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.”