Following is a transcript of a First on CNBC interview with Jim Yong Kim, President of the World Bank, by CNBC's Annette Weisbach
Annette Weisbach (AW): Let us start with your major takeaways from the G7 meeting
Jim Yong Kim (JYK): I've been to several of the G meetings and I can tell you that these are critical important times for leaders to tackle the most difficult questions. Earlier when the G7 leaders were by themselves they tackled every tough political issue you can imagine. And for us the issues were also tough, Terrorism, the leader of Nigeria was there talking, in Iraq talking about the difficult Islamic state and Tunisia and the recent terrorist bombing at their museum is one of the success stories we must support. Then we talk about everything from climate change to the pandemics. We talked about how to address issues of hunger in the world. We felt that it was extremely useful and especially this G7 where Merkel was so focused on specific outcomes.
AW: You're talking about the whole range of topics but how much more commitment is there of the G7 nations to really change the climate goal or the hunger issue in the world
JYK: All of the nation's talk about what they have been doing. And then one of the big issues that was brought up was that now is a chance of bringing all our efforts together. There was a great unity over climate change where everyone is pointing to the cup 21 in Paris. Francois Hollande has been a huge champion and has taken over personal leadership in a way that is very encouraging. Merkel has been one of the strongest voices n reaching an agreement. One of the challenges is finding the $100bn that moves from north to south by 2020 and in many ways that job has been giving to us and the IMF. Christine Lagarde work and I work so closely on so many issues, this is one we think we can make progress. If we make progress by, let's say October, on finding a path to that 100bn then we will be able to file an agreement and when we will be able to take off in terms of fighting climate change. Everyone in that room was committed in achieving that goal.
AW: What do you feel, is it harder to raise money in a world where more nations want to balance their budgets are tight by austerity?
JYK: The sort of grand aid has been restricted and hasn't grown over the last 4-5 years. And it is understandable; we went through a very large crisis. Some countries have increased. We should all salute the United Kingdom, in spite of very difficult financial circumstances; they have got to the pledge of 0.7 of GNP. Germany has also stepped up this year. But many countries have been facing difficult situations at home that we are not able to increase that kind of foreign assistance. Now there are many different ways of financing for development, we can increase poor countries ability to raise tax revenue, we can stop illicit flows, and we also know we can make better use of official development to leverage other kind of financing including private sector financing and this is the new vision. If we are going to have the trillions of dollars we need to tackle the infrastructure deficit, to tackle all the problems around poverty we need to be much more creative. I don't remember this ever happening before form a G7 meeting. The leaders gave us permission and even urged us to be creative with our balance cheats in groups like the World Bank group. That is small sentence that, you just watch is going to have major implications.
AW: Yeah we watch out for that to happen. Let us also move on to because you spoke about the… the… sorry. The region in Egypt or elsewhere where Isis is taking hold of different parts of like Syria. What do you think should be done in that region to stabilise and also to make people participate?
JYK: There are so many things that need to be done there. There are infrastructure deficit in Syria… There are infrastructure deficits everywhere. On the most basic level we just need to build back on very fundamental parts of the country that has been destroyed. From our view, we think that one of the most important issues is social inclusion. One of the topics we talked about at G7 was terrorism and you can imagine there are different views of where it comes from and how to tackle it. I think the general consensus is that it's a very complicated problem. You've got to get at the ideology, poverty, education and inclusion. Christine made an inspiring speech about the role of women in these countries, which is something we need to draw in as a potential great strength. For us we are really going to focus on rule of law, making sure people feel like there is social justice, access to education, access to jobs: making people feel like they are part of society. And so much more than before we are going to tackle the problem of social inclusion in these countries very directly. We need to understand better why it is that young people are attracted to these extreme ideologies that are so violent. Is it simply an economical issue? We don't think it is simply anything. Or is it a combination of job opportunities and inclusion? And a feeling of inclusion and a feeling that there will be justice in society. We are going to explore many different avenues until we find things that work because we have no choice, we have to set this region to a path towards peace and a path towards growth. And we are going to keep looking until we find that,
AW: Do you think that the Arab spring should have been handled in a different way looking at the outcome now.
JYK: Many people have known the region for a very long time. Many people told me we were naïve about the Arab spring. Everyone as happy about the fact it happened, but many of the things we have heard focus on the fact that there was really no institution on which the Arab spring could then build. An institution meaning places where people could dialogue not only within countries but across countries. There is still not a very easy place where the Israelis, the Iranians, the Saudi Arabians, Muslim and Jew across that region can sit down and have a conversation about where they want to go. It brings me back to the G meetings, those are places where, the leaders are going to see their counterparts, without the cameras inside the room, and they are able to say we got to get somewhere, we've got to talk. That platform doesn't yet exist, we need to create it somehow, I don't know what it would be. The UN is certainly a very important part of that conversation but right now it doesn't seem like that is happening in that particular context. If we can find a way to have that conversations and find some paths forward to take the energy of the Arab spring and turn it into things concrete that would last, I think we would be on a much better path.
AW: Yeah it sounds very promising ,but looking at what happens inside Europe with the refugees coming from that region , even inside Europe you can't find an agreement amongst politicians how to share the burden, where people should go, What is your advice to the Europeans.
JYK: I'm an immigrant; I immigrated to the US when I was 5 years old. From an economical perspective, you look at these countries that are getting older, that have long ago lost their demographic dividend in terms of young people, and I would issue a challenge to Europe, and it's the same challenge that South Korea and Japan are facing today. The countries that find ways that can begin to think about welcoming immigrants and finding ways of integrating them in their economies, I think are the economies that are going to do better going forward. There are many jobs that citizens of a country do not want to fill anymore, but they need to be done, at some level of skill. The problem of refugees is really difficult. Its people that are leaving really difficult situations, and these situations I know its tough but I think a humanitarian response is called for. But let me put this other idea on your plate, I know this situation in South Korea intimately because I have family there, The ability to openly and warmly accept immigrants from other countries as Korea gets older and older and their birth rate gets lower and lower is going be a big factor that will determine how they do in the global economy, they know and they are struggling with that, Japan the is the same thing. .SO as an immigrant myself, as a Korean who emigrated from Korea and become a part of the fabric of society, I can tell you that this is not just a temporary problem around refuges: this is a fundamental question for all advanced countries. Their ability to embrace others that don't look like them, first that don't speak the same language, is going to be a big factor determining long term success.
AW: Yeah.. Yeah.. I think that is very clear. Let us also talk again about institutions but this time in Greece. The World Bank is advised in Greece, Greece looks like deteriorating, currently, What do you think will happen What should be done?
JYK: I don't think anyone outside the intimate negotiations knows what's going to happen. I'm convinced that everybody wants to find a solution that will work for them, I'm watching very carefully about the spill over effects. Some of the countries we work with directly in eastern Europe can have direct impact, who's systems are more directly connected for example to the banking system, but I think there can be broader implications and I think that some of the commentary I'm hearing from people that have been in many of these crisis is that there are many surprises, you think that the market has already calculated in the impact of a problem in Greece but You never know. I would simply urge everyone at the table to come to an agreement that would be good for Greece, good for Europe and of course good for the World. They are happening right now, some of my very good friends are involved in those discussions and we simply wish them well.
AW: SO you're saying that it's in the interest of Europeans to finance the Greek state for another round?
JYK: Well let me put it this way. I think that there are many very complicated aspects to that discussion, and having had the privilege of sitting in on many different discussions, I know that there are many different interests, imperatives if you will, and I don't want to insert my own opinion here, we just need to come to an agreement that works for Greece, but especially one that works for Europe and the Global economy.
AW: Just one more question on Ukraine because it is like also Europe, and the situation there is not very promising. You are involved there and the World Bank is involved, what do you think will happen next?
JYK: Well we've gone to the limit of our capacity to provide support Ukraine. We're working on everything from public financing to just providing basic services to their people. We are in fact very impressed with the Ukrainian leaders, they have made commitments to really tough reforms, and they have got them through their legislature and they are really trying to take the steps that they need to take. Of course their situation is very difficult they are in the middle of a conflict. We are going to continue to try and find ways to support Ukraine, because their stability is really important, again not only for the region but for the entire world. On the one hand it looks very tough on the other hand we are all really encouraged by the commitment and determination of Ukrainian leaders.
AW: Many thanks
JYK: Thank you