World Bank president focused on job creation ahead of annual meetings

Banga said the World Bank should tackle the issue of job creation 'with some urgency'. Photo: Brendan Smialowski / AFP
Source: AFP

The World Bank will unveil plans to tackle job creation, gender disparities, and food security at next week's gathering of the world's finance ministers and central bankers in Washington, its president said in an interview.

Ajay Banga spoke to AFP at the development lender's headquarters in Washington ahead of the Annual Meetings of the International Monetary Fund and the World Bank Group, which begin on Monday.

16 months into his term running the 80-year-old institution, the former Mastercard chief executive said he had made significant progress on his plans to create "a better bank and a bigger bank," and was now focusing on job creation as a key World Bank objective.

"1.2 billion young people in the emerging markets will become eligible for a job over the coming 12 to 15 years," he said. "The same countries are currently forecast to generate a little north of 400 million jobs. That's a big gap."

"If you don't give them clean air, clean water, healthcare and education when they're growing up, and a job when they're ready, then you end up with social challenges, migration, social circumstances, an unhealthy population," he said.

Banga took over as World Bank president in June last year. Photo: Brendan Smialowski / AFP
Source: AFP

"So we've got to find ways to attack this issue with some urgency," he added.

To that end the World Bank has created an advisory council on jobs, led by Singaporean President Tharman Shanmugaratnam and the former Chilean president Michelle Bachelet, which will meet for the first time in Washington on Wednesday.

The question they will seek to answer, Banga said, is: "How do we translate all that with the right regulatory policy to get jobs on the ground in these countries?"

Of those 1.2 billion young people, at least one third will be in Africa, making job creation on the continent a priority, he added.

The World Bank also plans to announce new goals to tackle global gender disparities and to boost agribusiness to tackle food security.

'Wet paint'

Ajay Banga said many of the plans to boost private sector investment were still 'wet paint'. Photo: Brendan Smialowski / AFP
Source: AFP

One of Banga's key objectives since taking office has been to look for ways to boost the role of the private sector in international development.

The World Bank previously estimated that developing countries will need an average of $2.4 trillion each year between now and 2030 in order to address the challenges posed by climate change, conflict, and pandemics -- significantly above the Bank's current annual commitments.

To do so, the bank set up a private sector "investment lab" last year with the CEOs of major private sector firms, which has now come back with a number of recommendations.

These include providing regulatory and policy clarity, tackling foreign exchange risk, providing better political risk guarantees, shouldering some of the risk of investing in developing economies, and packaging loans together to create a new "asset class," Banga said.

For this last recommendation, Banga has tapped S&P Global CEO Doug Peterson to lead a working group to say: "What needs to change for us to get to scale, size and replicable, standardized loans of large enough numbers that you can bring fairly large sums of money to work in this process?"

But he cautioned that many of these plans were still in their infancy.

"All of these are wet paint," he said. "This takes time."

Gaza reconstruction

The World Bank estimates the cost of reconstruction in Gaza at more than $14 billion, Banga said. Photo: Omar AL-QATTAA / AFP
Source: AFP

Amid Israel's ongoing campaign against Hamas in Gaza, Banga said the World Bank board had voted recently to increase its assistance to the Palestinian Authority for use in Gaza to $300 million, six times the figure for the previous year.

Israel has been at war with Hamas since the October 7 attack, which resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of official Israeli figures.

Israel's retaliatory campaign in Gaza has killed 42,438 people, the majority civilians, according to data from the health ministry in the Hamas-run territory, which the UN considers reliable.

The World Bank now estimates the cost of reconstruction in Gaza at more than $14 billion, Banga said, adding that the bank had formed a group composed of Palestinians, Israelis, Jordanians, Egyptians, the European Union and the United States, to look at how to rebuild after the war ends.

"There are a number of Middle Eastern countries -- Saudi Arabia, for example -- who are very interested in contributing to this thinking, because they see that redoing this the right way is the best, longer-term solution for economic growth there," he said.

"So I think we'll get more partners on board over the coming month or two," he added.

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Source: AFP