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10 April 2003

World Bank Will Help Iraq if Asked, Bank President Says

(Says spring meetings will continue to focus on poverty goals) (7480)
The World Bank is ready to assist Iraq with reconstruction aid if
asked, says Bank President James Wolfensohn.
Speaking April 10 to reporters in Washington, just prior to the spring
meetings of the Bank and International Monetary Fund (IMF), Wolfensohn
said that while he will bring the issue of Iraq before the Development
Committee board of directors April 13, the purpose of the board's
meeting is to "retain the attention on the other war which is going
on, which is the war against poverty." The Development Committee is a
joint advisory group of the Bank and the IMF.
"We need to remind ourselves the issue of poverty and development is
... a fundamental issue of huge proportions that tends to get pushed
aside [by the media and public] when there is a crisis," Wolfensohn
said. The spring meetings will focus on the strategy for achieving the
Millennium Development goals (MDGs) that target halving world poverty
by 2015, and on related development objectives, he said.
Because the world's population continues to steadily increase,
Wolfensohn said, the committee can't wait to discuss global poverty
reduction until the next meetings. World population is projected to
increase by 2,000 million people -- most living in developing
countries -- in the next 25 years, he said.
Wolfensohn said that before the Bank could lend money to Iraq, there
would need to be a "legitimate government" in place, verified by the
United Nations.
"This [Iraq] is a complex issue so I will seek the guidance of the
[development committee] board," Wolfensohn said. The Bank is limited
to what it can do in Iraq by U.N. economic sanctions still in effect,
he added.
Saying poverty is one of the causes of war and crime, Wolfensohn
stressed that the Bank "can make a contribution to the avoidance of
war ... and give people hope."
In Iraq, he said, the Bank is "prepared to do what we've always done:"
conduct needs assessments, work with the client government to sequence
problems, partner with other donors to coordinate funding, and
implement reconstruction and development projects on cooperation with
other donors and the client country's leadership.
"We can provide full service, partial service or no service,"
depending on what is asked of the Bank, he said.
The Bank president said he doesn't have "the slightest idea" how much
money would be needed to help rebuild Iraq.
The Bank remains "extraordinarily active in Afghanistan," Wolfensohn
noted. "When the shooting stops, it's not the end of the war. You need
to win the peace," he said.
The Bank has made "substantial progress' during the last decade in
improving its effectiveness in fighting poverty, Wolfensohn said. He
pointed to its work in more than 100 countries helping governments
adopt reforms that fight corruption.
He said that when he came to the Bank in the 1990s corruption was "off
limits for international institutions." Now all these institutions
"are trying to deal with it and opening up the debate in countries."
The Development Committee also will discuss "enhancing voice and
participation" on the board, particularly for African countries,
Wolfensohn said.
(Note: In the following text, "billion" equals 1,000 million.)
Following is the transcript of Wolfensohn's press briefing:
(begin transcript)
Press Conference with James D. Wolfensohn
Washington, D.C
April 10, 2003
WOLFENSOHN: Good morning, everyone, and welcome to the Development
Committee Meetings and to Washington.
I think you know that the purpose of these meetings is to try to
retain the attention on the other war which is going on, which is a
war against poverty, and that is the subject of the agenda for our
meetings.
It is, of course, very difficult to have a clear head in relation to
the issues which are on our agenda because of the overriding
significance of what is going on in Iraq at this moment, but there is
plenty of copy on that subject, and what we are trying to do in these
meetings is to remind ourselves that the issue of poverty and the
issue of development are ever-present and is really quite fundamental
and can't just be put aside while we are concerned, as we should be,
with the war.
The agenda itself for the Development Committee Meetings, you already
have, and it is, as you might expect, related to the consequence of
Monterrey and Johannesburg. It is focused on the Millennium
Development Goals and the achievement of those Goals, and a progress
report on making practical the steps that are being taken by the
international community in pursuit of those Goals. In particular we
are reporting on Education For All, health, HIV/AIDS, and water and
sanitation.
There is also a second item, and a very important one, on the agenda
dealing with the question of enhancing voice and participation at our
Board, on which the Board has taken the lead in terms of addressing
the question of the voice and the question of voting and which is a
subject that is under continuing review and where there appears to be
emerging consensus in terms of strengthening the offices of those
countries -- particularly in Africa, where there is a single
representation for very many countries -- that we will build capacity
in the offices and in the countries themselves to ensure more
effective representation.
This last issue is an issue, frankly, which is within the purview of
the Board shareholders, particularly in terms of shareholding and
voting rights, but we are providing services to the Board, and we look
forward to a discussion which will advance these considerations for
this meeting and for the coming meetings.
When I said that we are concerned with this other war, it is a very
serious issue for us because the developing countries have been
affected by the global economic downturn and by the issues of
investment and risk and consumer confidence. It will not be a surprise
to you to know that consumer confidence is at a 10-year low, that
economic activity is significantly down, and of course, this has a
depressing impact on development in many of our client countries.
So we are concerned about the issue of economic development. We are
concerned about the issue of trade, which has recently been suffering
at least some procedural setbacks in relation to the non-attainment of
certain milestones, in particular agriculture. And it is our hope that
at these meetings, we can take the time to remind all of us that this
issue is not one that can be deferred, that the issue is one of
urgency, and the purpose of this meeting is to address these questions
and to push on to make effective the undertakings that were given in
Monterrey.
So I am looking forward to very useful discussions with the members of
the Development Committee, and I will be very happy now to take your
questions.
Yes, Harry.
QUESTION: Harry Dunphy, from AP.
You are probably going to come under pressure from your leading
shareholder to take some steps to help Iraq. Now, I know that the Bank
can only deal with recognized governments, but I wonder if you could
give us some indication of what your thinking would be on how the Bank
might help a post-war Iraq given your experience in many post-conflict
situations.
WOLFENSOHN: Yes. Well, certainly, we stand ready in any situation of
reconstruction to be helpful. We have had a lot of experience in the
area, and typically, we work with the United Nations agencies in
giving that help.
The issue in this case is what is the authorizing environment for us
to proceed, and the first issue is that in relation to lending, it is
very clear that we are limited in terms of the provision of funding to
deal with recognized governments, and that is a decision for the
United Nations to take in principle. The most normal thing that we
would have would be a Security Council Resolution on the existence of
a state, and that, as you will understand from a practical point of
view, is very important because we have to lend to somebody who is
going to repay the money, so we need to ensure that they are a
legitimate government and that they are in place.
So that is a very straightforward, practical issue.
The other question is what it is that we can do in relation to needs
assessment, which I think is the phrase that is being used, or the
planning for the reconstruction in post-war Iraq. And we have said
again that we have the right to do that in normal circumstances, but
this is very complicated, because we are also affected by [UN]
Resolution 661, which is the original sanctions resolution, in
relation to what you can do in a country, and we are also affected by
the fact that there may be differences of view at our Board.
So we have come up with a very simple solution that we will put this
matter to our Board for decision as to what it is that we can and
cannot do, and I have told all of our shareholders that that is the
position that we will take. We are prepared to go in if we have an
authorizing environment from our Board to do feasibility or other
studies, but it needs to get our Board approval.
Yes?
Q: I have two questions. One is on poverty. Having listened to these
meetings for the last 15 years, I always hear the same argument, as
you said, that we are going to discuss with the members how we can
advance in the war against poverty.
My question to you is how long is this war going to be, and in your
tenure, have you felt that you are successful in the war against
poverty? We always see the same situation in countries, very poor
countries, Africa, Latin America, for example, and there is nothing,
or at least I don't see any advance in the war against poverty.
My second question has to do with the wife of the President of Mexico.
When she was here visiting you, you promised some grants to her
organization. Well, this is what she said publicly, and you said the
same thing on the follow-up. My question to you is what exactly is the
World Bank doing with her organization.
A: Well, I believe on the second question that I didn't promise
anything, because I never promise grants without approval. So I am
sure that I said we would take a look at what she is doing. I haven't
heard much about it since, but I will check into it.
But I can assure you that there is no current understanding of what we
are going to do. My belief is that my colleagues in Mexico City have
been reviewing with her's, as we do with other organizations, whether
or not the Bank can help. But as you know, our ability to help civil
society organizations is rather limited. We have to put monies through
governments. But I guess the purport of your question is that there is
no special deal with the wife of the President of Mexico. It would be
done in a perfectly normal way. And so far as I know, since I have not
followed up on it since that time, it is being dealt with in a normal
way.
But if you are seriously interested in where it stands, we can find
out for you and let your know.
On the issue of the advancement against poverty, even the Millennium
Development Goals only speak of a halving of poverty, the percentage
of poverty, by 2015. And the sad truth is that poverty is an
ever-present issue and one that we are seeking to address.
We have had success in some parts of the world, particularly in East
Asia, in some parts of South Asia, but since you come from Mexico, for
the last four years, you have essentially had an economic downturn in
Latin America which has put tremendous pressure on the Continent. And
what we are doing is to continue to address on the basic framework
that we are adopting in all countries, which is a comprehensive
approach to development, and we are trying to improve the game of the
donors of funds as well as the game of the governments.
On the donors of funds, we are working on how we can better reconcile
the ways in which we work together, and we recently had a very good
conference in Rome. We are working on ways in which we can improve the
effectiveness of what we are doing, and that will also be a subject
for discussion here.
I personally believe that we have made substantial advances in the
last decade in terms of the way in which we go about the business, the
effectiveness of the business, and I regret to say that there is no
silver bullet on poverty, but we have seen advances in many parts of
the world.
Sadly in the last four years, Latin America has not advanced in terms
of GDP growth per capita as we would have wished, and there is the
ever-present problem of Africa, which is racked by wars, racked by
HIV/AIDS, and has 47 countries -- which means 47 different government
bodies -- for 600 million people. And we are doing our best to address
that question, and there has been a significant advance in terms of
NEPAD [New Partnership for Africa's Development], which is the African
governments getting together in terms of themselves.
So I think it is unfair to say that there has been no progress, but
the problem is very difficult, and it is not, I regret to say, an
issue which the Bank can deal with alone. But I do believe that we
have made a lot of progress, and probably in another five years, we
will still be saying that there is a need for further progress. But I
think you have to look at where we've gotten.
Yes, ma'am?
Q: Julie Ziegler, from Bloomberg News.
I would like to follow up on Iraq if I may. Assuming that the Board
does approve some kind of assistance for Iraq, would you then be
willing to bypass the UN if approval in the Security Council is hung
up because of disagreement? At what point would you be willing to go
into Iraq?
A: Well, we are not in conflict with the UN. We are allowed to take a
look without UN approval at almost anything, but the question in this
case is not the taking a look where the Security Council comes in --
it is providing help and loans. And for that, we need some
international recognition, and that we cannot bypass.
If we want to get half a dozen people on an airplane to go over there
and take a look, we don't need Security Council approval for that. But
because of the complexity of this situation and because also of the
sanctions under [UN resolution] 661, it is a subject which I
personally think I should take to my Board, and I have told my Board
that I will take it to the Board. And the shareholders in the Board
are the same shareholders as there are at the United Nations, so
presumably, there will be some coherence between the position of the
United Nations and at our Board.
Yes, sir.
Q: Tattamangalam Parasunam, from Press Trust of India.
I have two questions. Could you kindly elaborate on progress in the
war on poverty in South Asia?
Secondly, whether in Iraq, as a result of invasion by outside
countries, or in Africa as a result of civil wars -- first, they
destroy the country, and then they expect the World Bank to restore
it. I was wondering whether you get discouraged by this kind of
development.
A: Well, there is a certain strangeness in having wars that you then
have to fix up, which are followed by other wars which you have to fix
up. And I must say that I find wars a very wasteful activity.
I wish there were no wars in general. The fact is, however, that there
are many wars. They have been going on for a very long time. And our
institution was actually founded after a war as a Bank for
reconstruction and development. We thought we had gotten away from
that and were essentially directing our attention to poverty, but more
recently we have had to deal with reconstruction in Congo, in Bosnia,
in Kosovo, in Afghanistan, in East Timor, concurrently in Gaza-West
Bank. That apparently is what we are doomed to have.
But our judgment is that one of the prime causes of conflict in the
world and the distress and crime is poverty. So for us, the issue is
to try to focus on the issue of poverty and equity, and in that
context, I believe we can make the biggest contribution to the
avoidance of war. If people have hope, they don't go out and shoot
each other. If they lack hope, then you have the basis on which
dissension can be increased.
And on South Asia, since you are from India, I think you know exactly
what is happening. You are having very good progress in India in terms
of GDP growth; in your adjacent countries, there is evidence now of an
improvement. It has been slow, but nonetheless, I think that with
education, with health programs, with improving governance, and with
increased trade, you can project that you will have a betterment of
life in South Asia, and there is evidence that that is coming through.
Let's try over here -- yes, ma'am.
Q: Suzanne Willett, Radio Canada. I don't know whether you are able to
respond to questions in French? I am from Canada.
A: I'll try.
Q [INTERPRETED FROM FRENCH]: Okay. Regarding the importance of the war
in Iraq, you said there would be an impact on developing countries.
Yesterday, we also heard that concern over security was a real
concern. Are you concerned about that impact as well?
A [INTERPRETED FROM FRENCH]: Yes. As you know, in the countries
adjoining Iraq, there are problems, problems of economic growth and
tourism, and Jordan and Turkey will experience this kind of
difficulty. But to address that, we don't need a resolution by the
Security Council or a decision by our Board. We always work with these
neighboring countries.
I have been recently to Jordan and Turkey, and it is clear that if
there is a war in Iraq, there will be spinoff problems for the
neighboring countries as well.
Yes?
Q: Michael Backfish [ph], German Business Daily.
To get back to Iraq and to the authorizing environment, suppose the UN
resolution is approved. What are you prepared to do and what financial
volume are we talking about?
A: We are prepared to do what we have done in other similar situations
if we are asked, where we have been asked to assess needs, we have
been asked to work with administrations in power, and then we set up a
calendar for the programs and projects. You will remember that in
Afghanistan, the first thing we did was to send kids back to school.
There are many things we can do -- that is what we have seen in our
experience -- in order to restore peace and make the country more
manageable.
But of course, we must start where there is the highest vulnerability.
That is where we have to rebuild infrastructure, we have to provide
basic services, and that is what sensible people will do. And problems
of safety and security all come together to make an individual package
for each country.
The differences between East Timor, Bosnia, and Afghanistan are
profound, but you go in, and you try to take a look, and then you
agree with the local authorities on what is the program. Typically,
after that, we and usually a partner will seek to get the funds
together in either a pledging session or some form of equivalent
session where the world comes together and says how much money it is
likely to put up. And then we set up the mechanisms for dealing with
that and then, together with all of our partners, seek to implement
under the leadership of the government or the administrative body.
Now, that is standard in terms of what we do. What we might be asked
to do in this situation, I don't know, but we can offer the full
service, a partial service, or no service, and we have to wait to be
asked, and we have to wait to see what the needs are. And to this
point, we don't know what we would be asked to do, but we obviously
have the capacity to take on this job very frequently with the United
Nations, who has different capacities and different specialties with
which we can work.
So it is not an issue of capacity in our case; it is an issue of the
definition of what it is we are doing. And as to the amount of monies
involved, I don't have the slightest idea. I don't know, frankly, how
people come up with the numbers. We have a pretty good idea of what
Iraq was like before the war. But even with all the watching of
television, it is pretty hard to come to an assessment of what it is
that would be needed, and it depends on which nationality television
you watch.
So I am prepared to wait until we get in there, and then we can come
back with a judgment. At this moment, honestly, I don't have the
slightest idea.
Yes, ma'am?
Q: Hi.  Matop Farid [ph], from Voice of America.
A follow-up on her question regarding Iraq. On Monday, according to a
new report, U.S. Treasury officials said they will be asking the World
Bank, but you are saying that you have not been officially asked. Is
that true?
A: There has been no official request to me to do anything. We have
had discussions with many of our shareholders, but my response is
really very simple. It is the one I gave you. I am prepared to
consider any of these requests when they come, and if they involve us
taking action in Iraq, I will refer it back to the Board for their
judgment as to what we can do.
If you were in my position, I think you would take a similar view.
This is a complex area. It is something on which I have the right as
President of the Bank to make a decision which in most cases that are
complex, I seek the guidance of the Board. This is a complex
situation, so I am going to seek the guidance of the Board. It is very
simple.
Q: Mr. Wolfensohn, I also have a question on Iran.
Recently, Congressman Sherman was very angry in a recent meeting of
the Congress saying that the United States will not like to fund the
World Bank as a major donor if they help Iran for that $750 million
because they don't want to support, number one, states sponsors of
terrorism.
What is the World Bank's policy as an international organization
toward Iran?
A: Iran is a member of good standing of the Bank. It has paid its
bills. It is a cooperative of the institution. And therefore, it is a
client with whom we deal.
We are not financing atomic power plants, we are not getting into
areas of concern to Mr. Sherman. We are dealing with humanitarian
issues, and we recently put through a $20 million loan on air and
water in the major cities.
So we continue to provide that sort of humanitarian assistance, and we
have the support of most of the Board. On this occasion, the United
States votes against because of resolutions in the U.S. Congress, but
we align in the middle. That allows us to maintain relations with a
client and member country but do so on issues which are humanitarian
in substance.
Yes, sir?
Q: Paulo Sotero from O Estado Sao Paulo.
I have a follow-up on Iraq. Bank officials told us this week,
describing what is the standing of Iraq with the World Bank that the
country has, of course, graduated in 1973, and after the first war,
has not paid what it owed you and has on a nonaccrual basis [mike
switched off]. How does that affect your capacity to help Iraq
respond?
A: The question was given that Iraq is $82 million in arrears and had
graduated, how does that affect our capacity to deal with Iraq.
There are two parts to the question. First of all, we could not lend
to Iraq unless the $82 million is paid up. We have had that situation
in the case of many countries, and usually, a mechanism is found to
pay that back, either with friends or from their own funding.
Sometimes it is just that they don't want to pay us, and when they
know that we want to get more money, they will pay us. And there are
significant cash flows in Iraq that I think would make $82 million a
sum that they could pay if they were keen to do so.
On the question of qualification, some countries graduate, as did
South Korea, and we no longer loan to South Korea, but in the Asian
crisis, it again had its GDP per capita dropped to a point where it
was within the framework of countries to which the Bank could lend,
and that is the case in Iraq. It graduated. The standard of living has
now dropped, so it is within the framework within which the Bank can
give assistance.
So the answer is that subject to paying back the $82 million, it is
our belief that we can deal with Iraq as a member country.
Yes, sir.
Q: Thank you, sir. My name is Talal Hashma [ph] with [inaudible]
Television.
I can see every time somebody asks a question about Iraq, you smile.
Do you feel that your spring conference will be overshadowed with Iraq
and issues like debt relief, AIDS, education, are going to be pushed
aside?
A: Well, I am going to do my very best to ensure that that is not the
case, but we have different rules than at a press conference. We have
an agenda. And the agenda is built around the issue which this meeting
has been called for. And the reason that I am smiling is not because I
am amused by it, but because I truly believe that when you get a
crisis situation such as Iraq, all the attention of the media and of
people goes to that subject. Whereas the issue of poverty and
development, which I regard as fundamental and a problem of huge
proportions, without minimizing Iraq, really, global proportions --
and urgency -- tends to get pushed aside.
If one looks just at the question of AIDS, where you have the
suffering that you have with 30 million cases in Africa, 12 million
people dead, 12 million orphans, if you look at the question of water,
if you look at the question of poverty, 3 billion people living on
under $2 a day, these are massive issues. And if you look at the
question in the next 25 years of 2 billion more people coming onto the
Planet so that the developing world becomes 5 to 7 billion, you cannot
put that off for one meeting or two meetings. It is an urgent issue
for today.
If you take the issue of trade, it is an urgent issue for today. And
fortunately, as I look at the agenda, there is no item which mentions
Iraq, although I can't promise what people will do at the meeting, but
I can promise that what I am going to try to do at the meetings is to
keep people focused on what I call "the other war," which doesn't get
the headlines but which is real, which kills people, which is
inequitable, and which I hope very much will be put in proportion in
the discussions that we have.
Yes, sir?
Q: Talking about this "other war," do you really believe that war and
poverty in countries such as Brazil, which needs to produce one of the
highest fiscal surpluses in the world, according to the agreement with
the IMF, can fight poverty producing this huge fiscal surplus?
A: Well, I do. I was in your country just two weeks ago and spent the
whole day with President Lula and members of the Economic Cabinet. The
reason that your Government is seeking to pursue fiscal responsibility
is because it recognizes that with fiscal responsibility, it can have
access to markets, and it can reduce the cost of borrowing.
Your country has already, since the Lula Government come in, reduced
your borrowing cost by more than 10 percent, 1,000 basis points, which
on $114 billion is a saving of $11 billion.
So the reason for fiscal responsibility is so that you can reduce your
borrowing costs, and you can have access to markets. It is not because
of some whimsical position taken by the IFIs [international financial
institutions].
But I think what is so encouraging about your country is that you are
seeking to build a new social consensus. You had 52 million votes for
President Lula, and the country appears to be united behind him. So I
think the big issue in Brazil is this social consensus is a very sound
and very intelligent, in my judgment, Cabinet, and I think that the
whole world needs to be supportive of Brazil because what you are
trying to do there is to confront the issue of social justice, and I
think you have every chance of succeeding. I am very impressed by what
I saw when I was down there.
Yes, sir?
Q: Khalid Hassan [ph] from Daily Times in Pakistan.
Sir, would you like to spell out what the Bank is doing for
Afghanistan, considering that the initial enthusiasm shown by the
international community after the fall of the Taliban has all but
evaporated?
And my second question is the fact that there are no demonstrators
outside, does it mean that the Bank has finally been accepted as the
good guys?
[Laughter.]
A: That would really upset me. I think there are a few outside, if you
would like to go out and photograph them, on 19th Street, who are
concerned about debt.
But on the second question, let me say that I think that criticism of
the Bank is actually quite healthy for us. It has made a difference to
the Bank over the years in terms of our position on everything from
environment to gender. So I am not against criticism. I think it is
healthy to have people with a different vantage point.
I draw the line a bit when it gets to violence, but in terms of
dialogue, I think it is healthy, and we try to support that dialogue.
As to the tone of the dialogue, I don't think there is any doubt that
in the last years there has been a coming together between the Bank
and civil society on many issues. That is not to say that we have
reached agreement on all issues; that is far from true. But on many
issues, I think responsible leaders of both international and local
civil society have come to recognize that we can help them and that we
need them. I think there is an interdependence between us and civil
society, and I regularly meet with leaders of civil society, and the
tone of the discussions is quite different than it was in the height
of the "50 Years is Enough" campaign.
So I am basically very hopeful, but I don't think we should ever want
to declare victory over civil society. I think we would be a less good
organization, and I think we need the balance.
Now, on the question of Afghanistan, there is no question that it has
less prominence today than it used to have, but I spoke yesterday to
Ashraf Ghani, who is the Finance Minister, and we were commenting that
they had a successful fundraising recently with commitments to the
trust fund. We are of course, extraordinarily active in Afghanistan in
trying to help the Government in what it is doing.
But it is also true to say that it is clearly now a second or third
priority to Iraq in terms of international interest, and I think the
task of everybody is to recognize that when the shooting stops, it is
not the end of the war. You do need to win the peace. And it will be
some time before Afghanistan wins the peace. I think they have made a
terrific start, but they are plagued with a lot of residual problems,
and I think Mr. Karzai is doing a good job; I think Ashraf Ghanis
doing a really wonderful job in terms of the finances. But it takes
time, and it requires continuing commitment, and that is the thing
that you have to keep reminding people of.
As I said, the shooting may have stopped, although not completely, but
the follow-through is what I think is crucial. And there are many
people still working on it, but I of course fear that it will drop
into second or third or fifth priority, and people will forget
Afghanistan, and I think our task is to ensure that that does not
happen.
Yes, sir?
Q: Frank Koller, from the Canadian Broadcasting Corporation.
A question on debt forgiveness. You mentioned the protesters outside
are concerned about that. The Bank has been involved with these issues
for a number of years. It does come up in the context of Iraq. I know
that Iraq's obligations are not big to you, but could you talk about
an evolution if there is one on these issues? Iraq does owe
internationally upward of $400 billion. It is a huge impediment. Is
there a difference in thinking about that?
A: Well, Iraq would not b part of the so-called HIPC [heavily indebted
poor countries] Initiative which is for the lowest-income countries,
the poorest countries in the world. As I think you know, we've got 26
of them already in the system and 12 that are really plagued at the
moment by wars or internal strife so that it is hard to get into the
system, but we continue to work on it.
We have done of the order of $40 billion of debt relief already, and I
think that is a very important start for those countries. When you get
to something of the scale of Iraq, I think that will be something that
will be negotiated bilaterally and separately, and in that context,
one will need to look at its income stream, at its oil proceeds, and
it will have to be negotiated on a separate basis. It will be totally
separate from the so-called HIPC Initiative. There are really very few
elements of the HIPC initiative that would apply to Iraq. But
stabilizing a country in terms of its debt is something that has been
done for years by agreement with official and in particular in this
case bilateral creditors, and less so in this case, private sector
creditors.
But there are some countries that are particularly involved on a
bilateral basis, as I am sure you know, and they will have to come to
a deal, and we are happy to help or not help in that context.
Yes, sir?
Q [INTERPRETED FROM SPANISH]: May I ask a question in Spanish?
I am Martin Carmona [ph].  I am from Mexico.
In Monterrey, the World Bank and the IMF talked about maybe closing
the door a bit on corruption, in other words, that resources being
lent to countries be used for what they were really meant to be used
and not that they end up in the pockets of presidents of many Latin
American countries.
What progress has been made in this field, and what are the results so
far?
A: Well, on the issue of corruption, I think we are in the front line
of the fight. We had a perfectly remarkable three-day meeting here
recently with Transparency International, and as evidence of our being
a leader in that fight, we are essentially working together, a major
civil society organization and the Bank, in terms of carrying this
issue both to the public and the governments. We are working in more
than 100 countries now, trying to make people aware of what the facts
are about corruption in countries, with surveys that we publish, and
then assisting governments in everything from legal and judicial
reform to regulatory reform to better governance, to
capacity-building, trying to help governments deal with this question.
Yesterday evening, I had here the President of Nicaragua, who has come
in on a platform which is to clean up Nicaragua, and he is doing in my
judgment an extraordinarily courageous job in terms of trying to deal
with that issue in his country. And that discussion which we had
yesterday was all about the issues of corruption and the need for
continuing support from donor countries to assist in that effort.
That would be typical of many such discussions which we are having
around the world on this same issue. We have a new administration now
in Kenya in Africa, which again is dealing with the question of
corruption, and I think that what has happened is that tin the last
seven years, the issue of corruption has come from under the table to
be on the table.
You may or may not know that in my first speech here, I addressed the
question of corruption, and prior to that time, it was as subject that
was off-limits for international institutions. But that and other
activities, notably by Transparency, has now got us all talking about
corruption and trying to deal with it and opening up the debate in
countries.
There is no way that I or anyone can issue an edict that says we don't
want corruption in any country and expect that it will happen. The
best thing we can do is throw light on it. The press is tremendously
important in terms of throwing light on the corruption issue to build
public opinion, and I think that the level of debate, if you compare
it today with the level of debate seven years ago, is really totally
different. When we started, people would smile and say, "You will
never get rid of corruption." Well, the fact is in lots of countries
now, it is the number one issue.
So I see an evolution in it, I wish I could say there will be no
corruption tomorrow morning around the world in either developed or
developing countries -- but I do think that we are on the job, and I
think the public is much more concerned about it than it ever was
before.
Yes, sir?
Q: Hi. Which are the agenda next steps in Argentina? Today you are
meeting with the Minister of Economy and the president of the central
bank.
A: Well, for us, the next steps are to today, I hope, with the
Minister of Economy, to agree on what the short-term program is. As
you know, we approved $325 million in recent times with the
Government. We are looking at a $500 million program now to deal with
the question of the currency crisis that you had in your country, and
we have agreed to put up a $500 million loan, and I hope that
negotiations on that will be commencing after today.
Those will be pursued vigorously. You have some elections coming up,
and that will obviously have an effect on where we go after the
elections take place, but it is business as urgent as we can make it
with the current Government, and we are continuing to discuss it.
I will be in a better position to tell you what we can do after I have
met with the Minister today, when I find out what he wants. But at
this moment, I don't know.
There was a lady here, and then we'll have one more question. Yes,
ma'am, in the red jacket.
Q: Diana Gregg [ph] with BNA.
Since you are so concerned about the issues of poverty not getting
sufficient attention, and you said you have this agenda for the Board,
could you sort of speak concretely to maybe where the shortfalls are
in terms of what moved from the last meeting, because I have looked at
the Development Committee papers, but some of those numbers are rather
huge.
A: Well, the numbers unfortunately are huge. The good thing about
Monterrey was that I think there was an understanding that development
needs two parties. It needs the government of the developing country
to manage effectively its business or be moving toward effective
management. And this was not something which was imposed; this is what
was offered by the developing countries themselves. A further example
of that is the African initiative, the NEPAD, which again proposes
this two-sided bargain where the African countries say we will
strengthen government, we will build capacity, we will look at legal
and judicial reform, we will look at financial sector reform, we will
look at education and health, but in return for that, we want support
for the Millennial Goals.
And I think the point that we are at now is that there is movement on
the part of developing countries, and there is a growing recognition
that the rich countries will have to come up with additional finance,
and the figures which are in our documents are huge; they speak to an
increase over current levels of up to $50 billion a year. And when you
look at the question of education, of health, of environment, of
water, it is not hard to get to a $50 billion figure.
So what we are trying to say to the financial leadership -- and I
think they increasingly understand -- is that if we could get to ward
the 0.7 [percent of national gross domestic product devoted to foreign
aid], which was a target that was set by our forefathers, which is
$160-$170 billion a year, that is the sort of order of magnitude of
development assistance which would make a huge difference, which would
allow us from the financial side to deal with the question.
We are, however, at $52 billion, and we are saying that the $52
billion compares with $350 billion for agricultural subsidies, close
to $1,000 billion for defense, and we are saying if you want a
balanced world for the 5 billion out of 6 who live in developing
countries, then you have to raise the game. And I think we are now
starting to address that issue, and the four subjects that we have
taken on the agenda are to present to the global body the realities of
funding the Millennial Goals. We are starting with Education For All.
I think that these meetings are moving progressively well. You will
understand that we have already had some success since Monterrey, with
the United States committing to an increase of $5 billion and Europe
committing to an increase of $8 billion. So we have $13 billion extra
coming in the next three years on an annual basis. It is not just a
once-off; it is an increase in the level.
That is a wonderful start but in our judgment is not likely to be
sufficient, and we will be addressing that question. I might say that
at a time of economic uncertainty when people are looking at domestic
budgets and when there are global political problems of the type that
we have today, it is hard to get people to focus on external
development assistance, but we keep at it because it is not because we
as an institution are just engaged to do that, but because we
profoundly believe that that is the issue of peace, and that is what I
hope I can get our colleagues to understand at these meetings.
Thank you all very much.
(end transcript)
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