statement by ignazio visco, governor of the bank of italy constituency of albania, greece, italy, malta, portugal, san marino, and timor - leste development committee, washington d. c., october 8, 2016 1. introduction global growth remains disappointingly anaemic. adverse long - term trends in advanced economies – low productivity growth, aging populations – combined with the slowdown in emerging economies and especially heightened geopolitical risks result in a high degree of uncertainty which prompt firms to scale back their investment plans. if we do not act to reverse this situation a self - fulfilling trap of low growth may take hold. policies both on the supply and demand side are crucial. to take full advantage of the very accommodative stance of monetary policies other policies to support demand and especially appropriate structural reforms should be implemented. the reduction in global poverty experienced in the last couple of decades is a success. it has been facilitated by booming international trade and rapid growth, especially in some populous emerging economies. however, not everybody has benefitted. guiding political and economic institutions in a more inclusive direction is essential to limiting adjustment costs and facilitating sectorial reallocation. maintaining market openness to revitalise trade in goods and services may enhance economic growth. multilateral cooperation among all economies is essential to generate better outcomes and the world bank should continue to play an important role towards this end. 2. a better and more legitimate bank a “ better ” bank identifies sound examples of previous interventions, using data - driven and evidence - based analysis to systematically assess their degree of success and to implement the lessons learnt. this is necessary not only for proposing transformative development solutions, but also for appropriately managing risks. the recent approval of the new environmental and social safeguards, if properly implemented, may represent an important step in this direction. we welcome the agreement on the dynamic formula in the context of the periodic revision of bank shareholding. introducing a dynamic adjustment mechanism, which builds on the bank ’ s development mission and global economic reality, will strengthen the ibrd ’ s legitimacy as a global player. recognising support for its development mission is essential for strengthening incentives to foster future contributions. the compression factor acknowledges the cooperative foundation of the ibrd and ensures an equitable representation of all shareholders for the years to come. 3. the contribution of ida to development over the last decades ida has provided a fundamental contribution to the long - term agenda of poverty alleviation. it should continue to

lastly, funds will be set aside for public sector employment. the fund for the ‘ citizen ’ s income and pension ’. – the fund for the introduction of the ‘ citizen ’ s income and pension ’ will have a total endowment of €9 billion per annum ( about €7 billion net of the sums coming from the fund to combat for public sector investment, this also includes the funds allocated to local governments. poverty, which are presently set aside to finance the ‘ minimum income scheme ’ ). the draft budget law only indicates the purpose of the measures : combating poverty, inequality and social exclusion and guaranteeing the right to work. following the economic crisis, the absolute poverty ratio has risen considerably among households, from 3. 5 per cent in 2007 to 6. 9 per cent in 2017. the increase has been particularly marked ( from 1. 9 to 9. 6 per cent ) among households with a younger ‘ reference person ’, i. e. under 35 years of age, which include a larger proportion of foreigners ( in 2016, in 60 per cent of younger poor households the reference person was foreign ). instead, the poverty ratio is stable – and below average – for households whose head is over 65 years of age ( 4. 8 per cent in 2007 and 4. 6 per cent in 2017 ). given the amount of resources allocated, the ‘ citizen ’ s income ’ should be considerably more generous than the current ‘ inclusion income scheme ’, not only as regards its amount but also in terms of the number of beneficiaries. it is very important, therefore, that it should be designed so as not to discourage the supply of regular employment by providing for efficacious incentives and sufficient checks to prevent misuse. 4 the budgetary provisions allocate part of the fund ’ s resources ( €1 billion in 2019 and in 2020 ) to reinforce the employment centres, which at the moment play only a marginal role in matching the demand and supply of labour. if the measures to reinforce the employment centres are to be promptly effective, organisational and regulatory changes will almost certainly be needed as well. responsibility for the employment centres is split between several levels of government, and the ways in which they cooperate with private sector agencies continue to be ill - defined despite the institution of the national agency for active labour policies in 2015. we calculate, based on istat data, that in 2017, only slightly over 25 per cent of job - seekers contacted an employment centre ; the share of unemployed