World Bank Vice President: Our Priorities are Education, Promoting the Private Sector

Interview

Washington – IMF and World Bank meetings come at a time when global growth rates are on the rise after almost 10 years of financial crisis, while growth in the Arab region is witnessing a decline due to the drop in oil prices, continuing conflicts, and geopolitical problems.

In his interview with Asharq Al-Awsat, Dr. Mahmoud Mohieldin, Senior Vice-President of the World Bank for Sustainable Development, reviews key issues raised at the 2017 Annual Meetings in Washington, new directions in financing and the means to stimulate the private sector to engage in projects traditionally undertaken by governments, as well as the association of funding with sustainable development goals.

“In 2016, the global growth rate was 3.2 percent and reached 3.6 percent in 2017; next year, it is expected to slightly improve to 3.7 percent,” according to Mohieldin.

However, he noted that international institutions have advised not to rush with optimism about a rising trend in growth rates for several factors, including the spread of “protectionist policies” in trade and investment.

“There are also non-economic factors that have been highlighted in some studies, including the impact of political disturbances and conflicts in some cities, the geopolitical dimensions of some areas and the high cost of fighting terrorism,” the World Bank official said.

As for the Middle East, a recent report by the IMF and the World Bank forecasts growth rates in the region at around 2.2 percent, Mohieldin noted.

He said that next year growth is expected to be close to 3 percent, which means that growth rates in the Arab region are below global growth rates.

“The reasons are varied, either because of issues related to the decline in oil prices of the oil-exporting countries, or to the Arab countries that made gains out of the decline in oil prices and did not compensate for the losses incurred by other countries, in addition to conflicts and crises in a number of Arab countries,” he explained.

Asked about this year’s focus on education, healthcare and the strengthening of the private sector, Mohieldin said that the World Bank has published the World Development Report, which includes a presentation on the education crisis.

He noted in this regard that the current crisis had three dimensions: “First, countries lose much when they do not measure well the outcomes of education. The old system of evaluation based on success and failure is a traditional method. There are international standards for measuring the quality of education and its degree of excellence in some fields, in particular when it comes to applied sciences.”

The second dimension, according to Mohieldin, is the means to make schools an adequate arena for learning.

He underlined the importance of going beyond school buildings by promoting the use of information technology, developing sciences to meet challenges of the present century, and competing with the digital economy that may reduce employment opportunities.

“The third dimension relates to the measures required by a country to invest in education. Not only in infrastructure, but also in human structure, health and nutrition, and there is evidence that malnutrition at early stages affects the child’s capacity to absorb, and thus his ability to work,” Mohliedin explained.

As for the strategy to reinforce the private sector, the World Bank official said: “The World Bank wants to encourage the private sector to undertake projects because any country has a ceiling in its financial portfolio. If the state runs out of funds in private sector projects, this will be at the expense of other vital projects that the private sector cannot or will not provide, such as rural girls’ education projects or rehabilitation projects for the poor. The World Bank will focus heavily on this area in the coming period.”

Asked whether Arab countries have moved towards the new era of technological intelligence and behavioral information and whether they had room for new investments, Mohieldin said: “In my view, Arab countries that were late to catch up with the old technology have a better chance of catching up with the new technology if good investment spending is made; it is important not to be a mere user or consumer, but to acquire the ideas behind this technology.”

Mohieldin: IT Offers Major Opportunities to Promote Arab Economies

Mahmoud Mohieldin, World Bank Group Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships

Washington – World Bank Senior Official Mahmoud Mohieldin said that Arab countries could benefit from major economic opportunities by depending on their human resources, especially in the field of Information Technology.

In an interview with Asharq al-Awsat newspaper, Mohieldin said that despite slow growth witnessed in the Middle East in 2017 due to conflicts and fall in oil prices, Arab States could still take advantage of opportunities in the IT sector, as the most traded and most needed product in the economies of the 21st century.

Mohieldin is the World Bank Group Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships.

He told Asharq al-Awsat about the new international trends to benefit from Financial Technology, know as FinTech and considered as a new technology platform for financial transactions.

The official also talked about the ongoing Spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington, and progress achieved in the implementation of the UN Sustainable Development Goals (SDGs), as well as efforts deployed by Saudi Arabia, Egypt, Morocco and other countries in promoting development.

On challenges facing the Middle East, Mohieldin said that internal conflicts, slow investments and the decrease in oil prices have affected the countries’ gross national income (GNI) and growth rates.

“Our estimates indicate that the growth rate in the Middle East and North Africa region would reach 2.6 percent in 2017, compared to 3.5 percent last year,” he stated.

“While the current situation does not indicate any improvement, we have hopes that finding a solution to the Syrian crisis, ending the war in Yemen, and restoring peace in Libya would positively influence those countries and the whole region,” Mohieldin added.

“Growth in the region depends on security stability, the implementation of economic reforms and investments in building and reconstruction,” the official noted.

Asked about solutions to promote economic performance in the region, especially in the Gulf, Mohieldin said: “The economies of the 21st century require innovative solutions in the wake of technological progress.”

He noted that Arab countries should rely more on their young population and seek to diversify their income by promoting the use of IT.

Mohieldin underlined the importance of FinTech, which he said was at the core of the evolution of banks and financial institutions.

He added that the new technology would allow countries to overcome development challenges, by making widespread access to financial services possible, while preserving the privacy of financial transactions.

The implementation of the Sustainable Development Goals (SDGs) is another important topic of discussion during the IMF and World Bank Spring meetings.

“While it is still early to evaluate the progress achieved over the past two years, there are some indications that a number of countries have taken measures in this regard,” he stated, commenting on the implementation of the SDGs since their adoption in September 2015.

“The performance of Arab States (with regards to the SDGs) was deceiving in some countries and good in other countries, especially in the field of basic education,” he said.

2016: An Economic Golden Opportunity for the Arab Region

Mahmoud Mohieldin
Mahmoud Mohieldin

The World Bank’s Corporate Secretary Mahmoud Mohieldin expects that gulf oil exporting countries will be affected by the decline in oil prices, welcoming reform measures taken by these countries which include general monetary policies and diversification of income sources.

In an interview with Asharq Al-Awsat, Dr. Mohieldin said that there are golden opportunities in the year of 2016 in light of the declining prices of both mineral products and agricultural goods.

The golden opportunity for Arab countries is to take advantage of those declining prices to develop domains of construction and agricultural, alongside other sustainment projects of renewable energy, thus diversifying income sources and endorsing economic reform, growth and stability.

When asked about political and economic change over the past years in the Middle East, Dr. Mohieldin began with clarifying that the outlook of the economic future for the region remains vague post shortage in information and data collection in Arab countries, especially those suffering conflict that affected their capabilities of accessing statistics and intelligence efficiently and in a beneficial manner.

On the other hand the World Bank, the IMF (International Monetary Fund), in addition to other institutions all differently and independently stated varying rates for the Middle East and North Africa, and it is important to take those rates into consideration.

Considering Arab countries a sole economic machine is a bit of an exaggeration. Each country represents its own independent entity despite the possibility of being interconnected to other fellow countries by the today still restricted intra-trade, investments, labor movement or money transfers.

As for the greatest changes that affected the region, in his opinion, was the 2008 financial crisis fallout that not only influenced the Middle East but also the world. Mohieldin also mentioned the declining oil prices and continues fluctuation of mineral products, services and agricultural goods’ markets, which also took a toll on the region’s economic status.

Arab countries will be able to take advantage of that decline for domains of basic construction and renewable energy projects, after cooperating with international financial institutions.