Progress in a Changing World
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Progress in a Changing World Mahmoud Mohieldin Senior Vice President World Bank Group Distinguished Speaker @wbg2030 Forum 0 December 12 2017 worldbank.org/sdgs Addressing Global Megatrends & Challenges Demographic transitions Urbanization Climate and resources Commodity cycles Technological disruptions Fragility and violence Debate about globalization Shifts in the global economy 12/15/2017 1 Source: World Bank Forward Look, September 2017 2 Addressing Global Megatrends & Challenges Demographic and Economic diversification; 600 million new jobs (SDG#8) Growth Transitions Sustainable Health & welfare system (SDG#3) Urbanization Urban management (SDG#11) Private expertise/funding for infrastructure/urban services (SDG#11; SDG#9; SDG#17) Climate and Shift from fossil fuels to renewables/ efficiency (SDG#7) Resources Agriculture adaptation (SDG#2) Cycles, Disruptions Shocks and risks preparedness (SDG#13) and Fragility Protecting vulnerable from fragility & violence (SDG#1; SDG#16) Shifts in Global New sources of growth and trade, especially for Economy commodity exporters (SDG#9) 12/15/2017 Reflections on the new global economy: multipolarity Evolution of the earth’s economic center of The world’s economic center of gravity, 1980– gravity: 1 CE to 2025 2016, in black, at three-year intervals 1989 2007 2049 1980 1998 2016 Source: Danny Quah, 2011 Source: McKinsey Global Institute, 2012 12/15/2017 3 Solutions: What to Avoid and What to Pursue 12/15/2017 4 Solutions: Avoid bad ideas 1. Dealing with joblessness by relying on the civil service; 2. Underpaying civil servants compared to the private sector; 3. Cutting fiscal deficits by sacrificing public investment in infrastructure; 4. Subsidizing energy except for very limited subsidies to highly vulnerable sections of the population; 5. Open ended protection for specific sectors; 6. Imposing administrative price controls; 7. Banning exports; 8. Exchange rate misalignment; 9. Resisting urbanization/underinvesting in infrastructure; 10.Ignoring environmental implications; 11.Poorly regulating the Banking sector and excessive interference; 12.Measuring educational progress solely by higher enrollments and ignoring the quality of education The Growth12/15/2017 Report Strategies for Sustained Growth and Inclusive Development, 2008 5 Solutions: The policy ingredients of growth strategies A list of common policies between countries with 7+ % growth over 25+ years 6 The Growth12/15/2017 Report Strategies for Sustained Growth and Inclusive Development, 2008 The 2030 Agenda and the Sustainable Development Goals 12/15/2017 7 An Opportunity for Transformation: From MDGs to SDGs MDGs SDGs (2000-2015) (2016-2030) Goals 8 17 Targets 21 169 Indicators 60 ~231 Priority Areas Human Development Holistic: Economic, Social, Environmental Scope Developing Countries Universal The global development agendas serve as a compass and guide for countries to determine their national development path 12/15/2017 8 Looking Back: MDG Progress By number of countries MDG 1.1 - Extreme Poverty 71 11 7 2 27 27 MDG 1.9 Under-nourishment 35 8 4 13 52 33 MDG 2.1 - Primary Completion 40 12 11 17 40 25 MDG 3.1 - Education Gender Parity 67 10 7 11 28 22 MDG 4.1 - Under-5 Mortality 38 18 16 37 34 2 MDG 4.2 - Infant Mortality 6 9 23 28 77 2 MDG 5.1 - Maternal Mortality 15 3 11 20 88 8 MDG 7.8 - Improved Water 67 5 2 12 40 19 MDG 7.9 - Improved Sanitation 36 7 7 14 58 23 Target Met Sufficient Progress Insufficient Progress Moderately Off Target Seriously Off Target Insufficient Data Source: World12/15/2017 Bank data, staff calculations 9 Progress on the MDGs Share Of Global Poverty 1990 15% 2015 50% 12% 1% Global poverty: 4% 1.96 billion Global poverty: 51% 702 million 37.1 % of global 9.6% of global 30% population population 33% 4% 0% East Asia and Pacific Europe and Central Asia Latin America and the Caribbean South Asia 12/15/2017Sub-Saharan Africa 10 An Opportunity for Transformation: Lessons learned from the field • Improve coordination and ensure the timeliness and effectiveness of policy instruments • Localize implementation and prioritize engagement of communities and community mobilization • Increase efficient allocation of resources • Recognize and identify interrelatedness of development goals at the onset • Ensure strong government involvement • Promote quality data • Increase cross-institutional collaboration • Bridge the humanitarian and development agendas Based on report: “Transitioning from the MDGs to the SDGs” jointly written by the World Bank Group and the UN Development Programme 12/15/2017 11 Coordination of development agendas The Colombian Example NAT’L DEV PLAN National Development Plan 2014-2018 Active national agendas determine actions related to at least 146 SDG targets - 86% 12/15/2017 12 Source: Colombia’s HLPF presentation Data: Crucial to understand how trends are shifting 12/15/2017 13 Financing sustainable development: The key components Source: World 12/15/2017Bank Group, 2015 14 Financing sustainable development $ Trillion Annual Average Infrastructure Investment until 2030 7 6 How much is out there? 5 More than $24.4 4 $10 trillion trillion in invested in low-yield negative government interest rate 3 securities bonds 2 $8 trillion 1 sitting in cash 0 12/15/2017 15 Financing sustainable development Private sector engagement is critical $ BILLIONS FDI 1990 2015 Soaring Private Capital Flows, Flat Official Development Assistance OFFICIAL DEVELOPMENT ASSISTANCE 12/15/2017 16 16 Source: IFC Presentation to Center for Global Development, February 2017 Financing sustainable development Private sector engagement needs to increase Can commercial financing be cost- COMMERCIAL FINANCING effectively mobilized for sustainable 1 investment? If not… UPSTREAM REFORMS & MARKET FAILURES Can upstream reforms be put 2 • Country and Sector Policies in place to address market • Regulations and Pricing failures? If not… • Institutions and Capacity PUBLIC AND CONCESSIONAL RESOURCES FOR RISK Can risk instruments & credit INSTRUMENTS enhancements cost-effectively 3 & CREDIT ENHANCEMENTS cover remaining risks? If not… • Guarantees • First Loss PUBLIC & CONCESSIONAL FINANCING, Can development objectives INCLUDING SUB-SOVEREIGN be resolved with scarce • Public finance (incl. national development banks and public financing? 4 domestic SWF) • MDBs and DFIs 17 12/15/2017 Financing sustainable development Opportunities for the private sector 12 largest business themes in a world economy heading for the SDGs 18 Source: Better12/15/2017 Business Better World Report, January 2017 Financing sustainable development Role of Sovereign Wealth Funds Main Elements of SWF Policy Source:12/15/2017 IMF, 2013 19 Financing sustainable development Role of financial inclusion 12/15/2017 20 Financing sustainable development: Role of savings Influence savings behavior: introduce savings Improve real accounts for all income through: students Realize the •increasing total factor productivity, potential of fintech •increasing labor efficiency, and •maintaining price Key drivers of stability domestic savings Mobilize digital/biometric ID Reform public systems social security Enhance commercial insurance systems 12/15/2017 21 22 Financing sustainable development: “Digitization” is disrupting every part of financial services Source: World Bank Group, 2017 22 23 Financing sustainable development: Fintech will become critical Source: FSB, Financial Stability Implications of FinTech, July 2017 23 The practice of sustainable development INVEST IN PEOPLE INVEST IN INCLUSIVE GROWTH INVEST IN RESILIENCE •Early childhood •Infrastructure •Fragility & development •Roads Conflict •Energy •Gender equality •Climate and •Sustainable weather shocks •Skills for jobs •Greening growth •Water •Pandemics •Equal management opportunities •Private sector •Job creation Achieve the twin goals of ending extreme poverty and boosting shared prosperity Sources: World12/15/2017 Bank Group, 2017 24 The practice of sustainable development Invest in people: Learning to realize education’s promise 25 Sources: World12/15/2017 Bank Group, 2017 The practice of sustainable development Invest in people: Learning to realize education’s promise • Learning outcomes are poor: low levels, high inequality, slow progress The three dimensions • Schools are failing learners of the learning crisis • Systems are failing schools Still there are reasons for hope How to realize • Assess learning – to make it a serious goal education’s promise: • Act on evidence – to make schools work for all learners Three policy • Align actors – to make the whole system work for learning responses “If your plan is for one year, plant rice. If your plan is for ten years, plant trees. If your plan is for one hundred years, educate children.” –Kuan Chung (7th Century BC). Sources: World12/15/2017 Bank Group, 2017 26 The practice of sustainable development Invest in people: Learning to realize education’s promise It’s more complicated than it looks: people act in reaction to the choices of others throughout the system 27 Sources: World12/15/2017 Bank Group, 2017 The practice of sustainable development Invest in people: Learning to realize education’s promise Coherence and alignment toward learning 28 Sources: World12/ Bank15/ Group,2017 2017 The practice of sustainable development Invest in people: Health SDG 3: Ensure Healthy lives and promote wellbeing for all at all ages Reduce global maternal mortality Reduce premature mortality from ratio noncommunicable diseases End preventable deaths of Strengthen