1 00:00:05,570 --> 00:00:08,239 S1: Hello and welcome to Development Futures, a podcast brought to 2 00:00:08,240 --> 00:00:11,840 S1: you by the Indo-Pacific Development Center here at the Lowy Institute. 3 00:00:12,440 --> 00:00:15,650 S1: My name is Alexander Dayan, the deputy director of the center, 4 00:00:15,650 --> 00:00:19,070 S1: and I am your host for this episode. In this podcast, 5 00:00:19,070 --> 00:00:22,010 S1: our researchers and some of the world's leading experts discuss 6 00:00:22,010 --> 00:00:25,400 S1: fresh policy insights and ideas on the most pressing development 7 00:00:25,400 --> 00:00:29,360 S1: issues in the world today. In this episode, we will 8 00:00:29,360 --> 00:00:32,450 S1: be talking about the future of the multilateral development banks, 9 00:00:32,510 --> 00:00:39,690 S1: often referred to as the MDGs. More than a year ago, 10 00:00:39,690 --> 00:00:42,690 S1: the MDGs embarked on an ambitious reform agenda for them 11 00:00:42,690 --> 00:00:46,530 S1: to tackle the pressing dual challenge of climate change and development. 12 00:00:47,010 --> 00:00:51,120 S1: Items on the agenda involve improving MDB governance structures, objectives 13 00:00:51,120 --> 00:00:55,170 S1: and targets, and creating new financial instruments to mobilise public 14 00:00:55,170 --> 00:00:59,640 S1: and private capital for climate and development investments. And this week, 15 00:00:59,640 --> 00:01:02,850 S1: finance ministers and other officials from around the world are 16 00:01:02,850 --> 00:01:05,970 S1: in Marrakesh for the world Bank and IMF annual meetings, 17 00:01:06,030 --> 00:01:08,399 S1: where a lot of attention is put on the reform 18 00:01:08,400 --> 00:01:11,880 S1: efforts in the work. So to discuss those, I am 19 00:01:11,880 --> 00:01:14,820 S1: joined by Clemens Landers, a senior policy fellow at the 20 00:01:14,819 --> 00:01:18,360 S1: center for Global Development who focuses on multilateral development banks 21 00:01:18,360 --> 00:01:23,310 S1: and sustainable development finance. Clemens previously worked at the US 22 00:01:23,310 --> 00:01:26,520 S1: Treasury on US engagement with the NBS and also at 23 00:01:26,520 --> 00:01:28,770 S1: the world Bank. So she's basically one of the best 24 00:01:28,770 --> 00:01:32,100 S1: persons to discuss those issues. I had the pleasure of 25 00:01:32,100 --> 00:01:34,679 S1: meeting Clemens a few months ago, when my colleague, Roland 26 00:01:34,680 --> 00:01:37,710 S1: Rajan and I presented our work on development finance at 27 00:01:37,709 --> 00:01:40,920 S1: CGD in Washington. And since that time, we've had the 28 00:01:40,920 --> 00:01:43,590 S1: idea of having her as a guest on our new podcast. 29 00:01:43,740 --> 00:01:47,640 S1: And I'm thrilled that this has finally become a reality. So, Clemens, 30 00:01:47,760 --> 00:01:49,650 S1: thank you very much for taking the time to have 31 00:01:49,650 --> 00:01:50,320 S1: a chat today. 32 00:01:50,340 --> 00:01:52,890 S2: Well, thank you, Alexander, and I'm so pleased to be here. 33 00:01:52,950 --> 00:01:55,050 S1: First, I would like to look at the big picture 34 00:01:55,050 --> 00:01:58,470 S1: and ask you the following questions. What do we mean 35 00:01:58,470 --> 00:02:01,920 S1: when we talk about MDB reforms generally? I mean, what 36 00:02:01,920 --> 00:02:05,790 S1: are the primary topics of discussion concerning those reforms and 37 00:02:05,790 --> 00:02:08,520 S1: in the context of the world Bank, IMF annual meeting 38 00:02:08,520 --> 00:02:10,890 S1: is happening as we speak. What do you think is 39 00:02:10,889 --> 00:02:13,919 S1: being discussed precisely on that specific topic? 40 00:02:14,520 --> 00:02:17,700 S2: Yeah. Well, you're right to point out that there's been 41 00:02:17,700 --> 00:02:21,990 S2: a really strong spotlight on the MDGs since for the 42 00:02:21,990 --> 00:02:25,440 S2: past year and the world Bank in particular about a 43 00:02:25,440 --> 00:02:29,669 S2: year ago, actually, Secretary Janet Yellen, the US Treasury secretary, 44 00:02:29,669 --> 00:02:34,110 S2: made a speech around what is now called MDB evolution, 45 00:02:34,440 --> 00:02:37,200 S2: really focused on the fact that it was time for 46 00:02:37,200 --> 00:02:41,250 S2: for some major changes within the system, with a particular 47 00:02:41,250 --> 00:02:43,860 S2: focus on the world Bank. And she made she made 48 00:02:43,860 --> 00:02:45,090 S2: the speech about a year ago at the center for 49 00:02:45,090 --> 00:02:49,800 S2: Global Development. And this is really created an enormous amount 50 00:02:49,800 --> 00:02:54,450 S2: of momentum, an enormous amount of political momentum around around reform. 51 00:02:54,450 --> 00:02:57,060 S2: And there's been especially a lot of a lot of 52 00:02:57,060 --> 00:02:59,669 S2: focus on the world Bank, which is which has been 53 00:03:00,000 --> 00:03:02,130 S2: in a lot of ways accelerated by the fact that 54 00:03:02,130 --> 00:03:07,010 S2: the world Bank also has a new, new president, AJ Banga. Um, 55 00:03:07,830 --> 00:03:11,730 S2: so so what is meant and what what really drove 56 00:03:12,660 --> 00:03:17,520 S2: drove the US Treasury secretary to, to start this whole process, 57 00:03:17,520 --> 00:03:22,109 S2: I think was, was, was was really several things. Um, one, 58 00:03:22,110 --> 00:03:27,900 S2: of course, was the Covid crisis really radically changed the 59 00:03:27,900 --> 00:03:32,580 S2: global economic landscape. Um, we really saw a lot of 60 00:03:32,580 --> 00:03:39,900 S2: countries really struggling to access capital markets and external financing. 61 00:03:39,900 --> 00:03:44,610 S2: And the MDGs were really seen to be the global 62 00:03:44,610 --> 00:03:49,820 S2: safety net. But their their response to Covid was was uneven. 63 00:03:49,830 --> 00:03:52,950 S2: There's there's there's quite a bit of literature out there 64 00:03:52,950 --> 00:03:55,800 S2: and including from from the center for Global Development just 65 00:03:55,800 --> 00:04:00,420 S2: around you know, some for some countries, you know, disbursements, 66 00:04:00,420 --> 00:04:05,280 S2: you know, weren't moving particularly fast. The institution for some 67 00:04:05,280 --> 00:04:07,590 S2: countries was very good on the crisis response and for 68 00:04:07,590 --> 00:04:11,310 S2: others was less good. And there's also a sense that 69 00:04:11,310 --> 00:04:15,060 S2: that that the world Bank in particular slightly missed the 70 00:04:15,060 --> 00:04:18,990 S2: boat on things like Covax, which was a multilateral funding 71 00:04:18,990 --> 00:04:22,800 S2: for for vaccinations and simply because its own internal rules 72 00:04:22,800 --> 00:04:27,210 S2: and procedures were too complicated for, for, for to participate. 73 00:04:27,210 --> 00:04:30,870 S2: And it eventually actually did end up participating. But but 74 00:04:30,870 --> 00:04:34,229 S2: just this feeling that that the world Bank really wasn't 75 00:04:34,230 --> 00:04:36,480 S2: equipped for the challenges of the day, and if it 76 00:04:36,480 --> 00:04:39,000 S2: was kind of missing the boat on the Covid crisis, 77 00:04:39,000 --> 00:04:41,790 S2: what did that really say about the World Bank's response 78 00:04:41,790 --> 00:04:43,830 S2: to the climate crisis, which in a lot of ways 79 00:04:43,830 --> 00:04:47,789 S2: is like a slower, slower brewing Covid crisis, but equally 80 00:04:47,790 --> 00:04:52,410 S2: as as existential in its nature? Um, and against that backdrop, 81 00:04:52,800 --> 00:04:56,520 S2: there was also a lot of political changes afoot. Notably, 82 00:04:56,640 --> 00:04:58,530 S2: you know, I've mentioned the United States quite a bit. 83 00:04:58,529 --> 00:05:00,210 S2: You can see maybe a little bit of my Washington 84 00:05:00,210 --> 00:05:03,599 S2: bias as I, as I sit here. But, you know, 85 00:05:03,600 --> 00:05:07,170 S2: there were big changes in the US political landscape with 86 00:05:07,170 --> 00:05:11,279 S2: with the election of Joe Biden and really, really sharp 87 00:05:11,279 --> 00:05:15,929 S2: turn on in terms of foreign policy and economic policy priorities. 88 00:05:15,930 --> 00:05:19,710 S2: And notably, you had you had an administration that was 89 00:05:19,710 --> 00:05:22,109 S2: that was after the Trump administration that was coming in 90 00:05:22,110 --> 00:05:27,270 S2: that really wanted to signal that it was multilateral, um, 91 00:05:27,420 --> 00:05:31,859 S2: that that it was focused on international issues like foreign 92 00:05:31,860 --> 00:05:35,339 S2: assistance and that it was also going to embrace the 93 00:05:35,339 --> 00:05:39,570 S2: climate agenda. And so in a lot of ways, this 94 00:05:39,570 --> 00:05:42,330 S2: really created a in a lot of ways, the stars 95 00:05:42,330 --> 00:05:45,029 S2: were aligned for really big focus and a really big 96 00:05:45,210 --> 00:05:50,220 S2: rethink of of the world Bank and the other MDGs 97 00:05:50,220 --> 00:05:54,370 S2: by association. So what is what is what is kind 98 00:05:54,370 --> 00:05:57,490 S2: of the meat? Meat on the bones here. You know, 99 00:05:57,550 --> 00:05:59,560 S2: think it's a couple of different things, but in a 100 00:05:59,560 --> 00:06:02,040 S2: lot of ways think, you know, you can this, this, 101 00:06:02,040 --> 00:06:04,029 S2: this evolution. And we can talk about it a little 102 00:06:04,029 --> 00:06:06,610 S2: bit further means a lot of different things to a 103 00:06:06,610 --> 00:06:11,680 S2: lot of different shareholders. And there's not necessarily complete agreement 104 00:06:12,010 --> 00:06:16,060 S2: amongst shareholders on on where the evolution and reform agenda 105 00:06:16,060 --> 00:06:18,880 S2: should be, should be headed. But think a couple of 106 00:06:18,880 --> 00:06:22,089 S2: areas where there is broad consensus and think this is 107 00:06:22,089 --> 00:06:25,330 S2: the easiest and the hardest is the system is too small. 108 00:06:25,420 --> 00:06:29,049 S2: The to the extent that the system is, is the 109 00:06:29,050 --> 00:06:31,870 S2: global safety net and needs to be the source and 110 00:06:32,110 --> 00:06:35,200 S2: should be the source of a lot of public global investment. 111 00:06:36,150 --> 00:06:41,760 S2: These together, institutions that are together providing 100, $200 billion 112 00:06:41,760 --> 00:06:43,740 S2: a year in financing. And that really is a drop 113 00:06:43,740 --> 00:06:47,010 S2: bucket in the bucket compared to the climate and development 114 00:06:47,010 --> 00:06:51,990 S2: challenges that a lot of low and middle income countries face. 115 00:06:52,890 --> 00:06:55,680 S2: So that's that's one piece. The second piece is really 116 00:06:55,680 --> 00:07:00,390 S2: thinking about how the these institutions can be more flexible 117 00:07:01,200 --> 00:07:07,950 S2: and in particular, more readily to readily engaged on climate 118 00:07:07,950 --> 00:07:12,120 S2: finance issues. And that kind of points to one of 119 00:07:12,120 --> 00:07:14,670 S2: the complexities in these institutions models is that they're really 120 00:07:14,670 --> 00:07:18,060 S2: demand driven institutions. It's not that the world Bank goes 121 00:07:18,060 --> 00:07:20,250 S2: to a country and says, we want to invest in 122 00:07:20,250 --> 00:07:23,920 S2: this project to the contrary, and this is really the 123 00:07:24,000 --> 00:07:27,360 S2: kind of heart and soul of what distinguishes an MDB 124 00:07:27,360 --> 00:07:30,600 S2: from a bilateral aid agency, for instance, is is it 125 00:07:30,600 --> 00:07:33,300 S2: really is the country that originates the project and says, 126 00:07:33,300 --> 00:07:35,790 S2: this is what we want to borrow for. So if 127 00:07:35,790 --> 00:07:38,460 S2: there's this, this increasing realization that we live in a 128 00:07:38,460 --> 00:07:42,540 S2: world where there are all these existential threats, you really 129 00:07:42,540 --> 00:07:46,410 S2: want to think about how you're incentivizing countries to borrow 130 00:07:46,800 --> 00:07:54,810 S2: to mitigate these existential threats, whether that's climate pandemic, you know, fragility, 131 00:07:55,770 --> 00:07:58,340 S2: you know, kind of what's been put under this rubric of, 132 00:07:58,350 --> 00:08:01,410 S2: of global public goods. And then the third piece, you know, 133 00:08:01,410 --> 00:08:03,960 S2: and think this is getting a little bit less of 134 00:08:03,960 --> 00:08:07,440 S2: a focus, but think remains incredibly important, is there is 135 00:08:07,440 --> 00:08:11,790 S2: this unfinished business of development there? You know, we are 136 00:08:11,790 --> 00:08:14,640 S2: nowhere out of the woods in terms of, you know, 137 00:08:15,000 --> 00:08:18,570 S2: eradicating poverty, you know, think, you know, a couple of 138 00:08:18,570 --> 00:08:22,619 S2: weeks ago, we had the Unga in New York. It 139 00:08:22,620 --> 00:08:25,920 S2: was very clear how off track the international community is 140 00:08:25,920 --> 00:08:30,210 S2: on pretty much every single SDG. So just as you're 141 00:08:30,330 --> 00:08:34,290 S2: reinventing new missions for these institutions, you also have to 142 00:08:34,650 --> 00:08:37,020 S2: ensure that they're staying in the course on their on 143 00:08:37,020 --> 00:08:42,630 S2: their original ones. So, you know, that's a lot. So 144 00:08:42,630 --> 00:08:47,010 S2: what is getting discussed in Marrakesh. And I really do 145 00:08:47,010 --> 00:08:50,010 S2: want to emphasize think Marrakesh is really kind of the 146 00:08:50,460 --> 00:08:54,540 S2: beginning and not the end point. One is, you know, these, again, 147 00:08:54,570 --> 00:08:56,970 S2: are meetings that are particularly focused on the world Bank 148 00:08:56,970 --> 00:09:01,710 S2: and not the broader system. One is that shareholders in 149 00:09:01,710 --> 00:09:06,780 S2: the institution have endorsed a larger perspective on what the 150 00:09:06,780 --> 00:09:12,540 S2: World Bank's mission is. So after many, many months of wordsmithing, 151 00:09:12,840 --> 00:09:17,040 S2: they've decided to add the bank's original mandate. And the 152 00:09:17,040 --> 00:09:20,520 S2: mandate is the twin goals of of eradicating poverty and 153 00:09:20,520 --> 00:09:23,670 S2: boosting shared prosperity. They've they've they've agreed to add to 154 00:09:23,670 --> 00:09:27,030 S2: a livable planet. So finance ministers who are shareholders in 155 00:09:27,030 --> 00:09:32,010 S2: the institution are going to be formally endorsing this new mandate. 156 00:09:32,370 --> 00:09:36,270 S2: So that's the big ticket item. But for many think 157 00:09:36,270 --> 00:09:38,939 S2: that that simply isn't isn't going to be enough. It's 158 00:09:38,960 --> 00:09:42,330 S2: it's the opening salvo in a reform process. But but 159 00:09:42,330 --> 00:09:46,020 S2: a new mandate is in and of itself, not a 160 00:09:46,020 --> 00:09:46,980 S2: reform agenda. 161 00:09:48,210 --> 00:09:51,540 S1: Okay, well, putting aside this new mandate, then what do 162 00:09:51,540 --> 00:09:55,050 S1: you view as the low hanging fruit of the reform agenda? 163 00:09:55,830 --> 00:09:58,710 S1: I mean, what changes to the development banks do you 164 00:09:58,710 --> 00:10:02,010 S1: think will be the simplest to implement with the highest impact? 165 00:10:02,610 --> 00:10:05,340 S2: Well, think maybe maybe kind of going back to the 166 00:10:05,340 --> 00:10:08,700 S2: financing side. I mean, think one of one of the 167 00:10:08,700 --> 00:10:14,250 S2: lower hanging fruit is the fact that there was recently 168 00:10:14,460 --> 00:10:17,850 S2: a report on this is going to sound very dry. 169 00:10:17,850 --> 00:10:20,850 S2: So listeners, bear with me because I'll make this fun. 170 00:10:21,300 --> 00:10:26,010 S2: But there was recently a report called the The Calf Report, which, 171 00:10:26,010 --> 00:10:30,150 S2: which reviewed the capital adequacy frameworks of these institutions. And 172 00:10:30,150 --> 00:10:34,440 S2: it basically found that most multilateral development banks manage their 173 00:10:34,440 --> 00:10:39,510 S2: finances very conservatively. And because they manage their finances so conservatively, 174 00:10:39,510 --> 00:10:44,250 S2: they're potentially holding back a lot of development finance. So 175 00:10:44,250 --> 00:10:48,240 S2: one of the the interesting perspective that the authors of 176 00:10:48,240 --> 00:10:50,700 S2: this report took was there were a few small changes 177 00:10:50,700 --> 00:10:55,920 S2: that these banks can make, changing how they provision for loans, 178 00:10:55,920 --> 00:11:00,030 S2: changing what's known as their equity to loan ratios, changing 179 00:11:00,030 --> 00:11:02,490 S2: how they view something called callable capital, which I promise 180 00:11:02,490 --> 00:11:06,929 S2: I won't get into. But a couple of things like this, 181 00:11:07,410 --> 00:11:10,440 S2: actually not a couple of pretty sturdy list of things 182 00:11:10,440 --> 00:11:13,760 S2: could be enough to really unlock quite a bit of financing. 183 00:11:13,770 --> 00:11:16,830 S2: And so in a lot of ways, you know, this 184 00:11:16,830 --> 00:11:21,030 S2: calf review and a lot of these findings are very 185 00:11:21,030 --> 00:11:25,950 S2: easy ways of really increasing the amount of headroom that 186 00:11:25,950 --> 00:11:29,370 S2: the multilateral development banks can be, then providing as loans 187 00:11:29,370 --> 00:11:33,240 S2: to their client countries without necessarily having to go to 188 00:11:33,240 --> 00:11:37,260 S2: shareholders to ask for more cash. The bigger difficulties in 189 00:11:37,260 --> 00:11:40,560 S2: this reform agenda is everyone wants the institutions to do 190 00:11:40,559 --> 00:11:44,069 S2: more and to change. But as you know, you know 191 00:11:44,070 --> 00:11:47,130 S2: very well and everyone in the development finance space knows 192 00:11:47,130 --> 00:11:50,880 S2: very well this is not a particularly this is not 193 00:11:50,880 --> 00:11:56,069 S2: a particularly glorious time for general the generosity of bilateral 194 00:11:56,070 --> 00:12:00,630 S2: donors to especially to multilateral institutions. So, so this, this, 195 00:12:00,630 --> 00:12:02,790 S2: this capital adequacy review is kind of the way it's 196 00:12:02,790 --> 00:12:04,560 S2: often described as the bank is, is a way of 197 00:12:04,559 --> 00:12:07,320 S2: squeezing a little bit more out of the lemon and, 198 00:12:07,320 --> 00:12:10,050 S2: and think in a lot of ways the institutions really 199 00:12:10,050 --> 00:12:12,510 S2: have embraced these mean for some it's been a little 200 00:12:12,540 --> 00:12:15,449 S2: bit too slow to embrace these reforms, but they have 201 00:12:15,450 --> 00:12:18,540 S2: embraced these reforms and have put forward some pretty, you know, 202 00:12:18,540 --> 00:12:24,720 S2: not enormous but good consequential new headroom numbers. I think 203 00:12:24,720 --> 00:12:28,380 S2: the world Bank put out said that, that by implementing 204 00:12:28,380 --> 00:12:30,170 S2: some of these reforms that could generate an extra 100 205 00:12:30,170 --> 00:12:33,660 S2: billion over the next ten years. So some, some pretty 206 00:12:33,660 --> 00:12:39,420 S2: good ambitious numbers linked to the agenda. So, you know, 207 00:12:39,420 --> 00:12:42,179 S2: and so hopefully that's something that, you know, the the 208 00:12:42,179 --> 00:12:44,520 S2: momentum on on that side will continue. 209 00:12:44,880 --> 00:12:47,280 S1: Well very good. Now I would like to talk to 210 00:12:47,280 --> 00:12:50,189 S1: you about the global public goods or the JRPGs that 211 00:12:50,190 --> 00:12:54,420 S1: you mentioned earlier. So for our listeners, global public goods 212 00:12:54,420 --> 00:12:57,690 S1: are goods and resources that benefit everyone. They are non 213 00:12:57,690 --> 00:13:00,719 S1: excludable so no one can be excluded from using them. 214 00:13:00,720 --> 00:13:03,809 S1: And they are non rivalrous, meaning that using them doesn't 215 00:13:03,809 --> 00:13:08,160 S1: actually reduce their availability to others. Example of JRPGs include 216 00:13:08,160 --> 00:13:13,939 S1: climate change mitigation, communicable disease prevention and global peace and security. Um, 217 00:13:14,080 --> 00:13:16,329 S1: and the global public goods are, in my mind, at 218 00:13:16,330 --> 00:13:20,350 S1: the centre of the MDB reform agenda, as the MDGs 219 00:13:20,350 --> 00:13:23,500 S1: are under pressure to expand and adapt to address global needs, 220 00:13:23,500 --> 00:13:28,000 S1: including through the provision of those global public goods. Now, 221 00:13:28,000 --> 00:13:32,200 S1: the problem is that for some developing countries, borrowing for 222 00:13:32,200 --> 00:13:35,559 S1: GPG programs at the domestic level can be challenging due 223 00:13:35,559 --> 00:13:40,870 S1: to fiscal constraints, for instance, or different national priorities. And 224 00:13:40,870 --> 00:13:43,720 S1: so to make these loans more appealing to these countries. 225 00:13:43,809 --> 00:13:47,110 S1: Institutions like the world Bank may need to actually sweeten 226 00:13:47,110 --> 00:13:53,110 S1: the deal, often involving subsidies, which translates into increased grant funding. 227 00:13:53,380 --> 00:13:56,410 S1: But given the limited budget of organisations like the world 228 00:13:56,410 --> 00:14:01,270 S1: Bank and other MDGs, allocating more grants for climate and 229 00:14:01,270 --> 00:14:05,830 S1: similar global public goods could actually result in reduced grant 230 00:14:05,830 --> 00:14:10,120 S1: funding available for other developmental issues. So my question to 231 00:14:10,120 --> 00:14:13,570 S1: you is this is there a trade off between financing 232 00:14:13,570 --> 00:14:16,510 S1: for climate and financing for development? 233 00:14:17,080 --> 00:14:19,630 S2: Yeah. No. Thank you for this question. It's I think 234 00:14:19,630 --> 00:14:22,390 S2: this question really just cuts right to the heart of 235 00:14:22,390 --> 00:14:25,600 S2: the matter and right into the really where a lot 236 00:14:25,600 --> 00:14:27,790 S2: of the the traffic jam is right now in a 237 00:14:27,790 --> 00:14:30,550 S2: lot of ways, in terms of the reform agenda and 238 00:14:30,550 --> 00:14:33,340 S2: in particular, I was making, you know, earlier this point 239 00:14:33,340 --> 00:14:37,960 S2: around the fact that these organisations are demand driven organisations. 240 00:14:38,470 --> 00:14:41,710 S2: So the question then becomes, well, how do you incentivise 241 00:14:41,710 --> 00:14:45,280 S2: countries to want to do things differently and to borrow 242 00:14:45,280 --> 00:14:49,350 S2: for different kinds of programs? But as you said, the 243 00:14:49,720 --> 00:14:51,970 S2: it's hard to get countries to want to borrow for 244 00:14:51,980 --> 00:14:58,540 S2: JPGs because you are basically taking out resources. Borrowing money 245 00:14:58,540 --> 00:15:03,190 S2: for a project that does not necessarily generate or generally 246 00:15:03,190 --> 00:15:06,810 S2: does not generate a cash flow. And for which you 247 00:15:06,810 --> 00:15:09,750 S2: as a as a nation, may not be capturing the 248 00:15:09,750 --> 00:15:13,820 S2: benefits of the project. And so there's a really core, 249 00:15:13,830 --> 00:15:19,080 S2: really systemic change here in thinking and in models that 250 00:15:19,080 --> 00:15:21,840 S2: the MDGs need to embrace if they're going to move 251 00:15:21,840 --> 00:15:26,000 S2: towards this agenda. But as you also pointed out and 252 00:15:26,010 --> 00:15:29,550 S2: think this is another element of real tension and negotiation 253 00:15:29,550 --> 00:15:34,500 S2: and debate right now, is that the logical path towards 254 00:15:34,500 --> 00:15:39,150 S2: financing more JRPGs is therefore not necessarily to finance them 255 00:15:39,150 --> 00:15:45,359 S2: through loans, but to really use grants much more systematically, 256 00:15:45,420 --> 00:15:49,020 S2: either to concessional loans to cheapen the terms of the 257 00:15:49,020 --> 00:15:52,440 S2: loans or actually just pure grants to finance some of 258 00:15:52,440 --> 00:15:57,870 S2: these projects. And then that creates a real trade off, 259 00:15:58,080 --> 00:16:01,650 S2: because if you need to fundraise for grants and you're 260 00:16:01,650 --> 00:16:05,100 S2: also needing to fundraise for your concessional lending windows for 261 00:16:05,100 --> 00:16:08,880 S2: your for course countries, you create a trade off when 262 00:16:08,880 --> 00:16:11,550 S2: a donor says, okay, well, do I give my dollar 263 00:16:11,550 --> 00:16:14,250 S2: to help fight poverty in the lowest income countries? Or 264 00:16:14,250 --> 00:16:20,700 S2: do I give my dollar to finance global public good 265 00:16:21,060 --> 00:16:25,530 S2: that benefits everyone equally? And there's also an added element 266 00:16:25,530 --> 00:16:28,170 S2: in the politics of climate change. Come in. Here is 267 00:16:28,170 --> 00:16:30,900 S2: a lot of countries are saying to the rich countries 268 00:16:31,140 --> 00:16:35,070 S2: at these institutions, as you're imposing this global public good 269 00:16:35,460 --> 00:16:39,480 S2: agenda on us, but you, because of how you grew 270 00:16:39,480 --> 00:16:43,830 S2: and how you prospered, created the global public bad that 271 00:16:43,830 --> 00:16:47,400 S2: now you are using development resources to try to mitigate. 272 00:16:47,550 --> 00:16:51,090 S2: And so there's there we're currently in a moment where 273 00:16:51,090 --> 00:16:55,920 S2: there's a tremendous amount of debate, but also, I would 274 00:16:55,920 --> 00:17:01,920 S2: say distrust within the system around, you know, the intentions 275 00:17:01,920 --> 00:17:04,500 S2: of a lot of the advanced economies that are that 276 00:17:04,500 --> 00:17:06,720 S2: are really pushing for these reforms of saying, you know, 277 00:17:06,720 --> 00:17:10,919 S2: you're you're really using a dollars towards purposes that really 278 00:17:10,920 --> 00:17:16,140 S2: aren't necessarily particularly aid related. They're very self-interested. So as 279 00:17:16,140 --> 00:17:19,890 S2: a result, you know, there really isn't right now a 280 00:17:19,890 --> 00:17:24,780 S2: very clear offer for how it is that these institutions 281 00:17:24,780 --> 00:17:29,790 S2: will finance JRPGs. The has a small fund on its 282 00:17:29,790 --> 00:17:32,820 S2: balance sheet called the fund, which was set up a 283 00:17:32,820 --> 00:17:37,230 S2: couple of, I think, in 2018. And it's financed mainly 284 00:17:37,230 --> 00:17:40,560 S2: through through net income. So that's the profit that the 285 00:17:40,560 --> 00:17:44,369 S2: organization makes. Some of its profit goes into financing this fund. 286 00:17:44,369 --> 00:17:46,859 S2: But it's it's very small. Think it's not more than 287 00:17:46,859 --> 00:17:51,180 S2: 100 $100 million has gone into this. There are some 288 00:17:51,180 --> 00:17:56,580 S2: proposals out there to create an entirely new window that 289 00:17:56,580 --> 00:18:03,119 S2: would be completely financed, separate from the again, but by donors, 290 00:18:03,119 --> 00:18:06,689 S2: and that those proposals create that new window, invite the 291 00:18:06,690 --> 00:18:10,680 S2: kind of criticism that I that I presented earlier. Um, 292 00:18:10,859 --> 00:18:13,950 S2: and then there are there is some interest in, in, 293 00:18:14,550 --> 00:18:18,209 S2: in figuring out some other slightly more innovative quote unquote 294 00:18:18,210 --> 00:18:25,020 S2: mechanisms to fund JRPGs. Um, you know, through, you know, guarantees, 295 00:18:25,020 --> 00:18:27,449 S2: maybe things like debt for nature swaps. I'm again, a 296 00:18:27,450 --> 00:18:31,380 S2: little bit more skeptical of the financial innovation around some 297 00:18:31,380 --> 00:18:34,110 S2: of these things because I kind of, you know, you 298 00:18:34,109 --> 00:18:35,760 S2: kind of have to go back to, you know, at 299 00:18:35,760 --> 00:18:38,430 S2: its core, what is it? You know, it really is 300 00:18:38,430 --> 00:18:41,520 S2: something where there's not a cash flow associated with it. 301 00:18:41,520 --> 00:18:44,970 S2: I don't necessarily think, for instance, a solar farm in 302 00:18:44,970 --> 00:18:47,250 S2: its pure sense of the terms is a global public good. 303 00:18:47,280 --> 00:18:50,910 S2: I mean, that's a project that's economically viable generally with 304 00:18:50,910 --> 00:18:54,450 S2: a cash flow that creates a return. I think much 305 00:18:54,450 --> 00:18:57,750 S2: more of a is like telling a country, don't, you know, 306 00:18:57,750 --> 00:19:02,310 S2: preserve your preserve your rainforest. Um, you know, there's not 307 00:19:02,310 --> 00:19:04,770 S2: a cash flow really that's associated with that. But the 308 00:19:04,770 --> 00:19:12,210 S2: benefits of us, the world having the Amazon rainforest are tremendous. Um, so, 309 00:19:12,210 --> 00:19:14,669 S2: you know, think right now this is, you know, and 310 00:19:14,670 --> 00:19:16,169 S2: this is why said this question is the heart of 311 00:19:16,170 --> 00:19:18,330 S2: the matter is this is one of the impasses that 312 00:19:18,330 --> 00:19:22,260 S2: we currently find ourselves in, on, on, on this kind 313 00:19:22,260 --> 00:19:25,500 S2: of broader reform agenda around JRPGs. And, you know, it 314 00:19:25,500 --> 00:19:29,010 S2: will be interesting to see where this comes out. But 315 00:19:29,010 --> 00:19:34,260 S2: part of where this I don't see a successful road 316 00:19:34,590 --> 00:19:40,890 S2: towards a focused MDB without much more grant resources. And 317 00:19:40,890 --> 00:19:43,650 S2: I struggle with whether or not that is a politically 318 00:19:43,650 --> 00:19:46,620 S2: realistic proposition in the day and age in which we are. 319 00:19:46,740 --> 00:19:49,470 S1: All right. Well, just to rebound on this example of 320 00:19:49,470 --> 00:19:52,890 S1: the solar farm, you mentioned that you don't necessarily see 321 00:19:52,890 --> 00:19:55,229 S1: it as a global public good, but actually, don't you 322 00:19:55,230 --> 00:19:58,770 S1: think it really depends on where this project is being implemented? 323 00:19:59,790 --> 00:20:02,429 S1: For instance, you know, a small solar farm in the 324 00:20:02,430 --> 00:20:05,250 S1: Pacific might not necessarily have a similar impact to. A 325 00:20:05,250 --> 00:20:09,180 S1: large scale one in Indonesia. Indonesia is a much larger 326 00:20:09,180 --> 00:20:13,190 S1: theater emitter than Fiji. So what underlies the argument that 327 00:20:13,200 --> 00:20:16,859 S1: a solar farm in Indonesia isn't necessarily considered a global 328 00:20:16,859 --> 00:20:20,850 S1: public good, despite its potential to significantly reduce global emissions? 329 00:20:21,590 --> 00:20:25,699 S2: Yeah. Mean think think. It has components, especially if you 330 00:20:25,700 --> 00:20:30,080 S2: can say the solar farm, you know, displaced a dirtier 331 00:20:30,350 --> 00:20:34,010 S2: form of energy and think you can say there there 332 00:20:34,010 --> 00:20:38,570 S2: are aspects that investment, but think in the purest term 333 00:20:38,570 --> 00:20:44,000 S2: of the sense of what A is, I, I don't 334 00:20:44,000 --> 00:20:47,090 S2: think it fully enters that box. And, and in particular, 335 00:20:47,090 --> 00:20:51,380 S2: when you're thinking about this framework of, you know, grant financing, 336 00:20:51,380 --> 00:20:55,010 S2: there are a lot of countries that borrow from the 337 00:20:55,010 --> 00:20:59,720 S2: world Bank for solar. Let's stay with this example where 338 00:20:59,720 --> 00:21:04,280 S2: these are very economically viable investments for the country. Now 339 00:21:04,280 --> 00:21:06,650 S2: they have the added benefit. And this is the added 340 00:21:06,650 --> 00:21:10,490 S2: benefit of renewables, of being good for the world. Right. 341 00:21:11,030 --> 00:21:17,490 S2: But they are also economically. The country also reaps the 342 00:21:17,490 --> 00:21:21,929 S2: economic advantage of that project and think this in a 343 00:21:21,930 --> 00:21:24,030 S2: lot of ways. And this is this is, you know, 344 00:21:24,030 --> 00:21:26,430 S2: you know, an interesting point you make is, is one 345 00:21:26,430 --> 00:21:29,280 S2: of the approaches the bank is, is trying to take 346 00:21:29,280 --> 00:21:32,220 S2: of kind of saying, you know, there aren't that many 347 00:21:32,220 --> 00:21:38,760 S2: projects that in their purest, pure sense, RPGs. So let's 348 00:21:38,760 --> 00:21:42,030 S2: think of ways that we can do a national project. 349 00:21:43,060 --> 00:21:47,710 S2: And include a type component. So I'm going to wade 350 00:21:47,710 --> 00:21:51,010 S2: into territory in which I'm not an expert. But, you know, 351 00:21:51,190 --> 00:21:54,100 S2: my health colleagues would say, you know, you could think 352 00:21:54,100 --> 00:21:55,960 S2: about this in the health sector of, you know, if 353 00:21:55,960 --> 00:21:59,800 S2: the world Bank is doing a big health sector investment 354 00:21:59,800 --> 00:22:04,180 S2: in a country to also have a component on that that's, 355 00:22:04,180 --> 00:22:08,290 S2: you know, prevention focused, or maybe it's a prevention focused 356 00:22:08,290 --> 00:22:11,680 S2: component that's linking into some sort of a regional prevent 357 00:22:11,680 --> 00:22:16,000 S2: supervision network. And so you then have had this, this 358 00:22:16,000 --> 00:22:20,680 S2: project that has strong national benefits and for which that 359 00:22:20,680 --> 00:22:23,169 S2: makes absolute sense for the country to kind of finance 360 00:22:23,170 --> 00:22:25,750 S2: and use its Ida allocation or its world Bank allocation 361 00:22:25,750 --> 00:22:29,380 S2: to borrow from. But there's also a little layer of 362 00:22:29,380 --> 00:22:33,880 S2: this project on top that has a regional or a 363 00:22:33,880 --> 00:22:41,139 S2: slightly more global component, and that sits much more naturally 364 00:22:41,350 --> 00:22:45,159 S2: within the world Bank MDB type model. 365 00:22:46,020 --> 00:22:49,080 S1: Well. Well that's interesting. You know, at the institute, we 366 00:22:49,080 --> 00:22:51,780 S1: do have some projects tracing what we call climate development 367 00:22:51,780 --> 00:22:55,020 S1: finance in Southeast Asia and in the Pacific. And what 368 00:22:55,020 --> 00:22:58,230 S1: we found is that sometimes what constitutes a climate adaptation 369 00:22:58,230 --> 00:23:01,440 S1: and mitigation projects can actually vary from one development partners 370 00:23:01,440 --> 00:23:04,950 S1: to the next. There's quite a bit of inconsistency which 371 00:23:04,950 --> 00:23:09,179 S1: makes the quantification of climate development finance challenging. And so 372 00:23:09,180 --> 00:23:10,830 S1: listening to you make me think that, you know, we 373 00:23:10,830 --> 00:23:14,100 S1: might face the same problems with global public goods in 374 00:23:14,100 --> 00:23:16,770 S1: the future. And so I really hope that standards of 375 00:23:16,770 --> 00:23:19,800 S1: transparency will be improved across the board in the future. 376 00:23:19,800 --> 00:23:24,210 S1: But that's that's another issue. Look, earlier you talked about 377 00:23:24,210 --> 00:23:27,450 S1: the fact that the world Bank and other MDGs are 378 00:23:27,450 --> 00:23:31,440 S1: demand driven. But what we've seen is that for many countries, 379 00:23:31,560 --> 00:23:35,070 S1: borrowing for from MDGs can be a complex and actually 380 00:23:35,070 --> 00:23:40,830 S1: resource intensive exercise which sometimes discourage borrowers. For instance, infrastructure 381 00:23:40,830 --> 00:23:43,020 S1: lending can be complex to navigate. You know, MDB is 382 00:23:43,020 --> 00:23:47,340 S1: applying stringent environmental and social safeguards, which, you know, play 383 00:23:47,340 --> 00:23:51,540 S1: a critical role in protecting vulnerable groups and environments. But 384 00:23:51,540 --> 00:23:55,740 S1: they often fail to provide the time and financial resources needed. 385 00:23:55,859 --> 00:24:00,060 S1: So how can we improve the demand for MDB financing, 386 00:24:00,060 --> 00:24:03,020 S1: making them more cost effective with maybe less red tape, 387 00:24:03,030 --> 00:24:06,360 S1: but at the same time ensuring the high quality of 388 00:24:06,359 --> 00:24:07,139 S1: those funding? 389 00:24:08,160 --> 00:24:11,170 S2: Yeah. This is this is a fascinating question and I. 390 00:24:12,070 --> 00:24:15,129 S2: I think you're seeing this, this play out in a 391 00:24:15,130 --> 00:24:19,910 S2: lot of different contexts. A lot of countries prefer to 392 00:24:19,910 --> 00:24:25,280 S2: go to China to borrow for infrastructure projects, though, that 393 00:24:25,280 --> 00:24:30,310 S2: type of borrowing seems to be going down. But they're faster, 394 00:24:30,320 --> 00:24:34,280 S2: less strings attached. For a country know you're operating in 395 00:24:34,280 --> 00:24:37,429 S2: real time and and you you want to have a 396 00:24:37,430 --> 00:24:42,050 S2: project built not in geological time, but in real, actual 397 00:24:42,050 --> 00:24:47,510 S2: human time. And, you know, another another example of this is, 398 00:24:47,510 --> 00:24:51,080 S2: you know, we especially, you know, during Covid saw a 399 00:24:51,080 --> 00:24:56,060 S2: lot of countries going to the bond markets for emergency financing, 400 00:24:56,060 --> 00:24:59,359 S2: even if, you know, spreads were, you know, 300 basis 401 00:24:59,359 --> 00:25:01,669 S2: points over what they could have been getting from the 402 00:25:01,670 --> 00:25:05,120 S2: world Bank. And again, it's, you know, that's just faster money. 403 00:25:05,119 --> 00:25:08,359 S2: And countries seem very much it's, you know, with certain 404 00:25:08,359 --> 00:25:10,879 S2: countries at certain moments in time, seem very willing to 405 00:25:10,880 --> 00:25:15,740 S2: pay extra for faster money with fewer strings attached. I 406 00:25:15,740 --> 00:25:19,550 S2: think this is actually a problem that is not gone unnoticed. 407 00:25:20,430 --> 00:25:23,580 S2: And it was interesting. AJ Banga, who was the new 408 00:25:23,580 --> 00:25:26,970 S2: president of the world Bank, was recently at the Council 409 00:25:26,970 --> 00:25:30,290 S2: for Foreign Relations, which is another US based think tank. 410 00:25:30,300 --> 00:25:33,350 S2: And at the end someone asked him what? What are 411 00:25:33,390 --> 00:25:35,760 S2: what is your big priority for the institution? And one 412 00:25:35,760 --> 00:25:37,080 S2: of the things he said is I want to fix 413 00:25:37,080 --> 00:25:41,490 S2: the plumbing, which doesn't sound particularly glorious until you really 414 00:25:41,490 --> 00:25:45,930 S2: actually think, you know, moving, moving things forward and faster 415 00:25:45,930 --> 00:25:51,120 S2: is is in itself a really important part of development. 416 00:25:52,230 --> 00:25:56,750 S2: And the organization in a lot of ways, especially, you know, 417 00:25:56,760 --> 00:25:59,159 S2: especially the world Bank is under a lot of pressure 418 00:25:59,160 --> 00:26:05,190 S2: to adhere to very strong safeguard standards and standards, which are, 419 00:26:05,190 --> 00:26:08,550 S2: you know, obviously important and obviously kind of how part, 420 00:26:08,550 --> 00:26:10,949 S2: you know, part and parcel of the model that the 421 00:26:10,950 --> 00:26:15,090 S2: world Bank offers that differs from China and may make 422 00:26:15,090 --> 00:26:17,970 S2: world Bank financing more sustainable than China financing over the 423 00:26:17,970 --> 00:26:22,619 S2: longer term, that's a whole different podcast, but you really 424 00:26:22,619 --> 00:26:24,149 S2: need to think of a way of how do you 425 00:26:24,150 --> 00:26:28,770 S2: reconcile these high standards with moving, moving forward faster, because 426 00:26:28,770 --> 00:26:32,790 S2: this is clearly part of what client countries are demanding 427 00:26:32,790 --> 00:26:35,520 S2: from the institution. And it's and it's quite frankly, I 428 00:26:35,580 --> 00:26:38,430 S2: think it's very encouraging to have a world Bank president who's, 429 00:26:38,430 --> 00:26:43,500 S2: who's talking about this early on in the presidency. We'll see. 430 00:26:43,500 --> 00:26:46,200 S2: You know, a lot of this, you know, is going 431 00:26:46,200 --> 00:26:49,770 S2: to be very political to unlock. But, you know, there's 432 00:26:50,280 --> 00:26:52,169 S2: I think this is you know, you were asking a 433 00:26:52,170 --> 00:26:54,090 S2: little bit earlier about low hanging fruit. I do think 434 00:26:54,090 --> 00:26:56,940 S2: there are there are elements here of that that that 435 00:26:56,940 --> 00:26:59,580 S2: just can be advanced a lot faster. And I'll just 436 00:26:59,580 --> 00:27:05,609 S2: say one one more thing. Um, during during the Covid crisis, 437 00:27:06,119 --> 00:27:08,550 S2: a colleague and I did did a little bit of 438 00:27:08,550 --> 00:27:11,550 S2: a piece of research on world Bank budget support operations 439 00:27:11,550 --> 00:27:15,960 S2: and budgets. World. The MDGs basically provide two main kinds 440 00:27:15,960 --> 00:27:20,880 S2: of programs. One is projects based financing and the other 441 00:27:20,880 --> 00:27:24,780 S2: one is just unrestricted financing for a country's country's budget. 442 00:27:24,780 --> 00:27:28,830 S2: And budget support tends to have policy conditionality. And we 443 00:27:28,830 --> 00:27:32,160 S2: went through all the different budget support operations during Covid 444 00:27:32,160 --> 00:27:36,000 S2: and found that operations were full of policy conditionality that 445 00:27:36,000 --> 00:27:38,910 S2: had nothing to do with the Covid crisis. And that 446 00:27:38,910 --> 00:27:43,380 S2: just seems like an enormous, again, missed opportunity, right? I mean, 447 00:27:43,380 --> 00:27:48,810 S2: you don't you don't want to be forcing countries to 448 00:27:48,810 --> 00:27:53,400 S2: do all of these complicated things in an emergency. The 449 00:27:53,400 --> 00:27:58,680 S2: complicated things are for another moment in time. So again, 450 00:27:58,770 --> 00:28:00,629 S2: think this, this kind of thing needs to be part 451 00:28:00,630 --> 00:28:02,520 S2: of the rethink of the plumbing. 452 00:28:03,119 --> 00:28:05,880 S1: Okay. Well just to rebound on this comments on on 453 00:28:05,880 --> 00:28:09,480 S1: budget support. During the pandemic, we've seen a resurgence of 454 00:28:09,480 --> 00:28:12,600 S1: the use of direct budget support in the Pacific as 455 00:28:12,600 --> 00:28:16,050 S1: a swift way for development partners to provide emergency financing 456 00:28:16,050 --> 00:28:18,629 S1: to those countries in the in the region at a 457 00:28:18,630 --> 00:28:22,170 S1: time where international borders were closed and travel was restricted. 458 00:28:22,770 --> 00:28:25,770 S1: And now today, most Pacific Island countries are actually facing 459 00:28:25,770 --> 00:28:29,760 S1: high risk of distress, according to the IMF. Yet our 460 00:28:29,760 --> 00:28:31,950 S1: analysis of early numbers show that the use of budget 461 00:28:31,950 --> 00:28:33,930 S1: support is here to stay. So how do we make 462 00:28:33,930 --> 00:28:36,990 S1: sure that we continue to use budget support, which actually 463 00:28:36,990 --> 00:28:41,070 S1: provides quick and in the case of the Pacific, concessional financing, 464 00:28:41,250 --> 00:28:44,910 S1: while also considering the debt sustainability issue in the Pacific, 465 00:28:44,910 --> 00:28:46,770 S1: but also in the broader developing world. 466 00:28:47,870 --> 00:28:52,310 S2: Yeah. No. And that's a very. It's very timely question to. 467 00:28:52,370 --> 00:28:56,300 S2: Mean one of the things about how the world Bank 468 00:28:56,300 --> 00:29:00,830 S2: and MDPs provide financing to lower income countries. And this is, 469 00:29:00,830 --> 00:29:04,580 S2: I think, one of their real strengths and why they're very, 470 00:29:06,350 --> 00:29:09,290 S2: very reliable partner for a lot of these countries is 471 00:29:09,290 --> 00:29:14,080 S2: when these countries enter into what's called high distress. All 472 00:29:14,080 --> 00:29:18,820 S2: of their loans automatically switch to grants. So the idea 473 00:29:18,820 --> 00:29:23,590 S2: behind this is that the MDB should not be contributing 474 00:29:23,620 --> 00:29:30,160 S2: to the country's debt distressed position. One of the weaknesses here, though, 475 00:29:30,160 --> 00:29:36,040 S2: is that doesn't mean even though Ida can start providing 476 00:29:36,040 --> 00:29:40,420 S2: as grants which come with a cost because grants at 477 00:29:40,420 --> 00:29:42,130 S2: the end of the day do decrease the amount of 478 00:29:42,130 --> 00:29:45,640 S2: volume over time that you can obtain. It doesn't necessarily 479 00:29:45,640 --> 00:29:49,120 S2: mean that the country has to pursue grant financing from 480 00:29:49,120 --> 00:29:54,250 S2: all of their creditors. So it creates this, this, this 481 00:29:54,250 --> 00:29:59,350 S2: strange situation sometimes where a country is simultaneously getting its 482 00:29:59,350 --> 00:30:01,720 S2: money from Ida in the form of grants, but also, 483 00:30:01,720 --> 00:30:07,920 S2: you know, issuing Eurobond Eurobonds that, you know, 10%. And 484 00:30:07,980 --> 00:30:10,630 S2: and and I do think this is this is something 485 00:30:10,630 --> 00:30:13,510 S2: where there is an opportunity for, for a little bit 486 00:30:13,510 --> 00:30:16,690 S2: of a rethink is, is, you know, what is what 487 00:30:16,690 --> 00:30:20,890 S2: is Ida's role and not just itself being responsible lender. 488 00:30:21,970 --> 00:30:25,870 S2: But have helped a bit of encouraging countries to kind of, 489 00:30:25,870 --> 00:30:29,980 S2: once they've flipped into that high debt distress territory where, 490 00:30:29,980 --> 00:30:34,660 S2: you know, their debt is no longer on a sustainable path. 491 00:30:35,080 --> 00:30:37,750 S2: How does that also change their relationship with with the 492 00:30:38,230 --> 00:30:41,230 S2: rest of the creditors? And and this isn't really fully 493 00:30:41,230 --> 00:30:45,970 S2: something that has been been worked out. The institutions have, 494 00:30:45,970 --> 00:30:48,550 S2: you know, both the IMF and world Bank have rules 495 00:30:48,550 --> 00:30:51,340 S2: that are supposed to limit how much non-concessional debt a 496 00:30:51,340 --> 00:30:55,090 S2: country can take out. They also have little carrots and 497 00:30:55,090 --> 00:30:58,420 S2: sticks that can either penalize a country if it goes 498 00:30:58,420 --> 00:31:02,680 S2: beyond its non-concessional lending headroom. But think these carrots and 499 00:31:03,070 --> 00:31:08,710 S2: sticks in particular are actually pretty. Not not necessarily as 500 00:31:08,710 --> 00:31:12,700 S2: as effective as as they could be. But, you know, 501 00:31:12,700 --> 00:31:15,700 S2: in a lot of ways, I do think, you know, 502 00:31:16,420 --> 00:31:18,880 S2: we are, you know, in terms of debt, really seeing 503 00:31:18,880 --> 00:31:23,110 S2: a breakdown in terms of how creditors cooperate and in 504 00:31:23,110 --> 00:31:25,510 S2: terms of multilateralism. And one of the things that I, 505 00:31:25,510 --> 00:31:30,250 S2: you know, would really love to see amongst major creditors, 506 00:31:30,250 --> 00:31:33,070 S2: especially like let's put the commercial creditors aside because this 507 00:31:33,070 --> 00:31:35,560 S2: isn't going to happen, but, you know, official creditors, so 508 00:31:35,560 --> 00:31:40,180 S2: multilateral and bilateral is just an agreement to follow the 509 00:31:40,180 --> 00:31:42,610 S2: Ida rules. Once a country has gone into high levels 510 00:31:42,610 --> 00:31:45,370 S2: of debt distress, the automatic rule is that should be 511 00:31:45,370 --> 00:31:46,530 S2: triggering grants. 512 00:31:46,540 --> 00:31:49,750 S1: Well, that's a great idea actually, and would definitely help 513 00:31:49,750 --> 00:31:53,560 S1: making the current high debt situation in developing countries more manageable. Thanks. 514 00:31:53,560 --> 00:31:58,540 S1: Thanks for sharing. Now, you mentioned China in your previous answer. 515 00:31:58,540 --> 00:32:00,880 S1: And so I'd like to ask you about the impact 516 00:32:00,880 --> 00:32:05,560 S1: of the US-China competition in the context of reforms. Both 517 00:32:05,560 --> 00:32:08,590 S1: countries compete not only economically but also in the area 518 00:32:08,590 --> 00:32:11,920 S1: of development finance. In the world Bank, for instance, the 519 00:32:11,920 --> 00:32:15,850 S1: United States is the largest shareholders in China is the 520 00:32:15,850 --> 00:32:18,550 S1: rising number two, but also the major borrowers and in 521 00:32:18,550 --> 00:32:23,230 S1: turn the largest voice for the bank's borrowers. And so 522 00:32:23,230 --> 00:32:26,650 S1: the deteriorating bilateral relationship between the United States and China 523 00:32:26,650 --> 00:32:30,180 S1: poses a threat to the governance of the bank. In 524 00:32:30,180 --> 00:32:35,070 S1: this context, do you think the US-China competition make makes 525 00:32:35,070 --> 00:32:39,390 S1: the broader MDB reforms impossible? And if this is the case, 526 00:32:39,390 --> 00:32:42,300 S1: what action should be taken by both parties to address 527 00:32:42,300 --> 00:32:43,680 S1: the situation effectively? 528 00:32:44,130 --> 00:32:48,640 S2: Yeah, that's that's a. That's an intense question, and I'm 529 00:32:48,640 --> 00:32:51,459 S2: going to answer you very bluntly, is I think the 530 00:32:51,460 --> 00:32:56,680 S2: biggest risk for a successful reform agenda is actually the 531 00:32:56,680 --> 00:33:00,940 S2: state of the relationship. As you said, the bilateral relationship 532 00:33:01,030 --> 00:33:07,160 S2: is not good. And in previous iterations of the relationship 533 00:33:08,030 --> 00:33:12,650 S2: when it had been better. US-China cooperation were really an 534 00:33:12,650 --> 00:33:17,180 S2: important motor, especially for the world Bank. And and you 535 00:33:17,180 --> 00:33:24,880 S2: really saw China. Especially in the context of of Ida replenishment. 536 00:33:24,890 --> 00:33:29,450 S2: China really stepping up increasingly as a more and more 537 00:33:29,450 --> 00:33:33,620 S2: important source of grant financing for for a lot of 538 00:33:33,620 --> 00:33:37,730 S2: the concessional windows. So so there really did seem to 539 00:33:37,730 --> 00:33:40,370 S2: be on the part of a willingness. And this was 540 00:33:40,370 --> 00:33:43,580 S2: this was much more prevalent under the Obama administration, a 541 00:33:43,580 --> 00:33:48,740 S2: willingness to bring China into these international institutions. And then 542 00:33:48,740 --> 00:33:53,630 S2: China wanted to act as a good participant in these institutions. 543 00:33:53,630 --> 00:33:56,990 S2: And and that, you know, was was, I think, a 544 00:33:56,990 --> 00:34:01,640 S2: really important motor for the world, frankly, that has stopped. 545 00:34:02,060 --> 00:34:06,800 S2: The two countries are not seeking cooperation and coordination on 546 00:34:06,800 --> 00:34:10,850 S2: on reform the way they were there. That level of 547 00:34:10,850 --> 00:34:14,600 S2: partnership just does not seem to be there anymore and 548 00:34:14,630 --> 00:34:18,770 S2: think that is that is a big risk for the institutions, frankly, 549 00:34:18,770 --> 00:34:21,020 S2: think it's a big risk for the world. You know, 550 00:34:21,020 --> 00:34:22,880 S2: I mean, we are talking about global public goods and 551 00:34:22,880 --> 00:34:25,819 S2: climate change and all of these things that require collective action. 552 00:34:25,820 --> 00:34:28,759 S2: And if the two largest global economies don't see eye 553 00:34:28,790 --> 00:34:32,359 S2: to eye on these issues or aren't willing to cooperate 554 00:34:32,360 --> 00:34:34,850 S2: on them, I just don't see how we can hope 555 00:34:34,850 --> 00:34:38,149 S2: to really solve them in the swift and effective way 556 00:34:38,150 --> 00:34:42,169 S2: we need to. Now, more specifically on on the world 557 00:34:42,170 --> 00:34:46,010 S2: Bank side, one of the issues that I was mentioning 558 00:34:46,010 --> 00:34:50,180 S2: earlier was, was funding and how important thought funding was. 559 00:34:51,130 --> 00:34:54,910 S2: So the historically world Bank and this is the so 560 00:34:54,910 --> 00:34:57,189 S2: that part of the world Bank that lends to middle 561 00:34:57,190 --> 00:35:00,760 S2: income countries is funded through capital increases. And generally what 562 00:35:00,760 --> 00:35:04,360 S2: happens is during a capital increase, there's there's a shareholder realignment. 563 00:35:04,360 --> 00:35:07,810 S2: So you look at a country's shareholding and then you decide, okay, 564 00:35:07,810 --> 00:35:10,930 S2: based on the World Bank's shareholding formula, or are they overweight, 565 00:35:10,930 --> 00:35:15,609 S2: underweight and the latest shareholding exercise that has shown that 566 00:35:15,610 --> 00:35:19,239 S2: China's China is really underweight at the world Bank, it's 567 00:35:19,239 --> 00:35:21,640 S2: currently the third largest shareholder. It should be the second 568 00:35:21,640 --> 00:35:24,460 S2: largest shareholder, which would allow it, which would actually allow 569 00:35:24,460 --> 00:35:28,569 S2: it to overtake Japan. So there's huge there's huge geopolitical 570 00:35:28,570 --> 00:35:33,410 S2: implications here. I think one of the reasons for which 571 00:35:33,410 --> 00:35:36,170 S2: the US has been reluctant to pursue a capital increase 572 00:35:36,170 --> 00:35:40,920 S2: negotiation in the context of this reform agenda. So it 573 00:35:41,000 --> 00:35:45,380 S2: has really been reluctant to talk about financing or growing 574 00:35:45,380 --> 00:35:49,040 S2: the institution through a capital increase. Is is because they're 575 00:35:49,040 --> 00:35:53,030 S2: afraid of this can of worms that a shareholder realignment 576 00:35:53,060 --> 00:35:57,229 S2: opens up. And I think that's I think that's frankly, 577 00:35:57,560 --> 00:36:00,590 S2: you know, very unfortunate. I think it's very unfortunate for, 578 00:36:00,590 --> 00:36:03,650 S2: for the institution because I do think, you know, there 579 00:36:03,650 --> 00:36:05,120 S2: are a lot of different you know, we talked about 580 00:36:05,120 --> 00:36:07,070 S2: the CAF reforms and we you know, there are a 581 00:36:07,070 --> 00:36:09,500 S2: lot of different ways that you can grow a balance sheet. 582 00:36:09,500 --> 00:36:13,430 S2: But the most tried and trusted in effective way is 583 00:36:13,430 --> 00:36:16,759 S2: through capital. So, you know, and so think in a 584 00:36:16,760 --> 00:36:19,430 S2: lot of ways that leaves the organization at a little 585 00:36:19,430 --> 00:36:22,910 S2: bit of an impasse, because there's not unity of vision 586 00:36:22,910 --> 00:36:27,169 S2: amongst China and the United States towards where these negotiations 587 00:36:27,170 --> 00:36:29,330 S2: and where the reform agenda should be heading in terms 588 00:36:29,330 --> 00:36:33,680 S2: of policy. But there's also a huge disunity in terms 589 00:36:33,680 --> 00:36:38,840 S2: of how do you financially grow the organization. And that 590 00:36:38,840 --> 00:36:41,540 S2: just unity, as I was saying, is, you know, there's 591 00:36:41,540 --> 00:36:46,400 S2: a lot of geo complex geopolitical linkages there. So I, 592 00:36:46,400 --> 00:36:49,490 S2: I am not optimistic on on this front. 593 00:36:50,469 --> 00:36:52,930 S1: All right. Well, now I would like to talk about 594 00:36:52,930 --> 00:36:56,560 S1: the billions to trillions concept. The billions to trillions concept 595 00:36:56,560 --> 00:36:59,800 S1: was first introduced at the third International Conference on Financing 596 00:36:59,800 --> 00:37:03,400 S1: for Development in Addis Ababa in 2015. The idea is 597 00:37:03,400 --> 00:37:07,060 S1: basically that billions of multilateral finance and official development assistance 598 00:37:07,060 --> 00:37:10,779 S1: should be used to mobilize trillions of private investments for 599 00:37:10,780 --> 00:37:14,650 S1: climate and development. But even though AJ Banga, the new 600 00:37:14,650 --> 00:37:18,130 S1: world Bank president, seems to be very enthusiastic about encouraging 601 00:37:18,130 --> 00:37:22,180 S1: private capital to contribute to development, progress in that regard 602 00:37:22,180 --> 00:37:25,299 S1: has been limited so far. So what are your thoughts 603 00:37:25,300 --> 00:37:28,480 S1: on the potential for this to happen, and what strategies 604 00:37:28,480 --> 00:37:30,520 S1: can be employed to achieve this? 605 00:37:31,210 --> 00:37:34,750 S2: Yeah, the built in the billions to trillions agenda. You know, 606 00:37:34,750 --> 00:37:37,150 S2: one of one of the ideas animating that was really, 607 00:37:37,150 --> 00:37:42,740 S2: you know, $1. In development finance and public finance can 608 00:37:42,739 --> 00:37:47,299 S2: mobilise about $10 in private finance, which is just an 609 00:37:47,300 --> 00:37:52,250 S2: enormous ratio. The latest numbers that I've seen is at 610 00:37:52,250 --> 00:37:55,850 S2: best we're on. We're at 1 to 1. More generally 611 00:37:55,910 --> 00:37:59,430 S2: think it's about 1 to 0.7. So so the billions 612 00:37:59,430 --> 00:38:03,859 S2: to trillions agenda has not has not materialised. And there 613 00:38:03,860 --> 00:38:05,690 S2: isn't a lot of focus on it. It's been it's 614 00:38:05,690 --> 00:38:11,450 S2: been re renamed as private capital mobilisation now. And it's 615 00:38:11,450 --> 00:38:14,630 S2: very clearly a priority of of of the new world 616 00:38:14,630 --> 00:38:19,210 S2: Bank president. He's created a lab focus specifically on this 617 00:38:19,239 --> 00:38:23,960 S2: this issue with a lot of eminent private sector representatives. 618 00:38:24,950 --> 00:38:29,810 S2: You know. I'm of two minds, frankly, on this gender. 619 00:38:30,170 --> 00:38:33,170 S2: I think, you know, from a political perspective. Think the billions, 620 00:38:33,170 --> 00:38:36,200 S2: trillions agenda was a little bit of a of a 621 00:38:36,200 --> 00:38:39,560 S2: donor agenda saying, you know, we need all this money 622 00:38:39,830 --> 00:38:43,549 S2: for the world. There are huge challenges, but we aren't 623 00:38:43,550 --> 00:38:47,480 S2: really fully going to pay for it. And ergo, let's 624 00:38:47,480 --> 00:38:52,610 S2: kind of create this, you know, self-fulfilling prophecy that our 625 00:38:52,610 --> 00:38:56,180 S2: dollars can really stretch and bring in, bring in all 626 00:38:56,180 --> 00:38:57,380 S2: of this private capital. 627 00:38:58,540 --> 00:38:59,259 S3: And. 628 00:39:00,020 --> 00:39:01,940 S2: And I think that in a lot of ways has 629 00:39:01,940 --> 00:39:04,880 S2: done a lot of damage, because a lot of countries, 630 00:39:04,880 --> 00:39:06,980 S2: you know, especially a lot of developing countries, kind of 631 00:39:06,980 --> 00:39:10,290 S2: look back and say. Where is it? Where did it come? 632 00:39:10,290 --> 00:39:14,610 S2: Where what? What happened? And and so, you know, think 633 00:39:14,610 --> 00:39:19,320 S2: part of the let's call billions of trillions 2.0 private 634 00:39:19,320 --> 00:39:23,330 S2: capital mobilization. Sorry for the acronym. Is to really think 635 00:39:23,330 --> 00:39:27,320 S2: about this in the context of much more anchored targets. 636 00:39:27,989 --> 00:39:31,969 S2: I think that 1 to 10 ratio is a little bit. 637 00:39:32,790 --> 00:39:37,500 S2: You know, unrealistic. So let's ground this conversation in more 638 00:39:37,500 --> 00:39:42,089 S2: realistic terms. So think that's that's a first start. And 639 00:39:42,090 --> 00:39:45,629 S2: you know of course you know you know think there's 640 00:39:45,630 --> 00:39:47,489 S2: a big actually. And this allows me to say this 641 00:39:47,489 --> 00:39:49,500 S2: is think, you know, one of one of the pieces 642 00:39:49,500 --> 00:39:51,690 S2: that's a little bit overlooked when you look at some 643 00:39:51,690 --> 00:39:54,299 S2: of the literature that's come out around the evolution roadmap, 644 00:39:54,300 --> 00:39:57,000 S2: is there's not so much discussion of the IFC and 645 00:39:57,000 --> 00:40:00,330 S2: of Miga, and these are the private sector financing arms 646 00:40:00,510 --> 00:40:04,820 S2: of the world Bank. But there's also an interesting question 647 00:40:04,820 --> 00:40:08,960 S2: about financing instruments. We've been talking throughout this entire conversation 648 00:40:08,960 --> 00:40:12,440 S2: about loans and grants, but there are other kinds of 649 00:40:12,440 --> 00:40:16,580 S2: instruments that these MDGs provide, for instance, guarantees. And when 650 00:40:16,580 --> 00:40:21,500 S2: you go back to the articles of agreement of, of the, 651 00:40:22,010 --> 00:40:25,700 S2: for instance, the international Bank for Reconstruction and Development, they 652 00:40:25,700 --> 00:40:28,520 S2: were really intended to be an institution that was mainly 653 00:40:28,520 --> 00:40:35,180 S2: providing guarantees, and guarantees are much more effective at leveraging 654 00:40:35,390 --> 00:40:39,710 S2: private finance than loans are. So one of the points 655 00:40:39,710 --> 00:40:41,810 S2: that I'm really making is that, you know, if you 656 00:40:41,810 --> 00:40:45,589 S2: really want to kind of focus on, you know, getting 657 00:40:45,590 --> 00:40:49,100 S2: more private capital in, it really does require changing a 658 00:40:49,100 --> 00:40:52,489 S2: lot of the instrument mix that these institutions are using. 659 00:40:52,790 --> 00:40:55,970 S2: And I really do think move a little bit more 660 00:40:55,969 --> 00:41:00,920 S2: towards guarantee financing through guarantees could be a very appealing 661 00:41:00,920 --> 00:41:03,200 S2: one for a lot of the different client countries of 662 00:41:03,200 --> 00:41:06,890 S2: the bank. The second thing, though, that I will say is, 663 00:41:06,890 --> 00:41:10,129 S2: you know, one of the other really big shifts that 664 00:41:10,130 --> 00:41:15,890 S2: we've had over over the past several years is, you know, 665 00:41:15,890 --> 00:41:18,680 S2: we're now in a very high interest rate global environment. 666 00:41:19,219 --> 00:41:23,930 S2: And I do wonder, it was, you know, during a 667 00:41:23,930 --> 00:41:26,990 S2: time of benign interest rates when investors were starving for 668 00:41:26,989 --> 00:41:30,589 S2: yield and really looking for investments in emerging markets and 669 00:41:30,590 --> 00:41:33,350 S2: low income countries, you know, and this was a time 670 00:41:33,350 --> 00:41:36,590 S2: when interest rates were low. Now there's a whole change 671 00:41:36,590 --> 00:41:39,410 S2: in kind of global risk appetite with interest rates going up. 672 00:41:39,410 --> 00:41:42,710 S2: And it really that search for yield changes. Investors can 673 00:41:42,710 --> 00:41:46,160 S2: stay you know in advanced economies and get that yield. 674 00:41:46,370 --> 00:41:48,290 S2: You know that really can change a lot of the 675 00:41:48,290 --> 00:41:52,009 S2: equation to around around the billions of trillions agenda and 676 00:41:52,010 --> 00:41:54,530 S2: around private capital mobilization. And if we couldn't do it 677 00:41:54,530 --> 00:41:58,070 S2: in a benign interest rate environment, the higher interest rate environment, 678 00:41:58,070 --> 00:42:01,609 S2: I think, also makes it that much more complicated. And 679 00:42:01,610 --> 00:42:04,940 S2: just one more point on this. This is also an 680 00:42:04,940 --> 00:42:08,509 S2: interesting conversation because it does link back to some of 681 00:42:08,510 --> 00:42:11,030 S2: the conversation that we were talking had, were having earlier 682 00:42:11,030 --> 00:42:15,710 S2: around global public goods. And in particular, you know, if 683 00:42:15,710 --> 00:42:18,500 S2: you want to use your concessional financing or your grant 684 00:42:18,500 --> 00:42:22,009 S2: financing to bring in private capital, is that the best 685 00:42:22,010 --> 00:42:25,759 S2: use of your money? Is it is it really on 686 00:42:25,760 --> 00:42:29,690 S2: private sector investments, or is it on the public sector side? And, 687 00:42:29,690 --> 00:42:31,970 S2: you know, a lot of a lot of criticism of 688 00:42:31,969 --> 00:42:34,130 S2: the billions of trillions, it's you're using a lot of 689 00:42:34,130 --> 00:42:39,380 S2: development finance to de-risk and ultimately subsidize private sector, taking 690 00:42:39,380 --> 00:42:41,180 S2: a lot of the putting a lot of the risk 691 00:42:41,180 --> 00:42:45,350 S2: on the public sector, but not the upside and putting, 692 00:42:45,350 --> 00:42:48,469 S2: you know, really de-risking the private sector. So so this 693 00:42:48,469 --> 00:42:52,820 S2: is this is really turned into quite a complicated, ferocious 694 00:42:52,820 --> 00:42:54,830 S2: debate in a lot of ways and can say it's 695 00:42:55,219 --> 00:42:57,890 S2: in particular, we do not have a unified view on this. 696 00:42:57,890 --> 00:43:00,290 S2: And this is one of the topics in development finance 697 00:43:00,290 --> 00:43:04,070 S2: where we are often internally most most in disagreement. 698 00:43:04,670 --> 00:43:07,520 S1: All right. Well, look, I hope this, this Lowy Institute 699 00:43:07,520 --> 00:43:11,690 S1: podcast will not contribute to additional disagreement at committee. I 700 00:43:11,690 --> 00:43:14,299 S1: have two last questions for you. For the first one, 701 00:43:14,300 --> 00:43:16,190 S1: I would like to take a step back and look 702 00:43:16,190 --> 00:43:19,100 S1: at the MDB reforms overall. Do you think the current 703 00:43:19,430 --> 00:43:22,219 S1: reforms go far enough, and if not, what else needs 704 00:43:22,219 --> 00:43:22,880 S1: to be done? 705 00:43:23,330 --> 00:43:25,939 S2: Look, I mean, as it as it stands right now, 706 00:43:26,120 --> 00:43:30,420 S2: I don't think that the institutions have done enough. I 707 00:43:30,420 --> 00:43:33,110 S2: don't think shareholders have done enough. I think there's this 708 00:43:33,110 --> 00:43:35,690 S2: is this is a little bit more of a marathon 709 00:43:35,690 --> 00:43:40,370 S2: than a sprint. And and again, you know, I really 710 00:43:40,370 --> 00:43:42,920 S2: do repeat myself here, but I really think part of 711 00:43:42,920 --> 00:43:45,230 S2: this is I think these institutions need to be a 712 00:43:45,230 --> 00:43:48,560 S2: lot bigger. I think these are this is the global 713 00:43:48,560 --> 00:43:52,520 S2: safety net. We need a bigger global safety net. And 714 00:43:52,520 --> 00:43:56,060 S2: there was a lot of. Speed bumps to growing these. 715 00:43:56,080 --> 00:43:59,620 S2: These organizations and think until there's there's an agreement on 716 00:43:59,620 --> 00:44:02,770 S2: on what big or how to get these organizations bigger. 717 00:44:02,770 --> 00:44:06,630 S2: We're going to be at an impasse around the reform agenda. 718 00:44:06,640 --> 00:44:09,100 S2: And that makes me very, very concerned. 719 00:44:09,400 --> 00:44:11,290 S1: Okay. Well, that's actually a very good segment to my 720 00:44:11,290 --> 00:44:14,740 S1: last question. So in this podcast, we'd like to conclude 721 00:44:14,739 --> 00:44:17,500 S1: by asking our guests for their big ideas on the 722 00:44:17,500 --> 00:44:19,900 S1: topic that we've covered in the show. I would like 723 00:44:19,900 --> 00:44:22,239 S1: to ask you this. What is your big ideas for 724 00:44:22,239 --> 00:44:25,420 S1: reshaping the multilateral development banks and making them more efficient 725 00:44:25,420 --> 00:44:29,319 S1: and better tailored for tackling global challenges in supporting sustainable development? 726 00:44:29,469 --> 00:44:32,500 S2: Well, you know, think we've touched on all aspects of 727 00:44:32,500 --> 00:44:34,030 S2: this in a lot of ways. So I'm going to 728 00:44:34,030 --> 00:44:39,070 S2: give you a slightly provocative answer. I mean, think, you know, 729 00:44:39,340 --> 00:44:45,820 S2: faster institutions, bigger institutions, more agile institutions, institutions that can 730 00:44:45,820 --> 00:44:49,270 S2: finance different kinds of projects, but that are also still 731 00:44:49,270 --> 00:44:53,739 S2: focused on the poorest of the poor and really on development. 732 00:44:54,010 --> 00:44:55,450 S2: I think we need all of that. And I think 733 00:44:55,450 --> 00:45:00,009 S2: there's there's right now, because of the year of focus, 734 00:45:00,010 --> 00:45:02,290 S2: we are not at a time where there's a dearth 735 00:45:02,590 --> 00:45:05,440 S2: of good ideas. I don't think that there's ever been 736 00:45:05,440 --> 00:45:07,930 S2: so much written about the multilateral development banks than there 737 00:45:07,930 --> 00:45:10,180 S2: has in the past years, whether it's by the institutions, 738 00:45:10,180 --> 00:45:15,850 S2: by by the governments that are shareholders, by, you know, 739 00:45:15,850 --> 00:45:20,860 S2: think tanks, some think tanks. So my wish for the 740 00:45:20,860 --> 00:45:26,080 S2: world is I think and and and this is you know, 741 00:45:26,469 --> 00:45:29,799 S2: this is inspired by, by a suggestion of a former colleague, 742 00:45:29,800 --> 00:45:33,010 S2: you know, was kind of making slyly on Twitter is 743 00:45:33,010 --> 00:45:35,890 S2: I think we need an international moratorium for a year 744 00:45:36,010 --> 00:45:40,180 S2: on all of these high level global convenings and think 745 00:45:40,180 --> 00:45:44,470 S2: we need to start getting some work done. This year 746 00:45:44,469 --> 00:45:51,460 S2: has been frenetic, uh, traveling from capital to capital. When 747 00:45:51,460 --> 00:45:54,609 S2: you look at the declarations and the statements that are 748 00:45:54,610 --> 00:45:58,660 S2: coming out of these summits, they are very mushy. They 749 00:45:58,660 --> 00:46:01,480 S2: are both promising the world and promising the moon and 750 00:46:01,480 --> 00:46:07,899 S2: promising the universe without really anything concrete behind them. And 751 00:46:07,900 --> 00:46:11,080 S2: I think it's time to start talking a little bit 752 00:46:11,080 --> 00:46:14,830 S2: less and doing a little bit more, because we are 753 00:46:14,830 --> 00:46:18,280 S2: really inhabiting this time where we have some very lofty 754 00:46:18,280 --> 00:46:22,510 S2: rhetoric out there and not a huge amount to show 755 00:46:22,510 --> 00:46:26,830 S2: for it. So I would like us all to get 756 00:46:26,830 --> 00:46:27,400 S2: to work. 757 00:46:28,150 --> 00:46:30,399 S1: Yeah, well, that's actually a great idea. And you could 758 00:46:30,400 --> 00:46:33,280 S1: also argue that such a moratorium would also drastically reduce 759 00:46:33,280 --> 00:46:36,010 S1: the carbon footprint of NDB. So overall, it'd be very 760 00:46:36,010 --> 00:46:36,790 S1: good for the planet. 761 00:46:37,000 --> 00:46:39,640 S2: There are there are many good externalities that could come 762 00:46:39,640 --> 00:46:41,890 S2: from this. We can start by doing it for six 763 00:46:41,890 --> 00:46:43,810 S2: months and then see how that goes. 764 00:46:44,290 --> 00:46:47,400 S1: Well, this is all what we have time for today, Clémence. 765 00:46:47,410 --> 00:46:49,570 S1: Merci book. We thank you very much for sharing your 766 00:46:49,570 --> 00:46:52,600 S1: thoughts on those topics. This this was really fascinating. 767 00:46:52,600 --> 00:46:54,400 S2: My pleasure. This was a wonderful conversation. 768 00:46:54,400 --> 00:46:57,370 S1: You've been listening to Development Features, a podcast from the 769 00:46:57,370 --> 00:47:01,089 S1: Indo-Pacific Development Center at the Lowy Institute, hosted by institute 770 00:47:01,090 --> 00:47:04,569 S1: experts and produced by my colleague Josh Goodwin. Development futures 771 00:47:04,570 --> 00:47:07,960 S1: is part of the Lowy Institute Podcast Network. Find all 772 00:47:07,960 --> 00:47:15,040 S1: our podcast series on our website. Lowe institute.org/publications. Thanks for listening.