Welcome to the second day of the policy conference. Im the ahead of inflation, oddities research and fidelity in boston and today we have the pleasure of hearing the latest views from the 13th president of the World Bank Group determined he began last year prior to joining he served as undersecretary of the treasury for international affairs, founded a Macroeconomic Research firm and served as the chief economist while many of us know him now as a policymaker there is a very long history in the private sector economics. When i was chatting with a friend of mine he mentioned the best moderators are funny, fluid and forgettable. With that, the floor is yours. Im very pleased to be here. Ive got some notes and then it is nothing as to tell people about and am looking forward to the conversation and the National Association the meetings were one of my favorite in the 1980s when i was at the Senate Budget committee and the joint Economic Committee select switched on to be back and see some old friends. The 1980s was an important time for u. S. Growth but like today, the years presented challenges for growth especially for the developing countries theres quite a few topics today but the one id like to tackle is the need for faster growth in the developing countries the challenges that they are facing and i want to focus on the importance of the growth rates within the developing country growth rate metric, but also the importance of Digital Financial services, which i want to speak about, and also transparency of debt and investment policy which is something the world bank is working on. I can list the various parts, but the short take is there are five different parts of it. The ifc, the International Finance corporation which works on private sector growth. There is the different types of crossborder risk and also to help settle investment disputes between the government and investors so its a big group with a Clear Mission about lowering the poverty rate and also increasing shared prosperity. That shared prosperity means to me and can be done from a mathematical income higher median that are social circumstances within countries, so it is a goal that probably we all share and they have to have better prospects for people around the world and especially in the poor countries. We have to use forecasts sometimes. In january we put out forecasts about 2. 5 . The good news is that was slightly higher than what the growth rate was in 2019, but the bad news is the first half is going to be slower than that given the coronavirus but even 2. 5 but that simply is not enough growth for the developing countries. Many of the poor countries need a faster growth rate by the World Economy in order to lift them up. Theres also the concern that growth is unequal to any quality in various forms which were all concerning for developing country growth. One is that the capital is tending to go more towards the developing country as me saying there isnt of capital flow going on. The capital is going more towards Big Companies rather than Small Companies and is about also contributes to the inequality of both income and also of wealth. There is an added problem with any quality as we look at the investment rate for developing countries, theyve been sluggish. The World Bank Report in 2019 had a subtitle which is sluggish investment in the countries. So, if you start from a platform that is unequal and then you have in any quality, that gives you prospects for continued i ay quality or slow growth in the developing world. World. There is simply notheres simplw investment taking place. So, id like to focus for a little bit on europe and then talk about the Digital Financial services. So, as we look at the growth rate around the world, one of the notable weaknesses has been in europe. Its just reported that the members onumbers that the weakeh in seven years, which is a particular concern to africa where a lot is because it is closely associated with europe growth rate. As we look at the 1 or even Slower Growth rates with europe we can look at the various factors and one is the structural system, Labor Mobility. One important one, the slow growth is coming at a time when the Central Banks owner inclined to be as possible so i want to talk a bit about that. It comes at the time when a timn mainstream economics considers the policies to be massively stimulative, that is the size of the Balance Sheet and expansion of the Balance Sheet. One interpretation of this now is there simply hasnt been enough that the constraint on the growth in europe is so great that the central bank should increase its bond purchases or even buying Corporate Bonds or increase its holding of the sovereign bond. The other interpretation that ive preferred is that they combined the monetary financial regulatory policy has not actually been stimulative. While textbooks teach monetari monetarism, thats the idea that monetary actions of the central bank are multiplied through the Private Banking system by the way of Bank Reserves and reserve requirements, the reality is that we move to a post monetarist world. The Balance Sheet has expanded in recent years, but there is no longetheres nolonger a direct o the private sector bank and credit growth so we have this under a Monetary System theres sure to be leverage but it hasnt happened. Adding to the inequality, Central Banks are buying long durations to cover the assets using shortterm liabilities. That is a major distortion of markets because the central Bank Purchases subsidized the least productive assets in the economy. To be productive, the market economy needs working capital. Thats a shortterm voting capital more than longterm capital at least in the growth space or the economy. That requires shortterm financing, bu but which of the supply omuch of thesupply of thl in europe is soaked up by the central bank in order to purchase and hold longterm government bonds. The policy details and provided the monetary stimulus is notable that slowness of private sector growth in europe especially for Small Businesses is buy all the targeted smallBusiness Credit programs out there is not working. I think its important that economists recognize the new environment postmonetarism. The key numbers are financial regulatory policies, which itself is biased towards large existing borrowers. That is a recipe for slow growth, especially for new entrants, Small Businesses, people without much capital or developing countries. All of those the system is biased to provide a slow growth for the people trying to get into the system. It is a recipe for any quality. I think its important that the economics profession reexamining the Monetary Policy tool leaving the slow unequal growth because it sets out to the capital in the longterm government bond, just not a workable system. I want to turn to africa for a minute and think that general point. One is the Structural Reforms are as political in the developing countries as they were in the developed countries. That means systems that work for the Labor Mobility, fiscal policy, Monetary Policy, providing sound money, some means for people to have access to money and credit in all of those are struggling in many of the developing countries. The world bank has a Major Program to try to put forward with transparency, debt and investment. What this means were the basis of that is if you have a more transparent system, you are going to be able to attract more capital so it is actually a recipe for Mortgage Investment and more growth if you can have more transparent in your system. The challenge is that it is very detailed in order to improve the transparency of the credit markets in the developing countries. And i want to list some of the challenges that we are facing. I may be able to find a list of those here and then i will save them all. And this is particularly important with the yield curve plastic is as i described how the slowness of the differenc is into the countries is in part as capital gets sucked up into the longduration, that doesnt leave enough for the investment thats needed in the developing countries. Let me take a moment here because they really want to give you a bit of a list. At times salang talking about how to credit and establish the developing countries. The environment has changed dramatically over recent years. Weve done a report and world bank did a report a couple months ago that went through and described the debt available to the developing countries. So, what we find out today in our analysis is that it was discussed that she g. 20 some creditors are using contracts confidentiality clauses. The borrowers to request relief from the calls to proceed with transparent data reporting. Creditors should be violating legal requirements of other creditors such as the pledge. These are important because they become obstacles to the investment within the developing country. The countries around the world have a negative pledge clause is a protection for the people of the country as the government think about new types of loans and we think it would be helpful if they would publish templates and we invited the g. 22 in the works of the g. 22 in the works of suggestion and push it forward in developing. I want to mention state owned enterprise debt. You push the debt down to a subsidiary of the government, the state owned enterprise and that doesnt show up in the debt statistics so it ends up being an obstacle to new investors coming in for the country. Another challenge is the growth of sovereign borrowing that provides collateral for the lender. It used to be dated and provides collateral that more and more they have been providing collateral and that ties up the assets of the country from other types of growth or borrowing that might have been achieved. So, we are working with countries around the world to try to shift the way from collateralized borrowing in order to have more transparency and get more investment. The bank has a policy of discouraging borrowing when this comes additional borrowing going on. We make the loans and grants to the countries that is an undercut in the interest of doing that is undercut if it then turns around and take some high Interest Rates and borrowing from other creditors. That would be pushing forward as we go into new years of encouraging the policy. The Transparency Initiative is to show countries they can have faster growth and more investment if theforeigninvestme transparency within the system. It sounds straightforward and like it should be the normal policy, but i have to say that the world system right now is to work against that approach so we are working on it and trying to deepen it and i want to take a moment and mentioned the importance of a new step in development which is digital services. Throughout history its been a giant struggle to have money rather than barter. You are comparing apples and oranges, comparing different kinds of goods and trying to trade. It was a big innovation to try to monetize the world financial system. But the problem has been throughout time that its hard to have money in the weakest parts of the global economy. Its hard for Small Businesses to get a hold of credit. Its hard for women to physically hold onto money because someone takes it away. So, that, those obstacles i think our weekend see an avenue to improving this to the Digital Financial services that you can think of as to actually have to start small amounts of money and that becomes one of the most important avenues towards dynamics so we are pushing hard for Digital Financial services to grow. That means its not easy you have to have a regulatory policy that encourages that kind of diversity, and you also have to have a Banking System or a telecommunication system that is up to the task of keeping track of individual money or even the smallest of the poorest person within an economy so its critical to get Financial Transactions down as low as possible so you need to be thinking about the smallest fraction per transaction cost that enables hundreds of transactions even for poor people in countries. In virginia its been a good example of a country that has managed to set up a system that works on the most basic cell phone and for the poorest person and that opens up new transaction volumes which people in this room, the Financial Market people know how critical it is to have a high volume of lowcost transactions in order to liquefy the market. I want to give you a sense im concerned about the slowness of growth especially the slowness of growth in europe and its going to be challenged by the Current Events and as we think about the developing countries. It is exacerbating the challenges and a lot of it is their own Structural Reforms we can hope for better systems. I helped on the other countries so they can get a better growth system going in their own country. One of the benefits of being the moderator you have the monopoly in the first question or two. I have a few questions to some of the, to have an item by everyone in the audience to submit questions by the app, i dont think theyll be any shortage of questions. So ive been coming to this conference for a very long time, and you mentioned you had been as well, we spent a considerable amount of time discussing frustratingly weak dental growth and investment. I know this is something you spent a lot of time think about. In your mind, what are the Building Blocks of strong and sustainable growth, how does the world big thick about this, what is the framework . I will tell you my view and then bring in the world bank. I think economic is pretty clear, governments and provide governments and provide restraints on their own time. And provide for people to operate in a free environment. That means the rule of law and some clarity in how the rules and regulation changes over time. Those are critical into getting growth. Because we know growth comes from people and people at the bottom having an opportunity. This idea that it was featured at the g20 this weekend and Opportunity Society is really important that people have to feel like they can try something and see if it works, thats either a new job skill or changing colleges or other things that are getting to go to high school for a lot of developing countries prepare first step toward growth is being allowed to go to seventh grade or eighth grade which a lot of countries are not allowing. As far as the world bank interacting with the system. The bank is active in governance process and rule of law. One other thing in the Transparency Initiative, the importance of knowing within a country who has the right to sign a contract on behalf of the government. Many countries dont have clarity and that so youre the lender, you come in and you get janet to sign on a contract and it really hasnt been scrutinized by other parts of the government. We want to see a governance process it makes sensible choices and to build the capacity because a lot of countries just do not have the people that can think about the contracting environment. And really focus on more learning. Help is critical and theres a lot of time on that. And extreme weather conditions is important for huge portion of the worlds poor. They tend to live closer to sea level, that was a broad statement but billions and hundreds of millions live close to sea level without very much protection and other aspects of that are important. So the bank works in all of those areas, but the starting point is a structure of economy that is basically market based rather than monopoly, one of the hardest things that we fight against his capture by state owned enterprises or by the military, many countries still have systems with is a biased in favor that there owned by the military or state owned enterprises. That really undercuts the innovation of the economy. Very interesting. Staying on the growth for just a moment. One thing you mentioned, just about better educational payments, and one thing you brought up yesterday was a significant increase in the female Participation Rate and here in the u. S. When i was researching ideas to pose to you, i was quite struck by the decline in globally in the female Participation Rate from some of the data on the world bank. How do you think about the female on the labor force in the dividend for growth that can bring. This is one of the strongest points of an economist can argue about 2. 5 growth or 3. 5 growth rate but one that we can agree on is a vital portion that women can provide into an economy. We see every day in terms of women being additive from a straight gdp standpoint but also very importantly creating different kinds of innovation that a man might think of. Often times better at negotiating a favorable outcome then a man might be. So getting that participation is vital everywhere around the world. Some countries are going up, and weve been encouraged, the world bank does a