2012 Changed Vision of WHY Computers & Humans Exist

2012 : How AI Winter ended

We are going to assume that at Personal Computing's Birth c. 1984, Bill Gates didn't deliberately confine humans to nearly 30 year monopoly of binary programming- most likely he hadn't read the last notes on Computer & Brain Neumann-Einstein-Turing left us to design futures of brainworking with in 1957 (Computer and The Brain written by John Von Neumann presented at Yale by Klara Von Neumann)

In any event Bill's wife Melinda together with the magical designer of million times more computing Power Nvidia's Huang started to help change Foundations Ai by 2014 - worlds I see Fei-Fei Li has applied AI-4-all to first 10 schools curricula, UN2 Digital Cooperation SDGs 2017, google & congress 2018, Stanford Sister Cities HAI 2019 ... Policy Hoover, Condy & 10 professors of tech revolution

Lets play an AI alphabet game, zzz a decade before 2012, in starting their phds, Hassabis & Li had a dream: neuro & natural science AI could change all of the intelligences listed and much "moore" if the Valley united humans around million times more compute a decade instead of Intel's 100 times - check out who's intelligence who in each of these categories determining millennials as first sustainability generation

we are witnessing one of the greatest technological leaps in the history of human endeavor the rapid rise of powerful artificial intelligence is considered by many of the greatest thinkers of our age to be no less significant no less important than the discovery of electricity, the splitting of the atom, the creation of the worldwide web or even the harnessing of fire

AI holds the potential to completely transform Life as we know it; to help us better treat and perhaps even cure conditions like cancer heart disease and Alzheimer's to hasten our journey towards net zero and realize a new era of potentially Limitless clean green energy even just to help us make our everyday lives a bit easier

however if we are to realize the untold benefits of AI then we must work together on combating its significant risks; too AI continues to advance with ever greater speed towards models that some predict could surpass human abilities , even human

understanding; there is a clear imperative to to ensure that this rapidly evolving technology remains safe and secure and because AI does not respect International boundaries this Mission demands International coordination and collaboration.

To support this Global effort the United Kingdom is proud to host this Summit in Bletchley Park the birthplace of modern Computing where Alan Turing famously cracked  the Enigma code and laid the foundations for a new digital age.....

OR ED

Consider This Testimony from one of the 3 Taiwanese- American Valley families to have navigated Freedom of Chips - The Huangs (along with the Yangs and the Tsais)

UAE AI Director Alolama so I'd like to start with a um question that was going on in my mind how many GPUs can Sam Altman buy for 7 trillion Dollars?

JHuang apparently all the GPUs in the world!

Alolama : i guess when we see Sam about he's talking about ambition; here in the UAE we don't lack ambition but is there a view that you can give the government leaders today with regards to compute capabilities and artificial intelligence? How can they plan well? Where do you think the deployment is going to make sense and what advice you have?

JH: First of all these are amazing times because NOW we Truly are at the beginning of a new Industrial Revolution: from production of "Energy through Steam" through "Production of Electricity" and "information evolution with PC and internet" , NOW Artificial intelligence: we are experiencing two simultaneous Transitions and this has never happened before: the first transition is the end of general purpose computing and the beginning of Accelerated Specialised Computing ; using CPUs for computation as the foundation of everything we do is no longer possible and the reason for that is because it's been 60 years we invented central processing units in 1964 the announcement of the IBM system 360;we've been riding that wave for literally for 60 years now and this is now the beginning of accelerated Computing

-if you want sustainable Computing. energy efficient Computing, high performance Computing, cost Effective Computing: you can no longer do it with general purpose Computing, you need specialized domain specific acceleration and that's what driving the foundation of our growth: Accelerated Computing; it's the most sustainable way of doing Computing going forward; it's the most energy efficient. It is so energy efficient ,it's so cost effective, it's so performance efficient that it enabled a new type of application called AI

The question is what's the cart and and the horse? You know first isaccelerated Computing enabled a whole bunch of applications that are accelerated today and so now we're in the beginning of this New Era and what's going to happen is there's a about a trillion dollar worth of installed base of data centers around the world today and over the course of the next four years we'll have $2 trillion worth of data centers that will be powering software around the world and all of it is going to be this architecture for Accelerated Computing . This is ideal for next generation of software called generative Ai and so that's really at the core of what is happening ; while we're replacing the installed base of general purpose Computing remember that the performance of the architecture is going to be improving at the same time; so you can't assume just that you willbuy more computers you have to also assume that the computers are going to become faster and therefore the total amount that you need is not going to be as much otherwise the mathematics if you just assume you know that that computers never get any faster you might come to the con conclusion we need 14 different planets and three different galaxies and you know four more Suns and to fuel all this

But hopefully its obvious computer architecture has advanced in the last 10 years - Nvidia has been contributing to advancing Computing and AI by 1 million times in the last 10 years and so whatever demand that you think is goingt o power the the world you have to consider the fact that it is also going to do it one million times larger, faster, more efficiently

Alolama: Don't you think that creates a risk of having a world of haves and have nots? since we need to constantly invest to ensure that we have The Cutting Edge and to ensure that we are able to create the applications that are going to reshape the world and governments as we know them? Do you think that there's going to be an issue of countries that can afford these GPUs and countries that can'?t and if not what are going to be the drivers of equity?

JH: excellent question : first of all when something improves by a million time and the cost or the space or the energy that it consumed does not grow up by a million times: You've Democratised the technology ;researchers all over the world would tell you that Nvidia singlehandedly democratized high performance Computing; we put it in the hands of every researcher, it is the reason why AI researchers: Li or Hassabis, Hinton in University of Toronto or Yann Lecun University of New York or Andrew Ng of Stanford simultaneously discovered us; they didn't discover us because of supercomputers; they discovered us because of gaming GPUs that they used for deep learning; we put accelerated Computing or high performance Computing in the hands of every AI researcher in the world and so when we accelerate the rate of innovation we're democratizing the technology.: The cost of building/purchasing a supercomputer today is really negligible and the reason for that is because we're making it faster and faster and faster whatever performance you need costs a lot less today than used to.

It is absolutely true we have to democratize this technology and the reason why is very clear there's an Awakening of every single country in probably the last six months that artificial intelligence is a technology you can't be mystified by, you cannot be terrified by it, you have to find a way to activate yourself to take advantage of it and the reason for that is because this is the beginning of a new Industrial Revolution 7:29 This Industrial Revolution is about the production not of energy, not of food, but the production of intelligence and every country needs to own the production of their own intelligence which is the reason why there's this idea called Sovereign AI: you own your own data, nobody owns it, your country owns the data ; its your culture, it codifies your culture, your society's intelligence, your common sense your history ...you own your own data, you therefore must take that data refine that data and own your own National Intelligence you can't allow that to be done by other people and that is a realization now that we've democratized the computation of AI, the infrastructure ofAI. The rest of it is really up to you to take initiative, activate your industry, build the infrastructure as fast as you can so that the researchers the companies your governments can take advantage of this infrastructure to go and create your own 8:39

AI I I think we in UAE completely subscribe to that Vision ; that's why the UAE is moving aggressively on creating large language models, mobilizing compute and maybe work with other partners of this. Let's try to flip the Paradigm a little bit, let's today assume that Jensen Huang is the president of of a developing nation that has a relatively small GDP and you can focus on one AI application, what would it be? Let's call it a hypothetical nation and say that you know you have so many problems that you need to deal with what is the first thing that you're going to approach if you're going to mobilize artificial intelligence in that scenario

JH: the first thing you have to do is you have to build infrastructure: if you want to mobilize the production of food you have to build farms. if you want to mobilize the production of energy you have to build Advanced Computing generators, if you want to digitalize your economy you have to build the internet, if you want to automate the creation of artificial intelligence you have to build the infrastructure it is not that costly; it is also not that hard .OK companies all around the world want to mystify, terrify, glorify all of those ideas but the fact of the matter is there are computers you can buy them off the shelf, you can install that as every country already has the expertise to do this; and you surely need to have the imperative To Go activate that. Additionally, the first thing that I would do of course is I would codify the language, the data of your culture into your own large language model and you're doing that here in UAE ( core 42 Saudi ramco) 10:29 you are really doing important work to codify the Arabic language and creating your own large language model but simultaneously remember that AI is not just about language ;AI we're seeing several AI revolutions happening at the same time: AI for,language AI for biology: learning the language of protein and chemicals , AI for physical sciences: learning the AI of climate materials energy Discovery: AI of the language of IOT keeping places safe, computer vision; and AI for Robotics and autonomous systems manufacturing and such; AI revolutions are happening in all of these different domains and if you build the infrastructure you will activate the researchers in every one of these domains. Without the internet how can you be digital? without Farms how can you produce food? without an AI infrastructure how can you activate all of the researchers that are in your region to go and create the AI models?11:48

AI: you touched upon the issue of (I would say) authentic ignorance: the fear mongering AI taking over the world and I think there is a requirement for us to clarify where the hype is real and where artificial intelligence really has the power to harm us , create a lot of disruption; and where AI is going to be good ?what do you think is the biggest issue when it comes to artificial intelligence right now? I ask because I think the problem of regulating AI is like trying to say we want to regulate a field of computer science or regulate electricity ;you don't regulate electricity as a invention or as a discovery you regulate a specific use case; what is one use case that you think we need to regulat eagainst and that government should mobilize towards?

JH: excellent question: first of all whatever new incredible technology is being created if you go back to the earliest of times, it is absolutely true we have to develop the technology safely, we have to apply the technology safely, and we have to help people use the technology safely and so whether it's the plane that I came in or cars or Manufacturing Systems or medicine all of these different Industries are heavily regulated today13:11 those regulations have to be extended , augmented to consider artificial intelligence; artificial intelligence will come to us through products and services; it is the automation of intelligence and it will be augmented on mtop of all of these various Industries; now it is the case that that there are some interests to scare people about this new technology to mystify this technology to encourage other people to not do anything about that technology and rely on them to do it and I think that's a mistake we want to democratize this technology. Let's face it: the single most important thing that has happened last year is how it has activated AI researchers here in this region it's actually llama 2 it's an open- Source model or falcon another excellent model14:22 there's so many open source models Innovations on safety alignment, Guard railing, reinforcement learning; so many different reasonings, so many different innovations that are happening on top of transparencies explainability; all of this technology that has to be built ; all were possible because of some of these open source languages and so I think that democratizing activating every region activating every country to join the AI Advance is probably one of the most important things rather than convincing everybody it's too complicated, it's too dangerous, it's too mystical and only two or three people in the world should be able to do that. I think (leaving it to others) is a huge mistake

AL With our UAE Focus, I think that we are democratizing ai, in the UAE we focus open source systems because we do believe that anything that we develop here should also be given as an opportunity for others that can't develop.. Most of this is developed using gpus so graphic processing units that you guys um are are supplying the world what do you think the next era is going to depend on is it going to continuously be built on gpus is there something else as breakthrough that we're going to see in the future? you think

JH Actually you know that that in just about all of the large companies in the world, there are internal developments : at Google there's tpus, at AWS there's traniumat, Microsoft there's Maya ... chips that they're building in China just about every single CSP has chips that they're building; the reaso nwhy you mention gpus is NVIDIA16:07GPU is the only platform that's available to everybody on any platform; that's actually the observation it's not that we're the only platform that's being usedm we're simply the only platform that's used that democratizes AI for everybody's platform; we're in every single Cloud we're in every single data center were available in the cloud; in your private data centers all the way out to the edge all the way out to autonomous systems Robotics and self-driving Cars. One single architecture spans all -this makes Nvidia unique that we can in the beginning when cnns were popular we were the right architecture because we were programmable. Aruda architecture has the ability to adapt to any architecture that comes along so when CNN came along RNN came along Along lstms came along and then eventually Transformers came along and now Vision Transformers birds eye view Transformer sall kinds of different Transformers are being created a Next Generation State space - models which is probably the next generation of Transformers all of these different architectures can live and breathe and be created on nvidia flexible architecture and because it's available literally everywhere any researcher can get access to Nvidia gpus and invent the Next Generation.

AL So for those of you who are non-technical and heard you knowa foreign language there with cnns and and some of the other acronyms that are being used the the thing about artificial intelligence is it's going through a lot of Evolutions over a very short period of time so whatever the infrastructure that was used probably 5 years ago is very different to the infrastructure that's being used today but what Jensen's point was I think it's very important point is NVIDIA has always been relevant historically we see companies that are relevant at one phase of development and then as the infrastructure changes they become irrelevant but you guys were able to innovate and and push through let's move to a non-ai related topic for a second 18:14 I want to talk about education so today knowing what you know seeing what you see and being at The Cutting Edge of the technology what should people focus on when it comes to education what should they learn how should they educate their kids and their societies

JH wow excellent question I'm going to say something; it's going to sound completely opposite u of what people feel --you probably recall over the course of the last 10 years 15 years ,almost everybody who sits on a stag elike this would tell you it is vital that your children learn compute rscience um everybody should learn how to program and in fact NOW it's almost exactly the opposite it is our job to create Computing technology such thatnobody has to program and that the programming language is human everybody in the world is now a programmer this is the miracle this is the miracle of artificial intelligence; for the very first time we have closed the Gap the technology divide has been completely closed and this the reason why so many people can engage artificial intelligence it is the reason why every single government every single industrial conference every single company is talking about artificial intelligence today because for the very first time you can imagine everybody in your company being a technologist and so this is a tremendous time for all of you to realize that the technology divide has been closed or another way to say it the tech technology leadership of other country has now been reset the countries the people that understand how to solve a domain problem in digital biology or in education of young people or in manufacturing or in farming those people who understand domain expertise now can utilize technology that is readily available to you you now have a computer that will do what you tell it to do to help automate your work, to amplify your productivity to make you more efficient and so I think that this is just a tremendous time um the impact of course it is great and your imperative to activate and take advantage of the technology is absolutely immediate and also to realize that to engage AI is a lot easier now than at any time in the history of computing it is vital that we we upskill everyone and the upskilling process I believe will be delightful surprising to realize that this computer can perform all these things that you're instructing it to do and doing it so easily so if I was going to choose a major and University as a degree that I'm going to pursue what would you give me as an advice for something to pursue if I were starting all over again; I would realise one thing that one of the most complex fields of science is the understanding of biology human biology not only is it complicated because it's so diverse so complicated so hard to understand living and breathing it is also incredibly impactful complicated technology complicated science incredibly impactful for the very first time and and remember we call this field life sciences and we call drug Discovery. Discovery as if you wander around the universe and all of a sudden hey look what I discovered nobody in computer science nobody in computers and nobody in the traditional industries that are very large today nobody says car Discovery we don't say computer Discovery we don't say software Discovery we don't go home and say hey honey look what I found today this piece of software ... we call it engineering and every single year our science our computer science our software becomes better and better than the than the year before every single year our chips get better every single year our infrastructure gets better however Life Sciences is sporadic if I were to do it over again right now I would realize that the technology to turn life engineering life science to life engineering is upon us22:49and that digital biology will be a field of engineering not a field of science it will continue to have science of course but not a field just of Science in the future and so I I hope that that this is going to start a whole generation of people who enjoy working with proteins and chemicals and and enzymes and materials and and they're engineering these amazing things that are more energy efficient that are lighter weight that are stronger that are more sustainable all of these inventions in the future are going to be part of engineering not scientific discovery so23:28I think we can end with a very positive note hopefully we're going to enter an era of Discovery an era of proliferating a lot of the things that unfortunately today are challenges to us whether it's disease whether it's limitations and resources

AL thank you so much Jensen for taking the time and being with us

or ED

Consider this testimony from World Banker Ajay Banga

0 Pakistan-American Masood Ahmed President of CGD welcomes India's world banker and former mastercard banker Ajay Banga to CGD L St DC

5,45 It's a pleasure and a privilege for us to welcome back the president of the World Bank group AJ banga to CGD : you were here in April 2023 when you talked about your/priorities vision before taking on leadership role at World Bank, (& IMF) and then September many of us watched a a speech that you gave and a talk that you had at CFR which was three months in to the World Bank role, then you talked at the annual meetings "report back to Governors" now it's eight months into the role - So to to get us started : looking back on your first eight months leadership of World Bank what has gone better than you'd anticipated and where do you think head winds have been harder track than than you expected

6:47 Banga : to begin with the level of Interest people have in what I'm doing is surprising! everybody wants to know whether I'm waking up in the morning and sleeping well and where I'm traveling and what I think every week, every day and so on and it life isn't like that but never mind so on a most serious note what's gone off so far into the system (and it's all wet paint so please don't take what I'm saying as done this is the beginning of a journey) we've got a new vision and Mission : it was important to add livable planet to our core eradication of poverty; this has enabled the entire Bank to widen the aperture by which it looks at issues and allows them to recognize the interconnected nature of the challenges we are facing and allows us all to speak and act I think with more depth and Intelligence

with more uh depth and Intelligence on those topics that's kind of one big thing it took work with the governors to

7:49 System-deep, the combo oh livable planet & poverty eradication is Big thing because we did a lot of work with the bank's governors to get people to align: as you can imagine, across the developed world and the Global South to begin to believe that livable planet is something they could identify with. To me as an actionable compass this includes anticipating pandemics, climate change, food insecurity, fragility and conflict the kinds of things that that matter for quality of life on a daily basis; the second big thing that got done was to create a clear focus on women and young people and I was surprised ( you won't be as a pro in the space) to find how many people thought that by focusing on women and young people I was going to ignore other disadvantaged people and I it took me a while to understand what their fear was and I tried to explain to them that women are not a minority so it's about time that it became a very specific Focus for the bank it's in our gender strategy for years but by calling it out I am trying to make the point that in the Developed World itself women have a difficult opportunity to get a fair plank to stand on; you only have to look at the share of venture capital that goes to female founded businesses in the United States let's not talk about other places and you realize that this is a matter of some Focus; if you take that into the developing world and you feel and realize that half the population cannot be productively used and employed in the world if you don't give them a chance to clean air, clean water education and health and then the chance for a job and funding then I think you're never going to get a productive enough system. So getting that in was important. Getting youth in was was easier because everybody knows there's a lot of young people in the global South ...and the only thing I was trying to say was that they need to have both a good quality of life when they're growing up AND the opportunity for a productive job when they are of age otherwise this demographic dividend becomes a problem ;there's a billion people coming through that pipe in the next 10 years in the global South a large number of them in Africa -see need for 350 million jobs being generated - that's a lot of people who don't have right now an opportunity for a role ; we need to see that now, a big challenge getting it ingrained into all our stakeholders.

10.25 The second part that we're working on is about capital adequacy and when I arrived there was a great deal of criticism that was being leveled ; when people were saying we're not taking that Capital adequacy program seriously I needed to check understand what that was about BECAUSE at the end of the day we have launched a hybrid Capital instrument which is not just the hybrid Capital that shareholders can provide but also that the private sector can provide although that comes at a higher cost than what you would get from your shareholders; and you know the second part of that hybrid capital is that the the bank board approved the use of sdrs but personally I see lots of challenges in using the sdrs directly into a multilateral bank ;I think you could use it indirectly through the IMF in a better way than you could just given the ecb's charter which clearly says you can't use these so there's a whole lot of challenges around it but it's a pool of money and therefore when there's a pool of money it's like bees is going to Honey right there's a need to figure out a way to use it well and then we've done work on the portfolio guarantee front we've done work on launching the old Global public goods fund has been opened up to donations from everybody that's now called the livable planet fund I think that work is all wet paint but the instruments are there the work's been done to get going that's where we; and the third part that's going on is becoming a better partner to everybody else to me that's kind of important and with the multilateral development Banks we've got now a focus space for the inter American Development Bank was the first one we agreed on three specific things we'd work on together people are working on 20 things on the ground but three things that Elan and I will track and

• the first one is Raising Finance for the Amazon
• the second one is climate and challenges in the Caribbean and we're doing a bunch of things on that as an institution but also involving him
• and the third is digital in girls access to education across Latin America in the same way I've done with the Islamic Development Bank
• I'm in the process of signing something like that with the Asian development bank so that we can get focused areas that are relevant to the region where these banks operate
• 12:48 there's a lot of other work to be done with the mdps on standards and hopefully we get we'll talk to that that this is all stuff that's happening and there's real progress at cop 28 on what we're doing against climate and hopefully you'll ask me about

13:06 The second part of your opening question whats not matching my initial hopes; what is harder to me is some of the stuff that comes with the model of governance that is evolved over time, but it's end consequences are challenging this is taxpayer money and therefore you know when you get taxpayer money and you leverage it in a bond market countries are going to want to be involved with how that taxpayer money is being used the problem with that is it becomes fragmented that's a real pain because it takes away scale so if you look at IDA which to me is Mission critical for the bank at the end of the day not just for our clients but for us as well IDA now has over 1100 different rules that have got put in by Ida deputies over the years it used to be 150 20 years ago so

we've ballooned into this thing where everything goes through a sieve to fit

into these rules and I think that's kind of inappropriate now it feels like we've probably crossed a Rubicon somewhere I mean I you know I don't know if 500 is better than 1100 but 150 is really nice; it allows you to start focusing and getting work done at scale so to me some of those are more challenging than I had originally anticipated when coming in I even when I came here in April; back then at CDG I didn't yet know about this issue of the rules and Ida it hadn't hit me ; it really hit me before I went to Zanzibar for the midterm review and I kind of was talking to the folks at Ida and somewhere one guy mentioned 1100 ruleS. What are these rules and then I learned how complicated. OK the countries have become pros at trying to find ways to get money funded from different windows but overall I say we're all wasting time on this stuff and I think we just need to find a way to thread the needle between the importance of shareholder tax money being used and the unintended consequence right of fragmentation at the other end

15.05

MA good so there's a lot of stuff there already to to get us going; can you drill down a little bit into what you were talking a out as a better bank for the client because when you were here in April you talked about fixing the plumbing as a priority; and and of course the the question lot of people are saying well what will this Translate into in terms of if you're a client, if you're a borrowing country; eg I know you've talked about shortening the time it takes together you've talked about maybe having longer load majorities - practically when and how will people see the benefits of this from a client point of view are they seeing it already

15.50 Banga: longer loan maturity is not part of a Better Bank. that's is part of doing business the right way and getting people a chance to get concessional financing done differently . Yes better bank improves time to Market of investment programs, second better Partnerships with others private sector multilateral Banks and third revolves round capacity building in the countries

1 Time to market takes 19 months on average from the time a project starts getting discussed to the time it gets approved by the board and then it can take between 9 and 10 months after that to get the first dollar out the door because the countries to whom these projects are going also have to get their own stuff done parliamentary approvals and so on ( eg you know we're living in the dream world of congressional approvals these days) so it works in the Emerging Markets too they're not exactly better off than what we in USA are

some things you can improve by helping to build capacity in countries for creating bankable projects and then actually getting them implemented and there our knowledge Bank hopefully can be useful but that's part of the change process that has to be driven; the 19 months is a little bit more in the world bank's control at least parts of it when you break those first 19 months down: some of it is really important and needs work to be done. There's you know ESF approvals to be done but can you do those on a risk based basis meaning does a a $3 million School in Nepal truly have to go through the same ESF process as a $25 billion do Hydro electric Dam in Ghana? I would argue anybody who's ever worked would tell you that risk-based things make sense to do whether you're in government or you're in the private sector or you work in an NGO everybody applies risk-based Frameworks the World Bank doesn't which is shocking and it now that we're beginning to put in place a couple of hundred projects already have benefited from some of that the idea is be very careful not to reduce your standard, the trick is to find a way to keep the standard but apply a risk lens to it now ; this is not rocket science it can be done and so we're working on that. The second piece is who all need to approve: what if you actually get back into the policy matrices and you look at who needs to approve what fewer numbers of people need to be involved directly approving projects at different stages but because over time you get the socialization of risk inside an institution and for more if you're not involved in this signing process you know every Tom Dick and Harry wants to be involved with approving something and my point is like why the hell are you involved which part of this has your name involved in it and this is an issue I had in my prior firm and you know one of I just I still remember this funny story. I discovered one day to get approval for a new effort at MasterCard required 99; some poor guy had to get 99 signatures and he of course complained about it in a big chore when I was beating them up on time. So then I started going into why are those 99 signatures required turns out he needed six signatures the other 93 were hangers on; and so it can happen in the private sector it can happen to us, and it has and so one of the things we're trying to do and Anna is leading this for us this whole effort is to really go through that with a fine tooth comb and you know make sure we don't throw the wood out with the trees but reduce this and so a third element of that is every project goes to the board for approval again the $3 million school goes so does the 2 and a half billion hydroelectric Dam

I would argue you could do that in a little more creative way by getting programs approved so we've announced that we're going to get 100 million people in West Africa connected to electricity by 2030 I believe that electricity is a human right and 600 million people in Africa don't have electricity so it's to me it's priority number one in Africa get them connected without that no health no education no jobs nothing's going to happen so we have to get them connected so 100 million in West Africa. I want to do 100 million in East Africa that'll be 200 by 2030 huh not 2050 so if you can do 200 million by 2030. Then I think we change the dialog on how to get this done this requires Ida money government money private sector money but if now the board approves that then then can they approve tranches as compared to every single project in every single country will come back to them. we do that this will be 2050 it's a self-fulfilling prophecy

20:48

even though in any one project the approval process for the board is not the principal amount of the 19 months but when you add that up into many projects this is a a huge burden on management and systems and processes and so like this there's a ton of work to be done to knock that 19 months down and by

the end of next year I want to get it down to 12. I have no idea if I'll get it to 12 because this is not a you know like that I didn't exactly Pick 12 scientifically I just said it sounds better than 19 let's go there and if I get to 14 I'll still be happy and then I'll try and find a way to get a 10 but you have to do this in an ambitious enough way otherwise we won't change this.

21:40 AM So actually if I could just come back on one point that you raised both in terms of the streamlining of the project approval process at the board so that the board is involved more directly in the larger more complex projects the 1100 rules on Ida these are all dimensions of shareholders one in to exercise micro-controls controls over the operations of the institution and I'm sure you've raised these issues now and with all the shareholders in the board and and in capitals what's your sense of the appetite to actually tackle these things and bring the 1100 down to some number bring the uh projects that are under a certain amount straightforward repeater projects to be done and approved in a more streamlined way are you feeling that you can get some traction on this right now Banga: I think more more traction on the project approval system and delegation whether it's repeatable projects which is what you just said or whether it's program approvals which is what I was referring to those kinds of rule-based methods to create uh a quicker process of Delegation yes that is there just remember that's not the only issue in the 19 months in in fact it's a smaller part of the issue than some of the others but it's a pain in the system and you know it ends up then becoming that for every project country managers and ttls are flying into DC to go talk to 25 executive directors and convince each of them that it's okay and so that's the process stuff that needs to change and everybody knows this the sad part is everybody knows they all not their heads when they're talking to me but if they all knew it why did nobody do anything about it is what surprises me right and that's all I'm trying to do is shine a light on it and then be stubborn about it I think we're making progress on that one I think the 1100 rules on Ida I only just made a racket about it in Zanzibar and I got a lot of people in the audience nodding but clearly after I left a lot of people also did that right so there's that and there's that and unless you're Indian when that and that yes for for everybody else there's a very specific that versus that right and and I don't know how we'll get to that to be completely honest I think getting Ida to be both sized correctly but also be easier and quicker to comprehend and work with is kind of an important part of the next four five years so you know we'll see I'm going to try keep pushing it

24.20 AM: sunlight is the great disinfectant so just putting the spotlight on it get the thing started so let's talk a little bit about the question of tradeoff you know you said one of the big achievements first few months has been to introduce this notion that the the aperture of the bank has to be broader: look at livability of the planet as well as looking at the poverty aleviationagenda that the bank was pursuing before um a lot of people are then sort of raising questions about tradeoffs what does this mean you said at cop that you wanted to raise the share of climate projects to 45% and the question people what what were you going to give up how is this going to fit in you've got these Global challenges you've got these priorities eight uh priority programs how do they fit in with country priorities is the bank now moving away from country priorities how do you respond to that set of concerns that are out there?

Banga: as I said everybody is very interested in everything I do and this everything is always oh my God it's going to stop doing something else and the whole issue of intertwined challenges means that you don't have a choice about dealing with them together right so when you talk 45% of our financing will go to climate by 2025 why I said that was my predecessor had said we would get to 35% by 2025; the reality is that by the time I joined they were already passed 35 so they' done better than they had originally thought they would get to now I don't like all the way some of that is measured because the mdbs have agreed on a way to measure what's a climate project and we're working our way through getting that to be something I can feel good about and we're going to get there, but let's assume it's 90% directionally in the right direction so why should I stay with 35% climate related funding and then pretend that I did better than what the task was; so that was my idea of raising the ambition to 45% but I also said half to adaptation half to mitigation right and that's because when people get worried about money being put into climate they're all coming from the Western world's view of climate equal to energy emissions that is such a pedantic way of thinking; and it's such a crazy way of thinking in the global South climate is equal to no water for irrigation food you know in security soil degradation biodiversity loss forestry cover being taken out uh climate challenges in the Caribbean you know schools and hospitals that cannot act as climate shelters because they weren't built to absorb that so it beats me as to why this basic misunderstanding has crept in . We're like two ships Crossing each other in the middle of the night with fog horns blaring kind know one is a cause and one's an effect, and we need to get with the program this is not an either or and I think that is very important so when I talk about adaptation money it's actually going into the same things that fit the global challenges it's going to food it's going to health it's going to you see what I mean and so talking about climate resistant varieties of seeds and how to manage water and conserve water and how to help Kenya manage its soil degradation issue has everything to do with the global challenges its also has to do with adaptation and so I think we really need to understand that part of it and that to me is critical; the second part that's critical if you look at what we announced in COP28 around climate yes I did say 45% of world bank investment is livable planet and half-half mitigation-adaptation (and by the way I don't know if I'll get to half - these are just random numbers I pulled out from like that because I wanted the global South to not feel that I was ignoring their desires and concerns and at the same time I recognize that if we don't change and bend the curve on future growth to be less energy intensive with emissions we're all in trouble right so I kind of get that ; and all I said by half of was to say I get both if I end up at 60 40 I'll take it, if I end up at 55 45 I'll take it, but the idea is to say this is where our heads are going I'm sure somebody will now say you're at 48.2% muck like that and that's that's the problem with this whole thing if it was so accurate that I could predict 50% man I'd be like sitting and doing other stuff so we have. It's shocking to me how naiive some of these discussions are, there's nothing wrong with saying are you focused on adaptation as well as mitigation or not that is a terrific question, and one that I must answer to but whether it becomes 48.2 or 51.4 you know doesn't matter I don't really care

and the the the the second part we announced was the 100 million Africans being connected to electricity which I want to get to 200 million by 2030

the third part we talked about is methane ; methane is 80 times more dangerous than carbon dioxide it gets 2% of climate financing. 2% when something that's 80 times more dangerous gets 2% of financing something's not right and so 29.50 in addition to flaring and the leaks in pipelines which is a real big issue with methane there is rice paddy cultivation, Waste Management Agricultural and dairy methane things the bank knows and has run for years which you know well getting those to scale is what I've committed to doing in these coming 18 months and then try and fight methane in the atmosphere; we talked about getting the climate resistant debt Clauses for the Caribbeans going and all other small states, and now as you know we've announced for all countries not just small states help with dealing with catastrophes and then talked about getting a voluntary carbon Market Focus. I know it's a difficult topic but if we don't get into it nobody will. On forestry projects where we are directly involved not somebody else's forestry projects so where we are involved and we can do an environmental Integrity check and a social Integrity check environmental meaning in a jurisdiction that we allowed to audit around the project and ours we can ensure that trees are not being cut here and planted here social integrity meaning the money goes to the community and not the government only so that when you turn your back they don't cut the trees down because they still need the money you know that basic logic has to be built in so we're going to try and work on that and so those are the five things lot of them are interconnected to these tradeoffs that you asked about

AM 31:17 right in fact you could argue that adaptation is is just doing development well in light of the impact of climate change so as you say if you build a school that was designed for 35° C correct and now it's going to be 45° Summers if you're not building that in you can call it adaptation I just call it sensible development; BANGA yes and as another example: roads that don't get washed away every time there's a rainwater flooding deluge, so how does it how do businesses get their goods to Market farmers get their produce to Market if roads keep getting washed away these are all right. The fact that somehow you can segregate poverty eradication and sharing of prosperity from worrying about pandemics and climate change and food insecurity and refugees and fragility and conflict I don't quite buy that argument that's the issue now

AM 32:15 I want us to talk about 2 more related questions you know because in a way when people talk about trade-offs trade-offs become easier if the pie is growing and trade-offs become easier if you can also mobilize other people's money so let's talk a bit about other people's money: private sector money. As you know the trouble with other people's money, in this case private sector money, is that we have a history of anticipating that we're going to mobilize a lot more other people's money that we actually do in practice and today also you know we're I think the last numbers that I saw were the mdbs (Multilateral Development Banks) together mobilize 60 odd billion of private money directly and or indirectly and 40% or more was from the world bank group so now you created this private sector lab CEOs have come together to advise you're trying to do stuff to bring the guarantee function together so that we can do more on guarantees from the bank group you can supercharge MIGA (Multilateral Investment Guarantee Agency) but can I get a sense from you of where are you worried that we are still over optimistic in terms of how much money the private sector will provide for all of this are you feeling this is going to take us into the tens of billions we're talking about hundreds of billions where is all this going in your mind?

Banga: so just to dial back for a second I think the idea that you know you can wish the private sector right to bring in its balance sheet and people and Innovation into these is not a good idea you cannot wish it in and by speaking to it in governmental meetings you cannot wish it in what's coming very clearly from these private sector lab CEOs (but also CEOs outside the lab whom we speak to) is that there are three or four principal hurdles

...so for a minute let's take just renewable energy let's just focus on the one thing: in renewable energy solar and wind now have a per unit cost that is cheaper than fossil fuel they may have higher Capital costs UP front for connectivity and like they may have longer gestation periods therefore but when they do start producing very quickly because of the way that technology and scale has developed in these two areas the per unit cost falls off and the fossil fuel chart goes the other way so if that be the case in general if I my old life if I was the private sector CEO with Clarity of this my spreadsheet kind of begins to make sense so that should then lead to the conclusion that people should be breaking the doors down in Indonesia to construct you know everything you ever wanted to see

why is that not happening it's happening but not enough why is that there are three principal causes in that

the first one is they need regulatory policy Clarity and a lot of these countries do not provide that let's say the private sector would like 10 items clarified even if you got five or six done you would get people coming in and I give the example of India: prime minister modi in his first term just put a statement out there saying I'm going to get to 30% of my energy capacity to be renewable by 2030; this is not a scientific number it was a number to put a pin on the wall and make people run at it and then he announced a series of policy changes to help lend credibility to that idea he didn't do everything the private sector wanted just couldn't let see he's got his own trade-offs to make but he made some of them today India has 42% of installed capacity from Renewables already and it's not 2030, but its generation is not 42% it generation is in the teens because they haven't finished connecting the grids they haven't finished connecting the technology that's required to slip back and forth from base load to solar and wind when it's available, you know all that stuff all the technical stuff that goes into making this possible but he's got five or six years to go so he'll probably get to 30 that's what I think will happen; in fact Mumbai could well be the first City operating basically on renewable energy by 2030

now what does that mean? India is not perfect to invest in I'm not claiming that it's challenging but there's progress, we need that kind of clarity in the top 10 12 middle- income countries where the growth rate of emissions from energy will otherwise surpass the work that's going on in the developed World

finally to reduce energy consumption from heavy emissions sources - and that that chart is not a good chart if we don't change that curve - so we need to focus on that trying to focus on the smaller African countries to make them go renewable is a laudable cause but it won't change where we are headed for 2050 if we don't work on the larger middle- inome countries

the second uh part of this Beyond Regulatory and there we can help by the way because IFC is talking to the private sector if they were to be better capable of leveraging ibr and Ida who have all the influence with the government along with the IMF then in theory we should be able to help create the right regulatory policy like the bank did in India when this solar energy and renewable energy claim was made by the Indian government the bank was deeply involved in helping construct regulatory policy there for that purpose

Next big task is guarantees; even if you get all this political risk guarantees are what you need MIGA is 6.8 billion $ of guarantees; I've said we want to get to 20 by 2030 it's traveling that's the starting point hopefully we'll get there earlier ;it's not hundreds of billions you don't need hundreds of billions because the guarantee that you need are a proportion of the total project cost but 20 billion would be a great number to get that done we've got a series of things to do we fortunately have capital in MIGA to get to 20 once we get to 20 we'll have to start worrying about incremental Capital but that would be a nice problem to have so from here to there the challenges are you know we're putting together all the guarantee shops in the bank they were in different parts of the World Bank in IFC

and IBRD and in you know that we're trying to bring them together as you can imagine that's an interesting exercise so that's getting done and then we're trying to create a simple set of cafeteria menu style guarantees that'll

be available with transparent pricing for which you have to understand your risk pricing appetite which is getting done and then you got to train the people in the field to be able to sell the full range so that it becomes easier to do that that's all hard work this is not going to get done in 3 months but we're going to put the shop together by June July start creating the these training programs and I'm hoping that sometime over the next 6 8 10 months ; you'll begin to see these things being easier to deal with today if you're a client country you need two guarantees one which IFC has one which ibrd has you got to go through two processes I want to make that one and reduce the time to get it done by creating a single back office that's kind of what we're doing the front office and the booking of the risk will be in the correct balance sheets it's just putting the back office together stuff that

shouldn't be that hard to do but it's interesting to to do

AM it is the things that shouldn't be hard to do that often turn out to be the toughest

40:08 BANGA I just think I to be completely honest again --look these institutions have different boards they're the same shareholders but they're different people and they all create their own rules so this all comes down to the the unintended consequences of well-intended actions and all I'm trying to do is to work on those unintended consequences and cannot lose sight of the intentions of shareholders who deserve to be paid attention to but not for the wrong reason and that's the work that needs to happen that's hard work but if you're willing to take a few you know insults along the way from everybody it kind of is possible to do and that's what I'm trying to do so that's the second piece

the third piece is foreign exchange risk so we investing in euros and dollars and Yen and you're going to get paid in Indonesian rupia and Indian rupees and

you know Brazilian in real that is a little challenging because those currencies don't have wide and deep enough hedging you know these are 10 20 year projects the to get a hedge even on the Indian rupee which is a developed you know relatively developed currency Market you don't get more than a three to four year hedge so you're basically exposed for the other now you got to find a way to be creative on that and we're working our way through some ideas with the private sector Lab One Thing could be to have a risk sharing system by which the investor who's investing in India knows that on the average the Indian rupee declines by 5 to 7% against the dollar over 30 years per year and therefore shouldn't you be willing to absorb 7 to 10% yourself as the investor that's kind of your job then the government should take some part of it and then the tail risk that nobody can deal with ,we should absorb, so then what does that do to our risk appetite and how do we deal with it and that's the kind of work that we're working our way through ..and by the way all this is to tell you please don't hold your breath that you're going to get $100 billion of private sector investing next month I if that happens it's not because of me it's because they've decided to invest because they found projects they like and we should be willingly take that

AM: so let me just ask you one question on risk capital right because in some

ways should the IFI and is World Bank group uh in some ways will have to take a different risk appetite than it's had in the past? a lot of people say that there's a degree of risk aversion or avoidance in the system you know that the shareholders also very keen for the institution to be out there doing mobilization of private capital and let's say either countries but if there's a project goes wrong then the appetite for that is very low how do you see that do you do you worry about risk after I look

43.01 BANGA I think this thing of everybody telling the World Bank to take more risk is one of the bigger jokes that I've heard in my life and the reason that that's a joke is if he actually book that risk as a loss you're going to have to replenish my Capital so that I can remain AAA rated try getting a dollar of capital right now so to pass the buck around is not a good way to solve a problem this is like passing the parcel and one day the music will stop

and people are going to be left holding the parcel so I don't have time for that kind of conversation and I tell all the larger shareholders please don't talk to me about risk unless you're willing to back up the capital that otherwise may need to be taken then of course the conversation tends to evolve to a more thoughtful discussion and it should be the more thoughtful discussion so what's the issue with risk that first example of Foreign Exchange if we were to book an outsized loss in a country because of the velocity of change of foreign exchange or the level of change that was way beyond anything anybody had anticipated one way to solve for that is rather than book the loss is to extend that as a long-term L ten loan to that country and help them fight their way out of it, and you know we can do that we're capable of doing that there are ways to manage these things that don't result in catastrophe on the balance sheet; the second part of this is it is true that if you if a project goes wrong the level of intense scrutiny that suddenly everybody tries to put into this is why people in the first place want to socialize every risk and get 99 signatures this is a self-fulfilling prophecy if you're going to shoot the messenger nobody will want to be the messenger they'll say you deliver the message I'm right behind you right and we you know that's what I meant about good intentions are leading to unintended consequences that's one of those. I don't think anyone is doing this for bad reason everybody's trying to get the right thing done shareholders board members employees but the dynamic is not a favorable Dynamic for taking a risk if you essentially are willing to hang anyone for an error like I can bet on these voluntary carbon markets for forestry I can bet we're going to make a mistake in some place and I can bet I'm going to get criticized. You know I don't need this job so I'm willing to take that risk but a lot of other people do need what they're doing so I can't be disregarding of their motivations it's unfair on them and so I'm going to try and find a way to work my way through that that's the challenge so this risk thing is a chicken and egg issue in the financial sense it is the issue of where do you book it maybe we can find a way through that in a human sense it is how you approach the errors and mistakes that happen if every project in the World Bank was perfectly executed I mean you weren't doing the right project exactly or in any place I'm picking on this institution because I'm here. You can pick on anything if everything that the cgd did was perfectly done you guys would be you know something else you also make mistakes I make mistakes everybody in this audience you haven't made a mistake you're in the wrong room you should be up above somewhere ... so I don't understand this thing of risk: risk is an inherent part of trying to find a way to maximize the risk reward Arbitrage it's an inherent part if all we do is safe development we will spend many years not figuring it out now that doesn't mean we should be irresponsible that doesn't mean we shouldn't react as management when we learn there's been a mistake that doesn't mean we shouldn't learn from that for next time but if all you do I had a colleague of mine at City Once who said to me what happens is every time an auditor comes in and does a review and you find three things you create another three processes to manage those three and it's like putting wax on a on a floor on a wood floor it keeps building up if you don't sandpaper it down you will lose an inch of flow space

over time it's the same issue and that's Management's job to work at it there's

no passing of the buck here I'm not blaming anyone this is our job

47:21 AM you just come back from the midterm review of Ida and

you've said that you know we should aim for a larger Ida this time around replenishment; of course if you look at Ida you know it's been going the headline number has increased every replenishment but the donor contribution hasn't it's flat and it's really from Financial engineering now with interest rates being higher it's going to be harder to do the same kind of engineering on the bank you've on ibrd you've said uh you know let's focus on getting what we can out of the system before we try to get more money it's not easy environment in which to get Capital, you said that at marakesh that you'd be able to get to maybe 157 billion through stretching the balance sheet but also through this guarantees and HB and hybrid Capital but of course guarantees and hybrid Capital you can create the the receptacles but somebody's got to fill them and and put the money in and then there's an argument that says you know we can't afford to wait we really need to be scaling up the organizations even as we're improving them what's your sense of looking at the political environment in which the bank operates how do you think the most constructive way for approaching this issue ?

BANGA so look even if you give me another $200 billion tomorrow I'm not sure we would have projects to fund so let's just be practical about this a little bit so I think we need to as an organization do two things at the same time and all in the development Community I don't mean only the World Bank we need to start building bankable projects capacity in these countries do all that while also hunting for more money to be put in whether it's private sector money or hybrid capital or guarantees or a general Capital increase I think these are two things to happen

the only reason why I say a better bank before a bigger bank is because if you're a shareholder who today all rich countries have fiscal pressures there all rich countries have an inward looking environment that has developed over time over the Last 5-8 Years where people are beginning to question why dollar goes elsewhere compared to being put to use inside their own country this is happening in the developed world and so you have to give them the faith as shareholders to fight for you to say I know that the money is being well used in this institution right so the critic isms that go into the development community

of taking too long of ineffective end development not caring about climate and

50:03

all that stuff needs to be tackled and I'm of not being good partners with everyone that's why I keep saying better bank before the bigger bank but I also say but I'm coming back for you for the bigger bank so they know I'm not going away now the question is when so Ida is now it's this year it also a little tibit I was the first World Bank president to go to ida term review shocking but true Ida is the single most important thing in the world Bank single most important because finally the poorest countries are who we are here for we have to start with them and Ida is the only source for them of Grants and deeply concessional financing so it's really an important part of doing anything and if you want to develop their private sectors their own I'm not talking about multinationals investing in you know Sudan I'm talking about the Sudanese private sector trying to do work in Sudan how do you help them if you're not there for them so there's a lot Ida is really important to me next year we come up to looking at the shareholding pattern of the ibrd that's the year it's supposed to be relooked at there'll be work to be done what is this all about finally it's about the relative capital of different in of countries in the system and how you get to better Solutions the IMF just went through their quota increase with that very thing and ended up doing the quota increase by not changing the current shareholding but agreeing that the next one would have that so they found some compromise to work it through we're going to have to work our way through all that what's the a what's that's the politics of it the fiscal constraints and the shareholding I think Ida will get a fair amount of support from the developed world I'm hearing relatively good feedback from I was in Japan and Korea as I was telling you earlier it I'm going back to Dubai next week along with Jordan and I Saudi the UK Germany France the US are all talking about Ida being an important attribute of their overseas development assistance so I think we're in a relatively better place than I was thinking we might be but we've got a lot of work to do between here and December to convert the conversation to reality and I think that's it's going to be hard work and I need all the help that any of you can give me because this is Mission critical if we get to 30 billion instead of 24 billion which is what the flatlining of donor contributions has been and you leverage it four times to one which is what we've been doing then you could you know 6 billion extra is $25 billion

extra available over the course of the next four to five years to put into these countries that's real money and I would I would welcome that that's kind of what I indicated in in Zanzibar with when I was being asked what kind of number are you looking at so the second part of your question is what's the appetite to do this in different places even though it's not the specific thing you ask but I know it's in your mind and I think there the issue is I don't yet know that's for the ibrd capital increase I don't yet know but I will tell you this if you talk to the United States government and you tell them you give me a dollar of incremental Capital to ivr and even if everybody else wants to keep their Capital share the same meaning they don't want the US to increase its share then out a share insecurity

they'll all put in six bucks so one will get to six will get to seven seven is

leveraged six times at ibrd that's 42 you show me one program in the United States government where $1 becomes 42 and I will give you a personal medal so therefore if you do the math this is money that can be best used in a way that cannot be used directly on any one:1 trust fund or any one:1 direct use of Oda this is a interesting model that has got built by The Genius of the people who created this institution many years ago and as now over the years through the expansion of the bond markets with enough bond market depth and width has allowed itself to become what I I really call this genius it is a brilliant model right and so I think that's an important attribute to keep reminding legislators and opinion leaders in all the developed world that this is leverageable money one for six yes it's not directly attributable to your country that part I understand if all you're doing this is for political gain in some bilateral way I get it you should do that anyway I'm not asking for all your money I'm asking for a fair share of your money and and it's one to 42 for the us but it's over a 100 for any European country yes I was just talking about the us because to me it's 177% of our of our capital and you know they have traditionally been the most generous of our of our shareholders all right I want to get to the audience in

55:04

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Legend

The World Bank Group

• International Bank for Reconstruction and Development (IBRD)
• International Development Association (IDA)
• International Finance Corporation (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)