The Way Forward: Building Resilience and Reshaping Development | WBG-IMF 2023 Spring Meetings

activity. So, those are the daily tasks of the World Bank and the IMF: how do we interact with Ethiopia, with Egypt, with Nigeria and with South Africa? Countries looking for a direction. With Turkey, and I didn't want to mention just a few, with 100 countries around the world, how do we work together to really find a path for the country that has better growth on the other side? The challenge is that the burdens continue to pile up. The burden of debt, the burden of climate costs, the burden of rising food prices, all of that adds up substantially.

So we are in a kind of liquidity crisis for the poorest countries, and also this long-term problem of where do you get the growth from? We know where it comes from, the productivity of new investments, but the stars are not aligned at this time to achieve it. Well, that's why it's good that twice a year we can all get together and then focus on what we can do through better coordination of our members and of course our institutions. I want to bring an element of positivity to this discussion. Yes, it is a very difficult time, but if we look back at what we have achieved in the last three years, three and a half years, it is a lot, David.

First, we managed to come together very early when COVID-19 hit, and collectively, the members themselves took appropriate political actions, and our institutions funded those that did not have access to other funding sources, which managed to bear the impact of COVID-19. -19 is economically much lower than it would have been otherwise. I remember that our first assessment of the risks of the COVID-19 crisis was a 10% contraction of the global economy. That did not happen, 3.1% is nothing, but it is far from a 10% contraction. I remember   you and I discussing how we can coordinate actions  in financial terms, how we come together.

Our first loan was to Kyrgyzstan, Kyrgyz Republic, a week after the WHO announced the COVID-19 pandemic. Since then, we have funded 96 countries. Never in the history of the IMF have we done so much for so many people, and we have done it together with you. We have recognized that debt is a problem. I want to give you credit for being such a strong voice, including your latest blog, on behalf of countries that are crushed by the burden of debt. We have called the Debt Service Suspension Initiative and now we are in these Meetings, David, and I am very happy.

We can tell our audience that we will not let our guard down on this issue. We are going to hold the Global Roundtable on Sovereign Debt, which will bring together for the first time all creditors, traditional, new, public, private, with the indebted countries and with us, the key institutions, so that we can sit around the table and finding solutions. to what could otherwise be devastating for countries. So, we've done things together that would have been much less effective if we didn't have that platform. To all who attend the Meetings, roll up your sleeves and continue with that spirit of getting things done.

And since this is the last time I have the pleasure of sitting with you at the beginning of the Gatherings, David, what is your hope for the future? What do you see on the horizon for our institutions? What's one piece of wisdom you'd like to pass on to everyone watching and, of course, my grateful self? That's tremendously nice. I take the word wisdom, so I don't know if I can achieve it, but I'm going to share a little bit. I'm going from small to big. Yesterday, four years ago, I walked into the atrium here as President of the World Bank, and you were a pillar of global

development

, then at the World Bank, now at the IMF, and one of our challenges was trying to find progress. in the countries.

That was my hope. We always had a vision of how to achieve better results for people in developing countries. But then we recognized that one way to do that was to make individual breakthroughs or regional breakthroughs. Some new vision, whether in the area of ​​currencies or fiscal policy, or trade policy or infrastructure

development

. I'm still working on making progress. One of the countries we worked in initially was Ethiopia. We saw that the dual exchange rate has an official exchange rate that is available to a few, and a parallel market exchange rate that is very expensive for the rest within the country.

It hasn't worked very well. I went to Ethiopia in early May 2019. I think you went in August 2019. We will revisit that at the Debt Roundtable and in our

meetings

this week to see if there can be a breakthrough because the number of The lives of the people at stake are enormous. I don't know, I didn't look it up, but Ethiopia may have 120 million people, it's a big number and it's growing. Creating a better future for them is both a macro challenge and then a micro challenge. Allowing more imports and exports to come and go through better systems will be vital to their growth and to improving their living standards.

So I wanted to start from the beginning, a lot of what we've done over my four years has been in specific countries and regions. How are problems solved in various parts of the world? But then that has been faced with this gigantic macro overlay of the world of COVID-19, slow growth, rising interest rates, and the Russian invasion of Ukraine, all conspiring in a way to not give enough money for either of the goals they have for people in developing countries. So I feel good, it's been a very busy four years, and before that, the US Treasury worked on similar issues at a very rapid pace.

I feel good about that, very good about the World Bank Group and all of our entities, but I'm also concerned, I guess I'll say this frankly, about the prospects for people in developing countries. There is no good way. I like your point of optimism: we have technology, we have institutions that care, there is enough money in the world, there is enough capital in the world to make it work. But my concern is that it's all absorbed into a small group and it's not working right now, and some fundamental changes are needed to make it work. It has been a pleasure working with you over these four years.

I am very confident that solutions will be found. It's a matter of will and then you find a way. I always remember in the context of these conversations, when we have a very steep mountain to climb, what Nelson Mandela once said: "Impossible until it's done." And I'm looking

forward

to engaging with our members this week, David, with you, with our partners at the World Bank. Because if we can imagine a world in which the tremendous capital, the wealth that is created, is allocated to the greater public good, in which we open opportunities for everyone to reach their full potential, in which we confront the tremendous challenge of climate change, then we can say that Mandela is right.

All these things we discussed are so difficult, impossible until they are done. A great topic for the challenging week ahead: we each have 15 difficult

meetings

. I don't know, you may have 25 tough meetings ahead of you this week, but with a clear objective, and thus enjoy where you can, I will try to do the same. We are launching our Spring Meetings Week. Yes, excellent. And I can see our friendly host looking at us with this sign that says: time is up. Thanks for that fantastic conversation. Thank you, President Malpass, MD Georgieva. In fact, he has given us some insightful context about the main topics that will be on his agenda this week.

With this we come to the end of this event, but there is more to come. You can watch this replay, as well as other events throughout the week, at live.worldbank.org/

spring

meeetings

2023

. We hope you enjoyed hearing from our distinguished guests today, but please continue your comments online with the hashtag #ReshapingDevelopment. We would love to hear from you. I'm Noreyana  Fernando, and thank you for joining us.