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 HUNDRED AND ELEVENTH MEETING WASHINGTON, DC – APRIL 24, 2025 DC/S/2025-0022 April 24, 2025 Statement by H.E. Edgar Abraham Amador Zamora Minister of Finance and Public Credit Mexico On behalf of Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, and The Kingdom of Spain Statement by H.E. Edgar Abraham Amador Zamora Minister of Finance and Public Credit Mexico On behalf of Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, and The Kingdom of Spain 111th Meeting of the Development Committee April 24, 2025 Washington, DC The Development Committee 2025 provides a unique opportunity to address current global challenges and build the collective will needed to meet the expectations of the people we serve, especially for the poor and most vulnerable peoples in our countries, for the women, children and youth who deserve a better future. Jobs are indeed the path to prosperity; we could not have a better title for this year’s meeting of the Development Committee. Large uncertainties in the world economy are already leading to a downgrade in economic growth forecasts, and continued inflation. This is the time to strengthen our collective policy instruments to mitigate the adverse effects of the global context to drive sustainable and lasting growth. The reconfiguration of international trade offers an opportunity for emerging economies to strengthen their position in global manufacturing and services, including by strengthening regional value chains. It provides the incentives to attract investments, generate quality jobs, and improve the competitiveness of local industries, especially if strategies help to integrate small and medium-sized enterprises into production value chains. However, the prolonged effects of the COVID-19 pandemic and other recent crises have left significant setbacks in education and the productive capacity of many economies. The loss of learning in mathematics and reading has reduced the labor skills of millions of people, affected the supply of skilled workers and limited the potential for economic growth. This context requires a comprehensive strategy that allows for the alignment of job training to the needs of greatest growth sectors. Millions of people each year leave their communities for lack of job opportunities. A comprehensive strategy for attracting investments and creating quality jobs will go a long way in providing job opportunities for people in human mobility. They can become a strong engine of economic growth and positive regional integration. The mobilization of private resources is one of the main drivers of job creation and economic development. A broad agreement between governments, the private sector, and society is essential. Establishing clear mechanisms to promote productive investment and strengthen the business ecosystem is the first step into generating a virtuous cycle of economic growth, job creation and enhanced prosperity. The private sector, especially small and medium-sized enterprises, will play a central role in this process. These companies represent most of the employment in middle-income economies and have the greatest development potential in low-income economies, but they often face unsurmountable barriers to their subsistence and participation in global markets. Special focused policy instruments are needed to ensure their sustainability. We recognize the critical role of innovation, digitalization, and technology in addressing development challenges faced by middle-income countries (MICs). These are essential elements to transition from investment-driven growth to sustainable and inclusive growth. Innovation and technology are key in addressing structural challenges and high-value jobs creation, they are the source of new products, services, and processes that drive economic growth and competitiveness. Digital transformation and advanced technologies are essential for enhancing productivity and competitiveness while improving efficiency, transparency, and service delivery in both the public and private sectors. Digital inclusion remains a challenge, particularly for poor and marginalized communities and for small businesses. Digitalization can bridge gaps in access to information, financial services, and markets, thereby promoting inclusive growth. We call for tailored measures in high-absorbing workforce activities in agriculture, manufacturing, and services, recognizing the critical roles these sectors play in economic stability, job creation, and sustainable development. Agriculture has immense potential for job creation and agribusiness development. We emphasize the importance of investing in education and skill development, including women and marginalized populations. This is crucial in middle-income economies where skills are already scarce. Investing in education, labor market reforms to protect workers rights, and finance opportunities, will expand opportunities for social mobility and sustainable inclusive economic growth. The World Bank group, as the largest global financial institution for development, is best placed to protect the development gains of countries, at times of great economic stress in the world economy. Enhancing the financial and policy instruments to support the development strategies of Middle-Income Countries will help in expanding global trade opportunities and job creation. Innovative instruments to facilitate the complementarities between public and private capital would include: • Reducing regulatory and bureaucratic barriers that hinder the formalization and expansion of SMEs. • Strengthening labor and technical training to ensure workers acquire the necessary skills for high- growth sectors. • Promoting the digitalization and adoption of advanced technologies in SMEs to improve their competitiveness. • Encouraging the integration of SMEs into global value chains and regional trade opportunities. A Call to the International Community Development results in the next decade will depend on the ability of developing countries to mobilize private resources, strengthen their business base, and generate quality jobs. However, this effort requires the support of the international community by: • Promoting an international financial cooperation framework that facilitates access to financing for productive investments in developing countries. • Supporting regional integration through trade and investment agreements, allowing middle income countries to benefit from global trade. • Strengthening alliances between multilateral organizations and the private sector to ensure the job creation impact of investments. Economic growth and job creation must be the central axis of the development strategy in the next decade. Coordinated efforts between governments, the private sector, and society are most needed for inclusive, sustainable, and resilient growth. The World Bank group and the IMF have a central role to play in facilitating continued access to financial resources and technical assistance to make sure economic uncertainty does not derail development gains and sustainability. 2