Davos, Switzerland — World Bank President Jim Kim is bullish on the opportunity for grant-making institutions such as the Global Fund to use a little financial engineering to make health and development dollars go farther.
Speaking at a breakfast event Thursday at the World Economic Forum in Davos, Switzerland, Kim made a pitch to global health donors, asking them to consider channeling their funds through the Global Financing Facility for maternal and child health, which promises a four to five time multiplication effect for the money it receives. By de-risking investments for the private sector and allowing countries to access low-interest financing, the GFF makes it attractive for countries to take World Bank loans for health projects — and to spend more of their own money on those projects.
Kim thinks more donors should use it.
“What we hope is that this is where we go, that every single donor starts asking the question, ‘now wait a minute, if I can amplify my impact four or five times … why would we not do that? Why would we not make a donation that could be stretched like that?’” Kim said.
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Kim described early-stage conversations he is having with directors of the Global Fund to Fight AIDS, TB, and Malaria, a grantmaking organization that just raised $13 billion in its latest replenishment round.
“I’m going to be struck down for saying this, but we’re actually having discussions with the Global Fund right now,” Kim said.
“The Global Fund is giving grant money to Indonesia and India, and Indonesians and Indians are asking us, ‘well, why don’t we leverage this? If we multiply it four times, we could actually build systems that last, instead of just using the money to buy [pharmaceuticals],” Kim added.
The bank president noted that with official development assistance totals overmatched by the number of people in the world with “high aspirations” to access health services and improve their economic well-being, “you’ve got to be as creative as you can possibly be to stretch the resources.”
Stunting could breed instability
One of the big issues Kim hopes the GFF can tackle is childhood stunting — the physical and mental underdevelopment of children that results from malnutrition and can have lifelong consequences.
The case for investing in stunting-prevention is clear, Kim said, and it relates to one of the big topics under discussion at the Davos gathering of world leaders and business moguls: a so-called fourth industrial revolution. In WEF-speak that means the revolution that is currently occurring across industries — and which will accelerate — as a result of the digital interconnection that increasingly characterizes everything people use and the way those things get created.
As more industries tap automated technology for jobs previously held by people, unskilled workers will struggle to find employment. The bank estimates that automation threatens 69 percent of jobs in India, for example. For children who experience diminished learning and poor school performance due to stunting, the future of employment looks even more difficult than what they face today.
According to Kim, that is not only a human development tragedy waiting to happen, but also a big risk for countries that fail to make critical investments now.
“What we’re talking about here is the fourth industrial revolution, and what we’re seeing is that the lack of investment in children — and you can see it in stunting levels and poor educational outcomes — is actually setting up countries for, I fear, instability,” Kim said.
“If you have 38 percent stunting in India, if you have 45 percent stunting in Pakistan, very high levels throughout Africa, once the fourth industrial revolution hits … and so many of those unskilled jobs are gone, what are those children going to do in the future?” he added.