If you want to fundamentally change how countries use energy, value their natural environments, or combat climate change, you have to talk to the people who hold the purse strings.
That’s what we’re doing this week. Finance ministers from countries around the world are in Washington for the annual World Bank/IMF Spring Meetings. We’re talking with them about these issues and more as we help countries shift to more sustainable development.
Underlying everything: climate change. This isn’t just an environmental challenge – it’s a fundamental threat to economic development and the fight against poverty. I can’t repeat that often enough. If the world does not take bold action now, a disastrously warming planet threatens to put prosperity out of reach for millions and roll back decades of development.
Disaster and climate risks were not addressed as part of the original framework of the Millennium Development Goals (MDGs). Recent experience has provided countless examples of the devastating impacts of disasters – impacts that go well beyond dollar signs or GDP statistics. It has become evident that disaster and climate risks are impediments to the achievement of poverty reduction and sustainable development goals, and should therefore be integrated in the development framework that will replace the MDGs.
Speaking ahead of the upcoming World Bank-IMF Spring Meetings, Bank Group President Jim Yong Kim called on the international community to seize the historic opportunity presented by favorable economic conditions in developing countries and end extreme poverty by 2030. This is an exciting goal, and success in achieving it has become possible. Kim pointed to the International Development Association, or IDA, the Bank’s fund for the poorest, as central to the tremendous effort needed to make this happen.
Every three years, development funders and borrowing country representatives meet to deliberate and agree on IDA’s strategic direction, financing, and allocation rules, and we just kicked off this process for the 17th “replenishment” of IDA (which provides development financing for the period July 1, 2014-June 30, 2017).
Two days of open discussion in Paris on March 20-21 with both investors and borrowers covered the complex development agenda faced by IDA countries, as well as the fund’s strategic approach to dealing with these issues. We worked to chart a way forward for IDA to most effectively improve the lives of the roughly 1 billion people in IDA countries still living on less than $1.25 a day.
This post was originally written for the Collective Solutions 2025 blog, a forward-looking study and collaboration platform to explore how the World Bank and similar multilateral institutions can best support developing countries to meet long-term sustainable development challenges in a post-2025 world. Read more about the study and join the collaboration site here.
I don’t particularly like cities. I’m a country boy. But I have lived in cities for the last 35 years; 10 in Bangkok, 15 in Manila, and 10 in Washington, DC (though DC might be called a town if it were in India or China). In the 1990s, I led work on environmental investments in east and south Asian cities. Most of the cities I worked in were severely “under-infrastructured and under-serviced,” and because many of them are built on coastal zones, this was particularly pronounced when it came to low-lying slums, drainage and sanitation. The heaviest price tag was often for drainage and flood control. During those years, I often wondered if and how the city and country leaders would ever catch up on infrastructure needs with the growing urban populations. Many have done well—while others are in worse shape now because they haven’t been able to meet the human tide.
The world commemorated World Water Day on March 22 with events around the globe focusing on ways to make international cooperation happen in the water. Events held in celebration of the Day covered all aspects of water - from water supply and sanitation, to water and its nexuses with food and energy, water resources management and water and climate change. But in most, if not all of these events, one theme was clearly cross-cutting: the importance of strengthening partnerships to leverage knowledge and facilitate innovative solutions.
I started working in Morocco four years ago as a result of the government’s request for support in implementing their national agricultural strategy, the Plan Maroc Vert. This strategy set the ambitious targets of doubling the agricultural value added and creating 1.5 million jobs in little more than a decade.
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China’s prospects stirred interest as the BRICs met in South Africa and a new survey by the Organization for Economic Co-operation and Development found China on course to become the world’s largest economy by 2016. The OECD study says China has “weathered the global economic and financial crisis of the past five years better than virtually any OECD country” and should be able to continue catching up and improving living standards over the next decade. While the OECD study says China needs to shift to more environmentally friendly modes of consumption and production, a new Climate Institute/GE Low-Carbon Competitiveness Index finds that France, Japan, China, South Korea and the United Kingdom are “currently best positioned to prosper in the global low-carbon economy.”
Climate Institute/GE Low-Carbon Competitiveness Index
Of the big reports that spew forth from the multilateral system, some break new ground in terms of research or narratives, while others usefully recap the latest thinking on a given issue. The recently launched 2013 Human Development Report, The Rise of the South: Human Progress in a Diverse World, falls into the latter category, pulling together the evidence for a tectonic North-South shift in global economic and political affairs, summarizing new thinking on inequality, South in the North etc and asking what happens next. If you’re currently sunk in the depths of Europessimism or US political stalemate, you may find such an upbeat story refreshing (or even disturbing). You can read the exec sum online, but it doesn’t seem to allow you to cut and paste (v annoying for lazy bloggers like me).
Some useful numbers to demonstrate the extent of the shift: From 1980 to now, developing countries’ share of global GDP rose from 33% to 45%, their share of world goods trade from 25% to 45%, and South-South trade as a % of the world total rose from 8% to 26%.
There is hardly a better place to focus on the ocean than Cape Town, South Africa. With the dramatic Twelve Apostles mountain range as a backdrop, only a narrow street separated us from the Atlantic coastline embracing this city. On March 20, I attended the first meeting of the Global Ocean Commission, a new independent task force of international leaders looking for ways to protect the high seas.
When Minister Trevor Manuel of South Africa invited me to join as a commissioner, I did not hesitate. As an Indonesian, I understand all too well both the predicament and the value of the ocean. At the World Bank, we have been participating in the development of a Global Partnership for Oceans (GPO), a coalition of over 125 groups aiming to increase investment and collaboration in a healthier ocean that can do more to reduce poverty.
The Global Ocean Commission was launched on February 12, 2013, to develop policy ideas and build international coalitions to reverse the degradation of the high seas – the part of the ocean that is not under the jurisdiction of any one nation. For that reason, the commission is a powerful complement to the GPO, which focuses largely on supporting countries’ efforts to better manage their coastal waters.
If you were to ask me what our biggest challenge is, I would say it is to convince politicians who have to grapple with day-to-day domestic issues that the ocean matters.
During my stay in Cape Town, I listened to a lot of conclusive science and saw a lot of convincing economic data. Let’s be clear, the facts are stark. If we don’t act, the ocean’s future—and by extension ours—is bleak.
Here it is in a nutshell: One billion people in developing countries depend on fish as their primary source of protein, and 350 million jobs are linked to the health of the oceans. Yet 57% of ocean fisheries are fully exploited. Another 30% are over-exploited, depleted or recovering. An increasing share of important marine habitats like coral reefs, mangroves and sea grass beds are being destroyed or degraded. You can learn about the impact in this video.
World Bank President Jim Yong Kim is putting policies to meet and combat climate change on top of the Bank’s agenda. That is extremely timely and has the potential to fundamentally revitalize the Bank, making it more relevant in today’s world.
Global finance for new clean energy projects is currently at $300-400 billion per year, of which the Bank funds about $10 billion. The International Energy Agency estimates that a minimum agenda, compatible with a two-degree temperature target, requires “green” energy investments of about $1 trillion per year. The Bank alone will only be able to provide a small portion of such additional finance.