Leaders share thoughts on new vision for financing development

Bill Gates, Co-Chair of the Bill and Melinda Gates Foundation, joined top development and finance leaders in a conversation on a new vision for financing development at the Spring Meetings in Washington D.C.

Panelists included Jim Yong Kim, President of the World Bank Group; Justine Greening, UK Secretary of State for International Development; Ghana’s Minister of Finance and Economic Planning, Seth Terkper; and Raghuram Rajan, Governor of the Reserve Bank of India.

Mr. Terkper’s contribution focused on domestic revenue mobilization and leveraging international financing for emerging economies to drive entrepreneurship and job creation.

He particularly wants the World Bank’s financial inclusion agenda to take into consideration the capacity of the mobile telephony and microfinance businesses to grow the small and medium enterprises.

“We are moving to a point where mobile money is not merely a transfer but because money is held in the pocket books – they are moving towards a savings approach – and therefore the central bank is stepping in, working with the mobile companies and the microfinance companies which are entrepreneurial entities and are spread all over,” Mr. Terkper stated. “What we need from the support perspective from institutions like the World Bank is to build a platform for supervision so that you do not experience charlatans coming into the field”.

The conversation focused on reshaping the development landscape and a vision for delivering a world free of extreme poverty where there is opportunity for all.

For Jim Yong Kim, the game changer is to double the IDA financing to 100billion dollars. The International Development Association (IDA) is a financial institution offering concessional loans and grants to the world’s poorest developing countries.

The World Bank President, however, expects governments in low-income economies to drift towards borrowing to invest in health and education, instead of their fixation to infrastructure development.

“We hear often from countries that they don’t want to take World Bank loans and invest in soft things like health and education; they want to invest in hard things like roads and bridges…but one thing you can count on is human capital and it’s still very difficult to make a case despite all the studies that are now available that show that health and education are critical to, at least, medium and to certainly long term economic growth,” said Mr. Yong Kim.

The concern for the global financial institutions is how to continue to build on the progress made whilst ensuring the gains are not eroded away by the current challenges.

The UK’s Justine Greening observed that the broader global economic challenges are going to make life for emerging economies in particular more challenging.

She is however emphatic on the need to tackle corruption, which she believes deprives poor people of the benefit to development support.

One means to tackle corruption, according to Governor Raghuram Rajan, is to improve access to opportunities, especially access to finance.

World leaders, last year, adopted a bold set of global goals to end extreme poverty and create a more sustainable, prosperous world – under the Sustainable Development Goals (SDGs).

However, the world’s development structures and their financial supports are under increasing pressure and facing strong headwinds in the shape of a challenging global economy, rising inequality, conflict and fragility as well as natural disasters and pandemics.

Bill Gates says there are great examples in poor countries indicating that by adopting the right methodologies and using expertise conditionality can help drive best practices faster.

“If we have the best tax systems, the best primary healthcare systems, the best educational system of countries at every level of income, adopted by others, then this development game will proceed very quickly” he stated.

Story by Kofi Adu Domfeh/Washington DC