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5 things to know from World Bank President Jim Yong Kim

September 24, 2015

World Bank President Jim Yong Kim speaks to reporters in New York, Thursday, Sept. 24, 2015. (AP Photo/Seth Wenig)

NEW YORK (AP) — World Bank President Jim Yong Kim says growing up as an economic migrant himself shaped his views on many of the major issues he’s tackling now as head of one of the leading institutions fighting global poverty.

In a wide-ranging interview with The Associated Press ahead of this week’s United Nations meeting on post-2015 sustainable development goals, the 55-year-old former Harvard medical professor touched on climate change, the migrant crisis, China’s economic slowdown and the Federal Reserve’s decision to hold off raising interest rates.

Here are five things to know from the interview:

- SUSTAINABLE DEVELOPMENT GOALS

The U.N.’s 193 member states are set to adopt a new 15-year plan to fight grinding world poverty, improve health and education and quell climate change. The 17 goals and 169 specific targets replace eight expiring Millennium Development goals adopted in 2000 – only one of which has been achieved.

Kim said the new goals “broaden dramatically what we’re trying to tackle.”

Achieving them, such as eliminating extreme poverty by 2030, will require finding trillions of dollars a year, Kim said. One area the World Bank is looking to find that money is taxes.

“We think that between 2 and 3 percent of GDP a year can be raised by better tax collection,” Kim said, noting that far too many countries maintain regressive tax systems where the poor pay more than the rich.

Many international corporations also still pay no taxes in developing countries, Kim said.

Ending extreme poverty, currently defined as a daily income under $1.25, “is going to be extremely difficult” Kim said.

But he remains upbeat: “When you’re working on development issues, optimism is not always based on rational analysis, often it is a moral choice.”

- CLIMATE CHANGE

Paris is hosting the U.N.’s COP21 summit on battling climate change in November. At the its 2009 climate conference in Copenhagen, developed countries promised $100 billion would flow every year from North to South by 2020. The World Bank is closely involved in achieving that goal, Kim said.

“Carbon is the currency of how you measure climate change, but water will be the teeth,” Kim said.

He noted that by 2030, 40 percent of the currently arable land in Africa will disappear because of climate change. While developed countries have the resources to recover from extreme weather events like 2012′s Hurricane Sandy, the developing world does not, Kim said.

“Imagine the furry of Hurricane Sandy hitting every year,” Kim said, and then imagine that happening in the world’s poorest countries.

- MIGRANT CRISIS

Kim moved with his parents from South Korea to Texas in 1964 when he was 5 years old and grew up in Iowa. He related how this experience has shaped him.

“I came here in 1964 as a refugee from a country that was said by the World Bank to be hopeless in terms of economic growth,” Kim said. “There was no sense that people who looked like me, not speaking English when I got here, would be part of the fabric of society.”

He still remembers slights from that time, like when other children would imitate karate chops when they saw him.

“Today there are a lot places where people say it’s just hopeless,” Kim said. “If I can come from a hopeless country, got an education, become a hyphenated American and become president of the World Bank, it’s my moral duty to make sure that every single person on the planet has that opportunity.”

- CHINA’S SLOWDOWN

China’s economic slowdown was “entirely predictable,” Kim said.

“They’re fundamentally changing their growth model from exports to one led by services and consumption,” he said. “From our perspective it was entirely predictable that there’d be bumpiness in growth rates.”

Kim said China remains committed to this reform process and that it should lead to “much more sustainable and higher quality growth.” Nonetheless, the slowdown is affecting other developing countries as the demand for their exports of raw materials and other commodities slumps.

- INTEREST RATES

The World Bank chief noted that he meets regularly with Federal Reserve Chair Janet Yellen.

“The Fed works in mysterious ways,” Kim said. “I think it was quite striking she said one of the reasons for not raising rates this time was the impact it might have on emerging markets.”

While the Fed kept rates steady last week, it’s “going to have to raise them at some point,” Kim said. “What this has done is given us time to go back to emerging markets and developing countries and say `OK, you’ve got a little reprieve.’”

The World Bank will use this extra time to encourage those countries to make necessary reforms to ensure that “when the rate does go up you won’t see this mass exodus of investors.”