but i sometimes point out to people that one of the problems with understanding the world bank is it's called bank. and so most people kind of associate banks with lending money at least they used to. and now they associate it with losing money i guess. but in reality where the bank performs best is combining innovative finance. we've got some great financial capacities to think about how to you know, rein index futures for various areas, try to help with trade finance and combine that with the knowledge and learning from the we generate that other countries generate that you generate and we create various platforms to be able to expand that but then to try to make investments that expand market institution and capacity. so it's not an individual investment alone but it's to try you know, how do you build a system by which others can expand. so you know, it may it be a carbon market. it may be a local currency bond market. it may it be microfinance market. it may be the capacity in a conditional cash transfer system. how do you in a sense lever and that to expand it, and oh what i woul

a sustainable fashion, generate that kind of financial channels and if it's not going to be the world bank, then for sure there are going to be other institutions developing. now, whether that will take the form of the so-called bricks bank or not, i have to say i have my doubts there because the bricks is a really nice acronym, but as a political grouping in terms of a knitting together of alliances i think the challenges they face dwarves anything that the u.s. faces in bringing together new challenges and i think bruce is right. it's not easy to have a convergence of interests and i don't think on this particular issue to be quite honest that they do have that kind of convergence of issues. that doesn't mean that the things that they're talking about aren't of enormous importance around relevance and what they're talking about is saying we need a global institution that has a new mandate and, you know, in fact a mandate to actually do something about green growth, about climate proofing investments. we need a global institution that reflects the change in membership and partly that's th

but the story of mcnamara at the world bank is the story of a man deeply activist in wanting to help solve these crises and conundrums in third world countries. and he made a very good point in his speech during the '80s, when there was a big famine, a somalia-like situation. and he said, "you know, these images of hunger are only a partial part of the story. we in international agencies have got to slog year in and year out, famine or no famine, to try to solve the issues to help these societies to learn to live with themselves." and we see that in bosnia today and we see that in somalia.and i suddenly realized that what i was writing in the world bank chapters -- the four chapters in this biography devoted to this highly active individual with all this financial and technical means at his disposal -- is that of an activist who wants to intervene, who wants to play, who believes he can make these governments come together and solve their crises. and now clinton, of course, is saying the same sort of thing. so, in a sense, the moral became, "how would my generation now lead?" i starte

bob zellic, president of the world bank. was one. he believes that -- in dealing with china and other countries that, what's we should ask of countries is to be responsible stake holders in a rule based international economy. that's pretty close to the theme of bruce's paper. here is the one exception which i think will, is both curious in terms of its motivation and -- and affect -- and will probably fade. and that is, a lot of -- sort of cheap, bashing of other countries. john michael and i make the point in our paper that every country on the planet with two exceptions has to hope and pray is never mentioned during american presidential campaign. because if it is mentioned it is going to be bad. two exceptions are israel and great britain. and, of course, china has come up a lot. russia has come up a lot. for some reason has declared that russia is the number one st strategic threat to the united states. that sound very yesteryear, i will say. we will have other panelists in the room about russia. i don't think anybody is going to

bob zoellick, who is the president of the world bank group. i think it is telling that during his tenure and i think i'll address you as bob since we've known each other for a while, that bob has not only led a -- one of the major multi-lateral institutions of the world but has done so in a manner that has been based on a significant recognition not only of the role of civil society but civil society as a fundamental partner and critical player in the development space. as you all know, bob zoellick came from the private sector as the vice chairman international of of the goldman sachs group but also someone who has devoted years of public service, whether it's been as the deputy secretary of state or a career in terms of time as the 13th u.s. trade representative. an individual who is perhaps the best of what a public servant is, someone with both dedication, knowledge and a vision for change. we're going to have a brief conversation and thought that we could explore a number of topics before we turn it out to you, our audience, and there wil

so, again, going back to the history of the world bank group, we had an arm that was originally set up in 1944 to help with the reconstruction of europe and japan, then developing countries in the '50s, ifc which is our private sector arm, private sector profit-making arm. then ida for the poorest which came up in the '60s. so my thought was in a way we need something to further support and sort of fund civil society working on these social accountability issues. now, this is not a slam-dunk because you know, again, if you believe in the separation of state and civil society, i'm always a little wary of public financing or government financing of groups because do they maintain their independence so working with interaction and others we spent time talking to groups about how can we do this in a way that helps fund and contribute to better societies and accountability, maintains independence, has high standards, and that's what we're launching. and it also is the subject of some sensitivity with our board of directors, 25 members covering these 188 countries because they're worried, we

thank you, president zoellick for the work you've done at the world bank. i work for the fao and i happen to be from tanzania. my question to you is on youth unemployment. this week, about 90,000 students will graduate in tanzania from six about 20% of them might go to college. the rest will probably have no employment or no alternative ways to find jobs. what is the bank doing advise countries or to advise governments and what can you tell your successor to do when he comes in to deal with the problem of youth unemployment? >> thank you. >> well, let me start by saying around the world, so not only in tanzania or in africa but in countries, developing countries an developed countries, what i find is a huge area of interest is the inner connectivity between education, skills, and workforce. you know, and we're working with a variety of partners to look at this issue. i mean this is an intriguing one. we started with the islamic development bank, part of our broader partners to do research on education and youth unemployment and we came up with an e for e in

then robert zellik will step down as head of the world bank. his exit interview here on gps. next we go to israel which has anoinlted a king. what in the world does it mean? and, finally, the curious case of the guy who has come to be known as american french fry brother. a cultural lost in translation all the way from china. you won't want to miss it. first, here's my take. everyone is looking at europe these days as economic and political protests mount across the continent. the downward spiral in europe has produced a great debate over the virtues of austerity. the idea that government with large budget deficits must reduce these deficits mainly by cutting spending. if they don't get their spending in order, they won't be able to borrow money and will face a fiscal nightmare of ever rising interest rates. the problem is that as governments have cut spending in very depressed economies, it has caused growth to slow even further. do you see government workers who have been fired tend to buy fewer goods than services. and all this means falling tax receipts and, thus, even big

you have a substantial world bank. and development is now -- businesses ngos as well as traditional actors as multilateral institutions. how do they need to adapt to this new environment? >> let me answer that by a little bit of an angle. the gate foundation and most of the people who work there are unashamed boosters of multilateralism. and what we would like to see actually is more engagement in a multilaterally effective world we would like to see greater efficiency and focus for these institutions. we'd like to see greater citizen and civil society support. and as said, some of the political trends in many major countries are in the opposite direction right now. and we think that's a problem. so i think what we would try in our modest way to do is to connect up some of the partners that we work with in the private sector in civil society among governments to say can we find partnerships with some of the key multilaterallies to leverage effectiveness and get the multilaterals where they're comfortable in their own s

president of the world bank was one. in dealing with china and other countries as to what we shall ask countries to be responsible stakeholders in a rule based international economy. that is close to the theme of bruce's paper. here is the exception that is most curious in terms of motivation and the fact that will probably fade and that is a lot of cheap backing of other countries. we make the point in our paper that every country on the planet with two exceptions has to hope and pray it is never mentioned during american presidential campaigns because it will be bad. the exceptions are israel and great britain. china has come up a lot. russia has come up a lot. mitt romney has for some reason decided to declare russia the number one strategic threat to the united states. that sounds very yesteryear i must say. we will have other panels talk about russia but i don't think anyone will buy on to that proposition and as for china, we all know that china is an easy target in some ways, but we have already mentioned people -

i sometimes point out to people that one of the problems with understanding the world bank is it is called bank, so most people associate banks with lending money, at least they use to. [laughter] now they associate with losing money, i guess. but in reality, where the bank performs best is combining innovative finance. we have great financial capacity to think about how to do index futures for various areas, tried to help with trade finance, but also to try to combine that with the knowledge and learning from that we generate, but other countries generate, that you generate and we create various platforms to be about to expand that. but then to try to make investments that expand market institution capacity. so it is not an individual investment alone, but it is how do you build a system by which others can expand? so it may be a carbon market. it may be a local currency bond market. it maybe michael finance market. it may be the capacity in a conditional-transfer system. how do you leverage that to expand it > but i would summarize is a we are in the business of development solution. som

going back to the world bank group, we had an arm originally set up in 1954 to help develop construction in japan. we have a banking arm, and then there's ida in the 60s. my thought was in a way we need something to further support and sort of fund civil society work done on social accountability issues. this is not a slam dunk because, you know, again, if you believe in the separation of state and civil society, i'm always a little weary of public financing or government financing of groups because do they maintain their independence? working with interaction and others, we spent time working with groups saying how can we do this in a way that helps funds these organizations, helps them attribute to civil societies, accountability, maintains independence, has high standards, and that's what we're launching, and it also is the subject of some sensitivity with the board of directors, you know, 25 members covering 188 countries because they are worried well, you know, are we creating and sponsoring groups that will attack the government? is it too popular for government officials? what we

there is talk about this being the last american president of the world bank. there's also talk about the emerging powers, india, china, and brazil and so forth, creating a related but separate facility. can you say a word about that? >>one, i think that's kim kin will find out that he takes over world bank and he will have to do contract mending by one half. essentially all of the ammunition is being already shot off by these three bi predecess. he's got no budget increase so it will be really tough situation and position for him to manage. at the same time, the kinds of challenges that the world bank was set up to deal with are perhaps getting bigger. developing countries are spending something like $900 billion per year on this as being part of their needs. some people are talking about double that as their needs. what agency will be able to actually do that in a cynical -- stable fashion and generate the kind of financial. if it is not going to be the world bank, there will be other institutions develop and. -- developing. whether that will take the form of

where do you see the big issues coming at the world bank that the world bank is going to have to deal you see its role and how do you see it raising its visibility with the american people in a way the american people continue to support or congress continues to support its efforts? >> one of the huge changes in the world and you see it in this financial crisis is two-thirds of the growth in the past five years came from developing countries. the world bank play as role with that on the financing side but equally upimportant on the poli side, trying to make sure there are safety net procedures without busting budgets and transparency. that's in the interest of europe and everybody else because those are sources of growth going forward. those are also going to be challenges. a lot of countries now in the developing world are concerned about what's the so-called middle income trap. how do they keep their productivity moving forward. that goes back to the same structural agenda i was talking about for europe and the united states. you know, some of that could be pushed with more open tra

us worldwide -- worldwide@cnbc.com. >> yes, just right there. >> beautiful. >>> this morning the world bank has trimmed the growth for 2012. the bank says china should rely more on fiscal policy to fuel growth. as local reports say china is fast-tracking infrastructure projects to lift the growth rate. joining us now for more, the chief investment strategist and our guest host is julian jessop here onset with us. first to you, this downgrade to 8.2% from 8.4% for china. a big deal? or a reason to worry? >> well, first, i think a small downgrade like that is worthy of a prize for accuracy. the bigger picture is that chinese growth is clearly going to be slower this year than it was last year. the real question is whether or not it's going to pick up in 2013. we don't think it will. our forecast for this year is 8.5%. but with the further slowdown to 7.5% next year. and that could be quite worrying for the global economy at a time where the euro zone is likely to be in a deep recession. and the u.s. economy is likely to be fragile. >> at the same time, people were worried that china was growi

things from a historical perspective because i have a great love of history and so i look at the world bank as one of the bretton wood institutions created in world war ii for one set of functions. if you think about the issues that people were trying to deal with in that era, which is currency, exchange rates, reconstruction, trade, those issues haven't gone away, they've been transformed. so the institutions -- some people feel you should do away with institutions. i think they play a critical role as a thin interconnecting tissue among sovereign states that still have to make decisions but you have to make them better. there are a loft aspects of that modernization of the financial agenda. we got the first capital increase of the bank in 22 years in the area for of 79 poorest states we were able to raise about $90 billion for those countries over the past five years and then a second area is something that i know you feel very strongly about which is to try to open up the institution. and this we created the first freedom of information act for a multi-lateral institution but equally or

i think, you know, having worked in the world bank for many years and then having observed both the bank and the fund as well as been involved with the african development bank, i think that there have been huge strides in recent years in the seriousness with which these institutions have incorporated that dialogue. it's not perfect, and as many say, it's sometimes contentious. but i think there have been great -- there has been great progress. i want to turn the question a little bit on one side because i think that the international civil society movement has been i would say extraordinarily successful in its engagement. it's had big wins, sometimes against quite a lot of resistance on things like debt or some of the climate things or some of the other aspects that he was talking about. but i wonder if there's an important challenge coming for the people in this room. >> yes. >> let me put it in the following way. at this point international civil society as sort of structured by great groups like interaction and its component, have got a pretty secure and privileged seat at that table

i mean this is this is very rarely alluded to two thousand and eight egypt gets the world bank's number one hundred reform and country in the middle and world. and in terms of deliberate forms egypt was unbeatable in north africa the middle east from the world bank now a mass point of view the bigger the bigger kind of none of this going on here is that off the second more war the nation state is broadly seen as kind of propose a trip democratic accountability not since the let in on something that's been going away and in some places never existed. but that's now a global phenomenon we now recognize that public policy outcomes on happen at the national level and the policy makers are actually the ones who are national parliaments they're elsewhere and the ones who are dictating policy on any way accounts or you know they're not them as representatives and as a global phenomenon that's where that's an india that's in china that's in the u.s. and u.k. we don't even should we have just had a global financial crisis we have a global political crisis because our institutions no longer funct

it is a great pleasure to welcome to the interaction forum robert zoellick, the president of the world bank group. it is telling that during his tenure, i will address you as bob, that bob has not only led one of the major institutions of the world, but has done so in a manner that has been based on a significant recognition not only of the role in society but as a fundamental partner and critical player in the developed space. as you know, bob came from the private sector as the vice chairman of international for goldman sachs but also someone who has devoted years of public service, whether it has been as a deputy secretary of state or a career in terms of time as the 13th u.s. trade representative. an individual who is perhaps the best of what they permit -- public servant is, with dedication, knowledge, and a vision for change. we are going to have a conversation to explore a number of topics before we go to our audience. there will be some microphones for that. perhaps the place to start, as you and a successful term antiworld bank, -- at the world bank, what have been the areas of acc

that the banking systems of all the world are against this because they the banking systems can create money out of nothing whereas they cannot create silver out of nothing ok finally step five well that's about it but then you see everyone is happy everyone is happy i think that that if greece should purchase a thousand tons they would be able to mint three hundred thirty three million of these coins and what is a population of greece about eleven million or so that would mean thirty coins for each for each and every greek i think that a party as a political party or a leader like a. super s. if he were to propose this he would wipe out all opposition he would gain astounding majority of support now great great degrees does have one hundred eleven tons of gold if they sold twenty four for a thousand tons of silver they would be doing their people a great favor whereas if the gold stays in the central bank is not helping anybody and if that i'm f. and these folks are saying that you pay off the debt that is there they want to sell the greek they have to they have to declare do fault fo

today i spoke to 700 world bank officials from all over the world, and one of the things we talked abouts the recent elections in france and greece. is a difference between the short-term and structural. i think europe has tried to cut too much too past. while at the same time we vice president done enough. you need to address both. you need targeted investments to try to get the economy going, help deal with unemployment and under employment but that needs to be coupled with cuts. that mean social insurance reforms defense cuts and constraint constraints, comprehensive tax reform phased in, in an appropriate manner so you don't undercut the economy today, but you have a real major impact over time. >> so how important is it for the government to in addition to cutting long-term and dealing with that structural issue, to invest strategically to grow jobs? infrastructure or healthcare, et cetera? >> i think it's fully appropriate for the government to spend less on consumption. the stimulus plan was oversold to the american people so therefore didn't meet expectations which tainted the wa

tremendous loss years after new financial regulations were designed to avoid such a debacle do the world's biggest banks still believe they're too big to fail. and. to cross-talk the fate of the world's biggest banks i'm joined by andrew schiff in new york he is an investment consultant for euro pacific capital and author of the book how an economy grows and why it crashes in london we go to sam bowman he's head of research at the adam smith institute and in san francisco we have robert good news that he is co-founder general counsel and policy director for green lining institute all right gentlemen crosstalk rules in effect that means you can jump in anytime on and if i go to you in new york do the banks still think after the debacle with j.p. morgan chase that they're still too big to fail i thought we got over that in two thousand and eight two thousand and ten well well well some of the banks are too big to fail and that's that's a creation of crony capitalism which is you're right i don't think it's a creation of capitalism but we have we decided that in the compassionate crisis of two thousand and

the world bank has admitted it made serious errors during the project. >> thanks for the latest there. the first hurricane of the 2012 season is heading toward mexico 's pacific coast. it has strengthened into a category 3 storm with winds up to 185 kilometers per hour. it is threatening to bring heavy rains along the port city of manzanillo. the number of indians has quadrupled to 650,000, making them the largest foreign population. they're seen as blue-collar workers. a new generation are changing the perception of their community by being partners in some of kuwait pose the top firms. -- kuwait's top firms. >> welcome to kuwait city. it was in this neighborhood that 60 years ago, the first wave of immigrants arrived. despite the modern facade, this is one of the oldest indian restaurants in kuwait. it is here where the indian business council campaigns. -- convenes. what is the secret of the indian business community's success? >> the companies that have a positive attitude toward work. less corruption. >> there is an emphasis on roles here and there is a new generation of entrepre