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Private sector partnership key to funding digital access for all
To connect the next two billion people to the internet, funding is crucial – and not the small type. The same goes for creating a global warning system that uses satellite data to preempt global disasters. To accomplish these enterprise projects, the UN requires a massive financial war chest.
Few understand the scale better than Axel Van Trotsenburg, the World Bank's Senior Managing Director. But with private-sector partnerships, it can be done, he noted during a Global Stage livestream event at UN headquarters in New York on September 22, on the sidelines of the UN General Assembly.
"In Africa, the African Union has taken decisions on the digitalization," he said, "I think we need to scale this massively, and I think it is doable and you see in countries like Kenya that have very sophisticated payment systems, sometimes better than in OECD countries."
The discussion was moderated by Nicholas Thompson of The Atlantic. It was held by GZERO Media in collaboration with the United Nations, the Complex Risk Analytics Fund, and the Early Warnings for All initiative.
Watch the full Global Stage conversation: Can data and AI save lives and make the world safer?
David Malpass' advice to World Bank successor: time is short
In his final interview as president of the World Bank Group, David Malpass spoke with Ian Bremmer on GZERO World to reflect on his time leading the global development organization and to share his advice for his successor, Ajay Banga.
Malpass became president of the World Bank in 2019 and has seen the world change significantly during his term. He says he’s proud of how the bank handled major global challenges like the COVID-19 pandemic, the war in Ukraine, and the Afghanistan evacuation. He also thinks the bank did a good job raising the alarm about an impending economic crisis: slow growth and skyrocketing global debt.
“We had a core vision that we want people in developing countries to have better lives tomorrow than today,” Malpass says.
When it comes to the insight he’d offer to the next World Bank president, Malpass has three simple words of advice: time is short.
Malpass stresses that now is the moment to really rethink fiscal and monetary policy to create a more equitable global economy, one where all the capital isn’t flowing to a centralized point. According to Malpass, part of the job of the World Bank president is to have tough conversations about the major challenges in the world, like debt and climate, to get advanced economies to take action.
“Who’s going to stand up to the advanced economies and say, ‘You’re taking all the money so there’s not enough left for the rest of the 6 billion people in the world?’”
Watch the episode of GZERO World with Ian Bremmer: World Bank's David Malpass on global debt & economic inequality
Debt limits of rich countries hurt poor countries' growth, says World Bank's Malpass
Does the global financial system need a major overhaul?
In his final interview on GZERO World as president of the World Bank Group, David Malpass discusses a serious problem with host Ian Bremmer: the consolidation of economic and political power in the hands of the wealthiest countries. The world is facing a massive debt crisis––60% of low-income countries are now in debt distress or dangerously close to it. The poorest countries are paying an average of 16% of revenue on servicing loans.
Decades of low interest rates and cheap goods, followed by the pandemic and runaway inflation led countries to borrow huge sums of money. But it didn’t happen in an equitable way. Wealthy nations like the US and the European Union pumped trillions into their economies to keep them afloat. But poor nations kept borrowing money they couldn’t afford to pay back.
“The poorer countries are not catching up, and we really want a world where the people in lower income levels actually get to grow faster,” Malpass tells Ian Bremmer. “That’s what creates stability."
Malpass says that the goal of the World Bank, and any value-based society, is faster growth in poorer countries so they can catch up with advanced economies and stabilize. And that means integrating the economies of developing countries better with the West, which can at odds with nationalist economic policies like “Buy America,” near-shoring, and inshoring.
“I think there’s plenty of room in a logical world to say we don’t want dependency,” Malpass stresses, “But we also want to have a vibrant, global marketplace that is competitive. And the US needs to lead and be the starting point for a lot of this rethinking of the global system.”
Watch the episode of GZERO World with Ian Bremmer: World Bank's David Malpass on global debt & economic inequality
- Ian Explains: The debt ceiling ›
- Podcast: Fix the global debt crisis before it's too late, warns World Bank's David Malpass ›
- World Bank's David Malpass on global debt & economic inequality ›
- US debt default would be "destabilizing," says World Bank's David Malpass ›
- Odds of a global recession? 50/50, says David Malpass ›
World Bank's David Malpass on global debt & economic inequality
The world has a huge debt problem. Economic growth is slowing, but global debt is skyrocketing.
David Malpass sits down with Ian Bremmer on GZERO World for his final interview as president of the World Bank Group to discuss the debt crisis, his tenure at the World Bank, and solutions for combatting growing economic inequality.
Global debt has ballooned in the last two decades to an eye-watering $300 trillion due to years of low interest rates and cheap goods that made money easy to borrow. Then, along came the pandemic which stalled growth and a war in Ukraine that shot up food and energy prices, leading to runaway global inflation.
Rich countries reacted by injecting trillions of dollars of stimulus money into their economies, borrowing huge sums in order to do so.
"So much more of the world's capital is going just to pay off the debt of the advanced economies," Malpass warns, "That leaves less for everybody else, and I think that's a grave concern."
Malpass also spoke about China's emergence in the 21st century as the world's creditor, his proudest accomplishments as World Bank president, and advice for his successor, Ajay Banga. He also points to countries like India and Indonesia, which he believes are poised for significant economic expansion.
Can the world solve the global debt crisis before it's too late? Watch this full interview with David Malpass on GZERO World with Ian Bremmer.
- World faces "lost decade" of economic growth, says World Bank economist ›
- Graphic Truth: Global inequality ›
- US debt default would be "destabilizing," says World Bank's David Malpass ›
- Debt ceiling crisis: A default by any other name... ›
- Staving off default: How unsustainable debt is threatening human progress ›
- Is the global debt apocalypse here? ›
- Debt limits of rich countries hurt poor countries' growth, says World Bank's Malpass - GZERO Media ›
- Ian Explains: Why is global debt so high? - GZERO Media ›
Podcast: Fix the global debt crisis before it's too late, warns World Bank's David Malpass
Listen: In his final interview as World Bank president, David Malpass sits down with Ian Bremmer on the GZERO World podcast to discuss all things debt. No, not your credit card or mortgage payments, but the sovereign debt that governments use to pay their bills.
Global debt has ballooned to an eye-watering $300 trillion due to decades of low interest that made borrowing money extremely cheap, followed by runaway inflation driven by the pandemic and war in Ukraine. This dynamic has forced a lot of nations––particularly the poorest––to borrow more money than it can pay back.
In a wide-ranging interview, Malpass explains how the global debt crisis got so bad and whether there's any hope of averting economic disaster before it's too late. He also reflects on his tenure as World Bank president, advice for his successor, China's emergence in the 21st century as the world's creditor, and why the US debt limit law needs to be rewritten.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.- Odds of a global recession? 50/50, says David Malpass ›
- Explaining the long history of US debt (& which other countries are saddled with debt) ›
- US debt default would be "destabilizing," says World Bank's David Malpass ›
- World faces "lost decade" of economic growth, says World Bank economist ›
- Inequality isn't inevitable - if global communities cooperate ›
- Graphic Truth: Global inequality ›
- Debt limits of rich countries hurt poor countries' growth, says World Bank's Malpass - GZERO Media ›
- Ian Explains: Why is global debt so high? - GZERO Media ›
US debt default would be "destabilizing," says World Bank's David Malpass
The debate in the US Congress around the debt limit and a potential default is like spending money on a credit card but refusing to pay the bill, according to David Malpass, outgoing president of The World Bank Group.
On GZERO World with Ian Bremmer, Malpass discussed the ongoing negotiations in Washington to avert a default and raise the debt ceiling before the federal government runs out of money on June 1. If the two sides can’t come to an agreement, Malpass says, the economic consequences will be “destabilizing.”
As a global financial leader, Malpass believes the US should consider rewriting the law so there’s no threat of default and adds that putting pressure on lawmakers might be the most effective way to get Congress to take action.
“If you’re over the debt to GDP limit, don’t pay salaries to senior government workers, to congressmen,” Malpass argues.
In this clip, learn why Malpass thinks Congress will come to a last-minute agreement and why minting a trillion-dollar coin to solve the problem is a very bad idea.
Watch the full episode of GZERO World with Ian Bremmer on PBS airing soon on US public television. Check local listings.
- Debt ceiling deal: long way to go in little time ›
- Pete Buttigieg explains: How the debt limit impacts transportation ›
- Chris Christie weighs in on US debt limit fight ›
- US debt limit: default unlikely, dysfunction probable ›
- Will the US default on its debt? Ask GZERO World's guests - GZERO Media ›
- Debt limits of rich countries hurt poor countries' growth, says World Bank's Malpass - GZERO Media ›
- Podcast: Fix the global debt crisis before it's too late, warns World Bank's David Malpass - GZERO Media ›
Earth Day 2023: Show me the money
The theme of this year's Earth Day on Saturday is "Invest in Climate." One of the key messages is that "businesses, governments, and civil society are equally responsible for taking action against the climate crisis." But they are not equally motivated.
Businesses invest for profit. Governments spend to achieve political goals. And civil society's pockets are ... empty.
Meanwhile, roughly $5 trillion is needed to help the planet transition to clean energy by the end of the decade. Most of that money would go to the developing world, which is historically less responsible for polluting the planet but disproportionately suffers the impacts of climate change.
Yet the official statement doesn't even mention climate finance. Why?
Earth Day is all about climate activism. Governments are mostly an afterthought — unless to portray them "in a negative light and called out for their perceived lack of efforts to adequately invest in — and ultimately save — the planet," says Eurasia Group analyst Franck Gbaguidi.
Developing nations have long been telling wealthy ones: You need to cough up the cash for us to go green because you're mostly responsible for global warming. Rich countries have been like: Yeah you're right, but I have other spending priorities right now, so lemme dig up some coins from my sofa cushions.
For the Global South, though, the Western response to Russia's war in Ukraine demonstrated that wealthy nations can in fact mobilize immense financing virtually overnight — when it's in their political interest.
Developing countries are fed up. They are feeling the impacts of climate change more acutely than wealthy nations, which broke a 2009 promise to channel $100 billion annually of climate finance to the Global South by 2020. What's more, developing nations are now struggling even more economically under a pile of COVID-fueled debt and higher interest rates, which raises the cost of servicing that debt.
Still, there's growing chatter that 2023 might be a pivotal year. For one thing, the developing world now has a media-savvy champion in Mia Mottley.
The feisty Barbados PM, who became a global climate icon with a breakout speech at COP26 in Glasgow, Scotland, spearheads the Bridgetown Initiative. This group pushes global institutions like the World Bank to adopt new policies, such as loan disaster clauses that allow a government to temporarily stop paying its loans without penalty following an extreme weather event.
For another, the World Bank itself will soon have a new boss in former Mastercard CEO Ajay Banga, who says he wants to double down on climate finance by mobilizing more private-sector funds. But how?
One idea is for the World Bank to act as an insurance agent for private investment in climate projects in the developing world, which can be risky and expensive. Basically, private lenders and the World Bank would join forces and pool their money, but the institution would pick up most of the tab if the project went south.
Expect the climate finance convo to heat up as we get closer to the COP28 Climate Summit in Dubai in late November. You might recall that last year's COP27 in Egypt wrapped with a vague pledge by rich nations to bankroll a climate reparations fund for the developing world.
That's no surprise, given that the issue has become a much bigger priority for developing economies and a much less pressing topic for rich countries than in 2021, when net-zero emissions commitments were a dime a dozen.
But the stakes will be even higher at COP28, hosted by the UAE, a mega-rich petrostate that’ll side with the cash-strapped Global South. Huh? The Emiratis are investing heavily in green power and want to fight the bad optics of emceeing as a fossil fuel producer.
"Failure to show concrete progress [on the reparations fund] will deepen the divide between industrialized and emerging markets, exacerbate the geopolitical fragmentation of the world, and potentially delay concrete actions to stop global warming," says Gbaguidi.
Staving off default: How unsustainable debt is threatening human progress
Three-fifths of the world's lowest income countries are debt distressed and in danger of default. Navid Hanif, assistant secretary-general for economic development at the United Nations, tells GZERO's Tony Maciulis that we need to make debt more sustainable by restructuring it. Hanif believes multilateral development banks, such as the World Bank, should offer affordable longer-term loans with lower interest rates to allow least developed countries better opportunities to deal with crises like climate change, poverty, and educating children.
During a conversation at the World Bank/IMF spring meetings in Washington, DC, Hanif explains how a financial divide will eventually become a development divide, which is not good for the world. He explains the urgency of the growing debt problem.
However, Hanif also expresses optimism about the potential for progress coming after years of the pandemic, citing the growth in people gaining access to the internet and a renewed commitment to climate goals.