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Why the UN's 17 Sustainable Development Goals are not on track to be financed soon
The world faces a sustainable development crisis, and while most countries have strategies in place, they don’t have the cash to back them up. How far off track are we with the financing needed to support the UN’s 17 Sustainable Development Goals, ranging from quality education and health care to climate action and clean water?
Shari Spiegel, who runs the UN’s Financing for Sustainable Development Office, sat down with GZERO’s Tony Maciulis at a Global Stage event for the IMF-World Bank Spring Meetings this week. She explains that the SDGs were off track even before the pandemic and that now, owing to global crises, many poorer countries have slipped backwards.
“We actually started backtracking on many of these goals as countries were under enormous stress, and particularly the poorest countries,” she said, noting that the global output of many of the poorest nations has fallen by 30% — and some, such as the Small Island Developing States, by 40%. This has led to an enormous finance divide — raising SDG financing and investment gaps from $2 trillion a few years ago to around $4 trillion today.
So how can the UN restrengthen multilateralism and, in turn, help narrow this gap? Watch here.
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Global Stage.
Are markets becoming immune to disruptive geopolitics?
There’s no escaping the intricate link between economics and geopolitics. Today, that link has become a crucial factor in investment decision-making, and who better to speak to that than Margaret Franklin, CEO of CFA Institute, a global organization of investment professionals? Franklin sat down with GZERO’s Tony Maciulis at a Global Stage event for the IMF-World Bank spring meetings this week.
Economists once predicted that sovereign debt would overwhelm global markets. But now, having been through the pandemic, the advent of AI, and wars in the Middle East and Ukraine, “there's almost a level of immunity,” she says, “to the dramatic nature of it until something really cataclysmic happens.”
And then? “The response, generally speaking, has been pretty positive,” Franklin says, with central bank intervention saving markets and building resilience.
In much the same way, the World Bank is trying to boost investor confidence by making changes that leverage private sector capital for public sector goals by better evaluating what level of risk the private sector will accept.
Individual investors should do the same, Franklin advises. “Really evaluate your risk profile … making sure you diversify,” she says, noting that fixed-income offerings have become more attractive. Younger investors, meanwhile, need to be cautious with getting their information on social media, she adds.
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Global Stage.
Why Africa's power partnership with the World Bank should attract investors
There’s a word frequently used at global convenings like the World Bank Group’s Spring Meetings held this week in Washington, D.C.—multistakeholder. It refers to an approach to problem solving that involves input from a wide range of players—governments, civil society, private sector corporations and investors.
It will take a multistakeholder approach to bring an ambitious new project announced Wednesday to fruition, an initiative to provide electricity to 300 million people in Africa by 2030.
Of the world’s nearly 800 million people living without power, an estimated 570 million are in Sub-Saharan Africa, according to the World Bank. The organization is partnering with the African Development Bank and its own International Development Association to provide up to $30 billion in funding, but is also banking on private sector investment to help make this plan a reality.
At the meetings this week, GZERO’s Tony Maciulis spoke to Lucy Heintz, Head of Energy Infrastructure at Actis Energy Fund, a global investment company focused on sustainability. Heintz expressed optimism in the announcement and explained the reasons why it could be attractive to investors.
“This is a great ambition and it's a huge plan,” Heintz said. “If it's met on the other side by a real intent to do business by government, wherever those governments may be, in those countries where energy access is still lacking, then I think you can start to see the pieces fall into place.”
Heintz explained there are already tools in place that mitigate risk for cross-border private investors, such as the Multilateral Investment Guarantee Agency (MIGA), a World Bank organization that provides insurance for noncommercial political and economic risk.
Success stories already exist globally, Heintz explained, with India being a prime example.
“India has put in place the right legislative frameworks, the right regulation,” she said. “It's also invested in the enabling environment. So, there's a very successful transmission grid investment program, which is led by the government, but then brings in private sector once those projects are de-risked.”
As for concerns about carbon emissions and environmental risk from expanding electricity generation, Heintz says there is a greater danger in not bringing more people to power.
“Reliable electricity supply is fundamental if you want to have any ability to mitigate the risks of climate change, whether it's refrigeration, cooling, the ability to earn a livelihood, it's fundamental,” she said. “I think that's the most important thing to have in mind.”
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Global Stage.
World Bank Group President Ajay Banga listens during the G-20 Finance Ministers and Central Bank Governors' Meetings at the IMF and World Bank’s 2024 annual Spring Meetings in Washington, U.S., April 18, 2024.
The big challenges facing the IMF and World Bank
As the International Monetary Fund and World Bank spring meetings wrap up Friday in Washington, the two crucial global lenders face a few important challenges in the year ahead. GZERO has been on the ground to bring you the big takeaways.
A tale of two recoveries. The IMF’s global economic outlook is fairly rosy as a whole. Inflation is easing in the US and Europe, and 3.2% growth of global GDP is a respectable clip – especially given recent fears of a recession. The US and Chinese economies are both growing, even if Beijing is still struggling with persistent debt and property market woes.
But the recovery has yet to reach every corner of the globe. One-third of the lowest-income countries are poorer today than in 2019, before the pandemic. And because inflation has pushed up interest rates, the costs of servicing sovereign debt have skyrocketed, an especially heavy burden for lower-income countries. Bringing financial stability to these fragile situations is a key focus for the IMF and the World Bank.
Power up. The World Bank announced it is launching a massive $35 billion plan to connect 300 million people in Africa to electricity. It’s the kind of fundamental development work the World Bank excels at, and it will help put the continent on track to drive an increasing share of global growth in the coming decades.
But many of the African students who might benefit from lightbulbs to study by also lack access to basic medical care – in fact, more than half the population of the globe finds themselves shut out of formal healthcare, and another two billion struggle to afford it. The World Bank plans to bring quality care to some 1.5 billion people and bolster public health systems to create sustainable improvements.
A new approach. World Bank President Ajay Banga stepped into a delicate situation succeeding David Malpass, who courted controversy with his skepticism about climate change. Banga is the first president in over a decade coming in from the private sector and he's attempting to streamline processes and make the institution more agile and flexible, which may include merging the Bank’s keystone conferences into one.
We’ll keep you up to date on progress during the Annual Meetings this fall.
For more on the big takeaways from this year’s conference, watch Senior Writer Matthew Kendrick’s interview with Tony Maciulishere.
How to tackle global challenges: The IMF & World Bank blueprint
The International Monetary Fund and World Bank’s Spring Meetings in Washington have told a tale of two economies: In the developed world, inflation is falling, and recession looks unlikely. But many of the world’s poorest countries are struggling under tremendous debt burdens inflated by rising interest rates that threaten to undo decades of development progress. That means these key lenders of last resort have their work cut out for them.
The good news? There’s a proven model, as GZERO Senior Writer Matthew Kendrick discussed with Tony Maciulis at a Global Stage event while reporting on the meetings. Somalia, once the byword for a failed state, managed to implement massive reforms to its financial system to meet the guidelines of the IMF’s Highly Indebted Poor Countries Initiative.
“Because they met those guidelines — while still in a very fragile environment where they were fighting Islamic extremists in the country, dealing with semi-autonomous zones in the north — they managed to discharge 90% of their debt,” said Kendrick. “It's proof that even in very fragile countries, if, as the Somali finance minister said yesterday, you build these projects into nationally unifying efforts to build a better future, they can have tremendous success.”
Kendrick also cited comments from experts calling for the IMF and World Bank to change how they view humanitarian work more generally and not back away from countries amid war. “Conflicts are becoming a day-to-day part of our lives all over the world,” he says. “That means that the IMF and World Bank, in order to make progress on development, have to figure out ways to work with the institutions in these countries as they are also in conflict.”
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Glogal Stage.
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- Why Africa's power partnership with the World Bank should attract investors - GZERO Media ›
World Bank announces plan to bring power to 300 million in Africa
World Bank Group is bringing power to the people. Literally.
This week, during the bank’s annual Spring Meetings, the group announced a major new initiative to provide electricity to 300 million Africans by 2030. It is estimated that nearly 800 million people globally lack access to power, and the vast majority of them, 600 million, live on the African continent.
GZERO’s Tony Maciulis met with the World Bank’s Director of Infrastructure for West Africa Franz Drees-Gross, to discuss the project's details.
Over the next six years, the World Bank aims to connect 250 million people using $30 billion of public sector funding largely drawn from its International Development Association. The development finance institution provides low-interest loans and grants to the poorest countries. The group has also partnered with the African Development Bank, which has committed to supporting an additional 50 million people.
The connectivity will come from a combination of sources, some existing and some to be created by the project.
“It turns out that the most cost-effective way to connect those 250 million people is to connect about half of them using off-grid solutions,” Drees-Gross said. “So that means solar home systems, it means mini-grids that aren't connected to the larger national grid, and the other half of that goal will have to be connected by grid extensions and grid densifications.”
The ambitious plan comes with challenges including fortifying and modernizing existing utility companies to be able to consistently provide power and collect customer payments.
“The problem in many Sub-Saharan African countries is that utilities aren't recovering their costs,” Drees-Gross said. “They lose 30, 40, sometimes 50% of electricity due to commercial and technical losses. Since they only invoice a fraction of what they buy from the generators and then fail to collect that entire amount, that leads to a deficit.”
That inconsistent business has made the utilities less attractive to private-sector investors. World Bank hopes its support in stabilizing the power industry in the region will be an opportunity that will bring in private investment, ultimately powering the growth of more economies in Africa.
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Glogal Stage.
Half the world can’t access healthcare. How can the World Bank help?
Globally, a shocking 4.5 billion people — more than half the world’s population — lack access to essential healthcare and another 2 billion have to make tough financial choices to find care. That means for the majority of people on earth when a child is sick, families can’t get medicine; when a mother gives birth, the delivery is unsafe; when people develop chronic conditions, they go untreated.
Billions of individual tragedies come together to hold back development in some of the world's most fragile countries, and that’s where the World Bank has a role to play. Monique Vledder runs the Global Health Practice at the World Bank, and she sat down with GZERO’s Tony Maciulis at a Global Stage event for the institution’s annual Spring Meetings.
She announced ambitious goals to start tackling the problem: “We are planning to reach, with our financing and our programs, 1.5 billion people over the next five years with quality health services,” she says, expanding the World Bank’s geographic footprint in healthcare to target vulnerable countries and build capacity in their healthcare systems.
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Glogal Stage.
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The Bland Bombshell and the Big Banks
Is there anyone more bland, more powerful, and less recognizable than Federal Reserve Chair Jerome Powell? He makes money moves more than Cardi B, and yet most people wouldn’t recognize him if he were sitting on their lap in the subway.
Why do relatively obscure banker meetings matter? Fair question, and it’s precisely why our GZERO team in Washington, DC, is covering the IMF-World Bank spring meetings this week.
For Masters of Monetary Policy like Powell, being bland is a strategy, not a characteristic. They speak in a purposely arcane language that requires near Bletchley Park decoding powers because everything they say makes news that impacts markets. This, in turn, affects things like your mortgage, your investments, and your grocery bill. It also impacts global poverty, which ought to make a lot more news. So understandably, they have to be careful and neutral to avoid panics or bouts of enthusiasm and ensure their signals leave lots of room for interpretation. But don’t mistake bland for lack of consequence. In global banking, bland is the brand, but influence is the purpose.
What have you missed so far?
Powell had a major bland moment at the Wilson Center’s Washington Forum on the Canadian Economy, which coincides with the spring meetings, where he hinted he would delay dropping interest rates because US inflation is proving more stubborn than predicted. “The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said, as the finance world listened to him emphasize every SYL-la-ble.
Then, in case anyone missed it, he took out the verbal highlight pen. “We can maintain the current level of restriction for as long as needed.” Whoa. Treasury yields moved higher that very moment, and he wasn’t even done speaking. Translation for those not steeped in Bland Banker Speak: Interest rates are gonna stay higher for longer – at least until the inflation rate hits the target goal of 2%. Govern yourselves accordingly.
That news got a tiny corner of social media all ginned up, giving us the world’s first – and perhaps last – Federal Reserve Meme: Check out this AI-generated Jerome Powell hyped on rate cuts. Maybe Blands really do have more fun.
Meanwhile, Bank of Canada Gov. Tiff Macklem, who was on the same panel with Powell, hinted he might go in the other direction – and having had many conversations with him over the years, I can say that Macklem isn’t bland at all. Just last week, he held the key interest rate at 5% because inflation had centimetered up a titch, but he still suggested a rate drop was “within the realm of possibilities” as early as June.
What would that mean? For one, if Canada drops rates faster than the US Fed, the Canadian dollar would likely weaken considerably, so depending on which way you travel, things could get either a lot cheaper or more expensive.
In short, everything central bankers say makes a difference to millions of citizens, and still, most folks only pay scant attention to talk about inflation and interest rates close to home – not internalizing how much impact these decisions have on major issues like global poverty. For example, GZERO’s own Matthew Kendrick has been reporting from the spring meetings this week, covering the impact of inflation on the most vulnerable economies like Somalia and what is being done to help. You can read his surprising look at the Somali success story on debt reliefhere.
But if world bankers are all so smart, why are one in three countries worse off than in 2019? Why are so many falling back into poverty post-COVID? To find out, our Head of Content Tony Maciulis sat down with Ayhan Kose, the World Bank Group’s deputy chief economist, who told him, “When the food price goes up, the price of oil goes up. That has significant implications for these economies.” He also noted that some countries have experienced “the weakest growth rate on average since the 1990s.” What are the solutions? Watch Tony’s interview here.
News about IMF and World Bank financiers doesn’t often make the front page because it’s so complex, often depressing, and … well, kinda bland. There are other riveting events, like Donald Trump’s first criminal trial, the war in Ukraine, and Iran launching missiles at Israel to grab our attention, as they should.
But spare a moment for the folks who live in Blandlandia – those people at the IMF and World Bank spring meetings. They are participating in panels like “The Path for Taxing the Super-Rich – Towards a Progressive Global Taxation Agenda,” “Biden Pauses LNG; COP 28 Fossil Fuel Phase-Out Decision – Is World Bank Lagging on Fossil Fuels?” and even “The Polycrisis – How Unchecked Public Debt Fuels Corruption and Bad Governance.”
Beneath the bland, the story of our world unfolds. Since 1944, when both financial institutions were established, the World Bank itself has funded over 12,000 programs focused on economic development and reducing poverty. Has it worked? The record is mixed.
There have been big wins – like the reconstruction of Bosnia after the war, or working on debt relief programs, like Matt described in Somalia. But the World Bank also set a goal of eliminating extreme poverty by 2023, and its leaders admit they are not even close.
Meanwhile, the IMF, whose mission is to “firefight” big, macro-economic emergencies, like a currency collapse, comes in for much harsher criticism. Its Structural Adjustment Programs – loans to low-income countries in distress – have been subjected to extensive research, often proving that they have kept people in countries like Zimbabwe or across Latin America in poverty while enriching investors. Are these Western-designed programs just a neo-liberal form of colonialism, as some suggest, or pragmatic ways to get countries onto the path of economic development? The debates are so divisive that China has moved into the space in countries that no longer trust the IMF, using its Belt and Road Initiative to invest in infrastructure and push its own influence. So, politics are driving this as well.
The IMF and World Bank may not always make things better, and there is even paranoia right now that Donald Trump, if he wins in November, might withdraw the US from the World Bank, which would devastate developing economies. Still, these two organizations are relevant and demand our attention.
At GZERO, we are committed to covering these topics and making them accessible and interesting. So please tell us what you think. If you have suggestions for things we ought to cover, or questions about events like the IMF-World Bank spring meetings, send us a note here, and we will post answers to some of your key questions next Thursday.
Thanks for your remarkable attention to all these matters, and now, let’s get at the rest of the news.
– Evan Solomon, Publisher