DEVELOPMENT COMMITTEE
(Joint Ministerial Committee
of the
Boards of Governors of the Bank and the Fund
on the
Transfer of Real Resources to Developing Countries)
ONE HUNDREDTH MEETING
WASHINGTON, DC - OCTOBER 19, 2019
DC/S/2019-0053
October 19, 2019
Statement by
H. E. Mohammed A. Al-Jadaan
Minister of Finance
The Kingdom of Saudi Arabia


Statement by
H.E. Mohammed A. Al-Jadaan
Minister of Finance
The Kingdom of Saudi Arabia
100th Meeting of the Development Committee
October 19, 2019
Washington, DC
This milestone of our 100th meeting comes at a time of a fast-changing development landscape, with
persisting poverty and income inequality. Trade tensions, economic uncertainties, and geopolitical risks
pose challenges to attain the and World Bank Group (WBG)'s Twin Goals and the Sustainable
Development Goals (SDGs). However, some important opportunities to tackle the challenges are emerging
across the landscape such as promised by technology and an improved policy environment in many
countries.
Continued softening of global growth recovery with subdued investment especially in emerging markets
and developing economies (EMDEs), impedes progress on the development track. The downside risks to
the outlook remain elevated, with major challenges to boost resilience and foster long-term growth.
Needless to say, that uncertainties, whether emanating from trade, technology or other source, if not
resolved, are bound to heighten geopolitical risks that loom larger in FCV situations and in countries already
facing slow or negative progress towards the Twin Goals and the SDGs. In this context, I look forward to
the FCV strategy which I hope will lead to better and more targeted assistance to countries in need.
Many countries are burdened with rigid economic structures to suit the new development landscape and
require an urgent but careful structural transformation that corrects the current mismatch between their
demographics and their economies. A new generation of reforms to enhance economic transformation with
technology is critical for the needed private sector job creation and more inclusive and vibrant economies.
Trade and commerce within a conducive governance framework are also important for business formation
in the private sector. Likewise, a smart framework for human capital formation with prudent social
expenditures key to skilling people for the jobs of the future.
We commend the WBG for taking on this agenda to help developing countries embrace the opportunities
created by the changing development dynamics. The quality papers presented today on Job and Economic
transformation, Trade and Global Value Chains, and Human Capital Project are interlinked and contain a
set of comprehensive policy options to achieve a stronger, sustainable, and inclusive growth. In designing
and implementing country support programs, WBG needs to recognize the heterogeneity between countries
and have a tailored support for macro and structural reforms, trade policy and human capital development
that yield maximum impactful outcomes. The WBG is even more tasked to analyze the tradeoffs involved
and the missing parts in the agendas addressed in each of the papers while reinforcing traditional
development priorities.
The WBG, the International Monetary Fund (IMF), and other international and regional Financial
Institutions (FIs) need to play their part to better assist policymakers in deepening reforms through better
coordination of their respective mandates and comparative advantage.
2


World Development Report 2020 - Trade and Global Value Chains (GVCs)
We welcome the World Development Report (WDR) 2020 on Trade and GVCs, which analyzes the
implications of the changing face of globalization for development. The WBG has a role to support client
countries in taking advantage of the benefits brought about by the trade and GVCs, while managing the
associated risks. Indeed, Trade and commerce have played a critical role in economic development and
enabled productivity gains. The stress on the enabling environment of a rules-based trading system is
appropriate. It will serve as a bedrock for gainful participation in GVCs and maximize its benefits through
building solid national value chains and adequate regulatory bodies to oversee the liberalized financial and
product markets.
GVCs can also create adverse income distribution and market concentration that involve important trade-
offs. These issues should be more thoroughly assessed such as, for instance, between boosting growth and
widening income inequality, and between the demand for skilled workers and nonskilledjob seekers. Going
forward in operationalizing the WDR, we encourage WBG to prioritize policy support for the development
of local supply chains to make them more competitive in the regional and international value chain markets,
including by thinking more innovatively with the objective of integrating local firms in GVCs through
better access to digital technologies and technical know-how.
Job and Economic Transformation (JET):
We welcome the renewed focus on Job creation and economic transformation and its prominence in IDAl9.
Getting the right enabling environment, while necessary is not sufficient for Job creation. The WBG is
encouraged to elaborate a strategy for engagement on JET with greater clarity on issues of the informal
sector, industrialization, income inequality and economic opportunities, as well as on how countries could
benefit more from GVCs. Lack of necessary coordination between markets often results in market failures
and this need to be addressed given the size of informal activities in Low Income Countries and Fragile,
Conflict and Violence situations.
Going forward, more analysis on how successful economic transformation happens and the path of inclusive
and sustainable job creation would be helpful. Discussion of some missing issues is needed such as fixing
the business climate during structural transformation, the role of SMEs in effectuating the change. We
would also like to see more on how to increase productivity and the related tradeoffs between inducing
more adoption of technology or increasing factor employment. WBG engagement will be more fruitful with
enhanced operational clarity on country platforms and more specificity on country programs.
Human Capital Project:
We are encouraged by the growing list of adopters, which demonstrates commitment to improving the
health and education outcomes. We propose that the Bank further explores the lag between the market
demand and the supply of human capital to make this project relevant to the issues faced by countries. We
welcome the refinements to the human capital index (HCI) and urge the Bank to further strengthen the
methodology to make the index a guide for country policy formulation and programs and ensure that the
HCI help bring countries, especially in IDA and FCV, closer to frontiers of education and learning
outcomes. We also call for more efforts to ensure that informal, self-employed and unpaid work is not
underestimated.
IDA Voting Rights:
The current voting system has worked effectively over the past decades, including the Part I-Part II
differentiation recognized in the IDA Articles. Although complex, the system has proven to be 'fit for
3


purpose' and discussion on whether and how the voting system may be adjusted is difficult and challenging.
In view of this, it is even more important that, in undertaking the proposed new review, the WBG Board
bears in mind the need to move in small and manageable steps. This is an important takeaway from the
2015 IBRD Shareholding Review and it is equally pertinent for the IDA voting rights review. Consensus
would be more likely if we retain the basic features of the current system and keep our ambitions realistic
in terms of adjustment of voting rights.
4