I just want to share with you what I have been experiencing over the last five years in having the great privilege of traveling to many of the poorest countries in the world.
This scene is one I see all the time everywhere, and these young children are looking at a smartphone, and the smartphone is having a huge impact in even the poorest countries. I said to my team, you know, what I see is a rise in aspirations all over the world. In fact, it seems to me that there's a convergence of aspirations. And I asked a team of economists to actually look into this. Is this true? Are aspirations converging all around the world? So they looked at things like Gallup polls about satisfaction in life and what they learned was that if you have access to the internet, your satisfaction goes up. But another thing happens that's very important: your reference income, the income to which you compare your own, also goes up. Now, if the reference income of a nation, for example, goes up 10 percent by comparing themselves to the outside, then on average, people's own incomes have to go up at least five percent to maintain the same level of satisfaction. But when you get down into the lower percentiles of income, your income has to go up much more if the reference income goes up 10 percent, something like 20 percent. And so with this rise of aspirations, the fundamental question is: Are we going to have a situation where aspirations are linked to opportunity and you get dynamism and economic growth, like that which happened in the country I was born in, in Korea? Or are aspirations going to meet frustration?
This is a real concern, because between 2012 and 2015, terrorism incidents increased by 74 percent. The number of deaths from terrorism went up 150 percent. Right now, two billion people live in conditions of fragility, conflict, violence, and by 2030, more than 60 percent of the world's poor will live in these situations of fragility, conflict and violence. And so what do we do about meeting these aspirations? Are there new ways of thinking about how we can rise to meet these aspirations? Because if we don't, I'm extremely worried. Aspirations are rising as never before because of access to the internet. Everyone knows how everyone else lives. Has our ability to meet those aspirations risen as well?
And just to get at the details of this, I want to share with you my own personal story. This is not my mother, but during the Korean War, my mother literally took her own sister, her younger sister, on her back, and walked at least part of the way to escape Seoul during the Korean War. Now, through a series of miracles, my mother and father both got scholarships to go to New York City. They actually met in New York City and got married in New York City. My father, too, was a refugee. At the age of 19, he left his family in the northern part of the country, escaped through the border and never saw his family again. Now, when they were married and living in New York, my father was a waiter at Patricia Murphy's restaurant. Their aspirations went up. They understood what it was like to live in a place like New York City in the 1950s.
Well, my brother was born and they came back to Korea, and we had what I remember as kind of an idyllic life, but what was happening in Korea at that time was the country was one of the poorest in the world and there was political upheaval. There were demonstrations just down the street from our house all the time, students protesting against the military government. And at the time, the aspirations of the World Bank Group, the organization I lead now, were extremely low for Korea. Their idea was that Korea would find it difficult without foreign aid to provide its people with more than the bare necessities of life. So the situation is Korea is in a tough position, my parents have seen what life is like in the United States. They got married there. My brother was born there. And they felt that in order to give us an opportunity to reach their aspirations for us, we had to go and come back to the United States.
Now, we came back. First we went to Dallas. My father did his dental degree all over again. And then we ended up moving to Iowa, of all places. We grew up in Iowa. And in Iowa, we went through the whole course. I went to high school, I went to college. And then one day, something that I'll never forget, my father picked me up after my sophomore year in college, and he was driving me home, and he said, "Jim, what are your aspirations? What do you want to study? What do you want to do?" And I said, "Dad," -- My mother actually was a philosopher, and had filled us with ideas about protest and social justice, and I said, "Dad, I'm going to study political science and philosophy, and I'm going to become part of a political movement." My father, the Korean dentist, slowly pulled the car over to the side of the road --
(Laughter)
He looked back at me, and he said, "Jim, you finish your medical residency, you can study anything you want."
(Laughter)
Now, I've told this story to a mostly Asian audience before. Nobody laughs. They just shake their head. Of course.
(Laughter)
(Applause)
So, tragically, my father died at a young age, 30 years ago at the age of 57, what happens to be how old I am right now, and when he died in the middle of my medical and graduate studies -- You see, I actually got around it by doing medicine and anthropology. I studied both of them in graduate school.
But then right about that time, I met these two people, Ophelia Dahl and Paul Farmer. And Paul and I were in the same program. We were studying medicine and at the same time getting our PhD's in anthropology. And we began to ask some pretty fundamental questions. For people who have the great privilege of studying medicine and anthropology -- I had come from parents who were refugees. Paul grew up literally in a bus in a swamp in Florida. He liked to call himself "white trash." And so we had this opportunity and we said, what is it that we need to do? Given our ridiculously elaborate educations, what is the nature of our responsibility to the world? And we decided that we needed to start an organization. It's called Partners in Health. And by the way, there's a movie made about that.
(Applause)
There's a movie that was just a brilliant movie they made about it called "Bending the Arc." It launched at Sundance this past January. Jeff Skoll is here. Jeff is one of the ones who made it happen. And we began to think about what it would take for us to actually have our aspirations reach the level of some of the poorest communities in the world.
This is my very first visit to Haiti in 1988, and in 1988, we elaborated a sort of mission statement, which is we are going to make a preferential option for the poor in health. Now, it took us a long time, and we were graduate students in anthropology. We were reading up one side of Marx and down the other. Habermas. Fernand Braudel. We were reading everything and we had to come to a conclusion of how are we going to structure our work? So "O for the P," we called it, a preferential option for the poor.
The most important thing about a preferential option for the poor is what it's not. It's not a preferential option for your own sense of heroism. It's not a preferential option for your own idea about how to lift the poor out of poverty. It's not a preferential option for your own organization. And the hardest of all, it's not a preferential option for your poor. It's a preferential option for the poor.
So what do you do? Well, Haiti, we started building -- Everyone told us, the cost-effective thing is just focus on vaccination and maybe a feeding program. But what the Haitians wanted was a hospital. They wanted schools. They wanted to provide their children with the opportunities that they'd been hearing about from others, relatives, for example, who had gone to the United States. They wanted the same kinds of opportunities as my parents did. I recognized them. And so that's what we did. We built hospitals. We provided education. And we did everything we could to try to give them opportunities.
Now, my experience really became intense at Partners in Health in this community, Carabayllo, in the northern slums of Lima, Peru. And in this community, we started out by really just going to people's homes and talking to people, and we discovered an outbreak, an epidemic of multidrug-resistant tuberculosis. This is Melquiades. Melquiades was a patient at that time, he was about 18 years old, and he had a very difficult form of drug-resistant tuberculosis. All of the gurus in the world, the global health gurus, said it is not cost-effective to treat drug-resistant tuberculosis. It's too complicated. It's too expensive. You just can't do it. It can't be done. And in addition, they were getting angry at us, because the implication was if it could be done, we would have done it. Who do you think you are? And the people that we fought with were the World Health Organization and probably the organization we fought with most was the World Bank Group.
Now, we did everything we could to convince Melquiades to take his medicines, because it's really hard, and not once during the time of treatment did Melquiades's family ever say, "Hey, you know, Melquiades is just not cost-effective. Why don't you go on and treat somebody else?"
(Laughter)
I hadn't seen Melquiades for about 10 years and when we had our annual meetings in Lima, Peru a couple of years ago, the filmmakers found him and here is us getting together.
(Applause)
He has become a bit of a media star because he goes to the film openings, and he knows how to work an audience now.
(Laughter)
But as soon as we won -- We did win. We won the argument. You should treat multidrug-resistant tuberculosis -- we heard the same arguments in the early 2000s about HIV. All of the leading global health people in the world said it is impossible to treat HIV in poor countries. Too expensive, too complicated, you can't do it. Compared to drug-resistant TB treatment, it's actually easier. And we were seeing patients like this. Joseph Jeune. Joseph Jeune also never mentioned that he was not cost-effective. A few months of medicines, and this is what he looked like.
(Applause)
We call that the Lazarus Effect of HIV treatment. Joseline came to us looking like this. This is what she looked like a few months later.
(Applause)
Now, our argument, our battle, we thought, was with the organizations that kept saying it's not cost-effective. We were saying, no, preferential option for the poor requires us to raise our aspirations to meet those of the poor for themselves. And they said, well, that's a nice thought but it's just not cost-effective. So in the nerdy way that we have operated Partners in Health, we wrote a book against, basically, the World Bank. It says that because the World Bank has focused so much on just economic growth and said that governments have to shrink their budgets and reduce expenditures in health, education and social welfare -- we thought that was fundamentally wrong. And we argued with the World Bank. And then a crazy thing happened. President Obama nominated me to be President of the World Bank.
(Applause)
Now, when I went to do the vetting process with President Obama's team, they had a copy of "Dying For Growth," and they had read every page. And I said, "OK, that's it, right? You guys are going to drop me?" He goes, "Oh, no, no, it's OK." And I was nominated, and I walked through the door of the World Bank Group in July of 2012, and that statement on the wall, "Our dream is a world free of poverty." A few months after that, we actually turned it into a goal: end extreme poverty by 2030, boost shared prosperity. That's what we do now at the World Bank Group. I feel like I have brought the preferential option for the poor to the World Bank Group.
(Applause)
But this is TED, and so I want to share with you some concerns, and then make a proposal.
The Fourth Industrial Revolution, now, you guys know so much better than I do, but here's the thing that concerns me. What we hear about is job loss. You've all heard that. Our own data suggest to us that two thirds of all jobs, currently existing jobs in developing countries, will be lost because of automation. Now, you've got to make up for those jobs. Now, one of the ways to make up for those jobs is to turn community health workers into a formal labor force. That's what we want to do.
(Applause)
We think the numbers will work out, that as health outcomes get better and as people have formal work, we're going to be able to train them with the soft-skills training that you add to it to become workers that will have a huge impact, and that may be the one area that grows the most.
But here's the other thing that bothers me: right now it seems pretty clear to me that the jobs of the future will be more digitally demanding, and there is a crisis in childhood stunting. So these are photos from Charles Nelson, who shared these with us from Harvard Medical School. And what these photos show on the one side, on the left side, is a three-month-old who has been stunted: not adequate nutrition, not adequate stimulation. And on the other side, of course, is a normal child, and the normal child has all of these neuronal connections. Now, the neuronal connections are important, because that is the definition of human capital. Now, we know that we can reduce these rates. We can reduce these rates of childhood stunting quickly, but if we don't, India, for example, with 38 percent childhood stunting, how are they going to compete in the economy of the future if 40 percent of their future workers cannot achieve educationally and certainly we worry about achieving economically in a way that will help the country as a whole grow.
Now, what are we going to do? 78 trillion dollars is the size of the global economy. 8.55 trillion dollars are sitting in negative interest rate bonds. That means that you give the German central bank your money and then you pay them to keep your money. That's a negative interest rate bond. 24.4 trillion dollars in very low-earning government bonds. And 8 trillion literally sitting in the hands of rich people under their very large mattresses. What we are trying to do is now use our own tools -- and just to get nerdy for a second, we're talking about first-loss risk debt instruments, we're talking about derisking, blended finance, we're talking about political risk insurance, credit enhancement -- all these things that I've now learned at the World Bank Group that rich people use every single day to make themselves richer, but we haven't used aggressively enough on behalf of the poor to bring this capital in.
(Applause)
So does this work? Can you actually bring private-sector players into a country and really make things work? Well, we've done it a couple of times. This is Zambia, Scaling Solar. It's a box-set solution from the World Bank where we come in and we do all the things you need to attract private-sector investors. And in this case, Zambia went from having a cost of electricity at 25 cents a kilowatt-hour, and by just doing simple things, doing the auction, changing some policies, we were able to bring the cost down. Lowest bid, 25 cents a kilowatt-hour for Zambia? The lowest bid was 4.7 cents a kilowatt-hour. It's possible.
(Applause)
But here's my proposal for you. This is from a group called Zipline, a cool company, and they literally are rocket scientists. They figured out how to use drones in Rwanda. This is me launching a drone in Rwanda that delivers blood anywhere in the country in less than an hour. So we save lives, this program saved lives --
(Applause)
This program made money for Zipline and this program saved huge amounts of money for Rwanda. That's what we need, and we need that from all of you. I'm asking you, carve out a little bit of time in your brains to think about the technology that you work on, the companies that you start, the design that you do. Think a little bit and work with us to see if we can come up with these kinds of extraordinary win-win solutions.
I'm going to leave you with one final story. I was in Tanzania, and I was in a classroom. This is me with a classroom of 11-year-olds. And I asked them, as I always do, "What do you want to be when you grow up?" Two raised their hands and said, "I want to be President of the World Bank."
(Laughter)
And just like you, my own team and their teachers laughed. But then I stopped them. I said, "Look, I want to tell you a story. When I was born in South Korea, this is what it looked like. This is where I came from. And when I was three years old, in preschool, I don't think that George David Woods, the President of the World Bank, if he had visited Korea on that day and come to my classroom, that he would have thought that the future President of the World Bank was sitting in that classroom. Don't let anyone ever tell you that you cannot be President of the World Bank."
Now -- thank you.
(Applause)
Let me leave you with one thought. I came from a country that was the poorest in the world. I'm President of the World Bank. I cannot and I will not pull up the ladder behind me. This is urgent. Aspirations are going up. Everywhere aspirations are going up. You folks in this room, work with us. We know that we can find those Zipline-type solutions and help the poor leapfrog into a better world, but it won't happen until we work together. The future "you" -- and especially for your children -- the future you will depend on how much care and compassion we bring to ensuring that the future "us" provides equality of opportunity for every child in the world.
Thank you very much.
(Applause)
Thank you. Thank you. Thank you.
(Applause)
Chris Anderson: You'd almost think people are surprised to hear a talk like this from the President of the World Bank. It's kind of cool. I'd encourage you to even be a little more specific on your proposal. There's many investors, entrepreneurs in this room. How will you partner with them? What's your proposal?
Jim Yong Kim: Can I get nerdy for just a second.
CA: Get nerdy. Absolutely. JYK: So here's what we did. Insurance companies never invest in developing country infrastructure, for example, because they can't take the risk. They're holding money for people who pay for insurance. So what we did was a Swedish International Development Association gave us a little bit of money, we went out and raised a little bit more money, a hundred million, and we took first loss, meaning if this thing goes bad, 10 percent of the loss we'll just eat, and the rest of you will be safe. And that created a 90-percent chunk, tranche that was triple B, investment-grade, so the insurance companies invested. So for us, what we're doing is taking our public money and using it to derisk specific instruments to bring people in from the outside. So all of you who are sitting on trillions of dollars of cash, come to us. Right?
(Laughter)
CA: And what you're specifically looking for are investment proposals that create employment in the developing world.
JYK: Absolutely. Absolutely. So these will be, for example, in infrastructure that brings energy, builds roads, bridges, ports. These kinds of things are necessary to create jobs, but also what we're saying is you may think that the technology you're working on or the business that you're working on may not have applications in the developing world, but look at Zipline. And that Zipline thing didn't happen just because of the quality of the technology. It was because they engaged with the Rwandans early and used artificial intelligence -- one thing, Rwanda has great broadband -- but these things fly completely on their own. So we will help you do that. We will make the introductions. We will even provide financing. We will help you do that.
CA: How much capital is the World Bank willing to deploy to back those kinds of efforts?
JYK: Chris, you're always getting me to try to do something like this.
CA: I'm trying to get you in trouble. JYK: So here's what we're going to do. We have 25 billion a year that we're investing in poor countries, the poorest countries. And as we invest over the next three years, 25 billion a year, we have got to think with you about how to use that money more effectively. So I can't give you a specific number. It depends on the quality of the ideas. So bring us your ideas, and I don't think that financing is going to be the problem.
CA: All right, you heard it from the man himself.
Jim, thanks so much. JYK: Thank you. Thank you.
(Applause)
