Bloomberg Audio Studios, podcasts, radio news. What we saw yesterday is a boost from private investment, from the likes of Larry Frank of Blackrock. He was here at the G seven. And what these in private investment funds are trying to do is boost money going to the global South middle income countries. And part of this is made possible by programs at the World Bank. And I'm pleased to be joined by Anji Banga, Thank you so much for joining us. John.
There was talking about a big emphasis, especially on Africa. This is to try one counter China from the US point of view, but also European leaders are trying to stem the flow of migration. How are you seeing this public private partnership play out?
And so I think Africa. The real situation is that Africa is going to get better than a half people going to two and frankly, how can you not have a continent of that contributing to future economic growth. That's the other way of looking at why Africa And so what I'm trying to talk about there is what creates jobs for those young people. It's got a demographic dividend coming through it. But if you don't give them clean air, clean water, healthcare and education when they're growing up, and
jobs when they're older. We have a problem with that demographic dividend becoming a liability. Can't do that only with government money and multilateral money. That's why people like what Laddier did yesterday Orsata was talking about, these are all the ways to get private sector money as well to come in at scale to help create the jobs in that country.
How difficult are these conversations on the sideline of the G seven when you see leaders here coming up wounded by recent elections, mattered because what their electorate is focused on is rising prices at home and immigration coming into their country. And meanwhile you have leaders talking about investments in other parts of the world and also what's going on of course with the war in Ukraine.
Yeah, but if you're discussing private sector investing, this is actually good for these leaders because it's a way to enhance every dollar that governments and multilateral institutions put in to add a little more and that's very, very helpful to them. So it just depends how you approach this discussion. My way of approaching it is it's not all about the money you give. One on one bilaterally, it's about
the leverage you get. So for example, if you give the World Bank money into what we call IDA, which is the institution that provides grants and concessional financing to the poorer countries, a lot of which are currently in Africa. Unfortunately, that gets the leverage. Every dollar you give me as a country as capital, I can make it four times. So leaders know that too, and then if you bring in the private sector, that four can become eight and ten.
So people are thinking about how to get a dollar to go to ten, not just a dollar for a dollar, And I think that makes for a good consation.
But it's multilateralism harder, which I know you're a big believer in. When you see the rise of nationalism.
Oh yeah, sure. I've been saying for years when I was in my old job private sector that a lot of the biggest things that buries me you chauvinistic nationalism, because it tends to create the absence of connectivity. But I think if you look at the last few months itself, we've managed to get capital and hybrid capital and portfolio guarantees into our institution and we are the one that's working with this multilateralism. So let me give you an example.
People keep asking me about the debt crisis in Africa, right, and if you think about the four countries from Africa that entered the G twenty Common Framework, Zambdir, Chad, Ethiopia, and Ghana. From the time they entered, we in the Bank have given them sixteen billion dollars of money. Nobody else has given them money. Of that, sixteen eight was concessional and eight was pure grants off. That sixteen nine was net positive. So that's all multilateralism at work. People
just talk about one part of it. But multilateralism does work with the leverage that institutions like the Bank provide.
We of course have a US election coming up, and part of what you've wanted to expand and your approach to the World Bank is not just poverty, but also climate. Do you think that would be at risk if we were to see a Trump presidency.
Not really. I remember that during his prior presidency he was one of those who actually gave the capital increase to the World Bank. He sees the value of this leverage and the value value of this kind of institution. Just to be clear, when I talked about a Liverpool Planet. I want to make sure you know it's not just climate, it's fragility, conflict, violence, it's things like pandemics and healthcare.
Because the whole idea of Liverpool Planet allows you to expand the aperture depending on what's relevant in that country, that region. In some cases it is climate. In some cases it's fragility conflict that is driving things. In others it is climate that is driving the fragility and conflict. You have to get to the root cause and try and go at it.
Well. There be more pressure, you think, whether or not it's Trump or Biden, potentially to figure out what's going on with China. They're the biggest bilateral credit and many say that what they are doing in a lot of these countries is called a debt trap.
Yeah. Interesting, So I think where they are today it's quite different from what it probably was some years ago. All the conversations we've had, the G twenty count framework and the IMF in the World Bank run something called this Global Debt Sustainability around table, and in that everybody comes the multilateral So are there as the bilateral creditors, the private sector creditors, of which there is a very large amount, and then the so called earlier ones the
Paris Club. What's really changed is it's not just bilateral credit that's an issue. It's also the private sector that is involved in lending. So today, if you want to do a debt restructuring for these countries, you have to first know who's put what money on the table, what's it costs, what's the covenants of its repayment, what's the whole thing in it. Get that data on a sheet. Without that very hard to know how to adjust that
money in. So that took time. But as you see it getting done and you can begin to see countries moving through the framework, I still think it's too slow. I think it should be faster because if you make it faster, more countries will feel emboldened to enter into the framework. And I think we need to work our way through this.
What you're offering, do you see as a viable path for these countries instead of say, turning to China.
Oh yes, I think it's not either or by just China. People are borrowing money from India, they're borrowing money from the UN, United States, they're borrowing money from the UK. Remember this bilateral creditors have been around for a long time. It may be called oda in some cases maybe actual lending through some countries. People there are countries borrowing bilaterally as well. I don't think it's in either all that
has to be either multilateral or bilateral. I just think it has to be done in a fair way, a transparent way, in a way that we can all understand what's going on, and then do it in a way that the countries who are borrowing also don't use only the borrowing as the resource, but also spend efforts on domestic resource mobilization, doing other things that enable them to free up the resources to do the right thing to development.
Aj Banga, thank you so much for your time.