Accra, Ghana//-The President of World Bank Group, David Malpass says the Bank is willing to support Ghana and other Sub-Saharan African countries to fully take advantage of opportunities presented by climate change and to support climate private sector investment.
According to him, the core to making progress on that is improving the private sector capabilities of countries including Ghana, working with governments to identify the strengthening that could be done that brings in new investment.
Mr Malpass gave the assurance at the Bank’s virtual 2021 Annual Meetings press conference with journalists from Ghana and across the globe.
“And a chunk of that new investment can come into climate-related issues. There needs to be efficient, clean energy and plants so that there can be more electricity with less carbon dioxide emissions. That’s a core goal of the greenhouse gas reduction agenda. And also land use and ways that there can be protection of biodiversity, which acts as a carbon sink”.
To this, he said: “We’re working throughout Africa in practically every country, on the climate agenda alongside the development agenda, recognizing that countries in order to be fully engaged, countries are going to need to see development as part of their outlook.
That means a lot of thought. World Bank can help supply the global knowledge for that, and leadership by the countries in moving in a good direction. That means toward cleaner fuels. That means toward a plan that gets expanded electricity access”.
Clean water access is actually a critical part, and water itself is a critical part of the climate agenda, because in many cases and countries, there are subsidies that are being done for economic activity that’s harmful to climate efforts, Mr Malpass added.
This is very clear in the water area where crops are grown in areas that may not be the best for that kind of crop and it misuses the water; and water itself, for example, flooding of rice crops causes a large emission of methane.
This whole dynamic of the world needs to be thought through from the standpoint of bringing together development and climate change, he emphasized.
Role of young people in global climate action
Answering a question on the role of young people in global climate action and how the World Bank is empowering the youth to take climate action, Mr Malpass, said: “Young people are aware of incentives, so there’s a joint action so people can understand what the challenge is.
That’s good, but people wake up in the morning and they react to incentives that are within their country structure, and I think there’s a huge amount of progress that needs to be made in that area”.
Technological change and entrepreneurialism are important. I was in, as I mentioned, Sudan and Jordan, I was also in the West Bank, and met, in each place, with young people, with entrepreneurs, and their ideas”.
One he mentioned is the world is changing because of digitalization. He thinks this should have, and it should be designed, so that it’s very positive from a climate change aspect.
“People, young people, are doing that. They recognize that. And so, to the extent that we can have digitalization penetrate more, it helps across the board from the economic growth standpoint, because it has so many side positive effects in terms of the information people have available, their ability to interact with the global system, all that’s improved, in general, in a carbon-friendly way”.
Incentives
Incentives are really important country by country. So one of the challenges that we’re facing, if you identify any problem that’s going on in climate action, it’s that huge subsidies are going in the wrong direction by countries, Mr Malpass, said.
They’re subsidizing fossil fuels; they’re subsidizing the mining of coal and the burning of coal. They’re subsidizing farmers that are digging up carbon sinks in order to plant crops that are subsidized by their governments for export, he noted.
“A starting point for this, is to identify the subsidies in countries. Also, I think we need to look at the price of carbon, at taxation of carbon, and also some kinds of systems so that there are incentives that go in the right direction”.
Poverty
When asked: “How can the World Bank support those countries’ efforts, and are there enough resources?” He answered: “It’s not just poverty; it’s the backsliding on women, on vulnerable, on children”.
These are tragic setbacks due to the pandemic and due to the global slowdown and the closures and now due to supply chain disruption and inflation, and debt among those.
The World Bank is responding with resources. In the 15 months ending in June of 2021, we committed $157 billion of financing that helps countries, Mr Malpass revealed.
He continued: “A lot of it, a chunk of it, is in grants. There’s a lot that’s zero interest rate loans and very low interest rate loans to help countries have better development outcomes.
That’s the core mission of the Bank. And we use the tool—and I want to again reiterate the importance of IDA within this. It’s replenished normally every three years. We accelerated that because of COVID. We’re doing a hurry-up that is vital for helping countries with vaccines, with their health care systems, and with poverty reduction”.
Reversal of development
We’re talking about a reversal of development and one part of that is the poverty numbers are going up. And how can the World Bank interact with that?
Well, they can identify country by country where the reversals are occurring; it’s broadly around the world. And then try—what we can do is identify ways that the world can do better on these problems, according to him.
“I’ve done that in my Sudan positioning speech. I’ll be speaking today at the G20; also, tomorrow at the IMFC meeting. You know, we’ve got the Annual Meetings of the IMF and the World Bank this week, which is bringing together finance ministers from around the world, and also world leaders. And I think the world should be asking leaders, how can this be done better?”
Why are so much of the resources going to the upper end? Why is median income going down, not up? And what aspect do policies play? Mr Malpass asked.
“To criticize, we’ve got a system that’s clearly guiding resources toward the upper end; that’s the central bank system and that’s also the fiscal systems of the advanced economies.
Those need to be rethought and changed in a way that allows growth by small-, medium-sized businesses. People that are looking for a new job, get them placed in the new job, especially in developing countries”.
In Jordan, where Mr Malpass was a week ago or so, the youth unemployment is nearly 50 percent. There needs to be a system of global, of international finance that is better suited toward people getting jobs in the poorest countries, in order to reduce the poverty rate.
And then, in the developing countries themselves, better policies in order to allow state-owned enterprises to be less dominant. That’s a major challenge.
The economy is dominated by state-owned enterprises. And we worked to try to say, can there be boundaries? Can there be oxygen for new businesses to set up, because they’ll be the ones that create the most jobs and bring down the poverty rate.
On the positive side, he met recently with new presidents from many countries that are really working to change their country. He met with the President of Tanzania that needs to really dig out of the COVID pandemic and move forward.
He also met with the new President of Ecuador—in 100 days, they were able to vaccinate those that wanted to be vaccinated, by allowing the vaccines to go to companies.
“And then, the employer had a huge self-interest in order to have the people of the country be—their employees be vaccinated. It accelerated the vaccination process using the incentive structures of the country.
There’s self-interest of businesses in having their employees be vaccinated when they want them to be vaccinated. That’s one powerful tool, and we could think about that worldwide”.
If we can harness incentives in the right direction, that will give us a way forward out of this reversal in development”, Mr Malpass assured.
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