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01:02That's a real productivity enhancer.
01:04And in fact, my conversation
01:05at Bangkok was that this is not
01:07about anything else than the jobs
01:09you would not have built if you don't use
01:11small AI in the emerging markets.
01:13The exact opposite discussion to what
01:15seems to take up all the time.
01:16Do you think about it as a super power then?
01:18In the developing world?
01:20I think of it as a huge
01:22enhancer, as a huge boost
01:24to what you could do to leapfrog
01:26with the right kind of applications.
01:28There's a series of such examples.
01:30A farmer, an illiterate woman farmer in Uttar Pradesh
01:33is able to point a 3G phone at the back of a diseased leaf
01:38and know that that disease equaled to this insecticide.
01:41And because the Indians have opened bank accounts for everyone,
01:44she can put a button there and get it delivered to her cooperative.
01:47That's a huge bridge over real problems.
01:50Where are you seeing the biggest growth in terms of emerging markets
01:54where people are using AI and where are you most worried?
01:59So I think obviously the upper middle income countries are quicker to jump on it.
02:04So in India with this kind of thing or in fact even El Salvador
02:07where we were the other day looking at how we're using technology
02:10for enhancing learning experiences in a classroom
02:13or things to do with healthcare in Indonesia.
02:16These are the ones that are jumping very quickly.
02:18What you've got to do is get the African countries to be there as well.
02:21Some of them are making real progress, but that's what I'm worried about.
02:24And what does that mean for you in terms of how do you get Africa to make more progress?
02:27You've got to do two things.
02:28You've got to make sure that you have applications that can be used
02:31and given to all these folks without having them to reinvent it
02:33because that's not their friend.
02:36Reinventing an app in every country will not get you to greatness.
02:39And the second part is you do need data.
02:41You may need delivered at the edge local compute kind of data
02:44and smaller data centers, but you do need access to data.
02:47What do you think about right now the race for capital
02:50and what that's doing to your job and the ability for some of the countries
02:55that are still emerging or developing relative to everybody else?
02:59And I say that just because there's huge amounts of capital being used
03:01for infrastructure, power projects, data centers,
03:04and whether that's getting soaked up in the right or wrong ways.
03:07So there's the implication of what's happening with overall debt in countries
03:10and what's that doing to government pricing of debt, which is a whole other topic.
03:13And that impacts the emerging markets too because, after all,
03:16it's a question of where the overall pricing is going.
03:19But the actual issue of availability of capital for investing,
03:22Andrew, it's not really an issue.
03:23Last year we mobilized three times the amount we mobilized three years ago,
03:27$112 billion versus $30 something.
03:29So that's not as much of an issue.
03:31Why is that?
03:32Because we talk all the time about how it's harder even for some of these companies
03:36to be able to get financing and that they're having to pay up quite a bit more
03:40in order to do that.
03:41There was just a story today about Broadcom chips
03:44and having to pay more to get access to those Broadcom chips,
03:48higher rates for some of those things.
03:50Is this different places that you're seeking money,
03:53investors who would not be necessarily drawn to some of these other things?
03:56Well, it's both.
03:57It's actually a question of where you get the money from,
03:58but it's also a question of the risk perception around some of these.
04:01What you're describing has come into a situation where people are worried
04:04about the risks of circular financing
04:06and also the risks of an unknown future business model from all these investments.
04:11In general, I still believe that AI is going to be transformative and profitable,
04:15but everybody sees bumps in the road from here to there
04:18and no one knows when the next bump will come.
04:20That's what you're seeing.
04:21Yeah.
04:21But in the emerging markets, that's not the case.
04:23What we're getting money for is for infrastructure,
04:26bridges, roads, airports, digitization, power, that kind of stuff.
04:30We're getting roads for healthcare, for agriculture, for tourism.
04:33There's money for that.
04:34But have the rates gone up in those areas as well,
04:36just because it seems like sovereign debt everywhere?
04:38Great question.
04:39So it's very interesting.
04:40Rates overall have gone up,
04:42but there has been a reduction in emerging market spreads over the last couple of years.
04:45And that's actually helped the emerging markets through this period,
04:48mostly because they learned their tough lessons from the previous 15 years
04:52and have kind of managed their balance sheets relatively well.
04:55But even if the spreads are tight, the reality is if overall rates go up,
05:01they are spending more on debt servicing than earlier.
05:03But a lot of the private capital mobilization we're talking about is not to governments.
05:08It's to ensure that investments happen on the ground in those countries,
05:12in five kind of sectors, infrastructure, agriculture, healthcare, tourism.
05:17But the spreads are tight.
05:17The spreads are tight.
05:18AJ, I was gratified that some of the major shifts that you've made at the World Bank
05:23in terms of climate mitigation versus climate adaptation.
05:27And just looking at some of the way that it's been,
05:31the narrative is that you read the room in terms of the Trump administration,
05:37and maybe you'd still like to do the climate mitigation,
05:40or do you now feel that adaptation for third world countries,
05:44you can't expect countries to suddenly have solar and wind when it's much more expensive,
05:50and they're just trying to develop into, you know, into a developed country.
05:54And adaptation makes so much more sense.
05:57But did you do that because suddenly your views changed?
06:01Because you were pretty ardent about mitigation.
06:04If you go back to when I joined the institution,
06:07and if you saw me sitting through board meetings,
06:09I used to tell them, here's the thing on mitigation.
06:11If you have gas available in a country,
06:14and gas is a natural transition fuel in the developed world,
06:18then why would you not allow them to get access to that gas
06:20to be able to manage their own energy?
06:22Because the right to affordable baseload power
06:26is kind of a human development issue.
06:28Right, exactly.
06:29That is the first comment.
06:30The second comment was that if you think about these countries
06:33and their circumstances,
06:34and forget about developing or developed,
06:37what is adaptation?
06:38It's resilient infrastructure.
06:39You build a road, it's monsoon-resistant.
06:42I grew up in India.
06:43I mean, I live with this stuff.
06:45Long before SUVs, India had monsoons.
06:47You got it.
06:48You plant seeds, get heat-resistant varieties of seeds.
06:52And I think that's, it all qualifies as climate co-benefits.
06:56And I used to have this conversation with everyone saying,
06:59make sure we get this balance toggling right.
07:01And what we've done, this last year, for example,
07:04the same conversation about leaving the room,
07:06I find it really interesting because the facts don't say it.
07:09This last year, $48 billion of our financing from our own balance sheet,
07:13out of the $120 from our balance sheet,
07:14went to climate co-benefits.
07:16But $48 billion from the private capital of 112
07:19also went to climate co-benefits.
07:22In one year, this institution got $96 billion.
07:25Can you change it to weather co-benefits?
07:26And I call it resilient infrastructure and energy.
07:30Good, resistant infrastructure.
07:30And energy.
07:31Yeah.
07:32And here's what.
07:33In Glasgow, the developed world said we'd give $100 billion.
07:36One institution one year got $96 billion.
07:39That fact is lost in the narrative.
07:42And I keep trying to make that case,
07:44that it's what you do and how you get it done that's really important.
07:48Right.
07:48And if you only get involved with terms and conversations,
07:52that's not what I'm into.
07:53I'm going to get stuff done.
07:54You've gotten more pragmatic, I think.
07:55Have you not?
07:56Yeah.
07:56Benefit of coming out of the private sector.
07:58Talking about being pragmatic,
07:59one other thing, it relates to AI, I imagine,
08:02but critical minerals.
08:04You've been financing a lot of critical minerals purchases.
08:07What's the problem?
08:08Want to do more, actually.
08:09I'm not yet financing enough.
08:10I think we should be doing much more.
08:12We should be doing five times the amount in the coming years.
08:15It's actually not just for AI.
08:17Minerals are used for everything from urbanization,
08:19the iron ore and the bauxite for our construction,
08:21to agriculture.
08:22We're just discussing agriculture.
08:23Right.
08:23Potash and the like from there,
08:25as well as then to energy.
08:27So we're connecting 300 million people in Africa
08:29to base load energy,
08:30to the discussion we were just having.
08:32And that requires copper wires.
08:33And so everybody focuses on the AI part,
08:36and actually then there's the, you know,
08:38all the uses of rare earths and minerals there,
08:40but actually it's a very wide spectrum.
08:42And we are focusing on all.
08:43What we're trying to do is get 20 countries to agree
08:46to set up the right regulatory framework
08:48that allows mining to happen safely and properly,
08:51including environmental safeguards.
08:53Second, try and do more processing on the ground
08:56in that country so you create local value-added jobs.
08:59You probably can't do production.
09:01Breaking a magnet in Zambia is hard.
09:03But processing in Zambia is possible.
09:05And then you get the magnet production
09:07to be in a place where energy is adequate
09:10and skills are adequate.
09:11So you start doing that properly,
09:13you create local value-added jobs in these countries.
09:16That's what we're focused on.
09:17Ajay, I want to thank you for coming in.
09:18It's great to see you.
09:19We appreciate it very, very much.
09:20Thank you.
09:21Thanks.
09:21Thanks.