DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries) NINETY-NINTH MEETING WASHINGTON, D.C. - APRIL 13, 2019 DC/S/2019-0028 April 13, 2019 Statement by H. E. Guy Parmelin Minister and Head of the Federal Department for Economic Affairs, Education and Research Switzerland On behalf of Azerbaijan, Kazakhstan, the Kyrgyz Republic, Poland, Serbia, Switzerland, Tajikistan, Turkmenistan and Uzbekistan Statement by H. E. Guy Parmelin Minister and Head of the Federal Department for Economic Affairs, Education and Research Switzerland On behalf of Azerbaijan, Kazakhstan, the Kyrgyz Republic, Poland, Serbia, Switzerland, Tajikistan, Turkmenistan and Uzbekistan 99th Meeting of the Development Committee April 13, 2019 Washington, D.C. First, we congratulate Mr. Malpass on his election as the new World Bank Group (WBG) president. Facing a challenging economic outlook requires a clear vision and strong leadership. With the Forward Look the WBG has compelling vision. We trust in the new leadership to continue its implementation efficiently and with a focus on qualitative projects adhering to strong environmental and social standards. Considering the clouded economic outlook and the rising debt levels in many developing countries, we call on the WBG together with the IMF to further strengthen their work with policy makers to improve debt sustainability and transparency, to increase efficiency and effectiveness of public financing and to undertake growth- enhancing structural reforms. Mainstreaming Disruptive Technologies at the WBG We welcome the efforts of the WBG to advance the critically important agenda of mainstreaming disruptive technologies. To successfully mainstream - meaning to replicate proven technologies, systems, and approaches in other countries and settings - we need solid evaluative findings from longer-term engagements. With this exciting but still new and rapidly evolving topic, a lot of exploratory work and pilot projects will have to be conducted first, to establish what works in what context. Hence, we support the five corporate priorities of the WBG to enable clients to build the digital infrastructure, to boost human capacity and to broker the risks related to the technology. To be successful, the WBG will need to create a culture of innovation in all its areas of activities. We are pleased that the WBG plans to conduct specific country diagnostics focused on disruptive technologies to inform the Country Partnership Frameworks. Such diagnostics can assess the ground level realities in a given country and identify opportunities and risks of new technologies. However, the WBG should also consider working on the regional and sectoral level. The goal of promoting universal and affordable connectivity in all countries should be pursued. To build the necessary digital infrastructure, the WBG will need to work on upstream, midstream and downstream levels and cooperate with private and public partners to develop new business models attracting private investment, in particular in countries most in need of infrastructure investments. Underserved populations should gain access to online markets and services, which could bring truly transformative results. We appreciate that the WBG intends to play a role in the design of technology-friendly regulation that would facilitate rapid innovation and mobilization of the private capital, while keeping its focus on engaging local entrepreneurs. We encourage the WBG to continue this path even though regulation is a highly contentious topic. Digitalized government services require a whole-of-government approach to boost public service delivery for the benefit of all and particularly for the poor. Therefore, the WBG GovTech Partnership is a welcome and timely initiative. Alongside, the WBG should closely follow and participate in discussions in other international fora. To be able to capture the opportunities of transformative technologies, it will be necessary to invest heavily in human capital, especially in skills and capabilities, from early childhood to adult learning. Strong, skilled and adaptable labour will enhance the capabilities of firms to create jobs. We urge the WBG to pay close attention to associated risks such as massivejob losses, exclusion, and rising inequality, as well as data privacy, cyber security, or excessive market power by the largest technology companies. In implementing the approach, we ask the WBG to prepare tools to address and to mitigate risks at regional, country, program and project level. We regret the missing focus on the strong potential of modem transformative technologies to boost trade and facilitate integration into global markets and value chains. If a robust enabling environment tailored to the digital era is in place, new technologies should bring opportunities for companies of all sizes to engage in cross-border trade and to make, move, and market products and services faster and at a lower cost than ever before. It will be key to build well-functioning markets in the new data economy, ensuring the availability of ample opportunities for entry, innovation, and competition. Implementing the Forward Look: IBRD-IFC Capital Package Update We are pleased to note good progress on implementing both the 2016 Forward Look strategy -which aligned the WBG with the Sustainable Development Goals - and the provisions of the 2018 capital increase package. We appreciate that the WBG is demonstrating its commitment to improve its business model. We encourage the WBG to continue this path focusing on efficiency and sustainability. At the level of principles, we wish to underline the continuing need for a balanced portfolio approach through which the institution stays engaged with all clients at all income levels. This includes i) strengthening institutions and resilience in middle-income countries, who often fight poverty in remote regions and ii) projects on global public goods. A broad and balanced support to all clients is the cornerstone of the WBG's healthy risk profile and the AAA ratings of its institutions. In this context, we welcome the creation of the new Global Reimbursable Advisory Services unit to support Bank teams to enhance strategic fit, client responsiveness and impact. We look forward to the new strategy for increased engagement in countries afflicted by fragility, conflict, and violence. To be successful it will be necessary for the WBG to adapt its operating model taking into account the multidimensional aspects of fragility and to strengthen its partnerships with other actors active in this field. At the same time, given the increasing debt burden in many low-income countries, the Bank should further refine its tools to monitor the debt situation of its clients, adapt its financial products to debt profile of individual countries and promote sustainable lending principles. We are also counting on the WBG to continue to lead the global public goods agenda. From climate change to crisis response, we believe the WBG is well positioned to address these challenges in a manner focusing on its core competences and its value added. At a time when multilateralism faces a stiff headwind, the WBG continues to demonstrate its effectiveness, not only in fighting poverty and achieving shared prosperity, but also in addressing the pressing global challenges of natural and man-made disasters, protracted crises, dangerous pandemics, and the serious threats from rapid climate change. 2 The Cascade approach has strong potential to promote the creation of markets and to leverage private sector resources for sustainable development. The International Finance Corporation (IFC)'s leadership is crucial to move this agenda forward, but it cannot succeed without the full support of other parts of the World Bank Group. We support the strengthening of IFC and MIGA, and remain committed to the Capital Increase. Finally, we urge the Bank to help expand harmonization efforts between multilateral development banks and to work more collaboratively to maximize their contributions as a group, including by convergence around core standards. The World Bank Group as the leading Multilateral Development Bank can play a major role in creating effective country platforms to maximize the contributions of all development partners. 3