The World Bank president, Jim Yong Kim, on Thursday in Washington, said developing countries, including Nigeria, faced the risk of losing two-thirds of all jobs that currently exist to automation.
He also counseled developing countries to look beyond aids to foreign direct investment which he said has stronger impact than aids just as he called for the mobilization of idle trillions of dollars “sitting on the sidelines…to help meet the exploding aspirations of people all over the world.”
Kim Yong said these in his opening remarks at the ongoing World Bank/International Monetary Fund Spring Meetings in Washington.
According to him, “We estimate that two-thirds of all jobs that currently exist in developing countries will be wiped out by automation.”
He added that this is not something that would happen in the future as it had already started happening.
He said “Let me just give you one example. Two, three years ago we were arguing about whether 3D printing would ever be capable of taking over garment assembly because garment manufacturing, has been sort of the classic light industry that goes from country to country based on wages.
“Two years ago, I was told, ‘no way, garment manufacturing still requires human hands. This will always be the way it is. It’s going to be this way for at least another decade’. But I just met a woman who told me an exciting story about how she is making couture cotton T-shirts and other clothing in Haiti with 3D printers. And she said, ‘you know, it’s exciting in the sense that we know that Haitians now can run 3D printers,’ but the downside is that there are far fewer jobs.”
He continued, “So something we were arguing about two or three years ago of whether it was possible, is already happening right now in Haiti. And so for every country in the world, we have to think very seriously about what investments we need to make right now in order to prepare ourselves for the economy of the future. And for developing countries it’s definitely one of the most important things is more investment in human capital.”
On what The World Bank Group is doing to mitigate the effects of this, he said, “We have to find new and innovative ways to reach the poor, and make the world more secure and stable. We have to start by asking whether the private sector can finance a project. If the conditions aren’t right, we will work with our partners to de-risk that project or, if needed, de-risk entire countries or sectors.”
He added, “There’s never been a better time to find those win-win solutions. There are trillions of dollars sitting on the sidelines, earning little interest, and investors are looking for better returns. That capital should be mobilised to help us meet the exploding aspirations of people all over the world. And with the crises we face, our task is much more urgent than we ever thought.”
While responding to a question on aid effectiveness, Yong Kim said, “One of the things that we found is that foreign direct investment often has a much higher impact, much stronger impact on improving institutions and government than aid by itself.
“This is why we’re trying to bring together the financing we provide to governments and also the financing that comes from the private sector to create better institutions, more investment, more jobs, more economic growth, in a much more synergistic way.
“I think that’s the one thing we need to do much more effectively than we have in the past, because even inside the World Bank Group, the public sector side of the organization and the private sector side of the organization, for the most part, worked almost independently.
“Now, what we’re going to do is try to help both institutions evolve so that we can talk about de-risking entire countries with policy reform, improving the business environment, and at the same time facilitate the movement of private capital in a way that will lead to, we hope, more economic growth throughout the developing world.”
The World Bank president said his group was taking the issue of corruption concerning its interventions in countries seriously.
He said, “We at the World Bank Group have all kinds of measures, and we audit every single project. We follow the possibility of corruption very, very closely. So, on corruption and misuse of loans and grants that don’t give any outcomes, we have been following that for a long time, but I think the big question now for us in terms of aid effectiveness is we have got to stop fighting each other for the low hanging fruit projects.”
Yong Kim urged countries to take education seriously as it is the bulwark against the impending employment crisis.
“You’ve got to reduce childhood stunting. You’ve got to improve your educational system, improve health outcomes. And part of the reason that we’re focusing so much on private sector investments for infrastructure is so that we can try to free up resources to invest more in human beings so that more developing countries can be ready for the great complexity that’s about to come.”