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What keeps the President of the World Bank up at night?

Jim Yong Kim's picture
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Residents of Kashadaha village visit the Kashadaha Anando school in Kashadaha village, Bangladesh. © Dominic Chavez/World Bank
Residents of Kashadaha village visit the Kashadaha Anando school in Kashadaha village, Bangladesh. © Dominic Chavez/World Bank


This year’s World Economic Forum Annual Meeting comes at a time of good news for the world economy. As we said in this month’s Global Economic Prospects report, for the first time since the financial crisis, the World Bank is forecasting that the global economy will be operating at or near full capacity. We anticipate growth in advanced economies to moderate slightly, but growth in emerging markets and developing countries should strengthen to 4.5% this year.

Global growth is good news for the fight to end poverty and boost shared prosperity around the world. But there are a few things we’re seeing that keep me up at night.

First, aspirations are rising all over the world. Nearly everywhere I travel, I see people on smartphones - and thanks to the internet and social media, those people can see how everyone else lives. Our research suggests that as people access the internet, their reference income – the income to which they compare their own – begins to grow, leading to rising aspirations. And internet access is booming. At the end of 2015 in Africa, 226 million smartphones were connected to the internet. By 2020, that number will triple to three quarters of a billion. Some studies estimate that by 2025, 8 billion people worldwide will have access to the internet.

Rising aspirations are a good thing for the world.

First: Aspirations, linked with opportunity, can breed dynamism and drive inclusive, sustainable economic growth. But I worry - and studies suggest - that if aspirations are met with frustration, it could lead countries down the path of fragility, conflict, extremism and migration.

Second: Innovation is accelerating and technology is reshaping nearly every aspect of our lives. We see this in our development efforts: we are now using drones to map the Zanzibar Isles to create a digital national property register, and satellite imagery to map power outages for tens of thousands of villages in South Asia. New technologies are giving us more and better data, so we can see what works and scale our efforts around the world.

But technology is also changing the nature of work. We don’t know exactly what the future of work will look like, but we know that automation will replace scores of tasks, which will in turn eliminate many of the less-complex and low-skilled jobs. The remaining jobs, and new ones that will be created, will demand new and more sophisticated skills. Some studies estimate that as many as 65% of primary school children today will work in jobs or fields that don’t exist yet.

A report released last December by the McKinsey Global Institute found that roughly half of all jobs are at risk of being automated - and that’s just with the technologies we have today. As Rob Nail, one of the leading thinkers about technology, told me recently: “Today is the slowest day of innovation we will experience for the rest of our lifetimes.”
 

© McKinsey Global Institute
© McKinsey Global Institute


Third: While aspirations are rising and technology is changing the nature of work, we are facing a crisis in education. Our World Development Report this year found that more than 250 million children around the world cannot read or write, despite some schooling. Roughly 264 million children worldwide aren’t even enrolled in primary or secondary school.

Countries will not be able to compete in tomorrow’s economy unless they invest much more, and more effectively, in their people – especially in health and education, which build human capital. But the way we finance health and education is broken. Too often, heads of state and finance ministers are willing to invest in their people only through grants or concessional loans. Too many heads of state and finance ministers tell us, “First we’ll grow our economies, then we’ll invest in our people.” We need to change the system and create demand for far greater investment in people.

To help solve this crisis and to help countries prepare for an uncertain future, last autumn we launched the Human Capital Project, an accelerated effort to help countries invest in health and education. We’re working with some of the world’s leading health and education economists to shine a spotlight on how countries invest – and too often, don’t invest enough – in the health and education of young people in order to build the human capital stock of the next generation.

Eventually, the Human Capital Project will include a ranking, which we hope will create much more demand for countries to invest in health and education. The project’s data and analysis will also help us advise countries on where to invest resources for the biggest impact in improving outcomes in health and education.

We’re already seeing some startling findings on education. Examining data from the largest globally comparable database of education quality, which covers more than 90% of the world’s population, we’re quantifying the extent to which the same number of years of schooling leads to massively different learning outcomes in different countries. As our economists put it: the data imply that a year of schooling is worth much more in some countries than in others.

With this new data and analysis, the Human Capital Project will help countries improve their education systems, and we’re doing similar work to improve investments in health.

If we don’t act now, not only will our goals of ending extreme poverty and boosting shared prosperity be out of reach; peace, stability, and prosperity for large parts of the world could also be threatened. If we invest the right resources in people, with the sense of urgency that this crisis requires, we can create equality of opportunity, harness the power of innovation, and come closer to making the global market system work for everyone.


Originally published by the World Economic Forum as part of the World Economic Forum Annual Meeting.

Comments

Submitted by Risda Djambek on

Investing in people is a priority. Most countries in the world put emphasize more on economic development rather that people development, but both are very crucial. Therefore balancing the work plan between people development and economic development could be implemented in parallel with uniform understanding toward the goal. And the goal should be described in accordance with the funds provided with strict control and implementation. With the note expecting all ministers should be aware from the beginning without any deviation. Suggest auditor or qualified worldwide inspector must be attached to the process.

Submitted by Radhika Shrestha on

Adequate resources must be implemented in education which leads to gain all the opportunities

Submitted by Tom Geme on

All the above remedies notwithstanding, there is ardent need to invest in enhance ecological sustainability, that way the achievements of today won't be undone by the looming Climate Change

Submitted by FARRUKH HUSSAIN on

BRAVO

Submitted by Danladi Mohammed on

Forecasting growth of 4.5% in developing and emerging economies is a welcome phenomenon, in sub Saharan Africa such a figure is possible with good governance and right fiscal policies, the only challenge is inclusion, where rural dwellers hardly participate in the real economic activities that sustains the countries simply due to lack of right education and opportunities available to urban dwellers. Solution: Rural Development initiatives that addresses poverty reduction, improve literacy, gender equity, skill acquisitions and affordable abides through sustainable programs must be put in place.

Submitted by Mwangi on

Yes, we should focus more on education to eliminate ignorance and health for progress.

Submitted by Roland Abaka Forson on

Very useful write-up. Surely contains key learnings for me in Ghana.

Submitted by Manoj Kumar Mahato on

wow to hear , I am grateful to all the people who has been providing their contribution.
Thank' to all

Submitted by Ibrahima Souare on

The thoughts and concerns shared in this article is exactly what nationals globally need to prepare solutions, with a sense of urgency. Nations worldwide, need to collectively begin drawing not only their strategies for addressing these growing concerns but also consider ways of supporting other nations whom desire alternative solutions but lack full capacity.

Submitted by Ani Natalia on

Investment on human capital has always been a great topic to discuss. It is an important issue from the beginning of time. Nevertheless, the investment should be planned carefully. The governments need to make doable programs about it and communicate it thoroughly with their people.

Thanks for the article, sir.

Submitted by John Mathias on

This is inspirational work. Please keep it up. The world is counting on you!

Submitted by Morgan Orioha on

Great article. Without sound education people would not understand fully their capabilty and, no doubt their potentials would not be applied in our World. Thus aspirations would indeed be limited. Similarly, good health would lead to sound mind required for aspiration and innovation. The Human Capital project is a laudable initiative. Heads of Governments should be made to understand, adopt and indeed invest in their people in these two areas for prosperous future.

Submitted by Joseph Connors on

I really admire the efforts you put in to bring light to these difficult to predict issues. The true worth of a man is measured by the objects he pursues. Sustainable health and education to be attained via the rewards of innovation - reads similar to our world leaders using their personal dividends for charity and driving inclusion.

Submitted by Robert P Bruce on

Alongside investment in education and healthcare, a basic income is the most effective way of eliminating extreme poverty. The World is drawing closer to a new era of jobless growth, in which automation and AI will drastically reduce the number of jobs which can be created by new business investment and growth. The way forward, as Muhammad Yunus has written, is to turn our young people from "job seekers" into "job creators", but the bit missing from his book is the need for a basic income which will support households through this transition, and ensure a reliable flow of money into even poor and remote communities. The costs of such a scheme are also greatly exaggerated. Just a modest payment of $22 per month to the poorest billion people in the World could be paid for simply by eliminating Global Tax Havens and diverting this revenue to international aid.

UBI can be the basis for building sustainable local communities where young people will stay because they have a future. Indeed one of the few aspects of a basic income which is not often discussed is its role as an anchor to retain educated and innovative young people in the countries where they are needed. The growing disparity between rich and poor communities could drive overwhelming movements around the World of young people living in poverty who have "nothing to lose" today. But if becoming an economic migrant means giving up the right to the security of a guaranteed basic income in their home country, a lot more people will choose to stay put and contribute by transforming their own communities into centres of innovation and growth.

Submitted by Colin Campbell on

Thank you for posting this thoughtful article. Many are concerned and want to help out. Learning more of the perspective on a Global scale is helpful. Thanks again.

Submitted by Robert Johnston on

Knowledge transfer through the medium of Aid from Donor to Recipient countries can be a winning combination for all participants.A type of philanthropic, commercial approach that trains,educates and exports, contributing to deliverers and recipient country Treasuries- between developing and developed countries.Communication and Feedback are necessary component parts.Remember that, when,by your decision to respond(or not) , you are in a position to make a difference !

Submitted by K. Turner-President MIBA Group on

We thank you for your efforts to truly make a difference in Developing Nations of the world. Please continue to inform us, who like you seek solutions to a very old problem from the colonisation era.

Tell us how we can help!

All the Best to you and your teams.

Submitted by Edy Greenblatt, Ph.D. on

Thank you, Dr. Kim for the important blog that helps us focus on larger issues aswe all do the best we can in our own personal and professional worlds. Please let us know what individuals and organizations can do to support the Human Capital Project and the problems that it seeks to remedy.

Submitted by Nancy Avila on

Thank you for the interesting perspective, particularly the perspective about the future employment.
While that may be true that 65% of primary students today will work in jobs, or fields that do not exist, creativity and the fundamental cored knowledge such as STEM are (still) the keys to managing and, or, unlocking tomorrow knowledge, job skills, and employment opportunities. From my perspective, our world is a dynamic environment. Proactive innovation wisdom is an effective way to guide a country with her quest to prep for Human Capital to compete at the global level. In other words, it is a pro-active approach that will matter; that will offer time to market delivery (Human Capital).
Frankly, attacking the goals of ending extreme poverty and boosting shared prosperity involving a lot more factors than just addressing the educational piece of the contributing factors. Equally important to knowledge, skill sets that people should possess, a logical and sound mind is the additional importance. Clearly, as a "collected" one, we can try to change, to make the difference, the unfortunate facts remain, not all things are created equal ie, geographical conditions, natural resources, people's mindset, etc. So, the thought that we can bridge the gap, making the global market system work for everyone by investing the right resources in the people, with the sense of urgency to the relevant crisis requires will remain to be seen in an extremely distant future :(

Submitted by Chandra on

Technology has grown and billions of people are connected. We should use the same technology to bring education to children in developing nations. Use giants like Microsoft, IBM, HP to deliver. I am sure the funding will pour in for the initiative.

Submitted by Javaris Herndon on

The time is truly now for heightened urgency and intent on more efficacious investment in education and health. Far too many are focused more on economic growth than building their human capital, and likely over time the prevalent discrepancies will hinder longevity of overall growth for some.

Submitted by Veronica Melgar on

Unfortunately, the economy in some countries will never get better to invest in their people. In reality, by the time they have money, the head of state will be out of power, and the money will be gone as well!!!

Submitted by Bill on

Sure, Investments in Education and Healthcare will change our world!
Uganda should be at the fore front in changing the Education system!

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