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Cohort XII - US trip - Day 2 – morning sessionChristine Hogan – Executive Director for Canada, Ireland and the Caribbean at the World Bank GroupCanada’s largest development partner. Relationship goes both ways. Canada’s contribution is valued. Thought leadership, level of engagement, contributes to effectiveness as a whole. It is a fin institutions. Invests in countries. Not always in financial terms. More cooperative model. Milestone to celebrate end of world war I... Purpose to finance reconstruction of Europe. Bretton Woods. In New Hamphire. Was known as international bank for development and reconstruction (IBRD). Concept of development was added but main purpose originally was reconstruction. 50’s: infrastructure focus. 60’s shifted to rural and ag (economists and engineers). Then health and education - social and human dimension. Then fiscal issues along with IMF became prominent. Then social and governance. Now focus is on data. New flagship is human capital. Levels of investments in humans. Links back to productivity of countries. Provided an overview of World Bank Group. IBRD original institution. Then IDA (association) created for low income countries. Grant terms, generous loan terms. Replenished on 3 year cycle. Canada major contributor. 60 yrs ago, IFC was created. Private sector arm of the World Bank. Had its own Board and CEO. Concept of cascade (where public resources can spur private resources). MIGA is a guarantee institution. To manage risks in developing countries. ICSID is tribunal - to deal with dispute. Headed by a Canadian. IBRD - there are costs (interests on loans, grace periods, etc...). IBRD expected to be self sufficient. There was a major fund injection recently that took a number of years to negotiate. Areas of activity: public admin and law is the biggest. Sub-Saharan Africa 20%, South Asia 19%, Latin America 18%, Europe...Governance: USA largest shareholder with 16.28% (next biggest is Japan). Canada is 2.6% (with constituency of Ireland and Caribbean, 3.6%). 189 member countries. Not a political institution. Written in founding principles.16,000 term employees, 150 country offices. Twin goals: end extreme poverty (Bangladesh and South Saharan Africa recently) and boost shared prosperity (inequality can be extreme in many countries).Alignment with SDGs (#1 and #10 directly linked to twin goals). Role of Bank in knowledge. Changing nature of work. Role of automation. Doing business report also well known. Canada and World Bank. Very ambitious targets around gender. Climate change is massive priority for the Bank and Canada. 20% of activities for the Bank. IFC see itself being able to move market around climate. Ex: battery storage. In Africa - allows solar and wind. Governance also another area. Migration, conflict in fragile states. Helps other types of sectoral investments. Energy group visited. Minister of Health, Infrastructure, Development, etc... Approx. 10 professional staff - Canada, Ireland, Caribbean. Tricky time. World Bank are contributing to some of the good things happening in the world. Q: feminist engagement. How do you get US and other constituents on side? Canada not only country interested in advancing gender issue. Minister sits on advisory group. Two recent studies - cost of inequality. Canada needs to understand the role of WB to amplify goal of Canada. Very good partnership. Still work to do to point to results. To convey outcomes. Banks efforts is client driven. Need partnership to make it happen. Issue on economic empowerment of women. Comment from ESDC. Measuring outcomes - not easy. What is the culture at WB to see what’s happening? There is a culture of evaluation. It can’t hide. There were controversies in the past and has learned to point to results and outcomes. Environmental and safeguards framework. Throughout lifecycle of projects. Has to produce returns bc a financial institutions. Lots of pressure from donors who contribute to the bank. Need to report back to taxpayers on return on investments. Bretton Woods report tabled in Parliament every year that speaks to results. How do you get partners to participate in issues like climate and migration? New commitment to climate change in recent publications. Bank is a very nimble place. ??Changing nature of work??. Developed in a very transparent manner. 150K downloads. Various issues addressed - disrupted tech, taxation, etc... will create conversations with stakeholders, with private sector investors. Human capital index launched. Louise Levonian, International Monetary Fund Executive Director for Canada, Ireland, nine Caribbean countries and Belize, and Analisa Bala, Board Operations Officer, IMF Secretary’s Department IMF is amazing. She is an economist. Institution she looked up to. 189 countries sitting at the table, 24 exec directors.Canada, Ireland, 10 Caribbean countries. Behaving very collegially. Only two female directors at the Board. Different languages, accents, quite amazing in terms of what it is trying to achieve. Role of the Exec Board. Major policies and operations of the fund. Adds diversity to our voice - carry G7 status plus Ireland and Caribbean. Small countries with limited capacity and which are subject to environmental disasters. C. Lagarde keen to help small states. Championed a conference to build resilience to natural disasters. What can the small states to do to be better prepared? PM of these countries are here today. Minister Bibeau was here too. Canada well appreciated. How do you prepare for natural disasters, for the future that’s coming. IMF in global landscape. Unique global institution. Universal membership. Advice on economics. Big challenges: trust in institution is on the decline. Across the globe. Rising protectionism. Economic landscape is changing quickly - tech, productivity, policies, labour makret. Remain true to its mandate - high quality advice and lending. At crucial point. Canada and the IMF. Open mid-size economies. We have a lot at stake to ensure IMF is effective. Canada has been a vocal champion. Resilience and sustainable. Supports flow of trade and sustainability. Financial safety net. Prevent crisis. Fiscal policy advice, lends $. Analisa: she works in the Sec department. Involved in running the board as well. Board operations officer. Deal with policy work. Every policy item goes to the Board for review. Way to keep institution accountable for its contribution. Board is very critical in that sense. IMF has approx 2,600 staff in 150 countries. IMF vs WB. IMF is about lending. Also surveillance. Delving into uncharted territories. Macrocritical issues: inequality, climate change, female labor force, participation, corruption. Example: Domenica and natural disaster. Impact is 240% of its GDP. Hence macrocritical. Global surveillance products are better known. A lot of focus on spillover and cross-country analysis since the crisis. Greece great example. Want to be even handed. Treat every country the same regardless of its status. Meet with Ministry of Finance and Central Bank and civil society and NGOs. Lending. Instruments available quickly for crisis management. Some concessional lending (e.g. Ebola). Funding with conditions (countries need to agree to address internal causes for problems so they can receive funds). Need to get fiscal house in order, address corruption. Harsh conditions. But there are other lenders bilaterally who may not have as stringent conditions. Could result in instability. Capacity development. Governed on basis of power. US do not want to lose their veto at 15%. AIIB was created by China bc of inability to join ... Stability with prosperity is the promise of the Asian banks. crisis in operations is another one too. Concern ... debt levels are really high. But jury is out on whether Chinese model is working. Different models. Some countries may not be so thrilled to have such high debt with China. Who is signing the deals? There are also political hooks from accepting loans from China. China may not know what it’s like to not being paid back yet. Health of world financial system? There was a lot of stimulus. Need to ??fix the roof while the sun is shining??. Window for policy action is narrowing now. Tariffs are a big factor into this. Global debt is at an all-time high... acceleration in private debt. Trade is a big downside risk. And is a big priority for the fund. Invest in people may not be natural for the fund. Funds’ big strength is data. On gender, energy, etc... Difficulties of middle class were left behind by globalization. Inequalities within countries is a big concern. Not between countries. Canada has always been on the right side of history. Thank you Canada!Canada very well respected. People listen when we speak. Desire to get to know her in her new role. Louise’ first impression of her new role. Went from a staff of 27,000 to 8 staff so conscious of what she is asking. Feels like the Minsters’ office. Her staff exercises the challenge function. The challenges in the world are real but the IMF is working towards bigger outcomes. IMF is a big institution. Managing director (Lagarde) has a vision for the institution. IMF is looking at itself and looking to evolve. China’s lending is increasing significantly. Its status has to change. Quota = % of its vote. If we want multilateral system to continue, it will have to adjust. Federica SaliolaThe changing nature of work There is a lot of pessimism around this topic. Job losses, etc... not new. Report brings a lot of history from Marx to Keynes. Employment and automation can go counter direction. Employment losses in old sectors. Another force is innovation. There will always be a new box. New task, new sector, so challenge is for new sector to absorb those who lost their jobs in old sector. Report was downloaded 610,000 times. We were invited to download it. Changing nature of firms. Digital technologies. Why? Not expensive to set up. Alibaba ballooned between 2003 and 2017. They connect buyers and suppliers. Physical presence no longer prerequisite. Other examples - virtual networks like M-Pesa in Kenya, AirBnB, Didi Chuxing. Changes the nature of the contract too. Not as much long term contract. More inclusive. But short term work, part time. Important change re: skills. Can be relevant to people living in rural areas. What can governments do? Human capital: can be seen as old fashion recommendation but if people cannot read, how can they take advantage of these opportunities? New Human capital index. Chapter 3 of report. New. Productivity relative to frontier vs real GDP per capita. Canada #9 or 10. Index of 0.8 or 0.81... Factors in quality of health and education. Cuba does well. Lifelong learning - visible brain development difference when education starts early.Tertiary education plans central role. Can solve problem of skill mismatch. Social protection: informality stayed stable across the globe. More with digital economy Social protection would only cover 9% in India. Social assistance is only received by 2% of population. Proposes guaranteed social minimumSocial insurance (subsidized for poor, mandatory for more fortunate)Labour market regulationTaxationSocial inclusion is costly. Cost of full education could be 20% of GDP for low income countries. Energy subsidies proposed. Platforms don’t pay taxes but they are a huge portion of GDP. Question: report validates direction taken by Canada (education, digital). It is a global report so it’s hard to prioritize. Care a lot about outcomes. Future is very uncertain. What are the investments that need to be made to be prepared for various scenarios? How has report been received MC? Very well received. Positive messages counters pessimistic views. Countries can take advantages and numbers spoke for this. For some countries, difficult to relate bc the jobs being lost don’t even exist. Vocal on fiscal side. One criticism. Labour relations. Trade union very vocal. Decent job agenda. Focus on those who don’t have formal job. They have explained, clarified. Will probably never agree.WB vs IMF. They are bleeding into each other’s mandate. IMF has to think about social inequalities. And WB has to think about sustainability. Certain convergence of rhetoric. Are they struggling for more dazzle, or to remain the under the spotlight? There is real bi-partisan cooperation on foreign aid in the US so these budgets were not cut. Asian Banks are not applying conditions on governance, human rights... Strength of IMF in leader. WB was reorganized to address past problems. Governance is a huge problem. US will not want to reduce their share. Neither would European countries. If they did not exist, no one would invent them now but they do exist and they have a role. Momentum will keep them going. Test is when they have to replenish their funds. How do you measure prevention? Argentina received help. Chris Sands, Senior Research Professor and Director, Center for Canadian Studies, Johns Hopkins UniversityUsually met the group at US embassy.Works at John Hopkins. Involved with the Centre for Strategic and International Studies. Where are we after the mid-terms? Very normal result. Republicans did a bit less than what they had hoped. Trump did not have a lot of coat tail in the 2016 elections so they did not lose as many seats.Trade did not play a big role in the mid-term. Surprising. They don’t know if this issue works for them or not. Voter turnout was up. Increase due to millennials. Were not supportive of Clinton. Were against Trump but trusted the polls in 2016. Trade: Congress renews itself every two years so it’s a difficult one to control and discipline. The Dems have older leadership. Young new elected. Trade and USMCA will be voted on soon. Considered a money bill. Full text to be available on Nov 30. It will go to House Ways and Means and Finance. 15 days for house or senate before vote. Could see whole process take 6 months minimum but likely not to be approved before Cdn elections. Doubled the work of the Embassy and bureaucrats bc many new players. Pelosi may want to play for time. She could hold up for leverage. Deferred action on dreamer kids. Approx 250K of them. Immigration reform? The wall. Politics got better bc of caravan. Good for law and order. Obrador - mash up of Trump and Trudeau. Deal could take place where Mexico gets $ for airport and US get $ for the wall outside of USMCA. USMCA much more complicated than NAFTA. Requirement to document, rules of origin, new ways of calculating quotas / content. Two diminimus: example is level below which you don’t have to do certificates of origin (at $1000). Automotive 323 tariffs could kill it... ????? Early part of 2019 will be determinant for Trump. Either reined in or fighting back. People will not see lag effect of past decision affecting economy and could attribute it to Democrats. He may go toe-to-toe with China. Views on intensification of partisan polarization. In past, in many respect, Dems and Rep were in the same space. People don’t reach out to read on the other side... The difference in Canada between Lib and CPC is really not discernable in the big picture. Veterans are coming back and involved in politics but they are split. Public servants: some political appointees not very effective. They don’t understand how the machinery works. He is seeing a reconciliation. If you are not on top 10 lists, you can manage your department. In defense: increasing lethality!! Would never see this in Cdn context! Also goal of increasing military spending with secondary impact of increasing Bureaucratic efficiencies. Mueller. No one is expecting him to have a smoking gun. In both parties, there is probably a 1/3 of entrenched voters on each side. It will depend who he is running against. Dems could end up with a business person. Trump’s reliance on his family. How is that allowed and sustainable? Obama and Bush kept people too long. People are looking for a way to access and understand Trump and they are effective at it. Perspective on nuclear weapons. Trump believes US need largest and highest number of weapons. US is back into the game and ways to expand. Also cares about cyber-security, space. Why interest in Canada? And how about the longer term? If we can avoid going all in on protectionism, that would help the relationship. We have good groups that think a deal with US is the best deal. Canada should create same as fulbrite program??? Harper: funding cdn studies abroad was a loser so no longer supported. That is sad. Thx to Canada, we moved to electronic manifest. Tons of data to be mined. US-Canada relationship works best when US takes the role. ................
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