|This is my last week in the World Bank, after working at the institution for 20 years, the last five as country director for China and Mongolia.|
Imagine how the new Indonesia would prosper if everyone had affordable health insurance, every child completed secondary education and highways were in place connecting Indonesia’s three biggest cities: Jakarta, Surabaya and Medan.
The Food Aid Information System from the World Food Programme tracks data on food aid flows since 1988.
This somewhat provocative question was the title of a conference hosted by Oxford and Standard Charter this week in London. My answer was: "No, not tomorrow; but yes, eventually – especially if China continues to vigorously pursue economic reform."
The reason that China cannot be the engine of global growth tomorrow is straight-forward. For the last decade an awful lot of the final demand in the world has come from the U.S. That era is over for the time being as U.S. households now concentrate on rebuilding their savings. No one country can fill the gap left by the slowdown in U.S. consumption: Japan, Germany, and China together have less consumption than the U.S., so no one of them can replace the U.S. as the major source of demand in the world. It's not realistic to expect China to play that role. But we are probably moving into a more multi-polar period in which there is more balanced growth in all of the major economies.
At the Development Committee closing press conference, Bank President Bob Zoellick together with Agustín Carstens, who is Mexico's Finance Minister as well as Development Committee Chair, announced that the Bank is giving Mexico more than $205 million to help the country fight the Swine Flu virus.
“We're extremely grateful for the prompt response by the World Bank -- such promptness is always very, very appreciated,” said Carstens. “But beyond resources, what is also important is all the experience that the World Bank has accumulated in precisely having assisted other countries in this type of situation."
The project will be fast-tracked so that funds can be disbursed within 3-5 weeks.
Speaking at a news conference this morning ahead of the start of the World Bank/IMF Spring Meetings, Bank President Robert B. Zoellick hit on the need to address the second and third waves of economic fallout being felt in developing countries.
“First and foremost we need to ensure that we don’t repeat the mistakes of the past. When financial crises hit Latin America in the 1980s and in Asia in the 1990s…basic health, nutrition and education budgets were cut back severely. This time we must ensure that governments can protect targeted social expenditures and finance effective safety nets,” Zoellick said.
Nor can infrastructure be neglected, he said, citing the long-term negative consequences of slashing infrastructure investment during past crises. To help promote investment in roads, electricity, telecommunications, etc.--as a means of creating jobs and spurring economic growth--Zoellick said the Bank is planning a massive infrastructure initiative, to be formally launched on Saturday.
Zoellick also highlighted the Bank’s plans to boost support for agriculture—increasing lending from $4 billion in 2008 to $12 billion over the next two years to help ensure food security.
- Statement: Investments in safety nets, infrastructure needed to support poor in crisis
- Release: Bank to Invest $45bn in Infrastructure
- Story: Food Crisis Not Over for Many Poor People
- Webcast: IMF Webcast of Press Conference
Watch President Zoellick's opening remarks at the news conference below:
In light of the global economic crisis, the World Bank announced today that its investments in safety nets and other social protection programs in health and education are projected to triple to $12 billion over the next two years.
Additionally, the Bank also increased its fast track facility for the food price crisis to US$2 billion from US$1.2 billion. As World Bank Group Managing Director Ngozi Okonjo-Iweala explains:
"The continuing risky economic environment, combined with continuing volatility for food prices, means for poor people the food crisis is far from over. Many poor countries have not benefitted from some moderation of food price spikes in global markets. The decision to expand the facility will help ensure fast track measures are in place for continued rapid response to help countries."
More information about today's announcements: