Press Conference
with
Paul Wolfowitz
World Bank President
Guatemala City, Guatemala, April 29, 2006 Good afternoon and thank you for coming. This is my first trip to Guatemala as President of the World Bank. I have already visited Brazil and Mexico, so this is my third country in Latin America. These countries have given me a valuable understanding of the diversity of this region. Indeed, Guatemala itself is an incredibly diverse country. In Guatemala, I have been particularly interested in the challenges and opportunities of a multi-cultural country that is emerging from 36 years of civil war – It’s a country that is striving to promote social stability, responsible institutions and private sector-led growth. The peace process is now ten years old –and it’s a great achievement and one that needs to be sustained. During this visit, I had the opportunity of meeting President Berger, officials of his government, municipal mayors, members of political parties, religious leaders, members of civil society, and a wide-range of ordinary citizens. I visited government agencies that are working to make life easier for the average citizen by simplifying the bureaucratic red tape involved in registering births, deaths and marriages. I visited government procurement offices that have been put in place to increase transparency and fight corruption using modern computer technology. I visited health clinics that monitor the progress of children as they grow up and monitor the health of their mothers. I met with representatives of the private, business sector, and I met with youth leaders who want to build a prosperous future for this country -- a future without violence. I spoke with indigenous women who have placed their trust in the newly-created ombudsman and who have found empowerment in the exercise of their legal rights. I heard from ordinary citizens who have been able to access the justice system for the first time, thanks to a court that travels around the country in a mobile bus. And I heard some wonderful singing by children who were singing Mayan songs in their native Mayan language, learned from bilingual teachers. I had a chance to watch women weaving these extraordinary patterns that are based on learning and experience that goes back for centuries. And this morning, in Chimaltenango, I visited a farmers’ cooperative which has succeeded in producing high quality fruits and vegetables for the local market and for the larger Central American market. With the help of the World Bank and USAID, these indigenous farmers, who, a few years ago were living in extreme poverty, now have the possibility of exporting regularly to the North American market. Finally, I have to mention that you can’t travel around as this much of this country as I did, even in a short time, and fail to be struck by the enormous beauty of cities like Antigua or the landscape in Chimaltenango or Lake Atitlan. The richness and diversity of the people and the extraordinary beauty of the landscape, all speak of the enormous potential of this country, of the great hopes for this country and a deep awareness of the daunting challenges of equity and inclusion. Everywhere I have seen how strongly Guatemalans feel the country needs to be competitive and to grow through integration and trade, to generate jobs and opportunities, especially for the 50 percent of the population that still lives in poverty. I’ve seen how vital it is for the young to have opportunities here at home, in Guatemala, and how eager people are to stay here when they have those opportunities. And I have seen that the only way to make that happen is through effective government, good governance and institutions and integrity. Throughout this trip, I have reiterated the strong commitment of the World Bank Group to Guatemala and to help the people of Guatemala achieve this ambitious future. I look forward to coming back here not only in an official capacity but I hope some day I can see this country as an eco-tourist. Thank you very much. Muchas gracias. (Inaudible) REPORTER: You were speaking yesterday of Guatemala’s capacity for becoming a touristic country. What are the projects the World Bank is supporting to make this a reality? P. WOLFOWITZ: We have currently about five hundred and… -- nearly 600 million dollars -- in net commitments in various projects in this country, focused principally on education, health, infrastructure, judicial reform, financial sector reform and rural development. We certainly would be open to considering projects in the area of eco-tourism, and I should point out too that we have a private sector branch of the World Bank Group that can certainly work in that area. I think, though, an important point to make is that for eco-tourists to be successful here, and I think it has enormous potential, we need to address the whole issue of development. To attract tourists, you need a country that is prosperous and people that are healthy, so I think tourism has great potential in this country but it shouldn’t be seen as a sector isolated from the rest of the country. REPORTER: What are your views on the reports you received from the Guatemalan government on progress made in the fight against poverty. I would also like to know your opinion on whether Guatemala has the possibility of reaching the Millennium Development Goal of reducing poverty by half by the year 2015. P. WOLFOWITZ: I think in order to achieve these goals, and they are really essential goals, I think Guatemala really has to increase the level of investment in those areas that are most critical for developing the human potential of the people, and particularly the poorest people. That means more investment in education, health and basic infrastructure. The question is that, currently, total government expenditure – resources - in this country are about 10 percent of GDP, and that is a very, very low ratio. REPORTER: Do you plan to continue supporting both the mining and hydroelectric sectors? Some local communities and environmental groups around the world are very critical of them. P. WOLFOWITZ: Let me make it clear that our interest in everything we do here is helping this country deal with its huge challenge of poverty. It’s a country with a per capita income of well over 3,000 dollars, which puts it in the middle income category. And yet, 50 percent of the population lives on less than two dollars a day. That’s the real challenge here, that’s what we want to help with, and that’s the framework in which we are going to do everything we do. The subject of mining is a difficult one -- my understanding is there has been a lot of dialogue between government and civil society over the current mining law and that there is a new draft law in preparation, and certainly, we look forward to seeing that and seeing if that’s a framework within which there is support that we can give. The fundamental point here for us is how to help this country develop in a sustainable way. By the way, “sustainable” is a term we use in the development community as a kind of a short-hand. One of the most important parts of sustainable development is you have to take care of the environment. You can’t just make short term sacrifices with environment and call that development. It has to be something that is sustainable over time. REPORTER: I have a question on the U.S. economy. The US Fed chairman on Thursday gave the closest indication yet that there could be an imminent pause in the raising of interest rates and I wanted to hear from your perspective what kind of impact this pause could have on the financial markets. (Inaudible) P. WOLFOWITZ: I’m not about to talk about that. Sorry. REPORTER: Okay. Then I have another one and it’s following on the mining issue. I wanted to know what the WB position was…. if you are going to continue to support mining projects, specifically in Guatemala and the Western Hemisphere. (Inaudible) I’m going to repeat my answer to the last question. That’s going to depend on what Guatemalans decide they want to do and what is in their interest. And I think this new draft law reflects a considerable amount of thought about whether, and under what conditions, that kind of investment benefits the people of this country. We look forward very much to seeing what is in that law and what might make sense under that law. REPORTER: (Inaudible) How is the World Bank supporting Guatemala and Central America in the process of CAFTA? P. WOLFOWITZ: I think there is an enormous opportunity for the hard working people of this country to be able to sell their products into the biggest market in the world. We saw this morning in Chimaltenango two agricultural cooperatives that have over the last few years with some help from the World Bank and some from USAID, been able to develop such quality and consistency in their products, that they have supplied contracts with large local supermarkets that have succeeded in some significant exports to neighboring countries. And those two cooperatives could have enormous access into the North American market and are producing the quality now that would be competitive. By the way, these are people who were in extreme poverty just, I believe, as recently as 7-8 years ago, and now they are earning good wages, working under much better conditions and clearly have enormous pride in the work they are doing. That is sustainable development, that is the kind of work we would like to encourage -- and a significant part of being successful is being able to sell your products when they are produced. I don’t want to get into commenting on specific issues that may be involved in CAFTA, but I think that the general idea is that there are huge gains to be made for Guatemalan producers in accessing US markets. That is, I think, without any question. . REPORTER: Have you made any recommendation to the government of Guatemala on how to resolve the problem of poverty? Yes and one of the main points is one that I stressed already, I believe -- that this country needs to increase its investment in programs for the poor and particularly in those things that increase the level of human development, education particularly. There is no question that the poor people of this country are eager to learn, you can see that in the schools that I visited, but too many of them are unable to go to school or the schools they go to are of inferior quality and there is no way to fix that without increasing government expenditure. That means dealing with issues of tax evasion which, I gather, is a serious issue here. Another area where I think a lot of work could be done is in the area of improving the climate for investment, not just foreign investment (at least, not primarily foreign investment). There are too many regulations and red tape and obstacles, I think that make it particularly difficult for small and medium businesses here, which is why such a large part of the economy in this country is in the so-called informal sector, which means they are operating at a disadvantage. On the other hand I do think that there has been some real progress. As I said in my [initial] statement, I think, some of the reforms that are being done to increase transparency and accountability to give citizens better knowledge of what’s happening with government programs and public money and increasing access to justice. I think those are areas where progress has been made and that have to be sustained and deepened. (Inaudible) Thank you. Let me just conclude by saying that this is a country with enormous potential and richness, both human and natural. And it’s had a painful and tragic history. It deserves a much better future and I am hopeful that would be achieved and the World Bank very much wants to partner with the government and people of Guatemala to help them achieve that future. Thank you very much. |
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