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