Are suddenly surprised. Worth a thousand sales. Lets take you inside the perfect photograph that will get you to take at your credit card. Good morning, everybody. Happy friday. Happy pi day. Its a huge holiday. Escalating are between Vladimir Putin and the west over ukraine. Troops onlitary have the ukrainian border. The u. S. Calls this referendum illegal. John kerry is meeting with his russian counterpart. Peter cook is following the development. We thought we might hear from kerry already. He is due to speak shortly. Were supposed to get some readout on how his conversation with sergey b has gone in london. We know this is a final diplomatic push. Before that referendum on sunday. E heading into it this morning. Effort to trynal to deescalate this crisis. The u. S. Will offer some final ideas here for how the russians can work with the new Ukrainian Government and try to satisfy their concerns about their interest in crimea. We had sergey lab rob saying, this is obviously a difficult situation. Lavrov. Ie we have a lot to talk about. I look forward to the thertunity to dig into issues and possibilities that we may be able to find and move Forward Together to resolve the differences between us. On the ground, in ukraine, more signs of escalating tensions. Violence in the last 48 hours in the area of Russian Troops on the border with ukraine for what is called a another round of military exercises. That is escalating tensions as well. We had a statement from the Russian Foreign ministry about that violence in eastern ukraine, suggesting again that the Russian Military reserves the right to take people under his protection. As could threaten a further military push. That is the real risk right now. The u. S. Does not think it can get this referendum off the table for sunday. Can it convince the russians not to take the next step gekko annex the crimea. That would be the significant escalation in this crisis between russia and the west. That is probably job number one for john kerry. Whats happening in washington . There was some hope in ukraine that congress would be able to get its act together and vote in favor of an aid package for ukraine before the recess. Will that happen . Its not happening. Senate. House and disagreeing right now over competing versions of this 1 billion Loan Guarantee for ukraine. Everybody agrees that should happen. Theres a difference of opinion over an additional issue of imf quota. The helping Holding Things up. No aid for ukraine at this point from the United States even though everyone thinks it should and will happen. Things for the update. Peter cook following the latest. We have a very special guest this morning. To talk about the crisis in the ukraine and a whole lot more. He is the president of the world bank. Pledged 3 billion in aid to the Ukrainian Government. President cam tell us president kim, what will the money be used for . About 3. 7dy have billion worth of programs going on in ukraine, including two in crimea. This is the next wave. Mostly what it will be is to provide basic services. I just met with the Prime Minister when he was in town. He is facing a difficult situation. For us to move forward, we need to see some commitment to a reform agenda. They pass a really impressive reform agenda. This is a government that said even in the mists of all these difficulties, they will do things like remove subsidies. We feel they are moving forward so we will be able to move forward quickly if they continue on that path to being committed to those reforms. Confident thatbe the money going to ukraine will find its way to the right people and the right programs and wont be siphoned off into private accounts . In terms of the money we provide, we have a lot in the system my friend and predecessor made it a top priority to fight corruption. He have audit mechanisms so we can follow our money fairly well. What happens with a lot of the money we often dont know we have good mechanisms and we think we can follow it enough so that we know it will get to the people who need it most. We work in a lot very opaque places. The good news for us is that we have developed these systems where we follow money as closely as we can. We have auditing mechanisms and people on the ground. If they are committed to the reforms, we think we can move and will watch closely. The money has to get to the poorest. I want to read a quote from eigh 82011 assessment from the world bank. Before you were president of the ukraine has made important progress in Public Finance management reform in the past few years, including the areas of transparency, predict ability and execution control of the budget and public procurement. How confident you can be in your efforts to audit what goes on in ukraine thats not what was happening in ukraine in 2011. The government was corrupt and all kinds of money was finding compound thathe he built for himself. Aid thisine the is important to you. You want to make sure that nobody can say that kind of thing about your and ministration. If you look at the overall ukrainian economy, about 350 billion a year. Even though we are a major billion. Are 3. 7 righthe best we can do now. What we also do is when we find that there are some corrupt activity, we follow it up and display the companies that are involved. We have mechanisms this is complicated stuff. We always have to think about the people who are the beneficiaries. There are many people in the ukraine who lack most basic things. Good health care, access to sanitation and heating those are things we are focusing on. I want to move on to china. Whats your take right now on the slowing economy in china and the effect that is having on the developing countries around it . We wrote a report with the Chinese Government a few years ago. It was the first time that the Chinese Government had ever approved language that says they have to move from focusing on investments and exports to focusing on consumption and services as the Growth Drivers of their economy. The first time they said Enterprises Need to face prosecution. Documenttlined in this any process of reform, the likes of which the chinese is taking on, is going to probably lead to some slowing in growth. Ago, the premier held its press conference. We know that a slowing chinese economy is going to spill over into other economies in the entire world. On the other hand, we support very strongly the reforms that they are undergoing. They are tightening credit because they are potentially facing problems with all this credit coming out of the banking industry. Its hard to imagine a scenario where they can do that and growth would not slow at least a little bit. A slowdown in the chinese economy has the potential to exacerbate the growing gap between the rich and the poor in china. What are your opinions that the chinese comer in the Us Government can do to address income inequality echo its happening there. From spilling over and whats going to upset the political balance. When we look at Something Like them 1 00 a. M. Development goals which were focused on. The first one was to reduce extreme poverty. Greatermade a contribution to that than any other country in the history of the world because of growth. In the process, they faced a widening income inequality. To increase wages for average chinese citizens grade it will increase consumption in the direction that will fuel the growth of the economy in a different way. The chinese are very much aware of the income inequality and very much aware of the difficulty of providing Health Care Services and education to everybody. They have a system where its difficult to get Education Services other than where you are born. So people are moving to cities. What if it doesnt work . What if this effort doesnt translate into higher incomes echo we are in constant conversation with them. This new regime is one of the most significant economic makers that has ever been in the leadership of china. He is completely on top of whats going on and understands the situation. We are providing advice. Theyre talking about moving from 46 investment of gdp. Those are levels that we have hardly seen before. To scale that back and move toward a different driver of growth is complicated. There will be ups and downs. Are talking about balance. How about the balancing act we are seeing and emergingmarket nations as they are trying to digest the fed a tapering exercise here . How are they going to absorb that without really having the hiccups that we saw a couple of months ago . The end of january hiccup we did see that. There was some capital flight from the emergingmarket economies. All the signals are that janet yellen wants to continue german bernankes policies and that chairman yellen is going to try to make this as smooth as possible. If that happens between now and 2016, we think capital flows as a percentage of overall gdp will go down slowly. About 4. 6 right now. , going it will happen down to 4 in the next few years. It should have a positive impact in terms of better exports. The emerging markets have to balance that. Indonesia, india, turkey and brazil all of them are going through elections. We are in constant conversation with them and they know that reforms have to be undertaken in the Business Environment and trade policy. They know what they have to do but its difficult to pull the trigger when youre in the middle of an election season. They know what theyre hoping to do and we hope the reform agenda will accelerate. Cover a lot more with you. Such a treat to have you here. We are going to be back with the World Bank President and talk about clement change. Talk about Climate Change. To getverybody going burned . May be investors should have read the fine print. [indiscernible] you are watching Market Makers. We are having a great conversation with jim yong kim. Thank you again. We are taking time to ask about world bank policy. The world bank is still identified very closely with a set of economic policy, specifically, ones that have endured much criticism over the years. Is the washington consensus dead under Jim Yong Kims world bank . My first trip to washington was to be part of a movement trying to close the world bank. Get out of town. We werent really arguing with most of the washington consensus in the sense that you have to have independent Central Banks had much more prudent fiscal policy and watch your debt to gdp. Thats all good. The countries that listens to us in recommending those kinds of fundamental changes did better during the crisis years. What we were complaining about is the bank at that time did not appreciate the importance of investing in people. That has changed. The imf has been coming out talking about the importance of greater equity. Inequality is a drag on growth. This was not the perspective 20 years ago. Not . What did the world look like then that made this not front and center . We do not have the evidence that matched with our ethical and moral values. Care hasaying, health to be important and education has to be important. But we did not have data on the impact on growth. So Larry Summers led a panel recently that looked at the importance of Better Health for growth. 20002011, Larry Summerspanel found that as much is 24 of growth was a result of her health. Education we had the piece of scores. It is directly correlated with economic growth. Now we know. The evidence matches our ethics now so that you have to invest in will you be photographed in your do you have a photograph in your office of when you are . Were protesting are you building a the washington consensus where Economic Development is matched with health, education and rule of law, human rights . We are specifically not supposed to tell them to matters of politics. People are talking around the new Millennium Development goal structure that rule of law has to part of the picture. Were focused on economic growth. Now that we know that investing in human beings is good for growth, the agenda is much broader. The original washington consensus ideas were not bad ideas. There were not enough. What do you call the new ones . You cant do this from just washington. We go to somewhere in africa and bring everyone to a table. Fairlyagenda it looks uncontroversial. We need growth, but growth has consistent. What was the arab spring echo you have to invest in people. Education. None of that will matter if we spoil the planet so much that it will go back into the depths of property. Is of the role of the world bank to take on a policy Climate Change . Ima chain . Agree thatcientists manmade Climate Change is a reality. Im a medical doctor. That is little in medicine 97 of doctors agree on. What are the things were doing right now that we can do better to better Climate Change echo we can build cleaner cities. Our big project with the chinese is trying to put a plan together so they can build cleaner cities. Of all co2 emissions come from cities. Theyre being built more helterskelter in the developing world. The wayt news is that to improve productivity in agriculture is actually vertically aligned with putting more carbon back into the ground. Is something we can do about that. The world bank has committed itself to not finance or promote projects that either cause environmental degradation or contributes to the problems we associate with Climate Change. Right . We will do the best we can. There are countries where they will have to have different solutions. For example, there are countries today that we cant see options other than fossil fuels and even coal in a very rare circumstance. We are trying to find any option other than coal. People deserve access to energy. We have to balance our very aggressive approach to doing everything we can do better Climate Change with peoples right to energy. When you look at Companies Come you deal with them all the time. Are those that you can point to who you believe are doing it right . Making the right moves in terms of Climate Change. There are a lot of Countries Companies you would not suspect were having a huge impact. Cocacola we work with them on water issues. This is a fundamental problem for them. They have a real leader in looking at how to improve our water supply. Things on doing reducing their Carbon Footprint and transporting food. A lot of the Food Companies are working with us on this Climate Smart agriculture because they will need a steady supply of food going into the future. The private sector is ahead of government in trying to respond to whats happening. Whats your view on monoculture . Ofps that are acres crops fueled by fertilizers its done a tremendous amount for contributed to the decline in the price of food. It comes with some serious risks. Theres a lot of exciting things that were watching right now. Lets give you one example we will need to plant wheat. There are older varieties of wheat that had roots that were much longer than the ones we are using today. Their hardier and can withstand changes in climate and put more carbon back into the ground. All kinds of interesting innovations. Our job is to capture those innovations and help every country in the world scale them up. We are the people who should be most focused on taking great ideas and helping country scale them up. You are doing extraordinaire work. The viewers want to know more. Theres something exciting i got to see that maybe our viewers forgot. Duringg kim performed his time at dartmouth. Heres a quick reminder. You. Owe it all to to put you in the hot seat. There are a few burning questions we have so we can understand the man you are. Who would play you in a movie . Daniel daylewis. Wow. Thats a good one. Whats your favorite show to binge watch . The good life. Im a fan. The good wife. Whats your guilty pleasure . Golf. I play with michael bloomberg. Golf with mike. He is an avid golfer. Thats a nice guilty pleasure. Of all the places you coul evenr been, where is your favorite . I learned the most in haiti. Ti is a tough lace to go tough place to go. Its a 45 minute flight from miami. Deforestation has destroyed everything. I have learned more from illiterate peasants in haiti than anyone else i can recall. We had the identical conversation with the supermodel each are dad and the Sports Illustrated swimsuit edition. She moved there after visiting haiti and said that almost the identical thing. A 45 minute flight from amy. Youre in good company. I have a lot in common with supermodels. [laughter] thank you so much for joining us. What a treat. Back, havingme second thoughts . Perhaps hedge funds went big on fannie mae and freddie mac. We will be back. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and Stephanie Ruhle. Youre watching Market Makers on bloomberg television. Im Erik Schatzker. A pretty good opening act. I think so. Jim yong kim was here with us for the halfhour. Great stuff. We talked about so much. What an illuminating conversation. Talk about fannie and freddie. Hedge funds were millions of dollars into the mortgage giants. Theyre getting slammed this week. A plan