Speaker 1: Bloomberg Audio Studios, podcasts, radio news. What we saw yesterday
Speaker 1: is a boost from private investment, from the likes of
Speaker 1: Larry Frank of Blackrock. He was here at the G seven.
Speaker 1: And what these in private investment funds are trying to
Speaker 1: do is boost money going to the global South middle
Speaker 1: income countries. And part of this is made possible by
Speaker 1: programs at the World Bank. And I'm pleased to be
Speaker 1: joined by Anji Banga, Thank you so much for joining us. John.
Speaker 1: There was talking about a big emphasis, especially on Africa.
Speaker 1: This is to try one counter China from the US
Speaker 1: point of view, but also European leaders are trying to
Speaker 1: stem the flow of migration. How are you seeing this
Speaker 1: public private partnership play out?
Speaker 2: And so I think Africa. The real situation is that
Speaker 2: Africa is going to get better than a half people
Speaker 2: going to two and frankly, how can you not have
Speaker 2: a continent of that contributing to future economic growth. That's
Speaker 2: the other way of looking at why Africa And so
Speaker 2: what I'm trying to talk about there is what creates
Speaker 2: jobs for those young people. It's got a demographic dividend
Speaker 2: coming through it. But if you don't give them clean air,
Speaker 2: clean water, healthcare and education when they're growing up, and
Speaker 2: jobs when they're older. We have a problem with that
Speaker 2: demographic dividend becoming a liability. Can't do that only with
Speaker 2: government money and multilateral money. That's why people like what
Speaker 2: Laddier did yesterday Orsata was talking about, these are all
Speaker 2: the ways to get private sector money as well to
Speaker 2: come in at scale to help create the jobs in
Speaker 2: that country.
Speaker 1: How difficult are these conversations on the sideline of the
Speaker 1: G seven when you see leaders here coming up wounded
Speaker 1: by recent elections, mattered because what their electorate is focused
Speaker 1: on is rising prices at home and immigration coming into
Speaker 1: their country. And meanwhile you have leaders talking about investments
Speaker 1: in other parts of the world and also what's going
Speaker 1: on of course with the war in Ukraine.
Speaker 2: Yeah, but if you're discussing private sector investing, this is
Speaker 2: actually good for these leaders because it's a way to
Speaker 2: enhance every dollar that governments and multilateral institutions put in
Speaker 2: to add a little more and that's very, very helpful
Speaker 2: to them. So it just depends how you approach this discussion.
Speaker 2: My way of approaching it is it's not all about
Speaker 2: the money you give. One on one bilaterally, it's about
Speaker 2: the leverage you get. So for example, if you give
Speaker 2: the World Bank money into what we call IDA, which
Speaker 2: is the institution that provides grants and concessional financing to
Speaker 2: the poorer countries, a lot of which are currently in Africa. Unfortunately,
Speaker 2: that gets the leverage. Every dollar you give me as
Speaker 2: a country as capital, I can make it four times.
Speaker 2: So leaders know that too, and then if you bring
Speaker 2: in the private sector, that four can become eight and ten.
Speaker 2: So people are thinking about how to get a dollar
Speaker 2: to go to ten, not just a dollar for a dollar,
Speaker 2: And I think that makes for a good consation.
Speaker 1: But it's multilateralism harder, which I know you're a big
Speaker 1: believer in. When you see the rise of nationalism.
Speaker 2: Oh yeah, sure. I've been saying for years when I
Speaker 2: was in my old job private sector that a lot
Speaker 2: of the biggest things that buries me you chauvinistic nationalism,
Speaker 2: because it tends to create the absence of connectivity. But
Speaker 2: I think if you look at the last few months itself,
Speaker 2: we've managed to get capital and hybrid capital and portfolio
Speaker 2: guarantees into our institution and we are the one that's
Speaker 2: working with this multilateralism. So let me give you an example.
Speaker 2: People keep asking me about the debt crisis in Africa, right,
Speaker 2: and if you think about the four countries from Africa
Speaker 2: that entered the G twenty Common Framework, Zambdir, Chad, Ethiopia,
Speaker 2: and Ghana. From the time they entered, we in the
Speaker 2: Bank have given them sixteen billion dollars of money. Nobody
Speaker 2: else has given them money. Of that, sixteen eight was
Speaker 2: concessional and eight was pure grants off. That sixteen nine
Speaker 2: was net positive. So that's all multilateralism at work. People
Speaker 2: just talk about one part of it. But multilateralism does
Speaker 2: work with the leverage that institutions like the Bank provide.
Speaker 1: We of course have a US election coming up, and
Speaker 1: part of what you've wanted to expand and your approach
Speaker 1: to the World Bank is not just poverty, but also climate.
Speaker 1: Do you think that would be at risk if we
Speaker 1: were to see a Trump presidency.
Speaker 2: Not really. I remember that during his prior presidency he
Speaker 2: was one of those who actually gave the capital increase
Speaker 2: to the World Bank. He sees the value of this
Speaker 2: leverage and the value value of this kind of institution.
Speaker 2: Just to be clear, when I talked about a Liverpool Planet.
Speaker 2: I want to make sure you know it's not just climate,
Speaker 2: it's fragility, conflict, violence, it's things like pandemics and healthcare.
Speaker 2: Because the whole idea of Liverpool Planet allows you to
Speaker 2: expand the aperture depending on what's relevant in that country,
Speaker 2: that region. In some cases it is climate. In some
Speaker 2: cases it's fragility conflict that is driving things. In others
Speaker 2: it is climate that is driving the fragility and conflict.
Speaker 2: You have to get to the root cause and try
Speaker 2: and go at it.
Speaker 1: Well. There be more pressure, you think, whether or not
Speaker 1: it's Trump or Biden, potentially to figure out what's going
Speaker 1: on with China. They're the biggest bilateral credit and many
Speaker 1: say that what they are doing in a lot of
Speaker 1: these countries is called a debt trap.
Speaker 2: Yeah. Interesting, So I think where they are today it's
Speaker 2: quite different from what it probably was some years ago.
Speaker 2: All the conversations we've had, the G twenty count framework
Speaker 2: and the IMF in the World Bank run something called
Speaker 2: this Global Debt Sustainability around table, and in that everybody
Speaker 2: comes the multilateral So are there as the bilateral creditors,
Speaker 2: the private sector creditors, of which there is a very
Speaker 2: large amount, and then the so called earlier ones the
Speaker 2: Paris Club. What's really changed is it's not just bilateral
Speaker 2: credit that's an issue. It's also the private sector that
Speaker 2: is involved in lending. So today, if you want to
Speaker 2: do a debt restructuring for these countries, you have to
Speaker 2: first know who's put what money on the table, what's
Speaker 2: it costs, what's the covenants of its repayment, what's the
Speaker 2: whole thing in it. Get that data on a sheet.
Speaker 2: Without that very hard to know how to adjust that
Speaker 2: money in. So that took time. But as you see
Speaker 2: it getting done and you can begin to see countries
Speaker 2: moving through the framework, I still think it's too slow.
Speaker 2: I think it should be faster because if you make
Speaker 2: it faster, more countries will feel emboldened to enter into
Speaker 2: the framework. And I think we need to work our
Speaker 2: way through this.
Speaker 1: What you're offering, do you see as a viable path
Speaker 1: for these countries instead of say, turning to China.
Speaker 2: Oh yes, I think it's not either or by just China.
Speaker 2: People are borrowing money from India, they're borrowing money from
Speaker 2: the UN, United States, they're borrowing money from the UK.
Speaker 2: Remember this bilateral creditors have been around for a long time.
Speaker 2: It may be called oda in some cases maybe actual
Speaker 2: lending through some countries. People there are countries borrowing bilaterally
Speaker 2: as well. I don't think it's in either all that
Speaker 2: has to be either multilateral or bilateral. I just think
Speaker 2: it has to be done in a fair way, a
Speaker 2: transparent way, in a way that we can all understand
Speaker 2: what's going on, and then do it in a way
Speaker 2: that the countries who are borrowing also don't use only
Speaker 2: the borrowing as the resource, but also spend efforts on
Speaker 2: domestic resource mobilization, doing other things that enable them to
Speaker 2: free up the resources to do the right thing to development.
Speaker 1: Aj Banga, thank you so much for your time.