In my remarks today, I would like to offer observations on the current global economic context, the challenges we face, the opportunities before us, and how we can leverage a new playbook for development finance to foster sustainable and inclusive growth.
Global and Regional Economic Environment
Let’s start with some good news: Global growth is projected to hold steady this year. According to the World Bank’s latest estimates, we expect global economic growth to remain at 2.6% in 2024 before edging up to an average of 2.7% in 2025 and 2026. Meanwhile, global inflation is on track to reach a three-year low, and financial conditions have improved. The world economy, in short, appears to be in final approach for a “soft landing.”
Yet, despite these signs of stabilization, the global economy remains under significant pressure from a complex mix of economic and geopolitical factors. More than four years after the disruptions of the COVID-19 pandemic and subsequent global shocks, it’s clear that the world has yet to rediscover a reliable path to prosperity.
Global growth is stabilizing well below the 3.1% average seen in the decade before COVID-19.
Emerging markets and developing economies face a troubling outlook. Potential growth in these economies is projected to fall to 4% during this decade—a full percentage point lower than the previous decade’s average.
By the end of 2024, one in four developing economies is expected to remain poorer than it was on the eve of the pandemic. The income gap between developing and advanced economies is set to widen in nearly half of developing economies from 2020 to 2024—the highest share since the 1990s.
Weaker growth has severe implications: In the next 10 years, 1.2 billion young people across the Global South will become working-age adults. Yet, with our current growth projections, we expect to create fewer than 420 million jobs in that same period. Moreover, every lost percentage point of growth traps an additional 100 million people in poverty.
Such figures underscore the urgent need for collective action to revitalize the global economy and drive sustainable development.
A New Development Finance Playbook
Eighty years ago, representatives from 44 countries gathered at the United Nations Monetary and Financial Conference, which was held in July 1944 in Bretton Woods, just before the end of World War II. These countries saw the opportunity for a new international system after World War II. A system that would provide reconstruction from the devastating impacts of the war and lay the foundation for lasting global prosperity, stability, and peace. As part of the agreement, delegates to the conference agreed to establish the International Monetary Fund and the IBRD, which, along with the subsequent addition of IDA, IFC, and MIGA, form the World Bank Group.
Eighty years later, we face new challenges that require us to reimagine the global development financing landscape. We must tackle pressing issues such as an existential climate crisis, food insecurity, an ongoing pandemic recovery, fragility and conflicts that affect lives beyond the frontlines.
Multilateral Development Banks (MDBs), such as the World Bank, can play an important role in mobilizing resources and supporting the necessary reforms, combining affordable long-term finance, technical support, and policy advice to deliver sustainable results.
To realize this promise, we must be faster, simpler, bigger, and more impact-oriented. At the World Bank, we have undertaken significant reforms to ensure we are fit for purpose.
First, we’ve expanded our mission to end extreme poverty and boost shared prosperity on a livable planet. To achieve this mission in a world in constant change, we aim to create a future-ready World Bank Group; a Better and Bigger Bank for all our stakeholders, including Lower Income and Middle Income Countries, the private sector, donors and partners.
To maintain a focus on critical results, we’ve refined our corporate scorecard to include 22 measurable goals—tracking, for example, how many people receive quality healthcare services, how many children can read by the end of primary school, how many people secure jobs, and how much greenhouse gas emissions we avoid. This drives our institution toward impactful outcomes and provides our shareholders and clients with clear visibility into our achievements.
Second, we have revamped our Knowledge Bank structure, anchored in five verticals: people, planet, prosperity, infrastructure, and digital, each with clearly defined expertise.
Third, to scale up support on key issues, we launched six Global Challenge Programs in energy, food, water, forests, climate and biodiversity, health emergencies, and digital. These programs employ replicable and scalable approaches and will benefit from global partnerships.
Fourth, to enhance our efficiency, we leveraged new technologies, and further simplified our internal processes, which enabled us to shorten our project approval process. We also fostered greater integration and synergies among our institutions, including integrating operations as “One World Bank” in 20 pilot countries. These initiatives aim to remove bureaucracy, break down silos, free up client capacity, and approach challenges collaboratively.
Finally, we have identified new ways to stretch our existing balance sheet, enabling an additional $150 billion in lending capacity over the next 10 years.
These are some of the reforms that are paving the way for the World Bank Group to deliver greater scale and impact, allowing us to take on more ambitious projects and better support countries in their development journeys. We have seen the early signs of this ambition.
For instance, we are executing an action plan called Mission 300 to bring clean, stable, and affordable energy to 300 million Africans by 2030—250 million by the Bank and 50 million by the African Development Bank.
We have set a target to provide quality, affordable healthcare to 1.5 billion people by 2030.
We are also expanding social protection programs—with partners—to alleviate poverty and hunger for half a billion people by 2030, aiming for half of these beneficiaries to be women.
However, we remain clear-eyed about the scale of the challenges that lie ahead.
This is why we are working with our shareholders to secure a significant replenishment of the International Development Association (IDA)- the fund to support the world’s poorest nations. For IDA to meet the unprecedented development challenges faced by low-income countries, we need a robust replenishment by the end of the 21st IDA cycle. This will require the strong support from our shareholders.
And let me add that IDA is truly a great deal for taxpayers: by leveraging our balance sheet, IDA delivers four dollars of development finance for every dollar in donor contributions.
But even with increased financial capacity, we know that the World Bank alone won’t provide the trillions needed annually for climate, fragility, education, hunger alleviation, health care, and inequality, and other development areas. We have intensified our efforts to build partnerships and engage both public and private stakeholders.
Over the past year, we formalized partnerships with development institutions and harmonized policies. We signed MoUs with several MDBs and bilateral development partners, including the AIIB, our largest co-financing partner globally. In April, the World Bank Group and nine other MDBs launched a new co-financing platform. These partnerships extend beyond co-financing, to include greater knowledge sharing, capacity building, and technology transfer.
We are also strengthening our partnership with the private sector. We require their ingenuity, speed, and resources to overcome these challenges. Last year, the World Bank Group mobilized $41 billion of private capital for emerging markets, and raised another $42 billion from the private sector through our bond issuance.
To develop our capacity to mobilize greater volumes of private capital, we have partnered with 15 leading CEOs from global asset managers and financial institutions, including from China. The primary goal of this initiative is to enhance our catalytic role in attracting private investment to emerging markets by mitigating risks for investors and fostering enabling environments for bankable projects that create sustainable value, positively impacting society and the environment for generations to come.
In addition, we have created a WBG Guarantee Platform, housed in MIGA, which serves as a one-stop-shop for all WBG guarantee business, bringing together all WBG product offerings and experts.
The World Bank Group and China have fostered a mutually beneficial partnership for many years, achieving significant milestones together. Both sides play a key role in international development. Looking ahead, I am confident that through continued collaboration, both sides can further strengthen their contributions to more sustainable and inclusive development.
Closing
As a representative of an institution that was founded on the principle of global cooperation, I deeply believe in our capacity to work together to meet challenges of our time. With a renewed sense of common purpose, we have the opportunity to tackle development challenges including reinvigorating growth, creating jobs, combating climate change, and safeguarding a livable planet.
Thank you very much.
