David R. Malpass. Photo Credit: World Bank / Franz Mahr.
Georgetown SFS Dean Joel Hellman welcome World Bank President David Malpass (MSFS ’83) to campus on Friday, November 15 to kick start the weekend’s centenary events. As the Walsh School of Foreign Service celebrates its 100 years of service, leaders from international institutions, titans of business, and politicians of past and future converge on Georgetown’s campus to commemorate the University’s contributions to world history. Mr. Malpass started the weekend’s events with a sobering analysis of the global economy, challenges to economic development, and innovative solutions to our world’s most challenging problems.
Mr. Malpass extolled the economic successes of the last four decades, citing the alleviation of mass poverty in developing nations, improved educational outcomes, and lower infant mortality rates across the globe. Malpass noted that not all aspects of our recent development have been positive, however. Economic benefits in developed and developing nations concentrated around a few elites, leading to massive income inequality that has destabilized countries the world over. Unmet expectations of improvements in quality of life have failed to materialize for many countries’ citizens. Though the economic situation has improved for many, 1 in 12 people still live in deep poverty—they’re concentrated in states whose wealth has done the same.
The World Bank’s ideal economic growth is inclusive, broad-based improvements in median income levels. Corruption and poor fiscal management of nations’ budgets stymie success. The social contract of many developing nations has come undone—or in many cases, was never signed. Corruption limits the World Bank’s ability to improve economic outcomes for those who need it most—prolonging the hardship endured by so many. As corruption generates fiscal ineptitude, the World Bank is lending in a world dominated by high debt-to-GDP ratios and low central bank interest rates. Malpass argues that the World Bank is working hard to identify viable and impactful development opportunities for states, despite these challenges.
Malpass identified four key steps that states and international institutions must take to alleviate poverty and improve economic outcomes worldwide. First, improve the rule of law—corruption holds back successful investments that improve economic outcomes. Second, invest in human capital through education and social programs. Third, improve access to healthcare and nutrition in developing nations. Fourth, improve budget transparency in developing nations—many lenders-of-last-resort are now requiring recipient states to sign non-disclosure agreements as part of loan terms. Malpass argued that citizens should have a right to know how much debt their governments have taken on and for what purpose.
These steps are expansive, non-linear, and hard to achieve, but, as Malpass argued, they are critical to inclusive economic development around the world. Students in attendance should take note—as current leaders identify pie-in-the-sky solutions to our most pressing challenges, we should be thinking about how to implement them and continue Georgetown’s legacy.