The Western Balkans Case
When I travel to the Balkans for work, the journey typically begins with a cab ride to the airport from my home in Vienna. The taxi company I use is run and operated by Serbs living in Austria. It’s a great company: very reliable, clean cars and friendly drivers who are always keen to discuss the politics and economics of the Balkans. When I arrive in Belgrade, I’m picked up by drivers who have very similar skills to those of their compatriots in Vienna. However, the former have better salaries and opportunities simply because the company they work for operates in an environment that is much more conducive to nurturing and growing a business. In Austria, unlike in Serbia, a company can operate efficiently, is subject to a relatively fair tax treatment and knows the industry standards it needs to comply with. In turn, this explains to a large extent why workers, at any given levels of skills, are more productive in Austria – a basic intuition which William Lewis develops in his book The Power of Productivity, projecting the gains that Mexican construction workers make when moving to the USA.
Executives from Alstom, the Swedish pension fund AP4, Deutsche Bank, and the French pension fund ERAFP joined finance ministers for an informal climate ministerial discussion about carbon pricing during this year's World Bank Group/IMF Annual Meetings. After the meeting, Rachel Kyte, the World Bank Group's vice president & special envoy for climate change, described the conversation and some of the takeaways.
In a video shown at the UN Climate Leadership Summit on Sept. 23, 2014, German Chancellor Angela Merkel talks about her country's support for carbon pricing and how it can drive low-carbon growth.
A couple of weeks ago, I was in Warsaw to attend a conference jointly organized by the Polish and Turkish Central Banks (“Polish and Turkish Transitions: Achievements and Challenges Ahead”) on the occasion of 600 years of diplomatic relations between Poland and Turkey. Six centuries of (predominantly friendly) relations is indeed worthy of commemoration, but for our Polish hosts another anniversary was of even greater importance: 25 years ago, Poland was the first country from the former Communist Block to embark on the transition towards democracy and market economy. For Poland and other Central and Eastern European countries that joined it as new members of the European Union 10 years ago, this transition laid the foundation for a remarkable economic, cultural and political revival as Indermit Gill and I have argued in Golden Growth. Indeed, many in Poland would agree with the Economist that Poland has not had it as good as today ever since it was the preeminent Central European power some 500 years ago.
The great-power G8 have been bickering about geopolitics, the economic G20 have been fretting about growth, and the aspiring G24 have been jostling for policy influence. But this summer’s ultimate contest in international relations has focused instead on the elite G32: the group of 32 countries that sent the world’s top-performing soccer teams to the final brackets of the World Cup tournament.
Global rivalries based on fine-tuned football finesse – not dominance in diplomacy or brute force on the battlefield – framed this summer’s highest-profile competition for international supremacy.
Amid the lengthening late-summer shadows that herald the final days before the September rentrée, thoughts of the midsummer marathon surely warm the memories of World Cup-watchers who recall the thrills of the June and July festivities before the JumboTron – with throngs packing city squares worldwide, as well as filling the World Bank Group's vast Atrium (and television hideaways all around the Bank) on game days.
By the time of the final match, even many committed fans of other national teams seemed to admit that, in the end, Germany deserved its hard-earned victory – winning 1-0 in overtime against resilient Argentina – thanks to the team's technical skills and tightly coordinated teamwork.
The tournament’s most dramatic highlights – the agility of goalkeepers Guillermo Ochoa of Mexico and Tim Howard of the United States; the spirited hustle of underdogs like Ghana and Croatia; the epic 7-1 shellacking suffered by humbled host-country Brazil; the heart-stopping offside call against Argentina that nullified an apparent final-match goal – will deservedly dominate fans’ conversations as they await the next World Cup spectacular. And videos of the overtime heroics of two substitute players – André Schürrle, who made a picture-perfect cross to Mario Götze, who seamlessly slid the ball from his chest-trap downward for a left-footed volley past Argentina’s goalie Sergio Romero – are destined to be replayed forever.
But before the fine details of Germany’s triumph recede in fans’ hazy memory, it’s worth recalling the long-range strategies it required for the new champions to envision winning the crown. The success of the Nationalmannschaft required even more than the midfield mastery of Toni Kroos and Bastian Schweinsteiger, the exuberant playmaking of Sami Khedira, and the goal-scoring prowess of Thomas Müller. Along with disciplined precision on the field, Germany’s success was also driven by organizational skill on national planners’ drawing board.
A decade in the making, victory was patiently built through the Deutscher Fussball-Bund’s national plan that reportedly cost a billion euros or more – creating a coordinated national system of youth leagues, sports facilities, training regimens and individualized skill-building for players selected to advance toward the Bundesliga. Insightful long-range planning, born of adversity, paved the way to success: Germany’s football establishment realized that its system needed a sweeping overhaul after being soundly defeated in 2000, when Germany was knocked out of the European Championship without winning a single game. Germany had not won the World Cup since 1990, but the newly refocused German football system marshalled its long-term resources. After years of sharpening its competitive edge, Germany's hyper-efficient system has now earned the sport’s ultimate prize.
In January, World Bank Group President Jim Yong Kim urged the audience at the World Economic Forum in Davos to look closely at a young, promising form of finance for climate-smart development: green bonds. The green bond market had surpassed US$10 billion in new bonds during 2013. President Kim called for doubling that number by the UN Secretary-General's Climate Summit in September.
Just a few days ago—well ahead of the September summit—the market blew past the US$20 billion mark when the German development bank KfW issued a 1.5 billion Euro green bond to support its renewable energy program.
Last week the New York Times featured an editorial suggesting that the World Bank should become a remittance center. Remittances are the "largest and arguably most effective antipoverty effort in the world.....financed by the poor themselves...,” it stated. “But the cost to transfer those billions is likely to rise soon...[as] big banks are leaving the money-transfer business, including Bank of America, Citigroup and JPMorgan Chase."
"If banks can’t profitably transmit remittances — and won’t do so as a low-margin courtesy — then other secure, low-cost options must be found. One solution would be for the World Bank to become a remittance center.”
Football, the beautiful game, galvanizes people from young to old and North to South in a way that no other sport or entertainment can match. Last Sunday’s final was the most watched event in human history with an estimated 1 billion viewers (many of which, in South and East Asia, tuned in well into the night). What we experienced over the past four weeks has been described by some as the closest thing to a world religion: everybody watches it and worships it; everyone has an opinion and many believe that winning the World Cup is one of the greatest achievements a country can aspire to. No wonder that even the Popes seem to care. John-Paul II once pointedly said that “amongst all unimportant subjects, football is by far the most important.”
I knew there was something different about Carbon Expo this year as I looked up during the opening ceremony and noticed the room was packed, with standing room only for late arrivals.
That is when I first asked myself: I know why I am here, but why are you here? I felt like a veteran carbon warrior among a sea of young fresh-faced carbon players.
I started coming to Carbon Expo in 2004, and this year, for the first time, there are plenty of people I don’t recognize. So today I took some time to ask people what they were doing here and why there seems to be a growing interest in carbon markets.