ASIAN VOICES is an interview and debate program hosted by NHK senior commentator Aiko Doden. We discuss key international issues from an Asian perspective, together with experts.
Jul. 24, Thu.
Jim Yong Kim
(President, World Bank Group)
Since its establishment, the World Bank has been providing support for poor countries to help them achieve economic growth. President Jim Yong Kim has pledged to rid the world of extreme poverty by 2030. Believing that his organization needs to borrow ideas and know-how from the private sector to attain this goal, President Kim is working to boost collaboration with businesses and nongovernmental organizations. How does he plan to bring about a poverty-free world? We'll ask him about issues the World Bank must overcome to achieve its goal as well as visions for the future.
In July, World Bank President Jim Yong Kim visited Japan.
He attended a symposium with young Japanese entrepreneurs and urged them to lend their support to the World Bank.
"We are serious about ending poverty and boosting shared prosperity for the people who've been left out of the global economy for far too long.
The World Bank provides assistance to developing countries. President Kim has set a goal of effectively ending poverty throughout the world by 2030.
The World Bank's attention extends beyond developing nations, to the global economy. In June, the bank lowered its global economic growth outlook for 2014 to 2.8 percent. As the world economy is losing steam, President Kim has high hopes for advanced countries including Japan to be the driving force.
What future awaits the world economy? Can the World Bank achieve its goal of eradicating poverty? We'll ask President Kim.
Well, when I started in July of 2012, we didn't know whether the European Union would stay together. We didn't know if Greece was going to be part of the European Union. We were in a middle of a major crisis. And some of the major downside risks have really alleviated. So we're now in a much sounder footing.
But as the Bank lowered projections for the global economic growth in June, we were under the impression that perhaps you might speak in a more pessimistic terms.
There are still some risks. If the tapering of monetary easing of the US Fed is more abrupt than we hope, there could be some real bumps especially for emerging market economies.We are emphasizing now that countries have to really commit to the kinds of structural reforms that we know that they need to go through in improving their business environments and policy initiatives in terms of very specific things that everyone knows that these countries need to do right now. We really really encourage our countries to put those reforms in place and then, in the medium to long term, those kinds of reforms are really what's going to give us the long sustainable growth that we all want to see.
The World Bank is also calling on Japan to implement reforms.
Prime Minister Shinzo Abe's government has presented an economic policy dubbed Abenomics.
It includes three "arrows": bold monetary easing, aggressive fiscal spending and a growth strategy.
One of the key factors of the growth strategy is empowering women in the workforce to counter the aging of Japan's society and its falling birthrate.
Shinzo Abe: "My major challenge is creating a society in which women can shine. We will make sure that women account for 30 percent of national government employees next fiscal year."
Well, certainly the first two arrows have had a tremendous impact. Confidence of both in Japan and outside have lifted tremendously. If you look at some of the things that have happened, for example, recently, the agreement on the increase in the wages of Japanese workers to 0.39%. That kind of increase hasn't happened for 16 years. What we hope is that these other measures, the seriousness with which they're taking the structural reforms that are necessary in the Japanese economy, will result in real sustained growth. No one knows for sure, but we are watching and very impressed so far that they have been so committed to continuing those structural reforms.
And it also involves changing the mindset of the government and the people, perhaps. I am not saying this because I'm a woman, but there's also womenomics aspects to Abenomics.
How crucial is that, do you think?
It's very crucial. I mean if there is a huge unused resource in Japan, it is the women in the workforce. I think that for all men, having more women in the workforce, just with the diversity, increased diversity of the ways of looking at problems, of ways at looking at particular situations, it actually makes us all better when you have a much more diverse working environment. For Japan, what that means is bringing women into the workforce. There's no question in my mind that diversity in opinions, diversity in perspectives as you approach your problem is critical for your success at solving your particular problem. If everyone is thinking the same way, then the likelihood of solving a really difficult problem, in my view, goes down. So I think that having more Japanese women in the workforce should be something that Japanese men welcome.
Right. And will I be right in saying that diversity can be the game changer?
Absolutely. Absolutely. I would, I would agree with you completely.
So men should stop regarding women's participation as being a threat?
Well, I don't know what exactly the situation is here in Japan. But I think that if what your concern is making sure that your company or your organization is as effective as it can be, all Japanese men should welcome Japanese women to come alongside them and help them figure out the really tough problems that exist today, if you want to be competitive. When Japan was doing so well in the global economy, the simple fact of the matter is there were fewer competitors. Now there are many, many more competitors. As you face this kind of competition, you want to have as many different ways as thinking about problem solving as you can possibly get, and this means bringing more women into the workforce.
The World Bank was established in 1945 to help countries recover from the devastation of World War Two. Now, the organization assists developing countries in such fields as infrastructure building, medical service, and education. The annual budget for these projects is around 50 billion dollars.
In some cases, the World Bank's efforts have not borne fruit. Iraq is still rebuilding itself after the US-led war in the country while fighting between Islamic militants and government forces is intensifying. The conflict has displaced about 1.2 million people.
Well, we've had to slow down our operations there. And we had put many hundreds of millions of dollars. It's a very difficult situation. We've had to essentially halt our operations in Iraq.
By looking at the situation in Iraq, it leaves us with a sense of the futileness. I mean the efforts have not been producing us results.
It's very frustrating, but we have no choice but to keep going. We have no choice but to keep going back and to try building again.
Right. There must be division of labor. And you can't be too ambitious, but World Bank cannot be a player in party to the mediation.
Can that be frustrating on you?
Well, it's built into our Articles of Agreement. One of the good things about the World Bank Group is that because we do not interfere in domestic problems and we really stay out of politics. Our role is that no matter what one party or another may be saying or may be doing in terms of political relationships, our role is to look at the economy and to see if there's something that we can do to help boost the economy. This is the most important thing that we can contribute. Not to stop when there are tensions, but whenever possible, we need to go in and do things like build trade corridors. Make sure that there's enough energy supply. Make sure we continue to invest in educational systems and health care systems. There is no simple formula for building peace in the Middle East, but for us, we still see that there's so many things that need to be done right now to ensure that people have access to education and healthcare and a good job. And simply hope that the better we get at providing those kinds of basic services, providing people with a good job, that that will lead to a greater possibility for peaceful resolution of some really difficult problems.
Born in South Korea, Kim emigrated to the United States with his parents when he was five. He went to Harvard University and studied medicine and anthropology. He also founded a nonprofit organization providing medical assistance in developing countries.
Later, he worked for the World Health Organization on stopping the spread of HIV and AIDS and improving public health in developing nations. And in July 2012, he assumed the post of World Bank president.
He has set a goal of ending extreme poverty. Around 20 percent of the world's population lives on less than a dollar and 25 cents a day. The World Bank aims to cut the proportion to below three percent by 2030.
I noticed that the pin that you have on your left lapel is not the World Bank pin, but it says, "End Poverty". So you are quite committed to reaching that goal?
Absolutely. This is a very difficult task. We now need to do everything we can to end poverty. What does that mean? It means that we have to really focus on the countries where the most people are living in extreme poverty: India and sub-Saharan Africa, where most of the people who are living in extreme poverty are. So we'll certainly focus a lot on South Asia and sub-Saharan Africa, but it also means that if we really want to get to three percent, we really can't forget any country. If growth over the next 15 years continues as it was before the financial crisis of 2008, we'll only get to seven and a half percent. Seven and a half percent of people will still be living in extreme poverty. We want to get it to below three percent.
Right, but you set the goal to be 2030. That's 16 years away. Isn't that a bit ambitious?
It's very ambitious. It's one of the most ambitious targets that the World Bank has ever adopted. But think about it. This will be the first time in human history that we can actually talk about an end to extreme poverty. If we have this chance, this historic opportunity to end extreme poverty in this generation, we have to do everything we can to get there. And so what's that meant for us, that target has meant that we are now looking at everything we do from that perspective. Are we organized in a way that will lead us to the end of poverty? Are we working effectively enough so that we can reach the end of poverty?
Now, emerging countries are creating their own aid frameworks to be less reliant on the World Bank. One example is an Asia Infrastructure Investment Bank proposed by China. In July, the leaders of the BRICS nations- Brazil, Russia, India, China and South Africa- agreed to create a developmental bank with initial capital of 100 billion dollars.
It used to be that we were without question the biggest players in global development, but now there are many others. Whereas there are other private sector companies, whereas there are foundations, what we want to be able to do is to bring global knowledge to the table in every setting that we're working in and be unique in that. So if, for example, we're trying to solve a problem in healthcare, and let's say the problem is in maternal and child health. Let's say the problem is in some country in East Asia. I want my teams to get to a position where they can say, "Okay, you have a particular problem in maternal and child health. Here are the 15, 20, 30 best examples of other countries that have solved this problem with great success. And we've taken all these different experiences and distilled out from them what we think are the core elements of success. "I've been in this business for a very long time and I know that there's really no other group that does that particular kind of capturing of solutions and then bringing them in a way that's usable. So this is hard. It's difficult. There's no academic institution that can do this alone. There's no private sector or a foundation group that's able to do this.
Well, I don't mean to sound too harsh, but the Bank itself is under the criticism that despite being the provider of assistance, its operations themselves are often wasteful. How would you counter that argument?
Well, we're going through the largest change process at the World Bank in twenty years. One of the things we're doing is an expenditure review where for the first time in a very long time, we are looking at every penny that we're spending and asking ourselves that question. Is this where we should be spending our money? Are we spending too much in one area and not enough in another? We take those critiques very seriously. And we're in the middle of, of a very intensive three year process where we're cutting 400 million dollars in real terms from our budget. So, at whatever level people out in the world may be critical of us, we're even more critical of ourselves. Because again, if you're serious about ending extreme poverty, you'd better be on top of your expenses, you better know exactly what you're spending and you better know that every penny that you have to spend, you're using it in a way that will get us to our goal.
My position on it is very straight-forward. If you look at the infrastructure needs in the world today, and the most modest estimate is we need an additional one trillion dollars of investment in infrastructure every year for the developing countries. It's not a surprise to me that China right now or the BRICs countries together would want to form these institutions. Because they too are seeing that even in their own countries, but certainly in non-BRICs developing countries, the need for infrastructure financing is intense. There's a huge need for financing. So I welcome these initiatives to the extent that they are trying to address the same problem we're addressing, which is the need for financing for infrastructure. As they evolve, I've made it clear that I'm very open to working with and helping those institutions as much as possible.
But what about the principles like transparency and governance though?
We believe in those principles very strongly. I think we have to wait and see. We're not quite sure what form they'll take. We're not quite sure which principles they will embrace. For us-and this is the most crucial point-for us, the enemy is not another investment bank. The enemy is not another institution or the private sector. The enemy is poverty. The enemy is the lack of shared prosperity. If you really believe that the enemy is poverty and lack of shared prosperity, then you have no choice but to welcome these others who are saying that they are trying to tackle the same problem. So we welcome them because the problem is big enough for all of us to participate.
In July, President Kim attended a World Bank symposium in Tokyo. He's been focusing on using innovative ideas and technologies to achieve the bank's goal of a poverty-free world. 270 students, business people, and others gathered for the event.
A discussion was held with a panel comprising young leaders of companies or organizations that support developing countries. This woman makes handbags in Ethiopia with local materials and exports the products to Japan. This man produces prosthetic legs in India with local residents.
Panelist 1: "After getting some engineering skill to them, they can make another innovation after that. That will continue and that innovation will continue in the local community without me. That is what we will make it happen."
Panelist 2: "It is a pretty hot topic in Japanese private sector these days. A lot of companies want to venture abroad targeting the poor segments. So we provide advisory services, market research for these companies."
Dr. Kim: "For us, at the World Bank Group, we think that the most critical thing that we can do is to help with the diffusion of knowledge. There are so many good ideas out there that never been taken to scale, that never even worked. Because you know they may have brilliant ideas, but those ideas did not go through the process of making them usable. So for us, we value greatly our interacting these innovators and entrepreneurs here."
Absolutely. You know, I'm very specific. I've been very clear with this new cadre of people we've brought into the Bank- the senior directors of these global practices. These are some of the best experts in the world on water, on trade, on health, on energy. The best experts in the world, we've brought them in. I've been very clear. I said, "Your job is to literally scour the globe, go all over the world, you know, reach out to all of your colleagues, and find the best innovations that have solved difficult problems all over the world. Figure out why they work or why they didn't work, or why some of the innovations didn't work. And then bring them together and be able to present those to all of our member countries, literally at any given moments. "If someone asked you about solving a problem of water use in an arid area or section of a particular country, that person that's working in that country should have access to all the best solutions that anyone has ever come across. This is not easy. It's certainly not what some of our people are used to. We're asking them to think very broadly about how great solutions can be captured and then transferred into another place, and not taken in all its form and just stuck there, but adapted to each local context. Every time we do that, we'll learn more. Our intention is to make that kind of very special knowledge available to everyone.
Does that mean that the Bank may be growing out of its conventional approach to problem solving by making the most out of innovation and teaming up with entrepreneurs?
What we learned through surveys and looking at how our team spent their time, we found that if any innovation moved from one region to another, it only did that accidentally. There was no systematic process of capturing all the innovations across the globe and spreading through to every region.
That innovation will also contribute to job creation, which is the key to eradication of poverty?
Absolutely. The best way to eradicate poverty is to give somebody a job. This is why for another fundamental change that we've gone through with the World Bank Group is to bring our public and private sector groups together. But because we know now that more than 90% of all the jobs in developing countries are created in the private sector, a big part of the innovations we have to bring to bear are innovations that, for example, create a policy environment that makes it easier for the private sector companies to grow. So building a robust and healthy private sector is a huge part of our plan to end poverty.
Long before I became World Bank Group President, I really emphasized this for our students, because as a professor, as a supervisor, we used to send students out into the field all the time. They'd come back discouraged and cynical and pessimistic and I'd say, "Look, you're--even though you're a student, you're coming from a place with a lot of resources. And the minute you step into a really poor country, they're going to see you as a person with access to these resources. For you to come in with the cynicism and pessimism is deadly. Because it is not a question of whether or not you have done the analysis and you come out optimistic or pessimistic. For you, optimism is a moral choice. You have to choose to be optimistic about a situation." It's my duty, no matter how bad a situation looks now, to try to find the pieces of a potential strategy, of a potential way out, that will lead to the kind of development. That's my job. To be optimistic is my job. If you are pessimistic, you're going to miss things. If you're cynical, you're going to miss those things that may be the key to providing the path to development for even the poorest country in the world.
If you see that, you should call me and tell me you see it and then I'll work on being more optimistic.
Well, thank you very much, Dr. Kim, for making the time for us.
Thank you. Thank you for having me on your show.
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