Exclusive Interview with : Jim Yong Kim, President of World Bank
Updated on: 02 Jul 2016
World Bank chief Jim Yong Kim on why we should worry about the global economy.
World Bank President Jim Yong Kim, on a two-day visit to the country, says India is "a bit of an exception" in the sense that it has bucked the global trend of sluggish growth. In an exclusive interview, he voices concerns about the world economy and the fallout of Brexit, urges developing countries to wake up to the direct linkage between children's health and economic growth, and calls upon global leaders to rethink pathways to development in a fundamental way.
The world economy is facing a time of increased risk and uncertainty. Even eight years after the global economic downturn, it remains sluggish. Will it get worse before it gets better?
We have downgraded our growth estimates on a consistent basis. The last estimate we made was of 2.4 per cent global growth. I still don't think we are ready to say we are looking at a global recession. Countries, especially in Europe, need to engage in structural reforms; the uncertainty, the turmoil is going to get them to focus on the reforms. We need more investment; in this period of uncertainty it's hard to see how massive investments will happen. We don't see any immediate change in terms of the prices of commodities. There will have to be some sort of event that will drive high prices in commodities. Like, for example, China's period of enormous investments; we don't see anything like that happening soon. We thought prices of oil will go up a little bit but they may remain low for some time.
I am worried about the global economy. Among the things I am worried about is the flight to safety. Even the Japanese yen that's paying negative interest rates is seeing a huge influx of interest. Germany is paying negative interest rates; they can sell us as many bonds as they want right now. The U.S. as well. All that makes me worried about access to capital for developing countries. The infrastructure investments we want to make in developing countries, so much of it depends on the people's sense that investing in developing countries is not risky. India is a bit of an exception. India now has more foreign direct investment than China. In the midst of all the turbulence, it seems like for now India is doing very well.
This price forecast is good news for an importer of oil like India.