* Annual Meetings Blog
Thank you for joining us at these Annual Meetings. I want to express my particular thanks to the Chairman of the Board of Governors, Nguyen Van Giau, and to Agustín Carstens for his leadership of the Development Committee. Agustín and I have worked ever more closely over the last two years. I have deep respect for his skills as a Minister and as a thoughtful leader, and benefited greatly from his partnership and friendship. This is Agustín’s last meeting as Chair of the Development Committee, although I know I will wish to call on his advice and judgment in days to come.
I look forward to working with Minister Al-Khalifa of Bahrain, who has graciously agreed to assume the Chair of the Committee. Minister Al-Khalifa and I have worked together in earlier capacities, and I am delighted he has agreed to join us at this critical time.
I also want to thank my colleague Dominique Strauss-Kahn. Our two institutions have partnered closely over the last year, and I have much appreciated his insight, practicality and good humor.
I am grateful too, to the Turkish Government and the people of Turkey, who have been exemplary hosts for our Annual Meetings this year. We have enjoyed seeing this fascinating city in a country that has accomplished so much. Most of all, we thank the wonderful people of Istanbul and Turkey.
I would like to take this opportunity to recall former World Bank President Robert McNamara. He led and shaped the Bank for 13 incredible years. He brought to this institution enormous energy along with the firm belief that the problems of the developing world could be solved. He left behind him a formidable record: the effort to eradicate and prevent river blindness; the Bank’s first loan for nutrition; a focus on the rural poor; increased lending to agriculture; the publishing of the first ever World Development Report; and the opening of relations between the Bank and China at a crucial time in that country’s development – a reflection of both his foresight and leadership.
Robert McNamara shifted the focus of the World Bank Group toward the goal of overcoming poverty worldwide. It remains our core mission today, and ensures that Mr. McNamara’s legacy in international development – and to the World Bank Group – lives on.
In his final years, when I spoke to Mr. McNamara, he remembered fondly the tremendous staff of the World Bank Group, a true collection of talents across cultures and lands. His successors have expressed the same appreciation. I want to add my thanks to theirs. The people of the World Bank Group have risen to the challenge of crisis over the last year – with energy, creativity and strong sense of purpose for the client countries and people we are privileged to serve.
We are also saddened by the recent passing of Minister Futa of the Democratic of Republic of Congo. I would like to join the Chairman in extending my condolence to his family and the government of DRC.
I would also like to express my deepest sympathies to the family of the former Finance Minister of Japan, Mr. Nakagawa.
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A year ago, we came together at a time of turmoil. Today, that turbulence is far from over.
As a result of the global crisis, we estimate that 90 million more people will be living in extreme poverty by the end of next year; up to 59 million more people will lose their jobs this year; and an additional 30,000 to 50,000 babies may die in Sub-Saharan Africa.
Behind these numbers lie human stories:
-- Aoy Puon is a garment factory worker in Cambodia. Since the crisis hit, her monthly salary has been cut in half. Today she can’t make enough to send money home to her family who depend on her income. 48 garment factories have had to close in Cambodia over the past year, and 62,000 workers have lost their jobs – 90 percent of them women. Aoy is now worried that she will lose her job.
-- Zagd is a herder in Mongolia, where the financial crisis has caused livestock prices to plummet. Meanwhile, food costs increase daily, so Zagd can no longer afford to buy flour, rice, or sugar. For herders like Zagd, there is no pension or social benefit money – instead, with decreased income, the only recourse is to cut consumption. As one herder says, “I do not buy sugar because it is expensive. We do not use vegetables. We do not go out, therefore we do not need many clothes…In the winter time, we do not buy wood and coal.”
-- Lindiwe is 28 and lives in a shanty town in southern Africa. She's HIV positive and has TB. She was turned away from the NGO clinic that provides treatment for these diseases, because donor funding has dried up as a result of the financial crisis, and the NGO has run out of drugs. Prospects for additional funding look bleak: a recent World Bank and UNAIDS survey found that 1 in 5 developing countries have experienced cutbacks on anti-retroviral treatment programs, and 33 countries expect the impact to worsen over the next year. For Lindiwe, time is running out: "I am scared of dying and leaving my little girl alone," she says.
Jobs lost and lives destroyed. Girls forced out of school. Families who need to decide which meal to cut out of their day. Children malnourished. Human progress reversed, often irretrievably.
While we talk of recovery, the personal pain of poverty is all around us.
In cities, villages, valleys, and plains; on Main Streets and communities with no streets we hear a common refrain: “Don’t let this happen again.”
Sadly, we cannot make that promise. We cannot crisis-proof our world. Indeed, if there is one thing that is assured about the future, it is that there will be another upheaval. But with leadership and cooperation, we can learn lessons from the past crisis, and we can look ahead.
We need to look beyond emergency response, to actions to “build back better” -- actions that can endure.
That work is up to us in this room. Cooperation at times of crisis is the easier part. Cooperation when no longer staring into the abyss is the challenge.
Seeds of Crisis
Before looking to the future, we need to understand the past. Today’s upheaval did not occur from nowhere. The seeds were planted earlier.
The last 20 years have witnessed a huge economic shift. The breakdown of the planned economies in the Soviet Union and Central and Eastern Europe, the economic reforms in China and India, and the export-driven growth strategies of East Asia all contributed to a world market economy that vaulted from about 1 billion to 4 or 5 billion people. This shift offers enormous opportunities. But it has also shaken an international economic system forged in the middle of the 20th Century, with patched-up changes in the decades since.
Some seeds of today’s troubles were sown by the responses – or lack of them – to the financial crises of the late 1990s. After the Asian financial crisis, developing countries determined they never again wanted to be exposed to the tempests of globalization. Many “insured” themselves through managing exchange rates and building huge currency reserves. Some of these changes contributed to imbalances and tensions in the global economy, but for years governments muddled through amidst generally good growth.
Central banks failed to address risks building in the new economy. They seemingly mastered product price inflation in the 1980s, but most decided that asset price bubbles were difficult to identify and to restrain with monetary policy. They argued that damage to the “real economy” of jobs, production, savings, and consumption could be contained once bubbles burst, through aggressive easing of interest rates. They turned out to be wrong.
Regulators and supervisors of financial institutions were no longer grounded in reality. Financial innovation and competition vastly expanded services – including to companies and families often shunted aside in the past – but the alluringly simple design of “rational markets theory” led regulators to take a holiday from the realities of psychology, organizational behavior, systemic risks, and the complexities of markets and humans.
Even as we learn these harsh lessons, we need to anticipate and build.
In 1944, the delegates at Bretton Woods seized a moment to shape a new global arrangement. They spent three weeks in New Hampshire developing a system of rules, institutions, and procedures for financial and commercial relations in the world economy.
That world has changed enormously over the past 65 years. The current upheaval is changing the landscape yet again.
Already, we can see potential shifts in power and institutions and international cooperation. In part, the shifts will depend upon how the parties adapt to new circumstances; in part, upon the rapidity of the recovery; in part, upon changes in who holds the world’s capital, technology, and human resources and what they do with them; in part, upon how countries cooperate – or do not.
The Changing Context
Just over 10 years ago, during the Asian financial crisis, the world’s primary concern was whether China would hold its currency peg to help stabilize the falling economic dominoes. Today, China ranks with the world’s major economies and acts as a stabilizing force in the global economy. Together, China and India account for 8.5 percent of world output. They and other developing countries are growing substantially more rapidly than developed countries.
The United States has been hit hard by the crisis. But it is a resilient nation. Its future will depend on whether and how it will address large deficits, recover without inflation that could undermine its credit and currency, and overhaul its financial system to preserve innovation while adding to safety and soundness. The United States also needs to help people adjust to change, so that it can maintain its greatest trump card: openness to trade, investment, people, and ideas.
Japan is the first leading industrial power to experience a political upheaval in the wake of the crisis. The election of the Democratic Party of Japan could create a sustainable two-party democracy for the first time in the country’s history.
It is not clear that the old export model of growth will meet Japan’s and the world’s needs or be sustainable in a more “balanced” global economy that does not rely so heavily on the U.S. consumer.
An aging Japan will have new consumption needs. A global economy with more poles of growth could offer Japan new markets, especially for its impressive capabilities to use energy efficiently.
Central and Eastern European economies suffered strong blows. And their problems are far from over. The good strategic news is that the European states, for all their internal debates and negotiations, have recognized their interdependence. Under stress, this time, Europe did not splinter.
South East Asia may also have been given a boost by the crisis – depending on how opportunities are seized. The region lies at a geographic crossroads between India and China, two rising powers. ASEAN seems to have recognized the moment, and has taken actions to deepen its integration even while reaching out to others. Given the sizeable weight of Indonesia and the rising influence of Vietnam, their sound performance amidst economic turmoil has stood in sharp contrast to a decade ago.
For others, the long-term impact of the crisis may depend upon commodities, especially oil prices, which, in recent years, gave high returns. When the oil price is at $100, these countries are strong. When it is at $30, most are in serious trouble. This reliance on oil and commodities is a precarious basis upon which to build an economy in a world that is struggling to reduce its reliance on fossil fuels, and in which commodity prices gyrate as investors move in and out of an “asset class.” Will countries use these returns wisely – to diversify and build broader-based economic development? These are the questions for Russia, countries in the Gulf, and some countries in Latin America and Africa.
Prior to the crisis, the growth rates of a number of African countries were achieving impressive levels with consistency. Coming out of the crisis, there could be new opportunities. Some Chinese manufacturing firms are considering shifting their basic production to Africa. China’s African prospects – which include resource development and infrastructure – are likely to be complemented by others. Brazil is interested in sharing its agricultural development experience. India is building railways. These are the early days of a trend that will build.
Understanding shifting power relations is fundamental for shaping the future -- as the Bretton Woods’ delegates appreciated. The political basis for that system was forged through a shared experience in failed responsibility after World War I and a clear assessment of power after World War II. Change those power relations -- and the nature of the markets that connect them -- and the system looks out of touch.
What Next: Responsible Globalization?
The old order is gone. We should not waste our time and tears lamenting it. Today we must build anew. Today we can put in place the foundations for a “New Normal” of growth and responsible globalization.
Globalization has helped sustain high economic growth in many countries and lifted hundreds of millions out of poverty. Yet the growing linkages between economies have also played a central role in turning a financial crisis in the developed world into a global crisis that is driving millions back into poverty. The pace of climate change is accelerating, with poorest countries hardest hit. Diseases such as SARS in 2004, or this year’s H1N1 virus, start as localized outbreaks but quickly become global threats. Their virulence has only been intensified by increased travel and open borders.
We cannot and should not turn the clock back on globalization. Nor are publics demanding that we do so. But we can and must reform it to curb the damage it can wreak while expanding the enormous benefits that responsible globalization can provide to millions.
What Would it Take to Build Responsible Globalization?
First and foremost, we must recognize that developing countries are key to the solution today, progress tomorrow, and prosperity in years to come.
Two weeks ago, in Pittsburgh, world leaders embraced the G-20 as the premier forum for international economic cooperation among the advanced industrialized countries and rising powers. This is a good start. But the G-20 cannot be a stand-alone committee. Nor can it ignore the voices of the over 160 countries left outside. The G-20 should operate as a “Steering Group” across a network of countries and international institutions with a broader membership. It should recognize the interconnections among issues and foster points of mutual interest, without being either hierarchical or bureaucratic.
It should be connected to our G-186 here in this room.
Forecasters expect lackluster growth and continued high unemployment for a number of years. The U.S. consumer can no longer be the main engine of economic demand. Europe and Japan appear constrained; China can assist, but its credit growth could pose problems next year. With access to finance, other developing economies can help boost a global recovery. Many have the fiscal space to borrow, but cannot get the volumes they need at reasonable prices without crowding out their private sectors. The World Bank Group and regional development banks can assist. Enhanced financial regulation and supervision that shift incentives from short-term casino capitalism to long-term productive investment will help.
Second, leaders must emphasize that a balanced and inclusive global economy needs multiple poles of growth – and not just adding China and India. Countries in Latin America, Southeast Asia, and a wider Middle East can assist in the future if they invest today. Over time, investments in Africa, a market of almost a billion people, can integrate its markets and become another source of growth.
To build multiple poles of growth, we need to remove bottlenecks and boost productivity through investments in infrastructure and energy, private sector expansion, and regional integration linked to open markets. New poles of growth can be customers for the capital goods, services, and technology of developed countries.
Third, leaders must commit to making growth sustainable. As the World Bank’s recently released World Development Report on development and climate change points out, developing countries not only face 75-80 percent of the potential damage from climate change, but over 1.6 billion of their people still lack access to electricity. Developing countries – and their interests – must be at the table. They need incentives and financing to encourage low carbon growth by adopting technologies, implementing energy efficiencies, and investing in forestation.
Fourth, we must put in place mechanisms to protect the most vulnerable. Two weeks ago at the Pittsburgh Summit, the G-20 leaders re-iterated their support for a new $20 billion food security initiative launched at Italy’s G-8 meeting. They called upon the World Bank Group to work with donors and organizations to develop a multilateral trust fund to scale-up agricultural assistance to low income countries. Too often, bilateral aid concentrates resources in specific sectors and countries. But with this more comprehensive, multilateral approach we can pool resources and better support innovative efforts to tackle food security all the way along the food chain and build sustainable agricultural systems. Paper pledges, however, will not put seeds in soil or food in hungry mouths. Hunger and famine – as the present drought in East Africa shows – are an ever-present threat. So we must move quickly to turn this initiative into reality.
Food, fuel, and now financial crises have derailed progress towards the Millennium Development Goals, reversing years of gains. We must fill a gap in the global financial architecture by offering insurance to the poorest countries that they will not be left defenseless in the face of overwhelming shocks. The World Bank Group will work to flesh out the proposal for a Crisis Response Facility, endorsed by the G-20 and the Development Committee, that can be ready to offer quick and effective assistance for the most vulnerable and fragile countries, many of which are just emerging from conflict. From targeted safety nets to SMEs and microfinance, we can help buffer those with the least cushion from the greatest upheavals.
We must also work toward a hand-off from government stimulus to private sector demand, investment, and trade, by offering a counterweight to financial and trade protectionism. IFC has just launched a new Asset Management Corporation that manages funds to invest in banks, equity, infrastructure, and debt restructuring. We can help build developing country financial markets, while channeling capital from sovereign, pension, and other asset management funds to productive private sectors in developing countries.
The Role of the World Bank Group
Last year, the Bank Group stepped up to the crisis and delivered a record $59 billion of financial assistance. IBRD commitments almost trebled to $33 billion. IDA also reached a record high of $14 billion; over 50 percent of new IFC projects were in IDA countries. Support for infrastructure – critical to recovery and jobs – reached $21 billion; we scaled up assistance of $4.5 billion for safety nets and other social protection programs to cushion the most vulnerable.
IFC combines strong innovation with resource mobilization; we have launched initiatives on bank capitalization, trade finance, infrastructure, and microfinance.
We expect a new IBRD record of $40 billion or more this fiscal year. Demand for IBRD lending is now clearly moving significantly beyond the $100 billion level that the Development Committee called for in its Communiqué last year. IDA countries are also facing significant financing gaps. We estimate that financing shortfalls to cover at-risk core spending on health, education, safety nets, and infrastructure amount to some $11.6 billion for the poorest countries.
I know that budgets in developed countries are constrained. But responsible globalization requires responsible stakeholders. We can and must do more.
What is the Role for the Bank Group in a New Post-Crisis World?
A well capitalized World Bank Group would be positioned to play a leading role in the global response to the challenges of globalization, development, and financial crisis.
We have a global, local, and cross-sectoral presence with the skills to work with public and private sectors, middle income and low income countries. We have a repository of global best practice in development that we continually upgrade; world-class risk management and banking competencies; and the capabilities to leverage our balance sheet. We have a leadership role in the growing global public goods agenda, and a worldwide catalytic and convening power. All these factors make the World Bank Group unique among the multilateral development banks.
Four key drivers are likely to shape the Group’s post-crisis role:
Driver 1 will be traditional and innovative development finance. There is strong demand from the Bank Group’s clients for the institution to come out of the crisis well-capitalized and to be able to sustain the delivery of a critical mass of financing to support global economic growth and to overcome poverty. The World Bank Group can play this role in several ways. We can contribute to fiscal stimulus and protecting core spending in countries that are not in a position to implement counter-cyclical policies; we can help to boost global demand to support global recovery; we can finance and support trade; we can assist the private sector to assume the critical handoff from the governments’ crisis response actions; and through investment, we can help to build multiple poles of growth with responsive, accountable public sectors and dynamic private sectors.
The second driver will be delivering knowledge products. The Bank Group is a repository of global best practice in development, combining implementation experience, research, and learning, drawing on both public and private sectors. As such, clients are looking to us to connect and customize multiple sources of practitioner knowledge and innovation.
The third driver is the global public goods agenda – pressing global challenges such as climate change, and communicable diseases that require an institutional response that is multi-sectoral, combining policy advice and investments with a global reach grounded in country programs. Already the Bank Group is mobilizing significant financing through the Climate Investment Funds. We can play a key role in technology transfer, working with clients on low carbon growth strategies, and in strengthening health systems where we are now scaling-up our work. The Bank Group can also support the public goods of resilient and dynamic trading and financial systems, based on multilateral rules.
The fourth driver is future crises – those that we can’t foresee today but know will happen: it might be a pandemic, a natural or man-made disaster, or an economic or social crisis. In response, the Bank can mobilize its full range of skills and instruments for the benefit of its shareholders, as it has done recently in the food crises, or in response to the Indian Ocean tsunami or financial crises in Mexico and East Asia.
The World Bank is pursuing a number of financial measures to make the most of our capital, including a loan price increase; working with countries so we can use the shares they purchased with national currencies; a selective capital increase linked to changes in “voice”; tight budget discipline; and a possible increase in pricing for longer maturity loans. These measures emphasize the mutual responsibilities and contributions of all our members. But they may not be enough. If the IBRD continues its lending at the current rate, by mid-2010 it will be capital constrained. IFC is limited now.
Of course the future is uncertain. If the recovery falters, or simply struggles slowly, should we risk a World Bank Group already stretched to the limit and unable to lead? In the face of the next crisis – another food emergency, the next epidemic – can we afford to have a World Bank Group that has to hold back?
I thank the Development Committee for committing yesterday that it will ensure that the World Bank Group has sufficient resources to meet further development challenges, and that it will reach a decision on this issue by Spring 2010. This is an important step forward in the first General Capital Increase for the World Bank in twenty years.
The Reform Agenda
To serve the changing global economy, the world needs agile, nimble, competent, and accountable institutions. The World Bank Group will improve its legitimacy, efficiency, effectiveness, and accountability, and further expand its cooperation with the UN, the IMF, the other Multilateral Development Banks, donors, civil society, and foundations which have become increasingly important development actors. We know well the importance of advancing multiple reforms to address shareholder requests, improve performance, and build support with your legislatures.
Our efforts include:
· Improving development effectiveness, with a focus on the results agenda, decentralization, gender, investment lending reform, and human resources;
· Promoting accountability and good governance, including with our global anti-corruption efforts, an improved transparency and disclosure policy, and the soon-to-be-released recommendations of the Zedillo Commission; and
· Continuing to increase cost efficiency.
But we must go further.
The Bretton Woods system was forged by 44 countries at a time when power was concentrated in a small number of states. The great waves of decolonization were just stirring; the few developing countries were seen as objects, not subjects, of history. That world is long passed. The new realities of political economy demand a different system.
If developing countries are part of the solution, they must also be part of the conversation. The international system needs a World Bank Group that represents the international economic realities of the 21st Century, recognizes the role and responsibility of growing stakeholders, and provides a larger voice for Africa.
The first phase of the reforms to enhance the voice and representation of developing and transition countries in the Bank Group was completed a year ago, with an additional Board seat for Sub-Saharan Africa and an increase in the voting power of developing countries at IBRD to 44 percent. I am pleased that yesterday the Development Committee stressed the importance of securing a further increase in voting power for developing countries of at least an additional 3 percent – bringing developing countries to at least 47 percent, for final decision at our Spring Meetings next year. We must continue to be ambitious. We should try to see if we can increase the share of the developing countries toward 50 percent over time, even as the emerging economies share the responsibilities of assisting poorer countries with their development. The World Bank Group should more accurately reflect the world around us.
Conclusion
Mr. Chairman: The old international economic order was struggling to keep up with change before the crisis. Today’s upheaval has revealed the stark gaps and compelling needs. It is time we caught up and moved ahead.
We need a system of international political economy that reflects a new multipolarity of growth. It needs to integrate rising economic powers as “responsible stakeholders” while recognizing that these countries are still home to hundreds of millions of poor and face staggering challenges of development. It needs to engage the energies and support of developed countries, whose publics carry the heavy burdens of debt, competitive anxieties, and feel that the new powers must share responsibilities.
It needs to help offer a hand to the poorest and weakest countries, the 900 million people who still live without access to safe water, and the “Bottom Billion” trapped in poverty because of conflict and broken governance.
Yet it won’t happen by itself.
The question is whether leaders can cooperate in steering these changes. They will be drawn to the interests of the national publics they represent, as they should. Yet they will also be challenged to recognize and build common interests, not only case-by-case, but through institutions reflecting a “Responsible Globalization.”
Bretton Woods is being overhauled before our eyes. This time, it will take longer than three weeks in New Hampshire. It will have more participants. But it is just as necessary. The next upheaval, whatever it may be, is taking form now. Shape it or be shaped by it.Annual Meetings
Board of Governors of the World Bank Group
Remarks of
Robert B. Zoellick
President
The World Bank Group
Istanbul, Turkey
October 6, 2009
“The World Bank Group Beyond the Crisis”
Monday, October 12, 2009
Thursday, September 24, 2009
PHC Motors Ltd. Commissions Training School
by Florence Gbolu
A four-member delegation from Tata Industry Limited in India on Wednesday commissioned a modern training School for PHC Motors Limited in Accra.
The commission was part of a three day facility visit made by the delegations to the company.
The centre, which was put up by the company to serve as a re-training centre for management and staff is well equipped with engine parts of light, medium and heavy duty TATA vehicles and equipment for use during practical.
It also has a lecture hall with a sitting capacity thirty, a projector and a screen to ease training..
Wednesday, September 23, 2009
PHC MOTORS EXTENDS ITS ADDED SERVICES TO THE NORTHERN SECTOR
by Florence Gbolu
As part of efforts to show commitment and loyalty, to its esteemed customers, PHC Motors Limited has offered a two day free diagnosis Test at the
The exercise which took place at the Company’s Branch office in
It also provided customers a forum to bring to the attention of the Company their concerns and observations about their vehicles as well as interact with various stakeholders from the Driver and Vehicle Licensing Authority (DVLA), Police Motor Traffic and Transport Unit (MTTU), Insurance Companies on issues of safety and maintenance.
The drivers were also treated to medical screening on the eye, checking of blood pressure, and also received discount coupons to be presented at their next service dates as well as various incentives.
The event which received positive results saw customers coming from various parts of the sector such as
Speaking on the event, the Deputy Customer Service Manager, Ms. Afua Asamaning noted that the event will become a more regular one, to be held bi-annually since it will give customers the opportunity to learn about preventative maintenance of their vehicles during these exercises.
Additionally, she indicated that by these exercises, the company contributes its quota towards Corporate Social Responsibility, adding that, thirty-one clients showed up for the exercise.
On their part, the customers expressed their appreciation to PHC Motors for their support and loyalty and prayed for more similar exercise in the future.
Monday, August 24, 2009
World’s Progress on Maternal Health and Family Planning is Insufficient
Regular doctor visits, sonograms and various tests constitute routine prenatal care for pregnant women in developed countries. But for Adwoa, an expectant mother in Ghana, access to such health care is unavailable.
Instead, for too many other women in sub-Saharan Africa, pregnancy often can lead to painful long-term disability or death for the woman or her children.
This wide discrepancy on maternal health is the unfortunate message on the 20th anniversary of World Population Day, July 11.
Reducing maternal mortality by three quarters, and achieving universal access to reproductive health services is one of the Millennium Development Goals the international community set to achieve by 2015 to improve the lives of poor people. But the world is showing the least progress on this goal, according to the latest Global Monitoring Report.
Graph: Maternal Mortality Rates(Click to Enlarge)Source: Global Monitoring Report 2009
“One of the best guarantees for getting countries on the faster track to less poverty and more opportunity is investing in maternal health and reproductive health programs,” says Joy Phumaphi, World Bank Vice President for Human Development, Chair of the Partnership for Maternal and Child Health and former health minister in Botswana.
But support for population and reproductive health programs has significantly declined as a percentage of overall global health aid, from about 30 percent in 1994 to 12 percent in 2008.
Every minute, a woman dies of complications related to pregnancy and childbirth from mostly preventable and treatable medical problems, which adds up to more than 500,000 women each year, according to UNFPA.
For every woman who dies, another 20 suffer injuries and disabilities that can last a lifetime, robbing them of livelihoods and physical well-being.
In sub-Saharan Africa, a woman’s risk of dying from treatable or preventable complications of pregnancy and childbirth over the course of her lifetime is 1 in 16, compared to 1 in 2,800 in the industrialized world. And 1 in 11 children in Africa is likely to die before reaching his or her first birthday.
Also, fertility rates continue to be high—more than five live births per woman--in 35 poor countries in the world, mostly in Africa. Progress So Far
In recent decades, many countries have made progress in reducing maternal mortality and lowering fertility rates. For example, maternal mortality rate in Egypt fell from 174 to 84 per 100,000 live births through better access to family planning and births in health facilities supervised by trained birth attendants. Bangladesh reduced fertility rates from over 7 children per woman in 1970 to about 2.7 children per woman today, while infant mortality fell from 105 per 1,000 live births in 1990 to 47 in 2007.
Also, national public information campaigns have galvanized support to reduce maternal-related disabilities such as fistula, a painful rupture in the birth canal that occurs during prolonged, obstructed labor, which leaves women incontinent, isolated and ashamed.
But huge challenges remain as aid for family planning and reproductive health programs has not kept pace with demand.
Fertility Rates Impact Economic Growth
High fertility rates, along with inadequate health care, impede development and economic growth.
Investing in family planning and reproductive health programs is not only vital to saving women’s lives, but also to boosting women’s economic and social well-being, improving the lives of their children and families, and reducing endemic poverty.
“The longer it takes for countries to move to a low-fertility, low-mortality pattern, the greater the danger that high-birth rate countries will continue to experience greater inequalities in education, jobs, life expectancy, and adult prevalence of HIV/AIDS, than their wealthier counterparts,” says Phumaphi.
Family size can also greatly affect women’s jobs in the workplace, according to a recent World Bank report, Population Issues in the 21st Century: The Role of the World Bank. One cross-national survey suggests that the percentage of women in the labor force is directly related to national birth rates. In Bolivia, there were strong links between women using contraception and having jobs outside of the home. In the Philippines, the average income growth for women with 1-3 pregnancies was twice that of women who had been pregnant more than 7 times.
In order to Ensuring Health Systems Can Deliver
The World Bank and several of its international development partners —including UNFPA, the UN Children’s Fund (UNICEF) and the World Health Organization (WHO)—have pledged to work together over the next five years to help countries strengthen their health systems, from rural clinics to major urban hospitals -- to achieve the MDG5 targets.
For its part, the Bank has provided about $950 million in loans and grants for maternal and reproductive health programs, with another nearly $350 million in the pipeline. This financial support is provides an array of vital services to poor women and their families, including access to contraception information and services, health insurance, improved pre-natal care, provision of skilled birth attendants, access to insurance and emergency obstetric services, and post-natal care.
Population and Reproductive Health Facts indicates that more than 500,000 women die each year during pregnancy and childbirth – mostly in developing countries and mostly from preventable and treatable medical problems.
1 in 16 women is likely to die from pregnancy-related causes in Sub-Saharan Africa, with the world’s highest rates of maternal mortality — at least 100 times those in developed countries.
35 countries, also mainly in Sub-Saharan Africa, continue to have a total fertility rate of more than 5 live births per woman -- adversely affecting progress in reducing poverty.
Access to voluntary family planning could reduce maternal deaths by 25 to 40 percent, and child deaths by as much as 20 percent.
Maternal and newborn mortality costs an annual $15 billion in lost productivity.
Instead, for too many other women in sub-Saharan Africa, pregnancy often can lead to painful long-term disability or death for the woman or her children.
This wide discrepancy on maternal health is the unfortunate message on the 20th anniversary of World Population Day, July 11.
Reducing maternal mortality by three quarters, and achieving universal access to reproductive health services is one of the Millennium Development Goals the international community set to achieve by 2015 to improve the lives of poor people. But the world is showing the least progress on this goal, according to the latest Global Monitoring Report.
Graph: Maternal Mortality Rates(Click to Enlarge)Source: Global Monitoring Report 2009
“One of the best guarantees for getting countries on the faster track to less poverty and more opportunity is investing in maternal health and reproductive health programs,” says Joy Phumaphi, World Bank Vice President for Human Development, Chair of the Partnership for Maternal and Child Health and former health minister in Botswana.
But support for population and reproductive health programs has significantly declined as a percentage of overall global health aid, from about 30 percent in 1994 to 12 percent in 2008.
Every minute, a woman dies of complications related to pregnancy and childbirth from mostly preventable and treatable medical problems, which adds up to more than 500,000 women each year, according to UNFPA.
For every woman who dies, another 20 suffer injuries and disabilities that can last a lifetime, robbing them of livelihoods and physical well-being.
In sub-Saharan Africa, a woman’s risk of dying from treatable or preventable complications of pregnancy and childbirth over the course of her lifetime is 1 in 16, compared to 1 in 2,800 in the industrialized world. And 1 in 11 children in Africa is likely to die before reaching his or her first birthday.
Also, fertility rates continue to be high—more than five live births per woman--in 35 poor countries in the world, mostly in Africa. Progress So Far
In recent decades, many countries have made progress in reducing maternal mortality and lowering fertility rates. For example, maternal mortality rate in Egypt fell from 174 to 84 per 100,000 live births through better access to family planning and births in health facilities supervised by trained birth attendants. Bangladesh reduced fertility rates from over 7 children per woman in 1970 to about 2.7 children per woman today, while infant mortality fell from 105 per 1,000 live births in 1990 to 47 in 2007.
Also, national public information campaigns have galvanized support to reduce maternal-related disabilities such as fistula, a painful rupture in the birth canal that occurs during prolonged, obstructed labor, which leaves women incontinent, isolated and ashamed.
But huge challenges remain as aid for family planning and reproductive health programs has not kept pace with demand.
Fertility Rates Impact Economic Growth
High fertility rates, along with inadequate health care, impede development and economic growth.
Investing in family planning and reproductive health programs is not only vital to saving women’s lives, but also to boosting women’s economic and social well-being, improving the lives of their children and families, and reducing endemic poverty.
“The longer it takes for countries to move to a low-fertility, low-mortality pattern, the greater the danger that high-birth rate countries will continue to experience greater inequalities in education, jobs, life expectancy, and adult prevalence of HIV/AIDS, than their wealthier counterparts,” says Phumaphi.
Family size can also greatly affect women’s jobs in the workplace, according to a recent World Bank report, Population Issues in the 21st Century: The Role of the World Bank. One cross-national survey suggests that the percentage of women in the labor force is directly related to national birth rates. In Bolivia, there were strong links between women using contraception and having jobs outside of the home. In the Philippines, the average income growth for women with 1-3 pregnancies was twice that of women who had been pregnant more than 7 times.
In order to Ensuring Health Systems Can Deliver
The World Bank and several of its international development partners —including UNFPA, the UN Children’s Fund (UNICEF) and the World Health Organization (WHO)—have pledged to work together over the next five years to help countries strengthen their health systems, from rural clinics to major urban hospitals -- to achieve the MDG5 targets.
For its part, the Bank has provided about $950 million in loans and grants for maternal and reproductive health programs, with another nearly $350 million in the pipeline. This financial support is provides an array of vital services to poor women and their families, including access to contraception information and services, health insurance, improved pre-natal care, provision of skilled birth attendants, access to insurance and emergency obstetric services, and post-natal care.
Population and Reproductive Health Facts indicates that more than 500,000 women die each year during pregnancy and childbirth – mostly in developing countries and mostly from preventable and treatable medical problems.
1 in 16 women is likely to die from pregnancy-related causes in Sub-Saharan Africa, with the world’s highest rates of maternal mortality — at least 100 times those in developed countries.
35 countries, also mainly in Sub-Saharan Africa, continue to have a total fertility rate of more than 5 live births per woman -- adversely affecting progress in reducing poverty.
Access to voluntary family planning could reduce maternal deaths by 25 to 40 percent, and child deaths by as much as 20 percent.
Maternal and newborn mortality costs an annual $15 billion in lost productivity.
IFC Loan Supports Offshore Oil Development to Foster Economic Growth in Ghana
IFC, a member of the World Bank Group, on Monday signed a loan agreement for $100 million with Kosmos Energy, one of the key partners developing Ghana’s Jubilee field, an offshore oil and gas project that will help diversify Ghana’s economy and meet domestic power demand.
IFC’s senior and junior loan tranches are part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. Earlier this year, IFC signed a $115 million loan agreement with British Tullow Oil, another key Jubilee partner, bringing IFC’s support for the project to $215 million. Kosmos and Tullow are independent oil and gas exploration and production companies.
The project, located in deep water some 60 kilometers off the coast of Ghana, will produce domestic crude oil, generating foreign exchange income for the country and substituting expenditures for oil imports. It is also expected to boost government revenues, providing much needed income against the background of the global economic downturn.
“IFC’s support for the Jubilee project is critical for the Jubilee partners and for Ghana,” said W. Greg Dunlevy, Kosmos Executive Vice President and Chief Financial Officer. “IFC’s loan at this time of tight credit markets has been key in securing commercial bank financing in parallel. Equally important, IFC is assisting us in achieving the broad stakeholder participation that we are aiming for.”
IFC is supporting Kosmos and Tullow in preparing environmental and social management plans for the project. The loans also are tied to other milestones such as management of biodiversity conservation, safehandling of waste, and emergency response procedures.
Next to oil, the Jubilee field is expected to produce gas to support about 400 megawatts of new power generation, equivalent to about 30 percent of Ghana’s annual power consumption. The project also will stimulate the Ghanaian economy by purchasing goods and services locally. IFC is advising the companies on enhancing the project’s benefits for local communities and stakeholder engagement.
“The Jubilee oil field is a landmark project for Ghana,” said Somit Varma, IFC’s Global Head for Oil, Gas, Mining, and Chemicals. “The project will provide a new and vital revenue source in a country that has one of the best governance track records in Sub-Saharan Africa.”
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year.
IFC’s senior and junior loan tranches are part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. Earlier this year, IFC signed a $115 million loan agreement with British Tullow Oil, another key Jubilee partner, bringing IFC’s support for the project to $215 million. Kosmos and Tullow are independent oil and gas exploration and production companies.
The project, located in deep water some 60 kilometers off the coast of Ghana, will produce domestic crude oil, generating foreign exchange income for the country and substituting expenditures for oil imports. It is also expected to boost government revenues, providing much needed income against the background of the global economic downturn.
“IFC’s support for the Jubilee project is critical for the Jubilee partners and for Ghana,” said W. Greg Dunlevy, Kosmos Executive Vice President and Chief Financial Officer. “IFC’s loan at this time of tight credit markets has been key in securing commercial bank financing in parallel. Equally important, IFC is assisting us in achieving the broad stakeholder participation that we are aiming for.”
IFC is supporting Kosmos and Tullow in preparing environmental and social management plans for the project. The loans also are tied to other milestones such as management of biodiversity conservation, safehandling of waste, and emergency response procedures.
Next to oil, the Jubilee field is expected to produce gas to support about 400 megawatts of new power generation, equivalent to about 30 percent of Ghana’s annual power consumption. The project also will stimulate the Ghanaian economy by purchasing goods and services locally. IFC is advising the companies on enhancing the project’s benefits for local communities and stakeholder engagement.
“The Jubilee oil field is a landmark project for Ghana,” said Somit Varma, IFC’s Global Head for Oil, Gas, Mining, and Chemicals. “The project will provide a new and vital revenue source in a country that has one of the best governance track records in Sub-Saharan Africa.”
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year.
Ghana and other Countries Join Initiative to Improve Their Prospects for Agricultural Development
Delegations from eight developing African countries arrived in Addis Ababa this spring with a common goal –they wanted better results for their investments in agriculture.They left with a plan to measure the effectiveness of programs with the help of a new initiative that aims to find out what works on the ground, and what doesn’t.Agricultural Adaptations, or “AADAPT,” supports rigorous assessments of agricultural development projects known as “impact evaluations.” The program’s major goals are to gather knowledge about agricultural best practices and to provide the evidence needed for more effective agricultural policies and programs.The initiative has the potential to “radically shift the path of agricultural development,” and improve the lives of millions of small farmers and others in rural areas who depend on agriculture for their incomes and very survival, says Arianna Legovini, head of Development Impact Evaluation at the World Bank. “Doing this as part of our agricultural program is critically important today,” says Legovini. “Countries were very vulnerable to the food crisis and vulnerability might increase with changes in climate. There is a new urgency to invest in knowledge for agricultural growth and food security.”The recent G8 meeting in Italy reiterated the importance of food security and expressed concern about the impact of financial crisis and high food prices in developing countries, as well as the longstanding underinvestment in agriculture.N-COMPATIBLE BROWSERS HERE
11 Countries Join AADAPTThe AADAPT initiative—a collaboration of developing countries, the World Bank, and several partners—is part of the World Bank’s renewed effort to place agriculture at the center of the development agenda, as recommended by World Development Report 2008.Many countries suffered food shortages as well as high prices at the height of the food crisis last year, and many remain vulnerable. About 75 percent of the world’s poor depend on rain-fed agriculture for their livelihoods. Between 2000 and 2025, the number of Africans living in water-scarce environments is expected to increase from 300 million to 600 million.Facing some of these challenges, Ethiopia, Democratic Republic of the Congo, Ghana, Malawi, Mozambique, Niger, Nigeria, and Tanzania attended AADAPT’s inaugural workshop in Addis Ababa in April. Brazil, India, and Peru have also joined the new initiative so far. “We’ve been spending a lot of money on our programs and we are not sure whether our interventions have been effective and whether what we are doing is right or not,” explains Tigist Redda, a workshop participant from Ethiopia.Program Promotes Evidence-Based PoliciesUnder AADAPT, teams of experts will work hand-in-hand with government ministries and World Bank project teams to measure impact using data collection, surveys and control groups as necessary to obtain actual results, says Stephen Mink, World Bank lead economist working on Africa agriculture.While World Bank projects commonly include monitoring and evaluation, AADAPT, with initial funding of about $1.2 million, provides extra resources, both financial and technical, to obtain a “deeper causality of what’s working and what’s not,” says Mink.The program’s country-driven and high-quality impact evaluations compare the outcomes associated with a program against the outcomes that would have occurred had the program not been in place, says Legovini.AADAPT to Bridge Knowledge GapsAADAPT particularly tries to bridge knowledge gaps on how to:
Increase the adoption of agricultural technology
Secure high returns on investment in irrigation and other rural infrastructure
Reduce the vulnerability of rural populations
Manage natural resources sustainably
Workshop facilitators helped each country delegation design a work plan to test agricultural policies and evaluate their impact. The AADAPT workshop also created a community of practice, for countries to share evidence and experiences and to have ongoing discussions about what works.“It’s not just to find out whether the programs work,” says Legovini, “but knowing what works within the programs, that will make the programs more effective in the long run.” AADAPT Seeks the Right IncentivesFor example, a small fertilizer subsidy was seen in one case as being more effective if provided shortly after a harvest, when farmers have more money to purchase fertilizer, than a bigger subsidy provided later on, when farmers have less money. Patrick Verissimo, a senior agriculture economist in Mozambique for the World Bank, says AADAPT will help evaluate whether establishing savings groups and promoting the adoption of new technologies will boost the incomes of small-scale farmers and female-headed households.AADAPT is also helping to define what will be measured during an upcoming irrigation project, such as the extent to which improved water management leads to increased productivity on farms, he says. “AADAPT is helping us build impact evaluation into the design of our project so that we don’t just measure results at the end but learn as we go,” says Verissimo. Goal is to Provide ‘Best Advice We Can’For large rural infrastructure, countries need to find ways to secure high returns on investment by rapidly transforming agricultural production systems and ensuring the financial sustainability of operations and maintenance.Knowing how to make it all work is a “fundamental ingredient in ensuring public sectors have an interest and incentive to invest in costly infrastructure to lower vulnerability and increase growth in their countries,” says Legovini.“The idea is to provide the best advice we can, in terms of content and quality of data that gets collected in each country, and also to have a way of comparing results across countries, by measuring them in the same way.” Similar programs are currently being implemented in education, malaria, HIV, and local government by the World Bank’s Development Impact Evaluation Initiative and its partners.The World Bank’s partners in AADAPT are the International Food Policy Research Institute and several universities including Oxford, California at Berkeley, Maryland, Padova, and Yale, with support from the World Bank’s Gender Action Plan and the Trust Fund for Environmentally and Socially Sustainable Development. The Gates Foundation supports the program through the Living Standards Measurement Survey for agriculture.
11 Countries Join AADAPTThe AADAPT initiative—a collaboration of developing countries, the World Bank, and several partners—is part of the World Bank’s renewed effort to place agriculture at the center of the development agenda, as recommended by World Development Report 2008.Many countries suffered food shortages as well as high prices at the height of the food crisis last year, and many remain vulnerable. About 75 percent of the world’s poor depend on rain-fed agriculture for their livelihoods. Between 2000 and 2025, the number of Africans living in water-scarce environments is expected to increase from 300 million to 600 million.Facing some of these challenges, Ethiopia, Democratic Republic of the Congo, Ghana, Malawi, Mozambique, Niger, Nigeria, and Tanzania attended AADAPT’s inaugural workshop in Addis Ababa in April. Brazil, India, and Peru have also joined the new initiative so far. “We’ve been spending a lot of money on our programs and we are not sure whether our interventions have been effective and whether what we are doing is right or not,” explains Tigist Redda, a workshop participant from Ethiopia.Program Promotes Evidence-Based PoliciesUnder AADAPT, teams of experts will work hand-in-hand with government ministries and World Bank project teams to measure impact using data collection, surveys and control groups as necessary to obtain actual results, says Stephen Mink, World Bank lead economist working on Africa agriculture.While World Bank projects commonly include monitoring and evaluation, AADAPT, with initial funding of about $1.2 million, provides extra resources, both financial and technical, to obtain a “deeper causality of what’s working and what’s not,” says Mink.The program’s country-driven and high-quality impact evaluations compare the outcomes associated with a program against the outcomes that would have occurred had the program not been in place, says Legovini.AADAPT to Bridge Knowledge GapsAADAPT particularly tries to bridge knowledge gaps on how to:
Increase the adoption of agricultural technology
Secure high returns on investment in irrigation and other rural infrastructure
Reduce the vulnerability of rural populations
Manage natural resources sustainably
Workshop facilitators helped each country delegation design a work plan to test agricultural policies and evaluate their impact. The AADAPT workshop also created a community of practice, for countries to share evidence and experiences and to have ongoing discussions about what works.“It’s not just to find out whether the programs work,” says Legovini, “but knowing what works within the programs, that will make the programs more effective in the long run.” AADAPT Seeks the Right IncentivesFor example, a small fertilizer subsidy was seen in one case as being more effective if provided shortly after a harvest, when farmers have more money to purchase fertilizer, than a bigger subsidy provided later on, when farmers have less money. Patrick Verissimo, a senior agriculture economist in Mozambique for the World Bank, says AADAPT will help evaluate whether establishing savings groups and promoting the adoption of new technologies will boost the incomes of small-scale farmers and female-headed households.AADAPT is also helping to define what will be measured during an upcoming irrigation project, such as the extent to which improved water management leads to increased productivity on farms, he says. “AADAPT is helping us build impact evaluation into the design of our project so that we don’t just measure results at the end but learn as we go,” says Verissimo. Goal is to Provide ‘Best Advice We Can’For large rural infrastructure, countries need to find ways to secure high returns on investment by rapidly transforming agricultural production systems and ensuring the financial sustainability of operations and maintenance.Knowing how to make it all work is a “fundamental ingredient in ensuring public sectors have an interest and incentive to invest in costly infrastructure to lower vulnerability and increase growth in their countries,” says Legovini.“The idea is to provide the best advice we can, in terms of content and quality of data that gets collected in each country, and also to have a way of comparing results across countries, by measuring them in the same way.” Similar programs are currently being implemented in education, malaria, HIV, and local government by the World Bank’s Development Impact Evaluation Initiative and its partners.The World Bank’s partners in AADAPT are the International Food Policy Research Institute and several universities including Oxford, California at Berkeley, Maryland, Padova, and Yale, with support from the World Bank’s Gender Action Plan and the Trust Fund for Environmentally and Socially Sustainable Development. The Gates Foundation supports the program through the Living Standards Measurement Survey for agriculture.
World Bank President to Tour Africa
World Bank Group President Robert B. Zoellick next week begins a three-nation African tour to encourage investor and donor support to help the world’s poorest continent cope with the global economic crisis. During visits to the Democratic Republic of Congo, Rwanda and Uganda , Zoellick will see up-close some of the damage the financial crisis has wrought on these three countries of Africa’s Great Lakes region.
Ahead of his trip, the World Bank president encouraged investors to take advantage of investment opportunities that continue to beckon from Africa , despite the crisis. Opportunities exist even in African countries still mired in, or emerging from conflict, such as DR Congo, post-genocide countries such as Rwanda , and relatively stable countries such as Uganda .
“Some of the biggest gains in fighting poverty in Africa can be made if investors and donors boost support for agriculture, helping Africa achieve food security, while improving rural incomes and facilitating post-harvest marketing, conservation and agricultural processing,” Zoellick said. The funding most urgently needed should help expand Africa ’s share of global and intra-African trade, foster regional integration, curb armed conflicts, and build the crucial infrastructure in energy, transport and irrigation to promote manufacturing and industrialization on the continent, he added.
The World Bank president is visiting Africa within weeks of the Group of 20 Summit in Pittsburgh in September. World Bank Group support for Africa is mainly provided through the International Development Association (IDA) and International Finance Corporation (IFC). IDA provides grants and low-interest loans to the world’s 79 poorest countries, half of which are in Africa . IDA has over the last year committed more resources than initially planned in order to help African countries cope with the negative effects of the global crisis. IFC provides investments and advisory services to build the private sector in developing countries.
Ahead of his trip, the World Bank president encouraged investors to take advantage of investment opportunities that continue to beckon from Africa , despite the crisis. Opportunities exist even in African countries still mired in, or emerging from conflict, such as DR Congo, post-genocide countries such as Rwanda , and relatively stable countries such as Uganda .
“Some of the biggest gains in fighting poverty in Africa can be made if investors and donors boost support for agriculture, helping Africa achieve food security, while improving rural incomes and facilitating post-harvest marketing, conservation and agricultural processing,” Zoellick said. The funding most urgently needed should help expand Africa ’s share of global and intra-African trade, foster regional integration, curb armed conflicts, and build the crucial infrastructure in energy, transport and irrigation to promote manufacturing and industrialization on the continent, he added.
The World Bank president is visiting Africa within weeks of the Group of 20 Summit in Pittsburgh in September. World Bank Group support for Africa is mainly provided through the International Development Association (IDA) and International Finance Corporation (IFC). IDA provides grants and low-interest loans to the world’s 79 poorest countries, half of which are in Africa . IDA has over the last year committed more resources than initially planned in order to help African countries cope with the negative effects of the global crisis. IFC provides investments and advisory services to build the private sector in developing countries.
World Bank President to Tour Africa
World Bank Group President Robert B. Zoellick next week begins a three-nation African tour to encourage investor and donor support to help the world’s poorest continent cope with the global economic crisis. During visits to the Democratic Republic of Congo, Rwanda and Uganda , Zoellick will see up-close some of the damage the financial crisis has wrought on these three countries of Africa’s Great Lakes region.
Ahead of his trip, the World Bank president encouraged investors to take advantage of investment opportunities that continue to beckon from Africa , despite the crisis. Opportunities exist even in African countries still mired in, or emerging from conflict, such as DR Congo, post-genocide countries such as Rwanda , and relatively stable countries such as Uganda .
“Some of the biggest gains in fighting poverty in Africa can be made if investors and donors boost support for agriculture, helping Africa achieve food security, while improving rural incomes and facilitating post-harvest marketing, conservation and agricultural processing,” Zoellick said. The funding most urgently needed should help expand Africa ’s share of global and intra-African trade, foster regional integration, curb armed conflicts, and build the crucial infrastructure in energy, transport and irrigation to promote manufacturing and industrialization on the continent, he added.
The World Bank president is visiting Africa within weeks of the Group of 20 Summit in Pittsburgh in September. World Bank Group support for Africa is mainly provided through the International Development Association (IDA) and International Finance Corporation (IFC). IDA provides grants and low-interest loans to the world’s 79 poorest countries, half of which are in Africa . IDA has over the last year committed more resources than initially planned in order to help African countries cope with the negative effects of the global crisis. IFC provides investments and advisory services to build the private sector in developing countries.
Ahead of his trip, the World Bank president encouraged investors to take advantage of investment opportunities that continue to beckon from Africa , despite the crisis. Opportunities exist even in African countries still mired in, or emerging from conflict, such as DR Congo, post-genocide countries such as Rwanda , and relatively stable countries such as Uganda .
“Some of the biggest gains in fighting poverty in Africa can be made if investors and donors boost support for agriculture, helping Africa achieve food security, while improving rural incomes and facilitating post-harvest marketing, conservation and agricultural processing,” Zoellick said. The funding most urgently needed should help expand Africa ’s share of global and intra-African trade, foster regional integration, curb armed conflicts, and build the crucial infrastructure in energy, transport and irrigation to promote manufacturing and industrialization on the continent, he added.
The World Bank president is visiting Africa within weeks of the Group of 20 Summit in Pittsburgh in September. World Bank Group support for Africa is mainly provided through the International Development Association (IDA) and International Finance Corporation (IFC). IDA provides grants and low-interest loans to the world’s 79 poorest countries, half of which are in Africa . IDA has over the last year committed more resources than initially planned in order to help African countries cope with the negative effects of the global crisis. IFC provides investments and advisory services to build the private sector in developing countries.
World Bank pledges support for African post-conflict recovery
Goma, 11 August 2009 – The World Bank supports efforts by countries emerging from conflict in Africa to foster good governance and transparency in the natural resources sector that has often fueled violence, World Bank President Robert B. Zoellick said Tuesday after his first visit to the Democratic Republic of Congo.
Pledging World Bank support to demobilization and reintegration programs similar to the one that has helped hundreds of thousands of ex-combatants reintegrate to civilian life in countries of the Great Lakes Region of Africa, Zoellick urged African leaders to do everything to curb the illicit trade in precious metals. The trade funds militia groups and fuels the steady flow in illicit small arms and light weapons that often trigger a relapse into conflict.“Post-conflict countries face a big risk of falling back into conflict and so we must do everything we can to stop the exploitation of resources becoming a cause of violence,” Zoellick said. “My visit helped me better understand the development challenges of the Democratic Republic of Congo and was intended to reaffirm World Bank support for the country’s efforts to consolidate peace, and transition quickly from emergency assistance to sustainable development,” he added.
During the visit, the first lap in a tour of three African countries, Zoellick held talks with Congolese President Joseph Kabila, the country’s Prime Minister Adolphe Muzito, and key cabinet members whose ministerial departments work directly on World Bank-funded development projects.
During his meetings with President Kabila and Prime Minister Muzito, the World Bank president encouraged the government to sustain efforts to achieve debt forgiveness by reaching the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative in March 2010. This would lighten the burden of debt servicing and create the fiscal space that could help DR Congo fund crucial social and economic development programs, notably infrastructure investments.
Commending the government of DR Congo for adopting a Governance Contract in 2007, Zoellick encouraged the country to stay the course of the difficult but rewarding reforms needed to achieve good governance objectives. He notably pointed to the need for the government to complete the ongoing review of mining contracts in a way that safeguards the country’s aim of increasing revenue as well as that of investors, making the sector more attractive to private investors.
Zoellick also held discussions with diplomats, representatives of the donor community, the private sector and civil society. “I learned a lot from my discussions with them and got a chance to hear, first hand, what we need to do to ensure improved donor coordination as we work together to promote the social and economic development of this country,” said Zoellick.
Zoellick visited the Inga hydropower plant in Bas Congo and promised World Bank support to work with other donors, the private sector, the government and other stakeholders to rehabilitate existing infrastructure as well as tap the under-utilized potential of energy sources such as Inga.
The World Bank President also stressed that large-scale energy projects, such as Inga, should not overshadow the importance of small-scale projects, which serve the most vulnerable Africans. Small-scale energy projects can contribute to the prevention of some of the 10 million premature deaths of women and children that are likely by 2030 if nothing is done to limit the health impact of smoke from wood fires used for cooking. He also noted the need to adopt environmentally-sound schemes that must protect biodiversity and fisheries when energy projects are built on a river such as the Congo , which is the second richest river in the world for fish.
While in Goma, Zoellick noted that a World Bank-funded project is helping young girls and women who were victims of sexual violence heal from the scars as they attempt to resume a normal life. “Peace is crucial for the reconstruction of this country, and particularly for the reconstruction of this province,” he said. “Sexual violence cannot be tolerated, must be denounced and punished, and every effort must be made to restore the dignity of young women who have suffered sexual violence,” Zoellick said.
Zoellick, who left DR Congo over its land border from Goma into Rubavu in neighboring Rwanda for the second lap of his three-nation African tour, was accompanied on his trip by the World Bank Vice President for the Africa Region, Obiageli Ezekwesili, the director of operations for the Africa Region, Colin Bruce, and the Country Director of the World Bank for Congo Republic and DR Congo, Marie-Francoise Marie-Nelly. He will go onto to Uganda from Rwanda for the third and final lap of his tour.
Pledging World Bank support to demobilization and reintegration programs similar to the one that has helped hundreds of thousands of ex-combatants reintegrate to civilian life in countries of the Great Lakes Region of Africa, Zoellick urged African leaders to do everything to curb the illicit trade in precious metals. The trade funds militia groups and fuels the steady flow in illicit small arms and light weapons that often trigger a relapse into conflict.“Post-conflict countries face a big risk of falling back into conflict and so we must do everything we can to stop the exploitation of resources becoming a cause of violence,” Zoellick said. “My visit helped me better understand the development challenges of the Democratic Republic of Congo and was intended to reaffirm World Bank support for the country’s efforts to consolidate peace, and transition quickly from emergency assistance to sustainable development,” he added.
During the visit, the first lap in a tour of three African countries, Zoellick held talks with Congolese President Joseph Kabila, the country’s Prime Minister Adolphe Muzito, and key cabinet members whose ministerial departments work directly on World Bank-funded development projects.
During his meetings with President Kabila and Prime Minister Muzito, the World Bank president encouraged the government to sustain efforts to achieve debt forgiveness by reaching the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative in March 2010. This would lighten the burden of debt servicing and create the fiscal space that could help DR Congo fund crucial social and economic development programs, notably infrastructure investments.
Commending the government of DR Congo for adopting a Governance Contract in 2007, Zoellick encouraged the country to stay the course of the difficult but rewarding reforms needed to achieve good governance objectives. He notably pointed to the need for the government to complete the ongoing review of mining contracts in a way that safeguards the country’s aim of increasing revenue as well as that of investors, making the sector more attractive to private investors.
Zoellick also held discussions with diplomats, representatives of the donor community, the private sector and civil society. “I learned a lot from my discussions with them and got a chance to hear, first hand, what we need to do to ensure improved donor coordination as we work together to promote the social and economic development of this country,” said Zoellick.
Zoellick visited the Inga hydropower plant in Bas Congo and promised World Bank support to work with other donors, the private sector, the government and other stakeholders to rehabilitate existing infrastructure as well as tap the under-utilized potential of energy sources such as Inga.
The World Bank President also stressed that large-scale energy projects, such as Inga, should not overshadow the importance of small-scale projects, which serve the most vulnerable Africans. Small-scale energy projects can contribute to the prevention of some of the 10 million premature deaths of women and children that are likely by 2030 if nothing is done to limit the health impact of smoke from wood fires used for cooking. He also noted the need to adopt environmentally-sound schemes that must protect biodiversity and fisheries when energy projects are built on a river such as the Congo , which is the second richest river in the world for fish.
While in Goma, Zoellick noted that a World Bank-funded project is helping young girls and women who were victims of sexual violence heal from the scars as they attempt to resume a normal life. “Peace is crucial for the reconstruction of this country, and particularly for the reconstruction of this province,” he said. “Sexual violence cannot be tolerated, must be denounced and punished, and every effort must be made to restore the dignity of young women who have suffered sexual violence,” Zoellick said.
Zoellick, who left DR Congo over its land border from Goma into Rubavu in neighboring Rwanda for the second lap of his three-nation African tour, was accompanied on his trip by the World Bank Vice President for the Africa Region, Obiageli Ezekwesili, the director of operations for the Africa Region, Colin Bruce, and the Country Director of the World Bank for Congo Republic and DR Congo, Marie-Francoise Marie-Nelly. He will go onto to Uganda from Rwanda for the third and final lap of his tour.
Tuesday, June 16, 2009
The world economy is set to contract this year by more than previously estimated, and poor countries will continue to be hit hard by multiple waves of economic stress, said World Bank Group President Robert B. Zoellick today.
Even with the stabilization of financial markets in many developed economies, unemployment and under-utilization of capacity continue to rise, putting downward pressure on the global economy.
According to the latest Bank estimates, the global economy will decline this year by close to 3 percent, a significant revision from a previous estimate of 1.7 percent. Most developing country economies will contract this year and face increasingly bleak prospects unless the slump in their exports, remittances, and foreign direct investment is reversed by the end of 2010.
“Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks,” Zoellick said ahead of the Group of Eight finance ministers meeting in Italy. “Waves of economic pain continue to hurt the developing world’s poor, who have less cushion to protect themselves. There is much more we need to do in the coming months to mobilize resources to ensure that the poor do not pay for a crisis that is not of their making.”
Zoellick noted that, according to revised Bank estimates, the overall financing gap for developing countries will be between $350 billion to $635 billion in 2009, down somewhat from earlier estimates due to improved current account outturns, but still huge amounts.
“Low-income countries that have limited borrowing capacity due to low reserves and drained national budgets will face particular difficulties in getting sufficient finance in the next few years,” Zoellick said. “Because of this, lending from the World Bank, the IMF and other sources will become increasingly important as the crisis rolls across low-income countries.” Zoellick added: “There is not enough public sector money to solve the global crisis, so the recovery strategy needs to encourage private business and financing too.”
The crisis implications for poor countries are stark, and driving expanded use of World Bank resources. Requests for assistance are up at the International Development Association (IDA), part of the World Bank Group that focuses on the 78 poorest countries. For fiscal year 2009, which ends on June 30, IDA grants and interest-free loans are expected to total more than $13 billion, a record high, and an increase on last year’s $11.2 billion. Anticipating the needs of the poorest countries, the World Bank created a fast track facility in December to provide rapid funding for social safety nets, infrastructure, education, and health.
Demand has also grown rapidly at the International Bank for Reconstruction and Development (IBRD), the part of the World Bank Group that supports creditworthy low and middle-income countries. Loan volume is expected to increase to around $33 billion this fiscal year, compared to $13.2 billion last year.
Zoellick said it was important that the G8 meetings this month and in July follow-up on the promises made at the Group of 20 meeting in London in April to restore domestic lending and the international flow of capital.
Zoellick said some of the main risks still remaining included the need to clean up the balance sheets and recapitalize banks, address the unique financial risks in Central and Eastern Europe, guard against a rise in protectionism, and roll over large amounts of private sector debt in developing countries.
The World Bank Group actively monitors global economic figures. On June 22, the Bank will release Global Development Finance 2009: Charting a Global Recovery.
Even with the stabilization of financial markets in many developed economies, unemployment and under-utilization of capacity continue to rise, putting downward pressure on the global economy.
According to the latest Bank estimates, the global economy will decline this year by close to 3 percent, a significant revision from a previous estimate of 1.7 percent. Most developing country economies will contract this year and face increasingly bleak prospects unless the slump in their exports, remittances, and foreign direct investment is reversed by the end of 2010.
“Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks,” Zoellick said ahead of the Group of Eight finance ministers meeting in Italy. “Waves of economic pain continue to hurt the developing world’s poor, who have less cushion to protect themselves. There is much more we need to do in the coming months to mobilize resources to ensure that the poor do not pay for a crisis that is not of their making.”
Zoellick noted that, according to revised Bank estimates, the overall financing gap for developing countries will be between $350 billion to $635 billion in 2009, down somewhat from earlier estimates due to improved current account outturns, but still huge amounts.
“Low-income countries that have limited borrowing capacity due to low reserves and drained national budgets will face particular difficulties in getting sufficient finance in the next few years,” Zoellick said. “Because of this, lending from the World Bank, the IMF and other sources will become increasingly important as the crisis rolls across low-income countries.” Zoellick added: “There is not enough public sector money to solve the global crisis, so the recovery strategy needs to encourage private business and financing too.”
The crisis implications for poor countries are stark, and driving expanded use of World Bank resources. Requests for assistance are up at the International Development Association (IDA), part of the World Bank Group that focuses on the 78 poorest countries. For fiscal year 2009, which ends on June 30, IDA grants and interest-free loans are expected to total more than $13 billion, a record high, and an increase on last year’s $11.2 billion. Anticipating the needs of the poorest countries, the World Bank created a fast track facility in December to provide rapid funding for social safety nets, infrastructure, education, and health.
Demand has also grown rapidly at the International Bank for Reconstruction and Development (IBRD), the part of the World Bank Group that supports creditworthy low and middle-income countries. Loan volume is expected to increase to around $33 billion this fiscal year, compared to $13.2 billion last year.
Zoellick said it was important that the G8 meetings this month and in July follow-up on the promises made at the Group of 20 meeting in London in April to restore domestic lending and the international flow of capital.
Zoellick said some of the main risks still remaining included the need to clean up the balance sheets and recapitalize banks, address the unique financial risks in Central and Eastern Europe, guard against a rise in protectionism, and roll over large amounts of private sector debt in developing countries.
The World Bank Group actively monitors global economic figures. On June 22, the Bank will release Global Development Finance 2009: Charting a Global Recovery.
Economic Crisis Threatens Gains Made in HIV Prevention and Treatment
As global and local partners gather at the 2009 HIV/AIDS Implementers Meeting in Namibia, the global economic crisis is threatening hard-fought gains in human development and poverty reduction. With low-income countries increasingly vulnerable to slowing GNP growth, declining private capital flows, reductions in remittances and tourism, and weak commodity prices and export markets, the crisis is now threatening national HIV/AIDS prevention and treatment programs. Developing countries and their partners must help mitigate the effects of the economic crisis on health and on AIDS programs. Allowing HIV/AIDS prevention and treatment programs to lose ground would have negative consequences far into the future. HIV prevention efforts are at greater risk than ever. Preliminary data from a recent UNAIDS-WHO-World Bank survey of staff working in 71 countries showed that nearly half (in countries with 75 percent of people with HIV worldwide) expect prevention programs for people most at risk to be affected by the crisis. This is extremely worrying - less prevention will mean higher future treatment needs with larger future cost implications. The social and economic costs of HIV are already very high. Optimizing the HIV response requires increased emphasis on more efficient use of available resources, better targeted prevention, and addressing the social drivers of HIV transmission. Treatment for most of the 3.4 million people already on antiretroviral therapy (ART) in the surveyed countries seems secure for now, but 11 percent of respondents reported that the global crisis is already impacting treatment programs. Respondents in twenty-two countries, where 61 percent of those on treatment live, expect an impact on treatment this year. There is a strong risk that a planned scale-up of treatment access for the two-thirds of people with HIV who need it but are not getting it will not take place. Respondents report budget cuts and great uncertainty about future funding, job losses and decreased household incomes, and increased cost of antiretroviral drugs due to weakened local currencies. The joint UNAIDS/World Bank report, The Global Economic Crisis and HIV Prevention and Treatment Programmes: Vulnerabilities and Impact, will be released in Geneva in late June/early July. Much is at stake. Unplanned interruptions to treatment could increase the risk of HIV transmission and foster drug resistance. This could mean higher future treatment costs, increased burden on health systems, and reversal of economic and social gains made in previous years. Data from the World Bank indicate that economic growth in developing countries is expected to slow sharply to 2.1 percent this year, a more than three percentage point decline from last year. An estimated 53 million more people could be trapped in poverty, subsisting on less than $1.25 a day because of the crisis. Global trade in goods and services could fall six percent this year, the largest decline in 80 years. In Africa, this fall in trade badly affects countries with economies dependant largely on exports of minerals and other commodities. A new World Bank report, Averting a Human Crisis During the Global Downturn: Policy Options from the World Bank's Human Development Network, shows that during previous economic crises, developing-country governments reduced spending on health, education, and social programs. To avoid a repeat of this, the World Bank has recommended creation a Vulnerability Fund to help countries continue to help their poorest. "This fund could speed resources to existing World Bank, United Nations and regional development bank safety-net programs that give the poor access to health, education and nutrition services; build infrastructure such as roads, bridges and low-carbon technology projects; and support small and medium-size businesses and microfinance institutions that lend to the poor," said Mr. Zoellick, calling for support for the fund earlier this year. The World Bank is mobilizing up to $3.1 billion this year in health financing to help poor countries battle threats to their social services during the global economic crisis. This effectively triples Bank support from $1.0 billion last year and will be used to strengthen health systems in poor countries, boost their performance in preventing and treating communicable diseases, and improve child and maternal health, hygiene, and sanitation. The Bank plans to double its education financing this year in low- and middle-income countries to $4.09 billion, and its investments in social protection programs, including social safety nets, are expected to rise dramatically for 2009-2010 to $12 billion. "The World Bank will work with all partners to mitigate the impact of the economic crisis. The poor and most vulnerable must be protected and not become the victims," emphasized Elizabeth Lule, Manager of the World Bank's AIDS Campaign Team for Africa (ACTafrica), who is attending the HIV/AIDS Implementers Meeting and will chair a session on the effect of the economic crisis on the international response to HIV and AIDS. If prevention efforts and access to ART become more limited, there will be more HIV infections, more people who need but cannot get treatment, more strain on families and communities, and a resurgence in AIDS deaths. Lule says to maintain and expand access to HIV treatment, care, and prevention, developing countries and their partners should:
Make existing funding work more efficiently by reallocating resources from low- to high-impact prevention programs and by making programs more cost-effective;
Address urgent funding gaps by providing bridge financing to avoid cash flow and supply interruptions and by including an appropriate base level of funding for HIV as part of emergency budgetary support and social protection packages;
Plan for the longer term with contingency planning and by seeking better financial sustainability and longer-term funding commitments from domestic and external financing sources; and
Provide social safety nets for the most vulnerable and poor.
"It is crucial that the global community-developing and donor countries, civil society, charitable groups, and the private sector-work together to ensure that funding for HIV programs remains on track toward universal coverage because the price of not doing so is too high to accept," said Lule.
* * * * *As one of ten co-sponsors of UNAIDS, the World Bank helps shape the global response to HIV, in partnership with governments, NGOs, other agencies and foundations, and the private sector.
For more information, visit www.worldbank.org/aids and www.worldbank.org/afr/aids .Download Averting a Human Crisis at http://siteresources.worldbank.org/NEWS/Resources/AvertingTheHumanCrisis.pdf
Make existing funding work more efficiently by reallocating resources from low- to high-impact prevention programs and by making programs more cost-effective;
Address urgent funding gaps by providing bridge financing to avoid cash flow and supply interruptions and by including an appropriate base level of funding for HIV as part of emergency budgetary support and social protection packages;
Plan for the longer term with contingency planning and by seeking better financial sustainability and longer-term funding commitments from domestic and external financing sources; and
Provide social safety nets for the most vulnerable and poor.
"It is crucial that the global community-developing and donor countries, civil society, charitable groups, and the private sector-work together to ensure that funding for HIV programs remains on track toward universal coverage because the price of not doing so is too high to accept," said Lule.
* * * * *As one of ten co-sponsors of UNAIDS, the World Bank helps shape the global response to HIV, in partnership with governments, NGOs, other agencies and foundations, and the private sector.
For more information, visit www.worldbank.org/aids and www.worldbank.org/afr/aids .Download Averting a Human Crisis at http://siteresources.worldbank.org/NEWS/Resources/AvertingTheHumanCrisis.pdf
Wednesday, May 20, 2009
World Bank to provide $500m to boost trade, competitiveness
The World Bank has said it is prepared to approve an additional US$360 million over the next three years for a total of US$500 million in support of Africa ’s North-South Corridor (NSC) program.
On Monday in Lusaka , the World Bank’s Vice President for Africa Ms. Obiageli Ezekwesili told a conference attended by several African heads of state that the Bank has already approved US$140 million in support of the core investment requirements of the Corridor, and is prepared to commit the additional funding over the coming three years.
The remaining US$500 million will be for non-core projects that are complementary to the NSC.
Core Corridor projects already being funded by the World Bank include the Tanzania Integrated Transport Project, and the Zambia Roads Rehabilitation and Maintenance Project. Existing complementary projects include the Beira Railway, and the Roads and Coastal Shipping Projects in Mozambique , and the Malawi Infrastructure Sector Investment Project. Planned complementary projects include a multi-modal transport project in the Democratic Republic of the Congo .
Meeting Monday in Lusaka , African leaders lauded donors for pledging up to US$1 billion for the NSC program, which is aimed at reducing the cost of doing business in 23 countries. The World Bank said it is committed to the NSC because of its vital role in inclusively developing Africa .
“The Program is creating a new paradigm for economic development in the region – one that deepens collaboration among regional economic communities, takes a holistic approach to trade facilitation and transport infrastructure, and builds new relationships with development partners and the private sector,” said Ms. Ezekwesili.
She applauded the member economic blocs of the NSC - the Common Market for East and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) - for their concerted effort in making the region more competitive in the wake of a global economic crisis.
“At a time when the global economic crisis severely threatens Africa ’s recent economic achievements, the Program highlights the central importance of focusing on regional solutions. More than ever, regional integration is an essential strategy for redressing the impacts of the current crisis, unlocking economies of scale, and sharpening competitiveness in Africa ,” she said.
She, however, reaffirmed that unleashing economic growth through the NSC program requires policy administrative reforms supported by political will. She cited administrative reforms required to pull down national barriers in trade such as reducing cross-border clearing procedures, which lead to delays for both road and rail freight. She bemoaned the operational barriers between national rail networks.
“The Southern railway system is physically integrated, yet locomotives from one country are not allowed to travel on another country’s network – we estimate the resulting delays in shipments cost as much as US$120 million a year,” Ms. Ezekwesili told the conference She, therefore, stressed the need to revisit contractual relationships and access rights linking the railways along the Corridor to make them more beneficial to trade in the region.
Earlier the African Union Commission Deputy Chairperson Mr. Erastus Mwencha told the conference that delays are not only at the border posts but at sea-ports as well where it takes an average of 23 days for a ship to off-load. One stop border crossings, such as the Chirundu post between Zambia and Zimbabwe , have been commended as an efficient way of reducing delays across borders.
The Africa Vice President applauded the four Heads of State who attended the conference, saying their leadership is key to the region’s development. The host of the conference, Zambian President Rupiah Banda, was joined by President Mwai Kibaki of Kenya who is the chairperson of COMESA, South African President Kgalema Montlanthe chairperson of SADC, and Uganda’s Yoweri Museveni who represented the EAC. Several other donors also attended the conference, including the European Union, DFID, USAID, and Japan
On Monday in Lusaka , the World Bank’s Vice President for Africa Ms. Obiageli Ezekwesili told a conference attended by several African heads of state that the Bank has already approved US$140 million in support of the core investment requirements of the Corridor, and is prepared to commit the additional funding over the coming three years.
The remaining US$500 million will be for non-core projects that are complementary to the NSC.
Core Corridor projects already being funded by the World Bank include the Tanzania Integrated Transport Project, and the Zambia Roads Rehabilitation and Maintenance Project. Existing complementary projects include the Beira Railway, and the Roads and Coastal Shipping Projects in Mozambique , and the Malawi Infrastructure Sector Investment Project. Planned complementary projects include a multi-modal transport project in the Democratic Republic of the Congo .
Meeting Monday in Lusaka , African leaders lauded donors for pledging up to US$1 billion for the NSC program, which is aimed at reducing the cost of doing business in 23 countries. The World Bank said it is committed to the NSC because of its vital role in inclusively developing Africa .
“The Program is creating a new paradigm for economic development in the region – one that deepens collaboration among regional economic communities, takes a holistic approach to trade facilitation and transport infrastructure, and builds new relationships with development partners and the private sector,” said Ms. Ezekwesili.
She applauded the member economic blocs of the NSC - the Common Market for East and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) - for their concerted effort in making the region more competitive in the wake of a global economic crisis.
“At a time when the global economic crisis severely threatens Africa ’s recent economic achievements, the Program highlights the central importance of focusing on regional solutions. More than ever, regional integration is an essential strategy for redressing the impacts of the current crisis, unlocking economies of scale, and sharpening competitiveness in Africa ,” she said.
She, however, reaffirmed that unleashing economic growth through the NSC program requires policy administrative reforms supported by political will. She cited administrative reforms required to pull down national barriers in trade such as reducing cross-border clearing procedures, which lead to delays for both road and rail freight. She bemoaned the operational barriers between national rail networks.
“The Southern railway system is physically integrated, yet locomotives from one country are not allowed to travel on another country’s network – we estimate the resulting delays in shipments cost as much as US$120 million a year,” Ms. Ezekwesili told the conference She, therefore, stressed the need to revisit contractual relationships and access rights linking the railways along the Corridor to make them more beneficial to trade in the region.
Earlier the African Union Commission Deputy Chairperson Mr. Erastus Mwencha told the conference that delays are not only at the border posts but at sea-ports as well where it takes an average of 23 days for a ship to off-load. One stop border crossings, such as the Chirundu post between Zambia and Zimbabwe , have been commended as an efficient way of reducing delays across borders.
The Africa Vice President applauded the four Heads of State who attended the conference, saying their leadership is key to the region’s development. The host of the conference, Zambian President Rupiah Banda, was joined by President Mwai Kibaki of Kenya who is the chairperson of COMESA, South African President Kgalema Montlanthe chairperson of SADC, and Uganda’s Yoweri Museveni who represented the EAC. Several other donors also attended the conference, including the European Union, DFID, USAID, and Japan
Youth Unemployment a Major Challenge for African Countries
A panel of experts on youth and employment from Ghana, Kenya, Mali, and Colombia met on Saturday, during the annual Spring Meetings of the World Bank and International Monetary Fund, to discuss ways to alleviate the growing problem of youth unemployment in Africa.
The high-level panel, chaired by Africa Region Vice President Obiageli Ezekwesili and moderated by Human Development Sector Director Yaw Ansu, agreed that there are no easy solutions to the problem.
“Youth in urban areas are looking for jobs alongside thousands of others from the same schools, while rural youth are flooding into the cities looking for work,” said Sanoussi Toure, the Minister of Finance of Mali. “This is a tragedy. Our policies favor investment in education and training, but this investment has not led to job creation.”
Kinuthia Murugu, the Permanent Secretary of the Ministry of Youth and Sports in Kenya, concurred that economic growth does not equal job creation, “which is why we need specific targeted interventions.” He noted that Kenya has created a Youth Employment Marshall Plan, which aims to create 500,000 new jobs over the next four years by expanding the number of technical training institutes and subsidizing students, supporting entrepreneurs in rural areas, initiating labor-intensive public works, developing the information and communication technology (ICT) sector, and paying young people to plant trees, through a Trees for Jobs program, to help reverse the effects of deforestation.
In Ghana, the Government has taken a sectoral approach to the problem, said Professor William Ahadzie, Deputy Head of the Centre for Social Policy Studies at the University of Ghana. “We’ve developed a National Youth Employment Program that aims to actively engage youth in productive employment where they are needed – as health extension workers, waste and sanitation workers, teachers, and as paid interns in industry.”
The panelist from Colombia, Mauricio Cárdenas, former Minister of Transport and also of Economic Planning, spoke about his efforts to address youth unemployment during Colombia’s economic crisis in the late 1990s, when external shocks drove unemployment from 10 to 20 percent, and youth unemployment to 30 percent. “We tried two different programs,” Mr. Cárdenas said, “and then evaluated the results.” One program, called Youth in Action, trained young people for the labor market. “We provided three months of classroom training, followed by three months of on-the-job training. We also provided them with income support of $3 per day, which corresponds to the poverty line in Colombia.” Under this program, “80,000 young people were trained, and the evaluations were highly favorable, using different techniques to measure impact.”
The other program in Colombia focused on employment generation through small-scale communal works in urban neighborhoods. This program was less successful. “We depended on local NGOs to implement the program and secure co-financing from municipalities, but they did not have the capacity to do so.” Another reason for the program’s failure, Mr. Cárdenas said, was that “it required that the individuals be paid minimum wage, and this restricted job creation.” Based on these experiences, Mr. Cárdenas concluded that “the best strategy for tackling youth unemployment is associated with labor training that takes into account their need for income during training.” In addition, “you also have to have a supply of training programs. Our approach encouraged the creation of these programs by the private sector.”
During the discussion period, Mr. Murugu said that the private sector can be encouraged to create more jobs through contracts for public works, and noted that in Kenya, public works contracts require that the companies use a certain percentage of the contract for labor. In response, Mr. Cárdenas cautioned against the tendency to see infrastructure projects as the answer to the urgent problem of youth unemployment. “Infrastructure projects require a lot of bureaucratic work and take a long time to be implemented. Social interventions are much more effective, you can train and educate the youth, and then create incentives for firms to hire them.”
“After training, then what?” asked Murugu of Kenya. “In Kenya we spend 150 billion shillings on primary education, but how can youth make the transition to being employed when there are no jobs?” He emphasized the importance of improving the environment for the informal sector by requiring local authorities to sign job creation performance contracts. He also said that it is critical to support youth in agriculture, since most farmers in Kenya are more than 60 years old. “Our Trees for Jobs program is meant for rural areas,” he said. “Youth work with the forestry service, learn skills, and help preserve the economic foundation of our country.”
Professor Ahadzie of Ghana agreed with the need to support job creation in agriculture, but noted the need to link agriculture with non-farm activities such as processing, the creation of markets, and the need for credit.
The Director of the National Planning Commission of Nigeria, Ayodele Omotoso, in Nigeria, who was in the audience, said that “youth unemployment in Nigeria is 60 to 70 percent, and the labor market can only absorb 10 percent of new job entrants. We used to think that the public sector had to provide jobs. Now we are looking at things holistically. We have established a social protection program, with cash transfers to the unemployed. We are also reforming the education sector. We’re also looking at ways to increase youth employment in all sectors. In the agriculture sector, we’re looking at commercial agriculture, and also at land reforms. We’re looking at manufacturing, although that sector is constrained by inadequate infrastructure. We’re also looking to increase youth employment in tourism, ICT, transport, and utilities. The key lesson is that youth unemployment is a multi-dimensional problem that needs to be addressed on a macro basis.”
In her concluding remarks, Regional Vice President Ezekwesili said that it was clear that youth unemployment needs to be addressed from many entry points. “The profile of unemployed youth has to enter the way we think, just as gender has. Youth need to be effectively targeted in everything we do, so that they will have a stake in the future.”
The high-level panel, chaired by Africa Region Vice President Obiageli Ezekwesili and moderated by Human Development Sector Director Yaw Ansu, agreed that there are no easy solutions to the problem.
“Youth in urban areas are looking for jobs alongside thousands of others from the same schools, while rural youth are flooding into the cities looking for work,” said Sanoussi Toure, the Minister of Finance of Mali. “This is a tragedy. Our policies favor investment in education and training, but this investment has not led to job creation.”
Kinuthia Murugu, the Permanent Secretary of the Ministry of Youth and Sports in Kenya, concurred that economic growth does not equal job creation, “which is why we need specific targeted interventions.” He noted that Kenya has created a Youth Employment Marshall Plan, which aims to create 500,000 new jobs over the next four years by expanding the number of technical training institutes and subsidizing students, supporting entrepreneurs in rural areas, initiating labor-intensive public works, developing the information and communication technology (ICT) sector, and paying young people to plant trees, through a Trees for Jobs program, to help reverse the effects of deforestation.
In Ghana, the Government has taken a sectoral approach to the problem, said Professor William Ahadzie, Deputy Head of the Centre for Social Policy Studies at the University of Ghana. “We’ve developed a National Youth Employment Program that aims to actively engage youth in productive employment where they are needed – as health extension workers, waste and sanitation workers, teachers, and as paid interns in industry.”
The panelist from Colombia, Mauricio Cárdenas, former Minister of Transport and also of Economic Planning, spoke about his efforts to address youth unemployment during Colombia’s economic crisis in the late 1990s, when external shocks drove unemployment from 10 to 20 percent, and youth unemployment to 30 percent. “We tried two different programs,” Mr. Cárdenas said, “and then evaluated the results.” One program, called Youth in Action, trained young people for the labor market. “We provided three months of classroom training, followed by three months of on-the-job training. We also provided them with income support of $3 per day, which corresponds to the poverty line in Colombia.” Under this program, “80,000 young people were trained, and the evaluations were highly favorable, using different techniques to measure impact.”
The other program in Colombia focused on employment generation through small-scale communal works in urban neighborhoods. This program was less successful. “We depended on local NGOs to implement the program and secure co-financing from municipalities, but they did not have the capacity to do so.” Another reason for the program’s failure, Mr. Cárdenas said, was that “it required that the individuals be paid minimum wage, and this restricted job creation.” Based on these experiences, Mr. Cárdenas concluded that “the best strategy for tackling youth unemployment is associated with labor training that takes into account their need for income during training.” In addition, “you also have to have a supply of training programs. Our approach encouraged the creation of these programs by the private sector.”
During the discussion period, Mr. Murugu said that the private sector can be encouraged to create more jobs through contracts for public works, and noted that in Kenya, public works contracts require that the companies use a certain percentage of the contract for labor. In response, Mr. Cárdenas cautioned against the tendency to see infrastructure projects as the answer to the urgent problem of youth unemployment. “Infrastructure projects require a lot of bureaucratic work and take a long time to be implemented. Social interventions are much more effective, you can train and educate the youth, and then create incentives for firms to hire them.”
“After training, then what?” asked Murugu of Kenya. “In Kenya we spend 150 billion shillings on primary education, but how can youth make the transition to being employed when there are no jobs?” He emphasized the importance of improving the environment for the informal sector by requiring local authorities to sign job creation performance contracts. He also said that it is critical to support youth in agriculture, since most farmers in Kenya are more than 60 years old. “Our Trees for Jobs program is meant for rural areas,” he said. “Youth work with the forestry service, learn skills, and help preserve the economic foundation of our country.”
Professor Ahadzie of Ghana agreed with the need to support job creation in agriculture, but noted the need to link agriculture with non-farm activities such as processing, the creation of markets, and the need for credit.
The Director of the National Planning Commission of Nigeria, Ayodele Omotoso, in Nigeria, who was in the audience, said that “youth unemployment in Nigeria is 60 to 70 percent, and the labor market can only absorb 10 percent of new job entrants. We used to think that the public sector had to provide jobs. Now we are looking at things holistically. We have established a social protection program, with cash transfers to the unemployed. We are also reforming the education sector. We’re also looking at ways to increase youth employment in all sectors. In the agriculture sector, we’re looking at commercial agriculture, and also at land reforms. We’re looking at manufacturing, although that sector is constrained by inadequate infrastructure. We’re also looking to increase youth employment in tourism, ICT, transport, and utilities. The key lesson is that youth unemployment is a multi-dimensional problem that needs to be addressed on a macro basis.”
In her concluding remarks, Regional Vice President Ezekwesili said that it was clear that youth unemployment needs to be addressed from many entry points. “The profile of unemployed youth has to enter the way we think, just as gender has. Youth need to be effectively targeted in everything we do, so that they will have a stake in the future.”
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