Urgent action is needed to mobilize, redirect and unlock trillions of dollars of private resources to ensure global growth and shared prosperity.
Since 1956, the International Finance Corporation (IFC), the World Bank Group’s member focused exclusively on the private sector, leveraged $2.5 billion in paid-in capital from its shareholders to invest over a trillion dollars for private sector development. IFC’s 60 years of experience has demonstrated the private sector’s ability to create innovative, commercially viable solutions that deliver development impact.
“A year ago, we all signed up to the Sustainable Development Goals. The only way to achieve these goals is if private capital funds them and private business implements them,” said Gavin Wilson, CEO of IFC’s Asset Management Company (AMC) during the World Bank Group/IMF Annual Meetings 2016.
“That’s why we came up with the phrase ‘Billions to Trillions’ last year with our multilateral institutions in the run-up to the Addis conference on financing for development,” he added.
But what does “Billions to Trillions” actually mean? Wilson explained that “we must convert billions of official assistance … to the trillions in total financing.” But he raised a very important question:
For the first time in history, the proportion of people living in extreme poverty has fallen below 10%. The world has never been as ambitious about development as it is today. After adopting the Sustainable Development Goals and signing the Paris climate deal at the end of 2015, the global community is now looking into the best and most effective ways of reaching these milestones. In this five-part series, I will discuss what the World Bank Group is doing and what we are planning to do in key areas that are critical for ending poverty by 2030: good governance, gender equality, conflict and fragility, preventing and adapting to climate change, and, finally, creating jobs.
Good jobs are the surest pathway out of poverty. Research shows that rising wages account for 30 to 50% of the drop in poverty over the last decade. But today, more than 200 million people worldwide are unemployed and looking for work — and many of them are young and/or female. A staggering 2 billion adults, mostly women, remain outside the workforce altogether. In addition, too many people are working in low-paying, low-skilled jobs that contribute little to economic growth. Therefore, to end poverty and promote shared prosperity, we will need not just more jobs, but better jobs that employ workers from all walks of society.
- end poverty
- International Development Association (IDA)
- fragile countries
- Fragile and Conflict Afflicted States
- private sector
- financial inclusion
- Information and Communication Technologies
- The World Region
The release of the joint statement “From Billions to Trillions: Transforming Development Finance” at the World Bank-IMF Spring Meetings is one of the most satisfying moments during my two-year tenure as Managing Director and World Bank Group CFO.
My one regret is that the title should have been Billions for Trillions.
I got together with my friend Asma'a one evening at a popular Cairo café overlooking the Nile. Like many of the young Egyptians I had met that summer, Asma'a was smart, motivated — and unemployed. Since graduating with a law degree, she had applied for countless jobs to no avail, and had all but given up on finding a job in her field of study. She was particularly upset that evening because her parents had forbidden her from accepting a waitressing job, deeming the work to be morally inappropriate. Feeling ever more desperate, Asma'a said she would be willing to take any job just to be able to work.
Asma'a is one of 865 million women worldwide who have the potential to contribute more fully to the global economy. These women represent a powerful resource for driving economic growth and development. Yet the underuse of women's talents and skills is holding many countries back. An International Monetary Fund study estimates that if women like Asma'a were to participate in the labor force at the same rate as men, they could raise GDP in Egypt by 34 percent. Employed women also invest more of their income in their children's health and education, helping families to escape the cycle of poverty.
World Bank Group President Jim Yong Kim has started a conversation about development and the private sector on Oxfam’s blog.
The evolving discussion isn’t so much about whether to harness the private sector to cut poverty, but how to do it.
In an Oct. 28 blog post, Kim said the Bank needs to work with many partners to help meet the goals of ending extreme poverty and boosting shared prosperity. Private sector investment “is needed to stretch scarce development resources.”
“Engaging the private sector is not about how we feel about business; it’s about how high our aspirations are for poor people. If we rely only upon foreign aid, then our aspirations are far too low.”
ISTANBUL — On my first trip to Turkey, I met the country's political leaders, business executives, and civil society organizers — and some of the World Bank Group staff. We have 250 staff in Turkey, of which 200 are in the regional hub of IFC, our private sector arm.
While Turkey faces many challenges, I came away very impressed with many of the nation's accomplishments during the last decade. To learn more, watch this video blog.
“We have a fantastic opportunity to work together,” Dr. Kim told hundreds of investors at the 15th Annual Global Private Equity Conference, hosted by the Bank Group’s private sector arm IFC and the Emerging Markets Private Equity Association (EMPEA).
“…Private equity is going to play a critical role in whether or not we can truly have high aspirations for the 1.2 billion people living in absolute poverty in the world,” he said in a speech that was liveblogged and followed on Twitter with #wblive and #GPEC2013.
PRETORIA, South Africa - I have to admit it. I’m a bit of a development junkie. For most of my adult life, I’ve been reading thick tomes describing the success or failure of projects. I talk to friends over dinner about development theory. And I can’t stop thinking about what I believe is the biggest development question of all: How do we most effectively deliver on our promises to the poor?
So you can imagine how excited I was to have a day full of meetings with South Africa’s foremost experts on development: the country's ministers of finance, economic development, health, basic education, water and environmental affairs, and rural development and land reform - and then with President Jacob Zuma.
I chose to travel to South Africa as part of my first overseas trip as president of the World Bank Group because of the country’s great importance to the region, continent, and the world. It is the economic engine of Africa, and its story of reconciliation after apartheid is one of the historic achievements of our time.
ABIDJAN, Cote d’Ivoire – At a jobs training center in this key capital city in West Africa, a young man showed me his newfound skills as an electrician. At a workshop, light bulbs flickered on and off. And then he told me something really important:
“It’s been 10 years since I graduated with my secondary school degree, and because of our conflict, I have never held a job. So this is a blessing to me,” said the young trainee. “But my brothers and sisters and so many people haven’t had this opportunity. I wonder how they can get jobs, too.”
This past Sunday, at an event co-hosted by the Hüsnü M. Özyegin Foundation, global business leaders came together to discuss the impacts of the ongoing economic crisis on women. The event culminated in the announcement of several new partnerships to support women around the world.
Highlights of the new partnerships and initiatives announced at the event include:
- The Özyegin Foundation and Goldman Sachs will expand the Goldman Sachs 10,000 Women program to Turkey.
- Boeing announced Forum member efforts to track and spend $2 billion over the next three years on goods and services from women-owned businesses in supply chains.
- Belcorp announced a partnership with the World Bank to train 50,000 women in financial literacy in Latin America.
- McKinsey presented their new research, “The Business of Empowering Women,” which maps out potential business sector contributions across women’s life cycles.