Transcript: World Bank Group President David Malpass’s Interview with James Coomarasamy on BBC Radio’s “The World Tonight”

 

 

On Wednesday, the World Bank announced extra funding worth around 10 billion pounds for projects addressing food insecurity. David Malpass is the Bank's President. So what did he make of the suggestion from Russia's deputy foreign minister that the problems in Ukraine's Black Sea ports could be solved if sanctions on Russian exports could be lifted?

 

I don't think you can negotiate with someone waging war in that way. The critical thing is for the world to rally together and create a lot more supply. Russia is under a lot of pressure -- the people of Russia -- because of the terrible economy. It is shrinking rapidly. And so the key thing for the world is to create more supplies of energy of food of fertilizer, and move forward.

 

So to work on the basis of this situation could be here for some time?

 

We don't know what will happen with that. I think what we do know is that people around the world and in developing countries are under pressure because of the inflation and high food prices.

So it's important to have new investment and new supply and to make announcements of that. The advanced economies can say: “we're going to really create lots more and that's going to help with both inflation and with the shortages that are showing up.”

 

And they're showing up in pretty acute form in several countries, aren't they? Clearly Sri Lanka is at the forefront, it has defaulted on its debt. Do you fear that there are more similar circumstances to come in other countries?

 

There's a lot of pressure on debt in developing countries because the contracts weren't transparent. They added debt on debt over the years and now interest rates are going up, and it's against a backdrop where there was already a lot of inequality in the world. A lot of the COVID stimulus just went into the advanced economies. And so that's leaving developing countries behind.

 

You mentioned COVID. I mean, to what extent is the pandemic still a factor in these global problems?

 

We can’t underestimate: there was COVID itself, the pandemic and the deaths but then also the shutdowns and in particular the shutdowns and closures of schools. That's weighing heavily on children around the world. It's going to take years and years to make up for the educational losses that went on. So it's part of the equation. But it's also the inflation itself. This started in the first COVID recovery, there was a lot of added demand without there being supply. And so that's the balancing that needs to be done.

 

What's your sense of inflation and how it's going? There is an assessment that it might have hit its peak in the United States, but in a country like the UK, for example, where we're seeing levels we haven't seen for 40 years, that the assessment is it is likely to get even higher.

 

People are watching inflation expectations. Those are very responsive to supply, to the commitments of countries to make more. More energy, more food, more fertilizer and more products. And so I think the course of inflation depends a lot on the amounts that can be added into the global economy to make up for some of the losses.

 

The World Bank has announced a new commitment to try and help alleviate some of the problems caused by this food crisis. Where's the money going to go to?

 

It’s a coordinated effort to have a response in fertilizer, in food, to build up the availability. It goes to developing countries, in particular the poorest ones, and many of them are in Africa. So it can help with actual crops in some cases, but above all with food systems.

 

How concerned are you about the kind of export bans that certain countries--China and India, for example--have placed?

 

Export bans are a big problem. We've spoken against them. Countries shouldn't do that. I was pleased to see Indonesia removed their export ban on palm oil today. And I think it's going to show the world that there is enough production, there's enough supply, and if it can be allowed to move around among markets, the world can get through this.

 

And just to be clear, if the war in Ukraine stopped tomorrow, if everything that was stopping those fertilizers, the oil, the grain from traveling around the world, if that all went back to where it was before that wouldn’t end this crisis, would it

 

That would be a big step forward that we shouldn't underestimate. It's critical that Russia stop the war. And if it did, there would be a better outlook for people around the world, including for Russians.

And from the standpoint of the poorest countries around the world, they would be able to then resume the efforts to build better economies and to create more agriculture within their own economies, for example, and digitalization. All of those many steps are on hold right now waiting for the world to resume its forward movement

 

So if there was one thing that can be done, that would have the most impact, it is to end the war in Ukraine.

 

It’s vital to end the war in Ukraine, and if that can't be done, then it's vital that countries around the world, and especially the advanced economies, announce new supplies of energy, of food and of fertilizer. That's going to help with the inflation crisis and also with the shortages.

 

And that was the President of the World Bank, David Malpass.