World Bank adds Bayer, Hyatt and other CEOs to private sector initiative

By Andrea Shalal

WASHINGTON (Reuters) -The World Bank on Wednesday added four top executives, including Bayer AG CEO Bill Anderson and Hyatt Hotels CEO Mark Hoplamazian, to an initiative working to address barriers to private sector investment in developing countries.

World Bank President Ajay Banga, former CEO of Mastercard, launched the Private Sector Investment Lab shortly after taking office in June 2023, assembling 15 business leaders to brainstorm ways to create more jobs in developing countries.

Banga has worked to shift the bank's focus to look more at creation of jobs, underscoring a huge gap between the 1.2 billion young people poised to enter the workforce in developing countries over the next decade and the far fewer 420 million jobs on the horizon.

"You can't get jobs without development, and you don't get poverty alleviation and development without jobs," he told CNBC in an interview on Wednesday.

The next phase will aim at implementing proven solutions at scale, the bank said, identifying five priorities - regulatory and policy certainty, political risk insurance, foreign exchange risk, junior equity capital and securitization.

“With the expanded membership, we are mainstreaming this work across our operations and tying it directly to the jobs agenda that is driving our strategy,” Banga said in a statement. "It's about helping the private sector see a path to investments that will deliver returns, and lift people and economies alike."

The Lab's founding members included senior executives from AXA, BlackRock, HSBC, Macquarie, Mitsubishi UFJ Financial Group, Ninety One, Ping An Group, Royal Philips, Standard Bank, Standard Chartered, Sustainable Energy for All, Tata Sons, Temasek, and Three Cairns Group. It is chaired by Shriti Vadera, Chair of Prudential Plc.

The new members, in addition to Anderson and Hoplamazian, bring in Sunil Bharti Mittal, chair of Bharti Enterprises, and Aliko Dangote, President & CEO, Dangote Group.

The added members come from sectors critical to job creation, such as infrastructure, agribusiness, healthcare, tourism, and manufacturing - all industries well-versed in creating broad-based employment and economic opportunity.

The bank has already begun implementing the five priorities identified by the Lab, including work to streamline guarantee instruments, which resulted in a 30% increase in issuance and bolstered investor confidence.

In the area of foreign exchange risk, the bank said it was scaling local currency financing to deepen domestic capital markets, noting that its International Finance Corporation arm last year committed one-third of its long-term financing in local currency, and aimed to reach 40% by 2030.

The bank is also working with institutional investors such as Standard & Poors and BlackRock to standardize and securitize portfolios, unlocking capital from pension funds, insurers, and sovereign wealth funds, it said.

(Reporting by Andrea Shalal; Editing by Chizu Nomiyama)