marriage and inclusion and incredibly it is important and needs to continue and even speed up for the sake of the dignity of all people living in this country. at the very time we have good new stories in this country, the trend internationally is going in the opposite direction. there are laws commercializing homosexuality in 80 countries at present. the countries that you mentioned in africa and the baltics, this is a new chapter in what has been a chronic effort to criminalize sexual orientation. the death penalty is applied in seven countries on the basis of sexual orientation. how president obama issued the first-ever presidential directive on lg bt rights.

clinton gave an incredibly whereul speech in geneva many countries were very startled to see the u.s. out there weeding in this way and persons weret lgbt entitled to the same rights around the world and are a central part of what it means to promote human rights. as part of the presidential atective on the we look asylum claims on the basis of persecution. people have a well-founded fear of persecution because there are mobs going go to gore with -- going door-to-door with west's. -- going door-to-door with lists.

now, we see countries like russia exporting worst practices. president obama has been very outspoken on this and we'll will continue to contest this and make it a subject for bilateral diplomacy and do what we can the laws i described earlier to make sure other countries are standing with us, particularly from other regions and not just europe and north america. >> [indiscernible] thank you very much. this concludes the hearing.

>> a look at some news and the wall street journal. an article, chuck hagel arriving in japan to reassure ally. the defense secretary arrived in japan today on a six-day trip to reassure asian allies that the response to russia's intervention in ukraine should not be a sign that the u.s. is reluctant to support its friends in times of crisis. that response is raising concerns that the u.s. is wary of using its military to back international diplomacy. concern overe is u.s. backing when it comes to disputes between china and its neighbors. unease with north korea.

after two days in japan, secretary hagel will make his as defense secretary to china. that news from the wall street girl. secretary of state john kerry is on capitol hill this week. he will testify about the state department's 2015 budget request of 46 billion dollars, including $1.5 billion to support humanitarian efforts in syria. and $4.6 billion to secure personnel and facilities overseas. you can watch live coverage of the secretary's testimony before the senate's foreign relation committee on tuesday on c-span3. asics is a nonprofit organization. improveion is to printmaking. bookbinding is an art form. from accordion to flags to

traditional bound books that lay flat when you open. book and art and altogether handmade. wordsmore jus than just the in the book. it is the structure of the book. whetherr that is used, there is text or no text. it is all of that. world tonending discover and create. it is the amazing. >>a6 printing and bookbinding studio is one place we will visit this weekend as we look at of history and literary life bend, oregon. guest: the president of the world bank talked recently about

economic inequality. investing in infrastructure and empowering people living in poverty. the discussion was hosted by the council on foreign relations. it ran about one hour. >> good morning. thank you all for coming. it's a packed house. welcome to today's council on foreign relations meeting and also welcome to our new york participants who are joining us via video conference. this is the 14th installment of the david morris lectures series. it honors lawyers, public servants and internationalist who is have been an active -- honoring a lawyer, public servant and internationalist who is an active councilmember for nearly 30 years. our guest today, president of the world bank, dr. jim yong kim.

he's going to speak, some opening remarks. i'll chat with him a little bit and then we'll have about a half an hour of q&a. thanks so much for coming. dr. kim. >> good morning, everybody. thank you, michelle, and also thanks to our host, the council on foreign relations. i'm very honored to be here giving the david a. morris lecture. i want to talk today about some fundamental issues in global development and the world bank groups' role in helping countries and the private sector meet the greatest challenges in development. you know, for a very long time the rich have known to some extent and certainly to a much greater extent in recent years the rich have known how the poor around the world live. but what's new in today's world is that the best kept secret from the poor, namely how the

rich live, is now out. to village television, to the internet, hand held instruments which are rapidly increasing the number the poor possess, lifestyle of the rich and middle class about which the earlier had foggy ideas are transmitted in full color to their homes every day and that has made all the difference. the political turbulence we're seeing all around the world is very approximate causes, but a lot of it's fundamentally rooted in this one new feature of today's world. the question that nearly everyone that lives in the developing world is asking themselves is how can they and their children have the economic opportunities that so many others in the world enjoy? everyone knows how everyone else lives. tom friedman has referred to this group of people as the virtual middle class. last year when i traveled to president morales to a bolivian village 14,000 feet above sea

level to play soccer, of all things, villagers snapped pictures of us on their smartphones upon our arrival. when i visited a neighborhood in india, the poorest state in india, with also the highest number of poor people, a state of a population of 200 million people, i found indians watching korean soap operas on their smartphones. it's not a great mystery then why everyone wants more opportunities for themselves and especially for their children. we live in an unequal world. the gaps between the rich and the poor are as obvious here in washington, d.c., as in any capital in the world. yet, those excluded from economic progress remain largely invisible to many of us in the rich world. in the words of pope francis, and i quote, that homeless people freeze to death in the street is not news. but a drop in the stock market is a tragedy, end quote. while we in the rich world may be blind to the suffering of the poor, the poor throughout the world are very much aware of how the rich live and they have

shown that they're willing to take action. we cannot remain voluntarily blind to the impact of economic choices in the poor and vulnerable. not only because of the immoral argument that treating your neighborhood -- moral argument that treating your neighbor with dignity is the right thing to do, but when growth includes women, the young and the poor, we all benefit and inequality hurts everyone. women's low participation creates a loss of 28% in the middle east and north africa. a contract between people and their government -- this also, as we know, builds stronger economies. if we raised women's employment to the levels of men, for instance, average income would rise by 19% in south asia and 14% in latin america. just a year ago, the governors of the world bank group endorsed

two new goals for our institution. the first that we will commit our energies to end extreme poverty by 2030 and the second, that we will work to boost shared prosperity. on extreme poverty, what we mean is people living on less than $1.25 a day. less than the coins that many of us empty from our pockets each night. yet, more than a billion people in the world live on less than that each day. the second goal about shared prosperity, of course, is a focus on the income growth of the bottom 40%. but we know that even if countries grow at the same rates as over the last 20 years, if the income distribution remains the same, world poverty will fall to only about 7.7% in 2010. and that's the percentage of all the people in the world, not just the developing world living in poverty. from a rate of 17.7%. again, this is the entire globe that were living in extreme poverty in 2010.

in the past 20 years, the world was able to lift roughly 35 million people out of poverty every year. but if we're going to reach our goal of ending extreme poverty by 2030, we need to help 50 million people raise themselves out of poverty every year. we also know now that the fundamental problems of the world today affect not millions but billions of us. nearly two billion people lack access to energy. an estimated 2.5 billion people plaque access to financial services, and all of us, all seven billion of us, face an impending disaster from climate change if we do not act today with a plan equal to the challenge. martin luther king once said the arc of the universe is very long but it bends towards justice. today we must ask ourselves whether we, like dr. king did in his life, doing all we can to forcefully bend the arc of history towards justice, toward helping lift more than a billion people out of the devastation of extreme poverty.

i'm now just 21 months into my tenure as president of the world bank group, and i ask myself this question, are we doing enough every single day? just three months after i started, we defined ourselves as a solutions bank that will marshal our vast reserves of evidence and knowledge and apply them to local problems. a year into my job, the board endorsed our twin goals, and just six months ago the board endorsed our strategy, aligning our operations to meet the goals. since then we've made substantial changes and we're well on our way to becoming a solutions bank as we envisioned to help clients tackle the toughest challenge to meet the twin goals. you know, i feel very fortunate to work in an institution that has so much intellectual depth. nearly 1,000 economists and 2,000 ph.d.'s. and those ph.d.'s have at least 4,000 opinions of -- points of view on any given issue on any

day. and in my time at the world bank group, as you can imagine i've had no shortage of pointed advice from my staff. but their passion and insight remind me on a daily basis that our people care deeply about their mission. we recently took a survey of staff and one result was especially encouraging. 90% said they were proud to work at the world bank group. now our responsibility is to take all that experience, talent and knowledge and make it user friendly to any country or company that needs it. we need to work differently in order to reflect one of the indisputable new realities of the world -- governments and companies can turn to many places for financing and for knowledge. our comparative advantage has to be so clear that companies, countries and other partners will seek us out for the best, down-the-ground experience and advice available. we will now work much more cohesively so the staff and the

bank can work in the public sector, staff that work in the private sector and staff who provide risk insurance and guarantees will bring their collective experience together to better serve our clients. we've also created what we call global practices which will become communities of experts in 14 areas such as water, health, finance, agriculture and energy. in the next few days we'll be announcing the heads of these practices. imagine what it would be like if i were naming one of you in the room as a senior director of our water practice. you'd be responsible for designing investments in water and sanitation so that girls, for example, aren't walking miles every morning to the nearest river for cooking and cleaning instead of going to school. soon you'd have around 200 water experts on your team. you and your management team would look across water-related projects in the world and deploy the 200 experts to bangladesh, peru, angola, for instance, making choices to move holders of particular knowledge for

specific -- particular knowledge to address specific problems in a particular country. your task, more than anything else, would be to deliver solutions. you'd be expected to find the best approaches to water and sanitation that will help millions of poor people lift themselves out of poverty. in my opinion, you and your 200 experts would have the best jobs in the world in your field. our entire leadership at the world bank group, including the heads of global practices, will be responsible for spreading knowledge and scaling up successful programs. what we've called at the world bank group a science of delivery. delivery is about ensuring that the intended results reach the intended beneficiaries at or near expected cost. in order to deliver a scale, we need to cure ate knowledge, ack sell at problem solving, deal with complex systems, measure effectiveness throughout all of the projects that we work on.

if we can deliver on our problem -- on our promises, we can are have a transformational impact in the world. the world developments far outweighs the needs to address them. we can do so much more. in order to meet the increased demand we're expecting as we get better at delivering knowledge and solutions to our clients, we've also strengthened our financial capacity to scale up revenue and stretch our capital. i'm pleased to announce today that with the support of our board we now have the capacity to nearly double our annual lending to middle-income countries, from $15 billion to as much as $28 billion a year. this means that the world bank's lending capacity or the amount of loans we carry on our balance sheet will increase by $100 billion in the next decade to roughly $300 billion. this is in addition to the largest replenishment in the fund for the poorest with grants and loans that we received just in december. at the same time we're also

increasing our direct support for the private sector. mega is planning to increase its guarantees by nearly 50% over the next four years. i.f.c. expects it will double its portfolio in the next decade to $90 billion. in 10 years we believe the annual commitment will increase to $26 billion a year. taking as a whole, the world bank group's annual commitment which today is around $45 billion to $50 billion is expected to grow to more than $70 billion in the coming years. this increased financial firepower represents unprecedented growth for the world bank group. we are now in position to mobilize and leverage in total hundreds of billions of dollars annually in the years ahead. now, as a matter of integrity, we needed to look inside our institution and identify savings. at almost every large organization can become more efficient and we announced a goal of saving $400 million in the next four years and we'll

give details of the majority of the savings which we will of course reinvest in countries. i believe very strongly that we had to get leaner before we got bigger. so, in the coming years what will we be doing? we'll follow the evidence and we will be bold. the fact is that 2/3 of the world's extreme poor are concentrated in just five countries. india, china, nigeria, bangladesh and the democratic republican of congo. if you add another five minutes, indonesia, pakistan, tanzania, ethiopia and kenya it will have 30% of the extreme poor. expect us to focus on these countries but we will not ignore the others. we will have a strategy that ensures that no country is left behind as we end extreme poverty by 2030. so how will we be bold? in china last week we launched a report on the future of china cities. this report included the work of

more than 100 world bank staff and has spurred china to make policy decisions that address critical development and urbanization challenges, lug pollution, land rights for farmers -- including pollution, land rights for farmers. it will improve the lives of its citizens. we hope that these lessons from china will be beneficial to cities around the world. a second example is the work on the hydroelectric project. our board approved the world's largest -- potentially the world's largest hydropower site could generate more than 40 gigawatts of power which is equal to half of all the installed capacity of all the sub-saharan africa today. moreover, it could potentially prevent the emission of eight billion tons of carbon over 30 years if coal was used to

generate the same amount of power. we need this power desperately in africa. today, the combined energy usage of the billion people who live in the entire continent is equal to those who live in china. a third example of our being bold in our work is supporting conditional cash transfer programs. these programs provide monthly programs to poor families if, for example, they send their children to school or go to the doctor for a checkup. the results have been astounding. before conditional cash transfer programs, school attendants by poor children in parts of cambodia was 60%. today after the program started nearly 90% of children attend school. in tanzania, along with the

country leaders, we extended the cash transfer program which was started in 2010 for 20,000 households. by the middle of next year, we estimate it will reach one million households, covering five million to six million of the country's poorest people. this is what we mean by identifying successful programs, working with partners and taking transformational solutions to scale. this is the path we're taking in order to serve our countries better. the world bank group is committed to working in more effective ways with key partners and stakeholders, including those in civil society and we need committed political leaders. most importantly, we need to unite people around the world in a global movement to end poverty. as a physician, health activist and later health policymaker, i had the privilege of being part of the international hiv-aids movement that emerged in the 1990's. the aids fight is a story of

vast human suffering but it's also one of history's most inspiring examples of successful global mobilization to reach shared goals. when the treatment appeared in the late 1990's, they reached across borders to have an aids movement. the 200-fold expansion in treating aids patients over the last decade is the fruit of this movement. millions of lives have been saved and millions of children still have a mother and a father. social movements can produce results -- excuse me -- social movements can produce results even in the face of problems that appear insurmountable. we need to take the lessons from such efforts and apply them to a movement around today's great challenges. ending poverty, boosting shared prosperity and ensuring that our economic progress does not irreparably compromise our children's future because of climate change.

last fall i had the opportunity to discuss these issues with pope francis. when i described our commitment to build global movement to end poverty by 2030 the pope answered simply, count on me. with leaders like pope francis, a global movement to end poverty in our lifetime is possible. all parts of our global society must unite to translate the vision of a more just, sustainable economy into the resolute action that will be our legacy to the future. in global institutions, governments, companies and communities around the world, people have began to work to make this real. to all these people, to all of you i say we'll stand with you. thank you. [applause]

>> inspiring. great to have you. so we just heard a lot about the very lofty and wonderful goals you have and i want to drill down on one example. because ultimately the world bank is a financing mechanism, right? >> right. >> let's talk about the hydroelectric plant in the democratic republic of congo. tell me about the decision process there? what is the money used for exactly, etc.? >> so the initial $73 million is really for planning. but the numbers -- and i think this happens to most people who take a look at the geography, the potential, the numbers. hydroelectric power has been controversial for a very long time but in this particular geographically location with very little environmental damage with relatively little displacement, you could generate up to 40 gigawatts of capacity. that's half of what they have in sub-saharan africa.

it will be three cents of kilo watt. we pay 10 cents to 20 cents per kilowatt. in africa they pay 75 cents per kilowatt. they have -- >> despite the high costs. >> then if you add the cost of transmission, well, you know, chinese companies tell us they can build transmission lines as far as a couple thousand kilometers for an additional two cents, three cents per kilo watt an hour so we are talking about extremely cheap energy. if it's just the cheap energy you'd have to look at it but it's not just that. it's so much cleaner. so over a 30-year period, the co-2 emissions from a hydroelectric would be less than a coal powered power plant.

how do you reach the aspirations of our people, the aspirations the people have for themselves with regards to energy? you don't need coal, you don't need high row electric, you don't -- hydroelectric, you don't need that, you need solar and wind. it's not possible with intermittent power so the question you have to ask yourself, are you serious about two things? the first is, are you serious about working with african countries and people to help them reach their aspirations? and the answer for us is yes. the second is, are you serious about climate change? and if you are it's a twofer as we say. >> the kilo watt hour if it were coal? >> it would be higher. it would actually be higher. >> ultimately, what happens when the plant is constructed? are people going to have to pay for it? how far does the planning go? >> this would be a source of income for the democratic

republic of congo and you have to build the -- >> the consumers would pay for it. >> and they've already signed an agreement with south africa. south africa is ready -- they're beginning to get serious about agreeing to actually pay for the electricity. now, the thing is in five years, 10 years, 15 year 20 years, we absolutely know for sure that africa will need that power so the question is, which path do we go down? do we go down this path that would avoid nuclear, coal, and provide this kind of power which could be clean as you can imagine or do we go in other directions or do we turn away? for me, what we're saying, look, this is going to be hard. we know this is hard. there is a lot of instability in that region. but there are other projects in the world in which we've been able to build sort of a governance structure around something that's very important. the suez canal is one. there are others where we said this project is so important that we'll protect it from local

politics. >> very difficult to do. >> that's not going to be easy. that's not going to be easy, but the question is, is it worth it? and for me, something that would provide half the power that sub-saharan africa have and take carbon out of the air is really important to explore. >> it's cheaper than fossil fuels but in a lot of places you don't have that choice. you go to brazil and people are angry that their gas price is high because of ethanol. where do you balance where the poor in the world want electricity, they want cars and the developed world will say, it will cause emissions, how do you balance them? >> for us we're trying to say, look, there will be different solutions in different areas so are there places where solar and wind-based microgrids and minigrids make sense? absolutely. villages in india. there are villages in africa.

>> will you fund a coal plant? >> you know, our board has been very clear about this in that we would only do it in the most special circumstances. and so, you know, there are circumstances out there where there's just no other option. right now, i mean, we haven't signed any agreements on funding coal while i've been president. but you have to balance the need for power with climate change. and so if you look at the coal power plants that we would consider, kosovo, maybe smaller ones, the impact on co-2 emissions as a whole will be minuscule compared to what's happening now in the united states, china, everywhere else. would we do it? if it came to the point where there were absolutely no other potential choices for building base load which is what we're talking about. not for intermittent power. then i think we would have to consider it because people have a right to energy.

>> the world is awash in liquidity right now. there's a lot of cheap money in the world. frontier funds -- do you know what a frontier fund? it basically means investing in places like africa, bangladesh, etc. they're getting investment dollars in a way they have never before. do you co-invest with them? do you even have a role? >> we were just at the g-20 meeting. i didn't attend but our chief financial officer attended. for the last three or four g-20 meetings, the topic is we need more funding for infrastructure in developing countries. so the world is awash in liquidity, that's true, but it's really not going to fund those projects that are critical for economic development. >> so is your role go where the private sector will not go? >> we'll try to go where the private sector fears to go and then lessen their fears going there. if you get a sense of the scale, every year the official development assistance, foreign aid is about $125 billion a year.

so africa alone has about $100 billion a year in infrastructure needs. if you look at the bricks country, this is africa other than south africa if you throw in south africa and the bricks countries themselves have about $1 trillion a year in infrastructure needs. so foreign assistance is a tiny piece of it. what we now know is that as i said, everybody wants to join the global middle class. in order to meet those aspirations we are going to have to invest in infrastructure. there's no way that foreign assistance or even the bank, we're at $50 billion a year, is going to be able to meet that need. what we're really trying to do is structure deals so we lessen the sense of risk, that we make clear what the returns are going to be and then we crowd in, as it were, private sector funders. and right now there are a lot of private equity firms, black rock, others who are making the investment. what they're telling us is they don't just have the personnel to

be able to give them a sense of what the risk is. >> you need real -- >> how do you do that? we have folks. we have the 1,000 economists and 2,000 ph.d.'s that will give you a very, very fine grain analysis of what risk really is. >> i wasn't clear, how are you able to double your lending capacity? are you getting more money or is the board approving more leverage? >> both. we're going -- the board is approving more leverage. we're not -- let me put it this way. we are not getting a capital increase. in other words, we're stretching our balance sheet as much as we possibly can. and we have increased the single borrow limit. some of our biggest countries, india, china, brazil, are getting close to their single borrower limit. so what we've done is increase the price. this was a difficult negotiation, but they have agreed to pay a higher price for this extension of their ability

to borrow. >> interest rate. >> so it's about -- >> good. >> and we have a very healthy equity loan ratio. 28%. so the question for us is, how low can we get in terms of equity to loan ratio? >> this is the equivalent to l.t.v. you're way underwater. >> talking about 10%, 12% equity to loan. some banks were so leveraged. we were at 28%. we have an extremely healthy balance sheet. the question for us is how low can we go in terms of equity to loan ratio? in terms of it we could increase the volume of our lending. for us it was a matter of being more creative with the resources we have. >> every dollar you're lending you're lending out 10 times, 12 times?

i don't mean to put you on the spot. i never considered it for the world. i think of fannie and freddie. >> why do we do it this way? we have the best a.a.a. credit rating in the world. the reason we keep such a healthy loan ratio is because it's been argued we make risky loans. we loan to places nobody else will go. we just made a commitment to ukraine and we were the first ones to make a commitment of $3 billion. there is risk in what we do. you do have to keep a very healthy equity to loan ratio in being able to ensure you won't default or get in trouble. the question is how healthy does it need to be? we can go less than 28% equity to loan ratio and still have a very good institution and not

get in trouble. >> do you care about getting paid back? >> of course we do. here's why. when we talk about our market rate loans, the loans we provide to india, china and other places, it's about 50 basis points. >> cheap. >> we borrow minus 25 basis points, something like that. so the spreads just are not that great. we think when we provide a loan at those rates, it's part of the responsibility of those countries to us as an institution to make sure we get paid back. >> let's take questions from the audience. and we'll take some from new york as well. gentleman right here in the front. there's a microphone coming over. >> president kim, i'm very excited to hear about the discussion with regard to inga and the potential that the world bank sees with regard to it.

has there by coordination as it relates to the u.s. government and the power africa initiative with regard to leveraging the capability that the bank or power africa on the other side may have as it relates to inga given d.r.c. is not one of the countries related to power africa? >> we are in active negotiations. i know that many people in the u.s. government are very interested in inga. there hasn't been a decision yet about whether it would be part of power africa. it's not. it's not right now, as you said. i think the u.s. is going to be critically important partner. not only in the sense of government participation, but there are a lot of great companies in the united states that actually make the technology that we need for the grand inga. you know, this is difficult. when it's going to take the world bank, we're already working -- the first grant we're making to d.r. congo has been

matched by -- not fully but partially matched. so it will be african bank, world african bank, part of the government of the united states, we hope -- we're not sure yet. the government of china has shown great interest in this particular project. and i would like to think of this as a potential great -- potentially great opportunity for these institutions to work together around something that will be so important, not only for african people, but for the planet. and so this is a -- this is a rare opportunity that we have now. there's no question that it's going to be difficult. as china, the united states, all the different multilateral development banks, usaid, they are interested in this particular project, if we can get this group together i really do think we can make it work. >> right here in the front, again, and then we'll move to the middle and the back. >> world resources institute. i was surprised you didn't address climate change more

directly in your presentation. it's obviously global. it's obviously a threat multiplier and obviously the impacts are greatest on the poor and the poorest of the poor. i wonder if you could talk more about how the bank has embraced that set of issues. >> you know, i've talked about it so much that i decided not to talk about it this much in this particular speech. when i -- when i arrived at the world bank -- did i see harold in the group? so harold is one of my heroes and he was right there helping us begin that fight against hiv-aids, and the reason i point to harold is that when i came onboard, i asked the people who are working on climate change, i said, do you have a plan that equals to the challenge? and they said, well, what do you mean? i said, let's take one example. let's take hiv-aids. so when harold was head of n.i.h., they mounted a campaign the likes we have not seen before so we discovered people living with the virus in 1981

and n.i.h. made massive investments in be h.i.v. research. i remember harold saying, there are two types in this world. people researching hiv now and people who will be researching hiv in the future. moved huge amounts of funding into this particular area. we changed the laws so it would be easier to get the molecules into industry. then we changed the laws to get more molecules that are promising for industry more quickly. networks theet up likes of which we have never seen before and in 15 years we had a treatment that basically universally time deadly disease into one that was

a chronic condition. mean by plan. you have the basic planning, the industry, the clinical trials, whatever that would be -- do you have that altogether? i got was aot resounding no. i kept saying, what's the plan? andprofessor came to see me i asked him the same thing. what's the plan? do $8 billion a year in energy funding. what do you want me to do? there was no plan. them, here's what i think happens. i think what happens is that when some report comes out over some extreme event that happens, the whole world looks to you guys and they are asking themselves, what are you going to do? you say things like take fewer

showers, put solar panels on your roof and you say, it's not such a serious problem after all. our plan has five ports. there has to be a reliable price on carbon. we have to remove fuel subsidies. egypt is facing many problems. it they spend eight percent of gdp on subsidies. they have to remove fuel subsidies because it's bad for the air and very bad for government. unpopularpolitically to the movement. we want to work with countries to remove fuel subsidies. cleaner cities -- that's why we work with china. we think there are tremendous innovations in building cleaner cities.

and there being built lack of planning is causing carbon output to go up. we now know that there are fantastic examples of being able to reduce carbon monoxide from cities. this is an amazing example. we will reduce our carbon footprint by 30% i 2030. we will get the job done by 2017. the examples are out there. we have to be the organization that takes the great solutions that are already out there and spread them around the world. finance forccess to sustainable energy. we do not yet have the kind of access to finances that people need. there is not enough financing to and the demand for solar wind energy in africa. we need to do that. there is this thing we call smart agriculture.

there are some examples of how haveidual states c brought to the table really innovative ways of not only increasing productivity, but actually putting carbon back into the ground. i just had a great conversation with bill about this issue. he is very interested in agriculture and health. that everything you need to do to increase the productivity of small farmers in africa is exactly the same thing you need to do to create more climate smart agriculture. there are five things we know we can do right now. these are all propositions. on --is general agreement the most controversial one is the price on carbon. the other four, i think we all agree on this. if we could just make those five things happen, it's the

beginning of a plan. the basic point is this -- why are we not as serious about climate change as we were about hiv? harold andis we had others who led the charge. another part is, i think we are not yet arrived to the science of what they are telling us. there is criticism of the world bank. if your mission is to alleviate poverty, then you are focused on theree change, sometimes the two. clients isur biggest bangladesh. bangladesh, if you look at what's happening in the oceans and how much land they are going to lose, this will be the number one poverty-stricken nation. if you look at the coastal

cities, one of the predictions is that if we get to where we think we will get in terms of temperature rise and see rise, bangkok could be underwater by 2030. we feel that tackling climate change is critical to tackling extreme poverty. >> is the world bank the best mechanism? s hoping they would say, hey, here's the plan, go do it. >> you think the world bank can execute on that mission? climate smarte agriculture and provide better financing for global energy. we definitely can help people in inner cities. >> even though they don't get a lot of investment because it's not profitable? the profitability is one aspect of it. the real problem is you need long-term financing. it's very difficult to find it

anywhere in the developing world. the real issue and the reason so developing countries leaders are worried, it is still hard to find long-term financing for infrastructure and energy. now, with interest rates going up, will it get even harder? that is our role. it is making financing available for those things we know are good for people and good for the environment. >> let's go to the back there. the woman in the very back row. in the purple. thank you. a real pleasure to have you here. i'm with the campaign for tobacco free kids. my question is, given the bank focuses on the top five in india, china and bangladesh,

we happen to be the country with the greatest amount of smokers in the world. in favor of increasing tobacco taxes. which would increase the revenue of the government and decrease the number of smokers among the poor. >> let me answer the question a bit more fully. one of the most and port and studies that has ever been done in the world of health just came out recently. review of 20 did a years of investing in health. they were responsible for the 1993 report of investing in health.

they did a 20 year retrospective. e findings, looking at the studies that have been done over the 20 years, some of the findings are stunning. 2000-2011, they estimated that 24% of economic growth in that time was related to improved health. that, now,he case it's not just a question of investing in health. it's the right thing to do. health is the right thing to do economically. we have never had that kind of number in the world before. this is a stunning number. education, to give you another example -- they put out a program on international student scores. -- it's amazing that

the better you do on these scores, the better your economy does. now we have direct evidence in investing in education and health that is good for economic growth. we really do not have those numbers 20 years ago. for people like me your health activists who were using the moral argument to invest in health education, now we have the economic argument. you need to invest in their people. in that study, one of the is slowing-brainers tobacco use. it is something that we have to look at. what we are now trying to look at is how can we provide everyone some sort of security in health care? ebersol health care is the link which we are using. we are very involved in that. we have become much more involved since i took over. is, show us we work the evidence and we will move in that direction. i think the most exciting thing for me is that 20 years ago we

were arguing from a moral, ethical basis that you should invest in people. now, the evidence has caught up with our ethics. the evidence is clear, investing in people is a smart thing to do. every country i go to, when i , everyth heads of state single one of them asks me to questions. my expenditures for help in the cities and how do i build an educational system that will help us be more competitive in the future? every country in the world. every country, including this one, has a problem with these two issues. because they are so important for economic growth, we will be very involved in that. will you raise taxes on cigarettes?

very clear opinion on taxes. i think they are a good thing. whether they make sense in any to makeuntry, i'm going the argument that it will make sense in every single country. whether this works for them, i'm not sure. what we can do is to make very clear policy recommendations based on that. what happens is we make those recommendations and the countries to make the choice. it's a loan. when we provide a loan, the countries are in the driver seat. they make the choices. i will continue to bring the evidence to them that this is a good idea and my hope is that more countries will adopt it. >> let's take a question from new york. go ahead. much.nk you very grounded by this response you've just given to

the question about health and education. going back to your opening remarks, which basically focused on the fact that we live in a canerent age where the poor view that ash -- i a potential for what i would call motivation. , all of usent work involved in that know that there are certain countries and certain cultures which are motivated in a different way than others. you raise some of them like education and health issues. how do you see directing the world bank to capitalize and to expand the motivation of the recipient countries to address the issues which you are trying to address?

>> thanks for your question. friendext to you my good john. how are you? here is what we hope to be able to do. what we hope to be able to do is to really bring solutions together. ring the kind of approaches to improving educational systems and improving health care systems. andding better roads cleaner cities. we hope to bring all of those possibilities to countries directly. we hope that they would choose the options that make the most sense. we are a very unique organization. we are run by 188 governors. those governors are the ones who determine most broadly the

directions we go. of foreigninister affairs and the bellman. , ituse we are a collective is very difficult for us and management to dictate what any single country does. so the principle is we provide evidence, financing, everything we can to increase, as you say, the motivation, of countries to do the right thing, but because it is a collective, the countries have to make the decision, and this is important. one of the great criticisms of the world bank in the past is we told countries what to do. we land on the scene, fly in to the capital cities and tell countries what to do. we cannot and we will not do that anymore. instead we will try to convince through evidence.

i hope we can be very influential, and the better we get at providing, not just, sort of, ideas, what to do, but the better and we get at helping ow -- here ishe h how china solves the problem of irrigation, how a region in kenya has implemented climate-smart agriculture, how a city put in bus-rapid transit and had an impact on carbon emissions and got people moving, here is a toll road in senegal -- why don't you consider this? the difference is we are not saying build a toll road, we are saying here is an example of how this worked well, this could work for you. we want to excite the possibility of these countries and they will make the right choices. now i see that you are seeing at a dartmouth table. i seem red and fred there -- i see brad and fred there.

good to see you. >> the middle of the room. the woman -- he has the blue jacket on. >> thank you. i am from the state department. a question -- you have laid out a broad vision for change for the bank, and spoke about the need to bring a global community around the vision, around ending extreme poverty and addressing climate change, including business and government. what do you see as the mechanisms -- there is a discussion of the next round of global development goals, but it seems that getting the world around these goals, particularly such a diverse set of actors, to change them will be a significant task. any thoughts on what it will take? >> what i have been saying to our team, and people that are really close working partners,

people like the world wildlife fund, the people at the nature conservancy, we are in conversation with them all of the time. the approach is yes, we need a global agreement, and the opportunity will come up in paris in 2015. but, what can we do right now to make the likelihood of a global agreement -- to improve the likelihood of a global agreement? i think what we have to do is take all the things we know we can do right now, the things we know we are doing badly, and begin to tackle those issues so there is momentum. will there be a great agreement? i do not know. i hope so. that would be a huge boost forward. what are the promising signs? i think president obama and the u.s. have made strong signals about a willingness to move forward. china, despite the fact that it

is the largest inventor has a huge ambitious plan for reducing carbon footprint and the european union has always been focused on climate change issues. if those three came forward and lead the charge to having an agreement, i think we would have won. still, it is complicated. there are complicated issues about who play -- who pays for adaptation, for example. the most important thing is any of us who can act right now, do things right now, we need to do it, and for us it is straightforward. >> let's go to new york for another question. does anybody have a question? while new york thinks about it, let's go right here in the front. >> good morning. .y name is bob though i am now with the department of energy, for 60 years iran the private sector

arm of the asian development loansnd we increased our by a factor of 41 times in that period on rocksolid transactions. michelle is right when she says the world is awash with money, and you are right that there is no long-term capital, and the nexus there is the reason why money does not go to these projects, why the private sector does not go to these countries, and, hence, why they are poor, is the government's in these countries are so bad. there is no rule of law, no regulatory framework, etc.. i was is appointed to hear you talk about -- not talk about government because that is the key. my question is what is the world bank doing this -- doing on this issue? >> you acknowledge the issue. >> you know also that the quality of governance varies

dramatically across continents, across the world. i think most people would be surprised at how much better government has gotten over the last 20 years in african countries. if you look at the fiscal policies, one of the things that happened over a 20-year period is mainly because they had to these countries listened to groups like the world bank, imf and others and they watched carefully. they benefited tremendously from debt relief, but they also did institute more rational and evidence-based, as it were, fiscal policy. they did watch there and then--- gdp ratios.to-

governance issues are real. we continue to work in places where we know there is corruption because there is no other group that would do it. for example, we work in afghanistan. it is critical that we work in afghanistan. nobody wants to see afghanistan go back to an era to go back before 2001. we also know there is a lot of corruption there. the best thing we can do when we go into a country, we make it clear we have zero tolerance for corruption. my first major decision was whether to stop a bridge project because of corruption. we did it, and we will continue to do it. we have to fight corruption, and do everything we can to try to help specific countries improve on their governance. the good thing about the bank, because we have safeguards, we do auditing, we are so careful in following our money, we could at least tell our own govern