. When they create the business well give them access to an online virtual network. If they have a question, look, i am trying to put my hr system together. Here are the problems. Theyd either type it in or get on the phone and then there will be a network of entrepreneurs, i think most of them will be Women Entrepreneurs, who will then provide them direct feedback on how they can solve their program. She has told us she will be part of that network. Well come back to the issue of womens participation in the Global Economy in a moment. Sticking on the theme of globalstation and the wouldbe reversal of it. Given 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 . Well, so we are seeing lots of different Political Developments in different areas, and our we are, by by our articles of agreement, we are prevented, we are forbidden from getting involved in the internal politics of any of our member countries. So we are officially a nonpolitical organization. But, of course, we have to watch carefully because things that happen on a political level have a huge impact on the economy. So, you know, when we say policy uncertainty here, we are not sure what will happen with different trade agreements in the United States, we are not sure whats going to happen with brexit. So our role is to simply follow the developments as closely as we can and then prepare countries for the various things that might happen under these different political decisions. So our role is not to make any judgment on what happens politically but to prepare for the fallout when they do happen. Well, sure, because we understood from your speech that youre embarking on all these Innovative Financial strategies to try to essentially take a bet against the worst Case Scenario such as a pandemic. That is placing a financial bet. If you are placing financial bets for the future on the political outlook, are you betting on further backing away from globalization . Well figuratively speaking in the sense of the bet. I am an anthropologist. Whenever someone uses a bunch of words like globalization, my first question is, well, what do you mean by that, right . I dont see trade decreasing right now. I see trade increasing. And when you have someone like president xi who makes the kind of statement that he did, i mean, you know, he was essentially saying, unless we have open borders, more trade, more movement of ideas, capital, people, the world is in trouble. And we are inex orably moving in that direction. The key is to make sure, if you use his analogy, if its an ocean we all swim in, you have to make sure everyone can swim. Thats what were doing. There is constantly the drum beat of saying, lets not do so much for others, lets do things for ourselves. At different times thats gone up and down. Right before the United States joined britain in world war ii, that was exactly the conversation that they were having here in the United States. And so i think that kind of language goes up and down, but i think its just very hard to imagine a world in which every country in the world will close up. The countries that close their borders to trade will simply suffer because there is no talk of that in, you know, the african countries i have seen, latin america, south the east asia, certainly. If one or two countries decides to really stop trading, that would be a disaster for that country. Lets talk about the role of women. How does the world bank promote development for women when Women Entrepreneurs are a minority of women in developing countries . What kind of role will the Women Entrepreneurs finance initiative created this summer play in that . When i first came to the bank and before i came to the bank, i heard a lot about gender disaggregated data, gender informed projects. I thought, what does that mean . Is that real . It turns out that the first thing you have to do is just know what impact your projects are having on women. We didnt really collect that information. We thought the projects are working or theyre not working. When we took the next step to say, well, is it working for women it really informed the work we were doing in a way that was far more powerful than i thought it would be. Now every project before it goes to the board we have to know what the impact on women will be. Whether women are included. We have also focused in some instances, for example, weve invested in some banks in developing countries and weve encouraged them to set up specific branches for women. Because often what happens is that women will go into their traditional banks and be ignored. The data is just absolutely overwhelming. The greater participation of women will lead to significant Economic Growth. I mean, these numbers are easily quantifiable. And so the message is very clear, that setting creating situations where women can work, where women have, for example, child care so that they can work, these are critical for Economic Growth. These are not issues of justice alone. They are very much issues of justice, but theyre also issues of Economic Growth thats left on the table because you have not taken the time to make access to finance, to markets, for women a priority. We tend to be u. S. Centric here in the United States. What are some of the most challenging developing countries in the world for women, and where would you hope or expect to see progress, lets say, over the coming decade . There are great differences. Let me give you a couple examples. There are places in the world where very strict laws restrict the movement of women. But there are also places in the world that are very advanced economies where still women cant participate in the economy. So korea. I mean, its interesting, when i go to korea for some reason because i was born there, i speak the language, i tend to be disinhibited and i say exactly what i think to the koreans. I have said to them sexism is one of the greatest challenges. Korea has the lowest female participation in the work force of any oecd country. They are literally leaving many, many, you know, gdp growth points on the table by not making it possible. Now, japan also has this issue, but Prime Minister abe as made it a top priority. He is creating a professionalized child care work force, he is pushing so that women are on the boards of major companies. He made it part of his policy to bring women in the workforce. Its a wise thing to do. It will be culturally difficult but korea has to focus on doing that and other east Asian Countries as well. We believe the countries that will do best are the countries that understand the importance of women in every aspect of life. Then there is the role of leadership in organizations such as yours, and one of the leaders sitting to my left here. The questioner says, because there has been so much change in the world and possibly thats been reflected in change at the world bank, do you think the next president of the world bank should be a nonamerican woman, perhaps from asia or elsewhere in the world and, after all, these are the regions that still need the most from the world bank. Doesnt having an american, traditionally as the head of the organization hurt its standing around the world . A couple quick points. First of all, when i leave the world bank, the good news is that i will have no influence on who the who the next president of the world bank will be. You know, for good or bad, the global system sort of has a set of whats the right word informal agreements. So 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. , secretarygeneral of the u. N. , is never from the permanent five of the security council. Americans have a few slots. One the world food program, the other is unicef and the other is the World Bank Group. So i think its you know, the the board of the world bank should choose whomever is the best candidate. And there are candidates in this room who would be great as the next president of the World Bank Group. But i think thats the issue that has to be resolved. There has been this informal dividing up of positions in the world. And so, well just have to decide how thats going to work. Are we going to go away from that and make every position open for everyone . Maybe. But as they say, thats thats above my pay grade, in terms of deciding. Look, i you know, i think leadership can come from anywhere. And the ill tell you one story. A leader of a great nation in asia, who i have become friends with, he asked me about the election process last year. And i said to him, well he said to me, whats the issue . I said, well, you know, i think people are sensitive about an american continuing to have this job. He looked me in the eye and, in trying to give me the highest possible compliment, he said, but jim, weve never thought of you as an american. Now, you know, i played football in iowa in high school, i am in so many ways as american as you can be. But i speak three languages. I have spent a lot of my time in africa. And 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 south asia, that whatever your nationality, your ability to embrace the entire world should be the top criterion of the World Bank Group. The treasury secretary recently called on the bank to reduce lending to middle Income Countries that have developed significant resources of their own, saying that the World Bank Program should be, quote, tailored to help fully transition the borrowers off donor assistance. What do you think of that . Are there plans to look into that suggestion . Absolutely. Were looking into it right now. Its a perfectly legitimate and important question to address. Here is how it works. We are actually a bank. People have said, you know, you guys are like a bank with a brain or like a university with a lending arm. Were kind of both those things. I have 3,000 smartest people ive ever met in my life. So it is a living, breathing kind of an Academic Institution but its also a bank. So the first rule of any bank is you have to have diversity of investments. So if we were to get out of middle income some say only work in fragile states, if we did that our aaa rating would no longer be a aaa rating. Theres a genius of 70 years, combination of less risky investments with more risky investments. Were not asked to do more risky investments which were happy to do. In order to do that we must have balance in our portfolio. More importantly middle Income Countries are where 70 plus of extreme poor live. Just because of their size. If we were to neglect middle Income Countries all together, we would have to give up on this mission of ending extreme poverty. So we dont want to do that. You know, i think this is truly a cooperative. I cant stress enough, in 1945, they were looking backwards historically. Wars in europe, currency fluctuations that went up and down. Those of you in the financial world or monetary world, the bigger thy neighbor approaches where you tried everything you could to devalue your own currency visavis others. These kinds of things were happening every day. There was no place people could go to talk together if there was a conflict. Many would say post 1945 world order has led to great things. European union is part of it. We havent had wars in europe. Theres been a place to go. In the case of the World Bank Group, its truly a cooperative. Usually we try to work by consensus. So this is a place where despite the fact countries will be actively at war with each other, they can get together, sit at the table, and talk about how can we help somalia, how can we help refugees. What can we do after hurricanes in the caribbean. Theres 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 cant stress to you hu important it is to have that. If we got rid of the existing institutions, wed have to invent them again. So this is sort of a question about how things have evolved over the years. Someone asked, do you partner with organizations such as the gates foundation, any number of other sort of organizations like that and how does that relationship work and how has it changed your work . You know, one of the things ive tried to do in the last five years is completely change the way we work with other organizations. Sheila has really been at the center of that. So one of the things was that i came to this job, secretarygeneral of the United Nations was secretarygeneral ban kimoon. As i say, my home boy from korea. And so we met and hit it off right away. You call him that, by the way . I call him a very honorific term for someone who has come before you. It was very easy for us. I just got into very culturally appropriate with him. I used honorific language with him. He did with me as well. We would be sitting one day we were at an event, and president clinton happened to be there. We were speaking to each other in korean. He says, what are yall talking about . You guys going to take over the world. So we would go to places, and we would be we traveled a lot together. We traveled to some of the most difficult places in the world together. So we would be there in a room, full of military people, heads of state, and we would just start speaking to each other in korean. It would be about what we were going to eat tonight for dinner. They always thought something was going on. What really was going on is that we had now brought together the United Nations and the world bank in a way that it never has been before. So when he and i traveled for the first time to africa, he landed on the ground and said, you know, we looked at the history books. The World Bank President and secretarygeneral of the United Nations had never, ever traveled together before. But 70 years ago when institutions were created, that was kind of the idea these snuks worked together. The person in the u. N. Who really was most important in bringing the relationship together was Antonio Guterres who is now the current secretarygeneral. We think this relationship will continue, it will get even stronger. Thats just the u. N. With foundations weve made lots of efforts to do more with foundations and worked on lots of specific issues. The other thing were doing is were saying to the foundations and to the donor countries, we have this sort of what would you say, kind of like a Global Public good. Thats our aaa rating. Because we borrow at low rates were telling everybody you can give 10 million directly or take the 10 million and combine it with a loan. Instead of 10 million in grant, 4 million of relatively high interest loans, can you conform bin two and give 50 million of 0 money they can pay back. Thats fantastic resources we have to do more and mayor. You talk about Human Capital investment. Questioner says whats your view of potential impact of robotics, artificial intelligence, automation. That has ramifications with respect to the workforce going forward. I should have known, National Press club, youre going to ask me a lot of tough questions. I talked a little bit in the speech. Here is what worries me most. Little children so will everybody have access to highspeed internet . Ive heard lateeestimates are that all of africa will have access to 4g lte by 2020. Not everyone is going to be able to afford a smartphone but they will know someone with a smartphone. They are looking at how people live in the world. Weve done research on this. If you have access to the internet, your aspirations go up. The income you compare to your own, reference income goes up. You want a higher income, you have higher aspirations. I was born in one pft poorest countries in the world 1959 in korea. I think having higher aspirations is great. In context of higher as pierations that come from smartphone, internet, at the same Time Technology is eliminating a lot of tasks which in turn will eliminate lots of jobs. So our prediction, if you ask the question how many jobs that currently exist will be eliminated by automation, lets say in india, estimation, 68 , ethiopia, 85 . So 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 that you go from agriculture to light manufacturing, garments, shoes, and then to heavy industry. But right now theres not a single african country that has reached the level of efficiency of bangladesh in garments. What i hear from the 3d Printing Companies is that 3d Printing Companies will make all the garments and shoes pretty soon. Other people say maybe not so soon. I dont know what the answer is. This is why were so 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 who have been educated. So the reason were creating this ranking and creating this controversy, unless everyone gets on board with trying to improve tr Human Capital, were going to see a lot of extremely unhappy people with very high aspirations. Thank you for that. Were going to bring this program in for a soft landing here. Before we conclude, id like to remind the audience about upcoming events. On december 12th, headliners event with donna brazil. I believe in the news, long time chair and democratic strategist who shares hacks inside story of breakins and breakdowns that put donald trump in the white house. December 18th, nbc headliners breakfast with Walter Isaacson and hell talk about his new book about leonardo da vinci. Before we ask the last question, as you know we do have a traditional ceremony here at the National Press club in which we truly do present a token of our appreciation. Thats the iconic National Press club coffee mug. There you go. Thank you. [ applause ] and our last question, this is not necessarily one of the harder questions that we could have asked today but obviously youre president of the world bank. Who balances the checkbook in your family . Not me. I can tell you for sure, not me. My wife does. Yeah, let me just leave it at that. Very good. Short and sweet. How about a round of applause for our guest speaker s [ applause ] thank you. Id like to thank our National Press club staff including Journalism Institute and Broadcast Center for organizing todays event. You can find more information about the National Press club on our website. Can you also get a copy of todays program. Please visit press. Org. With that, were adjourned. Thank you. [ applause ]