What does social and environmental sustainability mean in the context of the World Bank Group’s policies?

Social and environmental sustainability implies a number of things. First, we recognize poverty alleviation will only come about by doing more than simply dealing with the economic dimension of development. The economic dimension is incredibly important; poor people need more money in order to survive and thrive. But if we do not take into account the environmental and ecological dimensions, the sustainability of that economic growth will certainly be jeopardized. And we have a lot of evidence where that could be the case: water resource management, as well as land and forestry, just to name a few.

The other dimension is the social dimension. What we are coming to understand about poverty is that it has to do with much more than simply income. It is the extent to which you are included as part of society, you feel you can make a contribution, and you have the opportunities to make that contribution. So those are the social dimensions of long-term sustainable development. Together with the environmental and economic conditions for sustainable development, these form a three-legged stool. And it is bringing the three together to make sense of them that is very important. I think our sense is that in the very long term, the issues of ecological and social sustainability are going to be as important as economic sustainability. We have done some work with respect to long-term development that envisions the world in 2050. The middle of the century seems like a long way away, but it really is not. It is within the lifetime of our children and grandchildren, and it is within the lifetime of infrastructure projects. By 2050, even considering modest income growth for developing countries mandated by the Millennium Development Goals (MDGs) for 2015, we will emerge with a global economy that is today about US$37.5 trillion. We expect a global economy of 140 trillion dollars, adding US$100 trillion to the net global economy. It is very clear that we cannot just pour that amount of money into the global economy and assume everything will be fine. You have to manage that in a way that is environmentally, economically, and socially sustainable. And I think that is the sort of challenge that we try to think about in the Bank; for instance, how to develop economic work and development work in a way that accounts for these long-term issues.

The World Bank is the primary external funder for a wide range of global initiatives. Have you observed a change in priorities for the Bank with respect to these initiatives in the last decade?

There have certainly been changes in priority for the Bank on many fronts. The first that comes to mind is the focus, or perhaps more appropriately, the refocus on poverty. In the years of World Bank President Robert McNamara, poverty was central to economic policy and then was somewhat lost on the agenda. I think poverty was firmly replaced on the agenda by President James Wolfensohn ten years ago, so the issue of trying to align poverty reduction as both an economic goal and a social and environmental responsibility has created a major change.

The second major change I would mention is our understanding that we live in a world that is much more interconnected than ever before. Therefore, issues of trading, communicable diseases, demographic change, migration, environmental connectedness, climate change, and biodiversity have all really shaped the World Bank’s role into being much more of a global institution, taking a global view and getting involved in global issues, like climate change. These issues were the sorts of things that environmental conventions were set up to deal with over the past ten years and they have all appreciably shaped our agenda. It is not so much just the World Bank changing, but the framework in which we operate has quite clearly changed enormously as well.

Finally, we have seen over the decade a major shift in conflict. We now have about 40 countries that are either in conflict or just emerging from conflict. When I joined the bank about 20 years ago, I do not believe we were working on a single country that was in conflict. But today, the number is somewhere around 35 to 40 countries in which we conflict arises as a major issue. So, I think there are several changes that have occurred in the external environment to which we have tried to respond.

In terms of environmental and social policy, what are some of the main differences between the World Bank Group and other international economic institutions, such as the International Monetary Fund (IMF)?

I cannot speak to the specifics of IMF policy, but the World Bank applies a somewhat longer-term sustainable development lens to much of our work. Because much of our work involves investment projects and programs, we try to adopt both an environmental and social standpoint as well as an economic and financial one. Obviously, groups like the IMF tend to operate much more in aggregate and do not deal with these issues in quite the same way. On the other hand, I think the World Bank has taken environmental and social issues very seriously.

To give you an example, we now have 150 people who work on environment development and over 100 people who work on social development. And this is a relatively new area for us, as it is looking at how people participate in their own development. We must analyze the empowerment agenda, identify the people who are unempowered, find ways to deal with marginal groups such as indigenous people, women, and the poorest of the poor, and prioritize social accountability and inclusion to ensure that institutions serving the needs of the poor are held accountable for their actions. What we have discovered is that when we deal with these issues, we not only get a better social impact, which is important, we actually get a better development and economic impact.