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 You are in: Bureaus/Offices Reporting Directly to the Secretary > Policy Planning Staff > Secretary's Open Forum > Proceedings > 2004

Achieving a New Global Balance

James Wolfensohn, President, World Bank
Remarks to the Secretary's Open Forum
Washington, DC
January 9, 2004

Opening Remarks and Introduction

MR. WOLFENSOHN: Thank you very much, Al, and Chairman Keppler, and all in the State Department who've invited me. I should tell you, in relation to my Carnegie Hall experience that there is a T-shirt which is sold in New York, in which it says, "How do you get to Carnegie Hall?" And on the back it says, "Practice, practice." Mine says, "Be the chairman." (Laughter.) And so you should judge my musical performance by the fact that I was chairman for a number of years, and maybe that has something to do with the fact that I can play there.

Let me say that it's a privilege for me to be here, because of the crucial importance that we give to the relationship with the United States, which in many senses was one of the progenitors of our institution. The Bank would not exist were it not for the initiative taken by the United States after the Second World War, when we were set up as the International Bank for Reconstruction and Development, a task that we fulfilled, with the United States' very strong guidance -- more than strong guidance, because there has been a convention that the president of the Bank -- and there have been nine of them so far -- would be nominated by the president of the United States, and not surprisingly it has always been an American citizen. So there is a close lineal relationship. The United States has 18 percent of the shares of our institution, and has been a very strong partner throughout the period, both in terms of joint activities and in terms of a sense of direction.

It's been a pretty good deal for the United States, I am forced to say in the presence of Bill Church (ph) of the Treasury, whom I see there, because the United States put in $2 billion in cash, and since that time more than $340 billion of loans have been made by the institution, because we in the institution of the Bank borrow on the basis of our credit and standing and on the back up of institutions. So the leverage has been very significant. And in the case of IDA, our institution which deals with the poorest countries, set up by President Eisenhower, we have expanded our role from reconstruction and development into dealing with the question of the poorest countries, and there too, with $26 billion committed by the United States, and more than $140 billion has been loaned on concessional terms, and more recently the institution, again with leadership from the United States, has addressed the question of increasing grants rather than concessional loans. And under the leadership of the United States we were given permission to put out on the order of a billion dollars worth of grants in the last round of the IDA negotiations, and we are now waiting for the next round.

So our bank has been closely associated -- and I see Mr. Natsios in the audience, and we have, I am very happy to say, a very close relationship with USAID in many places in the world. And so I come here not as an outsider, but in a sense as a partner in a joint endeavor, and one that I think has gone very smoothly in years past. There have been many people who have spoken of the importance of our institution and the work that we are doing -- perhaps no one more than George Marshall, who was around at the time of our creation. And he spoke of how normal it was for the United States to take the lead in terms of creating an environment of economic and social stability as a basis for peace.

So that's my commercial for the Bank. Now let me deal with the question that is before me, and which is before all of us, which is the issue of poverty and the issue of development. And this is the opportunity that I've been looking for to try to say, first of all, thank you to the United States, but also set the challenge that I see us all facing as we move forward.

Mr. Keppler spoke of some of the numbers, and I think it's important to remind oneself that while the headlines today are on Iraq and Afghanistan and on the Middle East, and to some extent on Argentina and emerging issues in different parts of the world, there is an issue which is just beyond the horizon -- perhaps not immediately visible, but the issue of the structure of our planet, the way we are running and what's going to happen in the next 25 to 30 years. Mr. Keppler spoke of six billion people on the planet today, five billion of whom live in developing countries. And the five billion have about 20 percent of the global resources. The 20 percent of the world, the one billion give or take 20, a little less, have 80 percent of the global resources, and that's the United States and the wealthy countries of the OECD.

So we start with an imbalance, an imbalance that has been cut away at over the last years as we have found in human and social terms that the lives of people in developing countries have in fact been improved over the least year. Life expectancy in the last 40 years has gone up 20 years in developing countries -- more than in all the time before that. Literacy has been significantly improved. Infant mortality and maternal mortality has been improved. More people are getting access to water and sanitation. So we have quite a lot to be proud of, and we have also seen economic growth, which is fundamental to the development of an approach to alleviating poverty and to bringing about greater equity. So we have reason to be pleased, but we also have reason to be deeply concerned. And the concerns, the ones of an imbalance in terms of numbers, concerns of an imbalance within countries between the rich and the poor, which we are seeing growing in so many parts of the world, and concerns also for what's going to happen in the next 25 or 30 years. In the next 30 years, the planet grows from six billion to eight billion, and all but 50 million go to developing countries, so that the president in 30 years time will be here talking about a world of eight billion people, of whom seven billion live in developing countries, and he'll be talking of a world in which India and China in terms of real purchasing power, particularly China, will be approaching this country in terms of economic strength. By 2017 we will have a world in which the United States does not dominate international trade, as it does now with 12 to 14 percent of global trade, and China with 4 percent, but where China will equal the United States in terms of its share of global trade.

So we are seeing coming up in this next period a real movement between the developed and the developing world, and the change of some sort of equilibrium. When I was in Avignon, President Lula came into the meeting, which is typically held prior to the G-8 meetings themselves, when the leaders of the G-8 meet with leaders of the developing world. And in a somewhat humorous way, President Lula said, "You know, this is my first time in this august club, and I am thrilled that we are here, invited by the G-7. But as I look around this room, I see President Hu of China, I see Prime Minister Vajpayee of India, I see my friend Obasanjo from Nigeria, I see Thabo Mbeki from South Africa, and it occurs to me that we represent five billion people in the world. Maybe next year the G-8 can come visit us, because we after all are a different force." And it was said humorously, but in Cancun certain groupings came out which tried to reassess the balance, and there is a different balance emerging.

But this balance is one that cannot be dealt with by leaders - or this imbalance that exists today, and potential imbalance -- cannot be dealt with by developing country leaders alone. What came out in Monterrey, what came out in the Millennial Development Summit, was a recognition by all the leaders of the world -- by the president of this country, subsequently reinforced by Secretary Powell, who I must pay great tribute to for his I think perception and understanding of the issues of development and the issues of poverty, and I've heard him speak here and other places on this subject. He's a man who singularly grasps these issues.

But what came out in the millennium development goal was that everybody said the most important goals in the millennium are dealing with the questions of poverty. They came out with a series of goals: that we should halve poverty by 2015, that we should get all the kids into school; we should address the questions of infant and maternal mortality; we should address the questions of water and sanitation; we should address the questions of the environment -- because it was recognized in 2000 that there aren't two worlds, there is one world. And when the leaders came together there was a need to set these global objectives. And it was followed by Monterrey -- Monterrey a meeting in which again the United States played a very significant role, but where very simply and very broadly the partnership was established between developed and developing countries. It was written out and reconfirmed, by the way, in Johannesburg, and reconfirmed again in NEPAD, the arrangement between the African countries about their objectives. And, very simply stated, it was that the developing countries said, We know we have a responsibility. We can't expect free money. We must expect an effective use of money. And so we have to strengthen our capacity. We have to deal with the issues of legal and judicial reform, so that we can protect rights. We must have a financial system that works equitably for people from the rich to the poor. And we must fight corruption. That issue of cancer, which is degrading so many of the countries around the world, and which is inhibiting, if not distorting, the efforts that are being made in terms of development -- not just from the outside, but within countries. And, may I add parenthetically, that it is not just people in poor countries that are corrupt in this business; there's a corruptee: there is someone who is doing the corruption, and there is someone who is enjoying the corruption or participating in the corruption. So the corruption issue spans the developing and the developed countries, and again the leadership of this country and the Foreign Corrupt Practices Act has been a signal development in terms of dealing with the issue of corruption in this country. And fortunately now we have with a U.N. resolution, and with the OECD resolutions, a criminalization of corrupt practice; whereas, when I started this job corruption was tax deductible in many countries for tax purposes. So you do have a change which is emerging on the corruption side. But it remains a central and important issue.

But the wealthy countries said, in Monterrey and in Johannesburg, We understand what you guys have got to do, but we have to do a lot too. We have to help you with building capacity. We have to open our markets to trade, because we understand the integration between trade and aid. And we also have to take a look at aid, and increase the amount of aid. And it needs to be effective aid, and a lot of work has been and is being done on the effectiveness of aid. This is not a new notion, though one that is opposed very pointedly and appropriately by the administration. The issue of effectiveness of aid is something that I've been totally preoccupied with in the eight and a half years I've been in the Bank. And that means getting your own organization in a proper condition. It means transparency, it means partnership, it means measurement, it means harmonization. It means all the things that go into making aid effective, which Mr. Natsios and others well know.

But as we look at the performance in terms of what has happened since Monterrey, and as I say reconfirmed in Johannesburg, and reconfirmed in the NEPAD, the arrangements between the African countries for their future, one has to doubt whether we have yet grasped the full impact of what we're saying.

When Mars was close to the Earth some months ago, I said to some of my colleagues, You know, if a Martian arrived here today and took a look at how we are trying to reach our goals, and he looked at the way we spend our money, the way we come together as earthlings to deal with these issues, he would get in his spaceship and he would go back to Mars and say these people are crazy. They make the promises, they say what they are going to do, but look how they are spending their resources. Aid has in fact dropped from 0.5 percent of GDP to 0.22 over the last 40 years. So we have 50-odd billion being spent today, rather than significantly larger amounts in real terms years ago.

The trade issue is, to say the least, is not very clear at this moment, as a result of Cancun. And we have of the order of $350 billion -- 100 billion in subsidies, the rest by tariff-protection benefits, to agricultural producers. And in 1999, we had $800 billion being spent on defense. It's probably over a trillion today. The 1999 figure comes from this building, just a month or two ago when they did a report on defense. So the last figures available were 1999. But as you look through those you find this amazing $800 billion on defense, 50-odd billion on development expenditures. And you have to say to yourself, you know, If we are serious about the question of equity, if we are serious about the question of social justice, if we are serious about the question of peace, is there a dynamic in the world to really stand up to the plate in terms of dealing with this issue?

My judgment is that that answer is not clearly answered. I think that we've learned a few things in the past years. First of all, we've learned that there aren't two worlds. September 11th showed that visibly. If anybody thought there was a wall between developing and developed countries, the image of the World Trade Center dropping was to me the image of that wall disappearing. On August 19th, when we saw in Iraq an attack on international institutions and the tragic loss of life, we can to realize that even international institutions are no longer protected or part of the process; they are engaged in the battle. And we have also seen, I think, very clearly that while poverty itself does not lead to terror, poverty certainly creates an environment in which people can be susceptible, the leadership, which can lead them to do things that they may not otherwise do.

And I'm not a brilliant economist, and I'm not a brilliant sociologist. But one thing I've observed in the eight and a half years I've been in this job is that we need to deal with the question of giving people the opportunity to have hope, the opportunity to deal with their lives in a way that everyone in this room wants. We did a study of 60,000 poor people, and interestingly enough the conclusion of what poor people want is the conclusion of what we want. They want a space in which they can live freely and without challenge. They want an opportunity for their children. They want hope. They want voice. The women want their rights. They do not want to be beaten. They do not want to be a second-class citizen, which happens too much around the world and I regret to say in recent studies too much in our own country. And they don't look for charity.

The fascinating thing is they look for opportunity. They want hope. And if you give hope to people, you have a real chance at peace. And if you don't give hope to people, you run the risk of instability. You run the risk of lack of peace. You run the risk of terror. That at least is my belief. We cannot address the question of long-term peace. We cannot address the question of stability on our planet, unless we today give leadership on the question of equity, social justice, and fight against poverty.

I see no other way to deal with the question of stability on our planet in dealing with that issue. Unfortunately, it is not a front-page issue. It is not an issue that will feature in our next presidential elections. It is not an issue that features very much in any presidential elections. And yet the linkage between the communities of the rich and poor are with us every day with the environment, with trade, with finance, with migration, as Al Larson said just now the issue of remittances -- there's nearly $90 billion of remittances now flow to developing countries, compared with 50 odd billion in development assistance -- $90 billion growing exponentially. Migration is linking us in a way that is certainly coming out in Europe, and certainly coming out in our own country. Health links us, crime, drugs and terror. There are no partitions anymore. We are dependent on each other.

And what I look for from our secretary of State and I look for from our country is a leadership that will say, Yes, we must deal with Iraq; yes, we must deal with the crisis of the moment. But the perceptible -- the imperceptible crisis in the next 20 years is imbalance. It's the issue of equity. And this is an economic issue, it's a social issue, and it's also an issue of what is right. Our country can give a lead in global leadership. It can give a lead in bringing together the people of the world around what is right for humanity. We can talk about ethics. We can talk about morality. We can talk about belief. We can talk about spirituality. We can talk about something that is at the core of the human aspiration and human life itself. An if we can give that signal, through the State Department and elsewhere, then we will be fulfilling the destiny that is upon us as the richest nation in the world, and one that can evolve not just into a nation on its own, but as to the true leader of our plan of redevelopment. Thank you very much. (Applause.)

MR. KEPPLER: Mr. Wolfensohn has generously agreed to take your questions and answers. We have about 15, 20 minutes. What I would like to ask is if anybody wants to ask a question, if you could go to one of the two microphones set up back there, so that we can include the comments in our transcript. Or, if you are sitting in front of a microphone, please be sure to press the button.

The gentleman over here, please?

Q: (Off mike) -- World Bank as someone who was a contractor, I did something called the Urban Edge under Kim Jacob's whom you know, and Tom O'Donnell is right here. Later on I worked for the evaluation office of the World Bank, and then I did an earlier study on corruption. And I must say with all due respect I think you've been a failure at the World Bank -- (inaudible) -- You've missed many, many opportunities that could have been -- (off mike) -- people particularly in the evaluation office, which was the strongest office at the time, have said you failed to listen to them. Only a small percentage of World Bank projects are sustainable. And this is largely because of the fact that at the Bank you are toldthat we cannot interfere with the internal affairs of our own country. This means that you can't get into the underlying problems of a country.

Now, I wrote a book based upon --

MR. KEPPLER: Excuse me, sir, this is a question-and-answer period, please.

Q: -- and I have here -- I'm leaving a critique of the World Bank, and I am going to ask you, the jury, to take a look at it and then come to your own conclusions. Thank you.

MR. KEPPLER: I would like to ask everybody -- this is an open forum where we come to discuss issues on their merits, and I would ask people to kindly refrain from personal characterizations and comments about what they perceive to be people's motives. The “value-added” to this program is that it's a Socratic forum where we talk about issues. People are free to express dissenting ideas, but not attack people personally.

MR. WOLFENSOHN: Can I just --

MR. KEPPLER: Absolutely. Please.

MR. WOLFENSOHN: I have been accused of being a failure many times -- (laughter) -- I've forgotten your name, but that doesn't trouble me particularly, and I would say to you that you are wildly out of date. I don't know when your book was written, but --

Q: (Off mike.)

MR. WOLFENSOHN: It's a shame that you didn't discuss it with people in the Bank now. But let's not get into that. We've just had a survey in our institution, a staff survey, in which we asked them about their jobs and their sense of being in the World Bank. We had an 83 percent return -- more than, by the way, any other international institution in terms of responding. And 84 percent of them -- 84 percent of the people in the Bank -- are happy in their work and feel committed to the direction of the Bank. And 93 percent are proud to be working in the World Bank. If that is failure, I am glad to be a failure. (Applause.)

MR. KEPPLER: Yes, sir?

Q: Mr. Wolfensohn, you did an excellent job of pointing out the challenge of inequity, low rates of expenditure on assistance. I wonder if you could take it one step further: How do we get from where we are now to where we want to be? That is, in kind of practical steps.

MR. WOLFENSOHN: Well, I would say a few things. First of all, you have to say that economic growth is fundamental. I don't believe we can deal with the question of equity without economic growth. And so I think the leadership in this country and the dynamism from our country is extremely important, particularly at a time when the rest of the world has had some difficulties, as have we. But the turnaround economically is the first thing that I think needs to be sustained.

But I think there is a second thing that needs to be addressed. And I say this somewhat hesitantly, because I don't know that I know fully the answer. But annually at the G-8 meetings there is a coming together of the leadership of de eloped and developing countries, in a relatively small group. And I think building on that, or building on other groups, there is a necessity for us to stand back from national interests and look at global interests. And if I were king of the world, I would be saying that we should be spending less on military expenditure and more on development. I would say that opening trade would be crucial. I would say by all means let's hold everybody accountable for effectiveness, for corruption issues, for transparency. And, by the way, in my speech in 1997 I in fact led the revolution in our institution to declare corruption as a cancer. We were proud at that time. No one in the Bank had talked about corruption, because it was seen to be outside the realms of the activities of the Bank, certainly when this gentleman was working there.

But I would say that there's a need for us to stand back and say if we want our kids to live in peace, then we must deal with the question of Africa. We must deal with the question of the world of Islam, of bringing on those countries that are disadvantaged. I would be supportive of initiatives such as the initiative of President Lula in Brazil, which I regard as one of the most important experiments in the world today as he tries to transform that economy from a very, very disparate, very divided economy, into something which is focused on a social program, putting food on the table and building equity. I think there are examples that could be lifted up. And I would love to see more on the front page and in the discussions -- issues built around our future and equity than -- and, by the way, in the presence of Secretary Turner about environment, which I think is crucial.

I would like to see us not just having nominal discussions on these issues, but really following through in an impressive and prioritized way. I don't think that's wild. I don't think it's dreamlike. I think it can be done if the leadership is there. But it needs focus and it needs attention. It can't be done in five minutes. It needs to be done consistently over the next decade and more.

But I think that there is no country in the world that can give that leadership more than this. And it's one of the reasons that I'm happy to be here at the feet of Secretary Larson, who will no doubt lead us, along with not Secretary Powell and the president of the day.

MR. KEPPLER: Thank you. The gentleman over there, please.

Q: Thank you. Following up on the previous question, it seems to me that one of the steps toward addressing the inequalities you spoke of would be for the Bank to require countries applying for its loans to ensure that their workers have the right to organize and bargain collectively with their employer. And in that connection, when the Bank met in Dubai in September, the executive vice president of the IFC, Mr. Woicke, in a meeting with representatives of the international trade union movement, said that he would make a proposal to the IFC board within the next six months to include all four of the ILO core standards among the bank's lending criteria. The question is: What is the status of Mr. Woicke's proposal?

MR. WOLFENSOHN: Well, it's not just Mr. Woicke's proposal. It is this issue of the core labor standards has been something that we have actually been discussing, as you probably know, with the ILO and with the Council on Trade Unions for quite a long time. And I think we're agreed on just about everything, except the right to organize. And the right to organize is something that frankly personally I agree with, but which runs into some problems at our board. You must remember that the Bank is dependent on our board and our shareholders, who are political bodies. And the issue of labor standards is something that probably needs to be fought out somewhere other than at the Bank board. We in our own programs and projects are dealing with the questions of youth employment, of slavery, of other issues associated with the core labor standards. But up till now it has been sensitive at our board, to say the least, to deal with the question of the right to organize in countries that do not have the right to organize. And we're doing everything we can to try to bring about the adherence to the labor standards of the ILO. I have said to my colleagues and friends in the ILO with whom we are working it's a question of us not provoking a failure in trying to get these things through the board, because in the end it's them that will decide. So I would say that we have made a lot of progress. I personally would like to see us at a level where we could adopt the ILO standards. But on the level of the right to organize, it is a political issue in many countries which I must say is still sensitive at our board of directors. Hopefully one day we'll get it through.


Q: Thank you. Mr. Wolfensohn, how important are or how much of a problem are large subsidies by developed countries, especially agricultural subsidies, that might prevent developing countries from fully exporting their products and hindering development, and what can be done about it?

MR. WOLFENSOHN: Well it is critically important. I was using the OECD language until recently in saying it's between 300 and 350 billion dollars worth of subsidies. I have been corrected by both the United States and the European negotiator to say it's $100 billion in direct subsidies, and $250 billion in advantages brought about by terror protection. But given that everybody speaks of a $300 billion number, our judgment and our studies show that if we could get rid of that you would have literally billions of dollars in increased trade from developing countries to take 150 million people out of poverty, and that it is one of the great inhibitors. But let me say that it is not just this issue existence of subsidies alone, or tariffs, which is the single impediment to trade. If the markets were open, we'd then to have to deal with the whole question of infrastructure, of meeting sanitary requirements, of delivery and all those other things that will require the build up in agricultural trade. So it's not an instant benefit, but it's a hugely significant long-term benefit, because the major production in developing countries is in agriculture, although there is a movement towards industry as well. But we have to deal with the question of agriculture, and it is the sticking point in the Cancun negotiations. So it's quite clear that that is central to the development process.

Q: Part of the discussion has been the aging of the West, and the young populations in the developing countries. I'm wondering what kind of initiatives you are planning on youth development, and what kind of work you are doing in developing leadership with these young populations in some of these troubled countries?

MR. WOLFENSOHN: Well, we -- I'm awfully glad you asked that question. There are 2.8 billion people on the planet today under the age of 25, and 1.8 billion under the age of 15. And we have over several years been developing programs. And I must say in my own mind I take it a little bit like our approach to gender. I think for quite a long time inadequate work was done in the development community on gender. I believe now that we are significantly in a leadership position -- I got beaten up in the conference in my first year in China, the women's conference. I was accused of all sorts of things, and the Bank was. But on the issue of enfranchisement of women, I think we've made a lot of progress. I think the next challenge is enfranchisement of youth. And before the annual meeting I went to meet with youth leaders in Paris for two days, representing 140 million young people from 60-odd countries. And I said to them, you know, We must work together, because the issues which we're dealing with are issues of your future, to which one of the more aggressive, nice young people said, We're not the future -- we're in the now. And don't you understand that when you were 17 you were a hell of a lot different than we are today at 17, with computers and with contacts and with everything else, and you ought to take us seriously now, not in 10 years' time.

So we are establishing in our own offices groups of 10 or 12 young people who will essentially be a youth corps in our Bank offices. We've had a highly successful group in Peru that has been operating for the last 18 months. And these are kids that are drawn from less advantaged segments of the society, between the age of 16 and 23. And we are having them review our programs and our projects and participate in the poverty reduction strategy discussions, and bring in other kids to give us a youth point of view.

I hope to have by the middle of this year 20 such additional groups in the institution. Given that we have all of our offices linked by satellite and video links, we are linking these kids in off times, so that they can meet with each other by satellite and have conversations, and try to allow them the freedom to both be critical of and assess and give us guidance on what they think we should be doing. And it's led to wonderful things. (Short audio break for tape flip.) Young people from indigenous communities, street kids -- huge issues in terms of orphans in Africa on AIDS, as an example of a particular community that needs to be dealt with. And I would say it's a new frontier. I think we have been very slow engaging young people. But for the last two to three years, we have been in high gear trying to bring young people into the operation. And it has been amazingly successful.

And let me say that we are not just starting with the outside. We're starting inside the institutions. We have run a program called the development marketplace, which is to get new ideas in development. The average age of the people running that is 28, 29, and happily they don't report to anyone. They do a much better job than if they did. And so giving the responsibility to young people has been tremendous. They obviously have guidance in the institution, but I think that we've not done enough. But I think amongst the international institutions, young people are telling us that we are now in the front row, and we're taking very seriously this question on the enfranchisement of young people. And as we go further of course the demographics change even more, and you get the disparity between the old and the young. And so the need to deal with this group is obvious. But I don't think any of us in the international community has done enough. And I hope that we are now in the lead in trying to do something.

MR. KEPPLER: The lady right here in front, please.

Q: Within the context of your opening remarks you mentioned health, and I know the World Bank has been very active with regard to HIV/AIDS. But could you explain the interventions that are possible and your projections for the future in terms of the World Health Organization's three-by-five initiative, and President Bush's $2 million initiative -- that is, the goal of getting two to three million people in sub-Saharan Africa in treatment within the next year to five years?

MR. WOLFENSOHN: Well, first of all, we are very supportive of both of those, and in fact I have colleagues at WHO today dealing with the three-by-five initiative. For those who don't know, the three-by-five initiative is to have three million people in treatment by the year 2005. And that is three million of 30 million that really need treatment in one form or another. There's been a big change in the last couple of years, because the economics has changed. Two or three years ago, when treatment was $10,000 more or less per person, everything was dealing with the question of prevention, which is of course a lot cheaper, and necessary anyway. The cheapest way to deal with treatment is to stop people having the problem. And so we do not discontinue that, but we are now, when it gets down to $300 or $200 per capita, as a possibility, and you have anti-retrovirals that do not need refrigeration and can be delivered in a more sensible way, you have a real opportunity. And we are addressing that very much. I think it's fair to say that until two years ago we were doing very little on treatment, largely because the economics. But I think there's a real possibility of doing this, so long as we also get national leadership in the countries in which we're operating, so that the leaders come up and both talk about the issue and deal with it. And more and more are finding it essential. But it's no longer as you know just an African problem. The issue in the former Soviet Union is significant. The issue in China is significant. The issue in India is significant. And I think we're going to have plenty of people to deal with. And I think that what we are doing now, although the leadership of the United States has been great in terms of announcing $15 billion over five years, we're still tinkering with the problem. And as Secretary Powell said, AIDS is the real -- I think I'm quoting him correctly -- is the weapons of mass destruction. And it is. And I spoke myself at the Security Council on this, because it's is every sort of issue. But we are underestimating the AIDS question. So I think three-by-five is something that we should achieve, but that's a fraction of what we really need.

MR. KEPPLER: We have time for one last question.

Q: Thank you. Mr. Chairman, the effective development in the developing world is clearly going to require a restructuring in the developed world. What is the Bank doing, or can it do, to assist the reconstruction or, excuse me, the change, the restructuring in the developed world to support that developing world?

MR. WOLFENSOHN: What we can do is a lot, but it's also not a hell of a lot. We can't make the decisions for the president of this country or leaders of the developed world. But we can be a fairly strong advocate. And so advocacy is what we are seeking to do. But on issues of level of aid or level of trade, it's quite difficult. What we can do is to try and get people to understand that this new partnership between the developed and the developing countries needs to move to scale, and needs to move to sustainable assistance, which requires a partnership between the developed countries and essentially the people of the developing countries.

We will be running in Shanghai in May a conference which will bring together developed and developing countries on the question not only of efficiency of development and effectiveness of development, but on the issue of how you can take what we're doing and sustain it going forward, with support from developing countries, but with more and more appreciation by the developing countries themselves, that the real resource they have are all the people in poverty, and you need to engage them in the solutions. So we are trying to sell to the developed countries the notion of scale, the notion of continuity, the notion of time in terms of commitment, the notion in terms of management of resources. And this conference I think is going to be extremely important. But let me say that this is all persuasion. It's all advocacy. It's all trying to lead people together as we sought to do in the harmonization conference, as we will be doing very shortly in Morocco in terms of coming together to look at effectiveness amongst the bilaterals and the multilaterals.

You must remember that we are a creature of the rich countries. They own us. They pay my salary -- I hope. And so I can advise my owner, but I can't make decisions for the owners. Now, maybe the Monetary Fund has a somewhat broader mandate in terms of its ability to intervene with the rich countries, but for us it's a question of persuasion. It's a question of trying to expose the issues and trying to persuade, And that is why again, if I can just close by saying the leadership of the United States is essential. It is the key to changing the global dynamics. I think the president has made excellent steps and I commend him for it. But this is a long-term issue, and one in terms of scale which at least I believe is way beyond what the world leaders have been able to do up to date. Thank you. (Applause.)

MR. KEPPLER: We are going to have to cut if off there, because we're over schedule. All I can say is if you (Mr. Wolfensohn) brought the same passion and commitment to your cello playing as you do to your mission at the World Bank, you'd be a regular there at Carnegie Hall.

I want to thank President Wolfensohn, Undersecretary Larson, for cutting out time from their very busy schedules to share with us their vision and views for what needs to be done to achieve a new global balance. I thank you both. (Applause.) Thank you for coming. See you at the next program.

Released on February 13, 2004

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