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our guests today are Mahmood Mohideen
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our senior vice president of the World
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Bank Group and Georgia Petrowski who is
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a senior fellow at the Wharton zeglen
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Center for business ethics
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Mehmood and Georgia thank you so much
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for joining us today acknowledged at
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Wharton thank you now thanks for very
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infinity very happy to have you here
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with us today so now let's start with
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you at the recent Washington DC meetings
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of the spring meeting of the World Bank
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and the IMF the New World Bank Group
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President David Malpass said that more
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more than 700 million people around the
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world are still mired in extreme poverty
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I wonder what is the thinking at the
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World Bank and the IMF about creating
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jobs and increasing the median incomes
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for people who are support well the
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figures shared by the president of the
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World Bank are based on the latest
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update on on poverty and inequality that
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was published a few months ago by the
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World Bank Group so this is the latest
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figures based on the information
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obtained from different countries and it
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seemed that we are up to a very big
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challenge especially if we put in
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consideration the fact that heads of
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state and country leaders agreed back in
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2015 to eliminate extreme poverty by
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2030 so we only have 11 years to go the
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success of having the number of the poor
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under the Millennium Development Goals
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been very much attributed to a great
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success by different countries in in
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achieving higher growth that enabled
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better jobs higher incomes especially in
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countries like China and an Indian now
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the the struggle is in countries in
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Africa and other low-income country
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are not really growing sufficiently and
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at the same the only thing that is is
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growing steadily is the population and
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in order to cope with the challenges you
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need to invest in human capital you need
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to invest in infrastructure and you need
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to invest in decent systems of social
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protection to deal with the with the
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shocks as well either
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economic shocks or natural disasters the
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kind of growth that we have been seeing
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during the last couple of years need
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ready to be changed we have been in
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decline the World Bank and the IMF have
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been revising down their estimates for
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growth for this year 2019 and for the
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upcoming two years until 2021 in order
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to deal with the challenges of extreme
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poverty especially in African you need
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to have growth figures exceeding 6% in a
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steady continuous way and this is
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basically again emphasizing the
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importance of investments Georgia based
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on what my mood just said if the world
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economy has to grow at more than 6
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percent especially to deal with problems
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of extreme poverty what do you think are
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some of the solutions to how that can be
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made to happen I mean first challenge is
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we measure growth through GDP and how
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much that really captured the quality of
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an cost of the growth so we might have a
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short-term growth but not necessarily on
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the sustain level and the same thing it
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is related to job creation because is
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first of all to acknowledge the fact
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that most of the people who don't have
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jobs are young people and then it's not
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just a question of creating growth so
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that they can get employed the question
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is do they have the relevant knowledge
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to get employed so this is usually
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neglected and second is the quality of
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the jobs and whether true drops they
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also have opportunities to improve their
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knowledge
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learning opportunities so that they can
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not just stay on the same jobs but also
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help the economy to go in the right
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direction now at the moment of the same
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spring meetings you actually led a panel
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discussion on the sustainable
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development goals and the need for
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countries to integrate into their
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national budgets some of the targets
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that countries are setting in that
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regard why is that so important and are
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there some countries that you think are
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doing a better job than others in that
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respect
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well this discussion is very much based
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on the finance for development agenda
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and the and the discussion that started
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back in July 2015 in Addis so we're not
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saying anything new but what's new at
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the emphasis on taking matters related
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to finance more seriously than have been
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taken so far and I like to to draw a
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picture of finance like a river with
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many good many sources public private
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domestic and external and in order for
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that river to give you the required
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water for life and development all
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sources need to be active and there are
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no substitutes here because the there
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are huge requirements for funding the
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SDGs without budget
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you cannot redo a good job with the
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private sector private sector would
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require discipline would require to know
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to what extent the government is
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clouding its activities in or crowding
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them out so the budget is not just about
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figures is basically about signaling and
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about incentives and about direction and
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unfortunately many countries when they
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talk about the future agenda for
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development or the 2030 agenda the the
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only talk in a very generic way very
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general way they don't attach costs and
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they don't attach spending priorities
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- there - that kind of work I've come
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across very good examples recently by
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countries at the state level like in
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India and Bangladesh have seen some good
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work at the country level and at the
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state level like in Colombia Vietnam and
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China have been masters of long term
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planning so issues related to strategies
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plans and budgets comes naturally in the
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system but at the end of the day it's
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all about implementation as well so it
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is early to get the finance public and
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private right you need to put the
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environment to encourage collaboration
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and business linking it to the SDGs the
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sustainable development goals and
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getting as local as you can in terms of
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implementation what what we call
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localization of the SDGs
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which is very different by the way from
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the old debate about centralization
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versus decentralization it's a
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completely different new system that
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respects the priorities and the
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comparative advantages of the local
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communities let's drill deeper into this
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question of implementation because that
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is so critical what are some of the in
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your experience some of the barriers to
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implementation that have existed in the
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past and and what can be done now to
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overcome those barriers right I think
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the work that we are pushing now towards
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more localization is based on the
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experience of the Millennium Development
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Goals which end in 2015 and in joint
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work with the United Nations Development
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Programme the UNDP and the World Bank we
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found that that the difference between
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failure and success is basically the
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delivery where where it matters at the
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end of the day all of these Development
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Goals mean better life better services
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better support to individuals and human
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beings wherever they are and they are
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located either in urban areas in cities
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and districts or they are living in
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rural areas so as as far as we have seen
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by evidence if the focus is only
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centralized and assuming that there is
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going to be some magic coming out from a
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trickle-down effect that one there's a
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didn't really work for country that
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achieved better results when it comes to
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education health services better
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transport these are the countries that
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have managed to factor in the local
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priorities engaging the communities in
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setting the priorities because under
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budget constraints you cannot really do
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everything at the same time so better to
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engage the local communities who know
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better what they need and then you can
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always put the standards put the the
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means of competition and have a kind of
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a national mapping not to be very much
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focused on the local matters but
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basically to have a kind of of a
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competition unleash between the
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different governance different cities in
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order to achieve the goals we have seen
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some good examples of that one one one
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very positive example I would refer to
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is from Colombia again there's a country
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that had been really facing trouble for
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many civil war included drug trafficking
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all kinds of of tensions and society
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were there during the last couple of
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decades theatres transformed themselves
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to become now an OECD country and this
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was the club of the richest countries in
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the world that didn't really happen by
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living matters to time to solve but
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basically about good policies good
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institutions and great deal of
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localization so Georgia just to build
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upon what you just said what can other
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countries learn from the example of
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countries like Colombia which seem to
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have figured out how to overcome some of
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the challenges well I think that the
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localization is also about understanding
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the needs of the local communities but
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at the same time create lis signalling
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intrapreneurship because if you are
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challenging the resources to address the
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real needs then there is a real demand
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in
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there is demand then you have
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enterpreneurship to support that the
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other is also talking about the
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budgetary allocations it's also
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important to look at which portion of
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the budget can be leveraged by bringing
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the private sector did not happen just
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by saying we would like to engage the
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private sector but the policy really to
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address the gap which exists between the
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commercial immediate interest of the
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corporate sector in addressing some of
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these issues which are not immediately
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awarded by the market so I know that the
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World Bank Group is doing a lot in the
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context of blended finance that's the
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contribution from the World Bank but
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that kind of innovative thinking is also
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needed from the government side so when
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they do the budgeting thing so this one
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thing the other is that the more you
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have direct knowledge exchanged between
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countries without intermediaries the
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better I mean it's good that the World
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Bank is taking lead on that for many
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years now knowledge at Wharton as well
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we need that but it's also we need to
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have that more complementary engagement
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where the country will learn from each
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other without filtering that and I would
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also argue that young people can play
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tremendous role in that one of my
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students from the last semester who was
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doing something on homelessness in
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Philadelphia during the winter break she
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went to Bangalore to look at how they
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address issues homeless in Bangalore and
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now when she came for this semester
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she started implementing some of this
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idea and you have the other things
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another student of mine this semester
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which is a few of his colleagues
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developing a new model of addressing
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issue of healthcare for low-income
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people in the United States suddenly
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said well maybe our concept can be
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equally relevant for Africa but engaging
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in Africa they also get if sufficiently
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differential to revise their thinking of
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how to do it in Philadelphia so this
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whole whole knowledge exchange thing is
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very kind of holistic and there are
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different ways and this is what we need
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to support I'm so glad that both of you
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mentioned both entrepreneur
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and innovation as important you know
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ways of dealing with these issues
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because that's a it takes me to the next
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point my mood that I wanted to bring up
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with you in reading some of your
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writings I know that you have been
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saying that in the past billions of
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dollars of investment were required now
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it is trillions and and to address the
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gaps between the resources that will be
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needed to implement the sustainable
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development goals and what resources
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that exist are available today what
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sorts of innovative financing solutions
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do you think have you been seeing that
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allow people to solve this to bridge
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that gap yes what triggered the the the
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discussion of the billions to trillions
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this is the phrase that we used to
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promote more private sector public
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sector kind of innovative solutions but
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basically the fact that some estimates
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when you aggregate all of the funding
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gaps in different countries to achieve
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this the 17 goals the the gaps were
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estimated or could be estimated to be
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around four to six trillion dollars you
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can see even the gap in the estimates
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because of lack of debt and information
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more recently only in five areas of the
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sustainable development goals education
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health and three areas of infrastructure
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like water and transport and energy the
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estimates of the International Monetary
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Fund tell us of a gap of around two
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point six trillion dollars these big
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figures perhaps may need to be
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translated at the country and the local
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level and again you will find these gaps
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at the end of the day you would say that
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these trillions of gaps are really part
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of a bigger story this bigger story that
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we have in the global system today more
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than 100 trillion dollars of available
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funds and assets many of them many of
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such assets are with negative yield or
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with zero
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turn so here it's basically how to
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encourage such funds to take perhaps
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more risk but more calculated risk with
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the help and partnership with different
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agencies including the World Bank and
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Regional Development Bank's and get part
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of this great availability of funds to
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where priorities of development are this
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will not really flow directly but they
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need to be incentivized they need to
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have better business environment
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governance rule of law and pipelines of
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projects and this basically the kind of
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partnership that the World Bank has with
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many of the countries that we don't just
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do transactions in many cases we are
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required by countries to help in
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improving business climate and the the
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pipeline of financeable projects having
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said that I think we need to deal with
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all of these gaps together
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I mentioned the gaps on finance and
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there is a gap implementation that we
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discussed and there is a gap of data as
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well and the gap of that is responsible
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for lots of the mess that we are seeing
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in terms of lack of funding in many
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countries because of lack of knowledge
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many investors may be just guided by
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perception part of that perception might
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be wrong or suffering from prejudice the
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only way to do it or to fix the problem
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is to provide better information it
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could be worse than what do you think
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and in many cases as we have seen it in
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Africa for instance is much better in
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terms of a decent return to risk mix but
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what we need is basically more updated
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in information and part of the of the
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discussion that we're doing with the
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business community as one of the PRS or
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the permanent representatives to the UN
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the ambassador of Canada mentioned that
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we need to be all bilingual I would say
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that we need to be multilingual so the
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government needs to understand the
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language of the private sector and at
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the same time both they need to
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understand the language of community or
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society and this requires page
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interpretations better in interpretation
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and not to live in this kind of isolated
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silos Georgia coming back to the point
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you raised early about entrepreneurship
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I wonder if you have any thoughts on how
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entrepreneurship can be used to help in
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achieving sustainable development goals
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especially among women entrepreneurs
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even say at the bottom of the pyramid
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and I was wondering if you have any
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thoughts on that well we have been
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working together the Sigma Center
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Wharton and and the World Bank for
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already five years with the ideas for
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action for young entrepreneurs and
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relatively recently we have another
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program on s DG's and her this is yes
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this is a phenomenal learning experience
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also for us because there's a really
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direct interaction with the
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entrepreneurs also they are
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understanding more and more is not just
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sufficient to have a good business model
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and to have a good startup that part of
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the work they need to do is to help also
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shaping the business environment in
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which they operate that also create kind
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of confidence for that corporations
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should follow the same philosophy
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sometimes they say we don't go in
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fragile states because they are fragile
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there is no institution the risk is high
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yes maybe the risk is high because also
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of their old business models new
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business model a new business new
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business thinking also helped them to be
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part of building these institutions and
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we have a good example with one of our
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partner firm image when they decided to
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make investment in Uganda vanilla
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production they understood they have to
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build partnership they cannot do it on
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their own and this is where the local
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engagement particularly in case of
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vanilla women are the main producers and
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the more they are engaged in that the
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more stronger social cohesion is in that
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environment will be to make much easier
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for other companies to come so we don't
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need
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the measure you know the the success of
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this initiative what like engaging woman
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enterpreneur just on the base how many
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new businesses has started but how true
00:20:07
that engagement new space has been
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created also encouraging companies to
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come to be take them as a part of the
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supply chain and so on so I think the
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experience so far has been tremendously
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positive I'm very glad that you
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mentioned Uganda because that reminded
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me that the World Bank has made a very
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major commitment to Africa I think 25
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billion dollars have been committed to
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digitalising Africa and and with a
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further equal amount to be sourced from
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the private sector and I was wondering
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my mood if you could explain what is the
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strategy here why is this so important
00:20:46
in reducing extreme poverty well there
00:20:50
is no way for Africa to come out from
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the traps of of poverty and inequality
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without embracing the good fruits of
00:21:01
knowledge and ideas and outcomes of the
00:21:05
fourth Industrial Revolution which is
00:21:07
about how to deal with big data how to
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deal with the new platforms of of
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knowledge including the platforms for
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transactions as well and commerce how to
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understand and have a good command on
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artificial intelligence this requires a
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huge infrastructure it shouldn't be left
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to some smart skillful business people
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and and young people alone be they are
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doing their part but there is a great
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deal of investment that should be done
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by the public sector by the private
00:21:44
sector in order to enable these
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countries to be part of this new world
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talking about the big data and how to
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restore that or retrieve that and
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protect them as well from breaching of
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security or such matters is very big and
00:22:03
huge investment so digitalizing Africa
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what we call the the moonshot approach
00:22:11
celebrating half a century since the
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first man landed on the surface of the
00:22:17
Moon as basically to give people hope
00:22:19
but give the people as well some
00:22:20
specific measures has been done by
00:22:24
President Kennedy to give timeline and
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Bish's target easy as well to understand
00:22:30
and easy to judge as well so we have
00:22:33
these programs of action at different
00:22:35
countries and partnerships we work with
00:22:38
all levels of engagement because it is
00:22:42
not just about having the production to
00:22:46
be engaged in technology or the finance
00:22:50
to be using FinTech solutions but as we
00:22:53
were saying before the discussion that
00:22:55
we have today or the interview that as
00:22:58
we are keen to have advances and
00:23:00
innovation in finance for instance
00:23:02
through what so-called FinTech we need
00:23:04
the regulators and supervisors to be
00:23:06
aware of the pros and cons not to
00:23:09
complicate the life of the market and
00:23:12
investment participants and we need the
00:23:15
government as well to avail the
00:23:16
infrastructure including identification
00:23:19
and good rule of law to the whole thing
00:23:22
in addition to that we need the society
00:23:24
itself which the ultimate beneficiary of
00:23:27
all of these kind of digitalization and
00:23:29
innovation to be brought up to date with
00:23:34
the requirements of the new world what
00:23:36
we call or what I called
00:23:38
sock tech I hope it is not abusing the
00:23:41
the acronyms but basically to simplify
00:23:44
what we're talking about this is this
00:23:47
contribution from the World Bank the 25
00:23:49
billion is a is I wouldn't say a drop in
00:23:53
the ocean but it's a it's a decent
00:23:55
contribution to a very demanding sector
00:24:00
when it comes to resources so to
00:24:03
conclude I have one question for both of
00:24:05
you and that is what you see as you said
00:24:10
in the beginning we are not that far
00:24:11
from 2030 now what do you see as some of
00:24:14
the biggest obstacles that exist to the
00:24:17
achievement of the sustainable
00:24:19
development go
00:24:20
by 2030 and what should be done to
00:24:23
overcome those obstacles well at the end
00:24:25
of the day it's a country level kind of
00:24:27
of a challenge so some countries may
00:24:30
suffer today from fragility and conflict
00:24:33
so they are busy with other matters some
00:24:36
countries are very much focused on the
00:24:38
short term while and if from development
00:24:42
perspective you can really consider 2030
00:24:45
as tomorrow but they are very much busy
00:24:47
with what could really survive have them
00:24:50
survive the day rather than having a
00:24:52
kind of a long term investment in
00:24:54
education health and the infrastructure
00:24:56
indeed taking care of the environment
00:24:58
and and and climate so this is another
00:25:01
kind of a challenge the other challenge
00:25:04
is could be resources you could have
00:25:06
very sophisticated government and
00:25:09
community but at the same time public
00:25:11
resources are not enough so that's the
00:25:15
list can go on so that's why we are
00:25:17
after this kind of specific tailored
00:25:19
approach that understands the pros and
00:25:22
cons the comparative advantages and
00:25:24
disadvantages of each country and try to
00:25:26
provide a solution to the requirements
00:25:30
some countries may not really need the
00:25:31
help of the World Bank like the
00:25:33
sophisticated OECD countries but again
00:25:35
they would benefit from sharing
00:25:36
knowledge and putting themselves in this
00:25:39
kind of a challenge of competition well
00:25:42
I will focus just on one being here at
00:25:45
Wharton of course the first thing comes
00:25:47
to mind is what we need to do about
00:25:49
management education I think we need a
00:25:52
fundamental change there if the private
00:25:55
sector is the sector which create most
00:25:57
of the job create value then are we
00:25:59
really preparing our students to take
00:26:02
the lead in this space and I think a
00:26:04
very serious reflection on that
00:26:06
understanding the challenges of
00:26:08
sustainable development goals from one
00:26:10
side the challenges of companies to
00:26:13
engage in that and what are the
00:26:15
knowledge gap present they're kind of
00:26:17
creative pressure on the professors to
00:26:20
reflect on their curriculum whether they
00:26:23
we are preparing the students for
00:26:25
tomorrow or we are just say telling the
00:26:28
same story of yesterday so these are the
00:26:30
challenges and this will not happen and
00:26:33
till the students themselves get a
00:26:35
little bit better organized better
00:26:38
exposed to the sustainable development
00:26:40
goals and the challenges they're
00:26:41
comparing what knowledge they need to be
00:26:43
part of that and I will conclude with a
00:26:45
conversation with my colleague will
00:26:47
offer from Wharton is about generational
00:26:51
responsibility the students has to
00:26:53
understand that it's not just our
00:26:55
generation what we can do for them but
00:26:57
what they can do for themselves and I
00:27:01
think that's the key Georgia thank you
00:27:04
so much for joining us today on
00:27:06
knowledge at Wharton thank you so much
00:27:07
thank youing a pleasure to have you here
00:27:09
yeah thank you for more insight from
00:27:13
knowledge at Wharton please visit
00:27:14
knowledge Wharton UPenn edu
00:27:20
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