Washington, D.C., January 12, 2005 Also available:
Webcast of the Press Conference
(RealVideo) PROCEEDINGS MR. WOLFENSOHN: Good morning, everyone. I have just come back from a trip to the tsunami affected areas and thought you might like a firsthand account of what I saw and what it is that we are doing. The initial purpose was to attend a meeting held in Jakarta on the 6th of January, which was a meeting of the affected countries and of the donors to try and take a look, some ten days after the 26th of December, at both the extent of damage and the potential of support. I think you know that there was a significant outpouring of support. In the initial phase, some absolutely understandable confusion in the field, but quickly remedied, I would say, by a mixture of the local governments and the UN which was in charge of the emergency aspects of the program. At the meeting--I think you know the Secretary General attended--a number of heads of state, and it itself was called on the instigation of the Prime Minister of Singapore but was chaired by President Yudhoyono of Indonesia. Those meetings demonstrated that there was considerable support, and what I then had the opportunity of doing was to go and look for myself at the extent of damage in the areas of Aceh and Indonesia, in particular, in Sri Lanka, and then finally in the Maldives. The first thing I'd like to say to you is that it's like nothing that you've ever seen before. It gives you the sense of as a planetary human being like being an ant. You flew over, as we did in both Indonesia and in Sri Lanka, lands that were as though they were taken by a vacuum cleaner, going into the land one and two kilometers. What appears to have happened is that the water receded as the first step, and then a giant wave went in up to a kilometer or two, receded, then ten minutes later came again, receded, and then 15 minutes later for the final, in most cases, came. And it is amazing when you're flying over these areas to look down and understand that trains had been picked up, 10,000 people had been just washed out in the space of minutes, and what is left is nothing, no trees, no houses, an occasional mosque interesting enough, because they were built on very solid foundations, but more occasional than normal, and no people to be seen, animals because I'm told that no animals were affected or very few, and just absolute devastation. I had the opportunity along with the Secretary General; in some parts of the trip we combined. Others, we went separately, but we combined first in Indonesia to take a look at the coastline. We flew two or 300 kilometers down the coast in Banda Aceh. We landed in Banda Aceh, which is a city that is almost 50 percent destroyed, and we went down to a place called Mulobo [ph], which was a place that was renown for palm oil and some agricultural developments. In this area, you again found absolute devastation. We in the Bank have had a program going in Aceh for some time, perhaps the only donor-supported program as part of the Kecamatan development project which is a local project for villages. We're, in fact, in more than 20,000 villages in Indonesia. It's the largest community development project that we have anywhere in the world, and we've got the 75 percent of the people in Aceh being approved by the Acehnese and by the Indonesians, and I met with some of my team; some 20 of them came to see me. One of them had 52 relatives, a list that he showed me, two-thirds of whom are now confirmed dead including his wife and his kids. Another had 15 relatives. Someone in our office had been caught in the middle of it all, lost her brother. She was thrown about 100 yards in the water, managed to hang on to some piece of steel, and by some miracle her kids floated her grandmother out. These stories are just harrowing, to say the least, and it makes the first point that I would make to you because they were repeated in Sri Lanka where I again went to a beach, another place where 10,000 people were lost in a lagoon. About a quarter of a mile from the route, a bus had been sort of thrown over there. You saw boats in trees, but the crucial thing I think that you all need to understand is the human devastation. Talking to the people and seeing the kids and going into the refugee camps, you could not come away without an acute sense--money and reconstruction is one thing--but the human reconstruction is something that is going to take quite some time and even now I would say the people are in a state of shock. As I said, I saw--after Indonesia, I went to Sri Lanka--and under President Kumaratunga and the team that was there, we were able again to tour the coast, first the west coast and then the east coast, and the stories were very similar and the devastation was very similar, until I went to Maldives where, as you know, there are 199 inhabited islands, 17 of them just completely erased, some 50 of them very badly affected, and for the Maldivians, it's quite a significant problem because they've always been worried about the impact of global warming, since they're only 1.5 meters above sea level, and here in one hit, two-thirds of the country was underwater. Fortunately, the capital had some sea walls that had been put in by the Japanese some years ago when they had another wave and that saved the capital, but it was a reminder of how important it's going to be when we are through this phase to ensure that in the reconstruction there is built into the reconstruction the necessary protections that may be possible in the region. I think all of you have seen on television and heard on radio about this so I won't go much longer other than to say that in terms of the organization itself, it is clear, and was reconfirmed yesterday at the meeting in Geneva, that the United Nations will coordinate the efforts immediately in terms of dealing with the crisis, and that we and the Asian Development Bank will take on the task of reconstruction. I want to make the point here that I think you should all understand that this is not some new superstructure we're talking about. We're talking about essentially supporting these governments and their own programs, and you couldn't but come away impressed by the actions taken in each of the countries by the governments to get emergency procedures in place and to get ready for their leadership of the effort to reconstruct in the countries. To give you an idea of the sort of thing we're doing in Indonesia, we put ten of our people in with Bappenas, which is the planning agency, and they're working as members of Bappenas in the Aceh relief program. So that instead of us coming in with an external program, the idea is to go in and help strengthen the operations in each of the countries, and we will continue to do that. In each of the three cases within the next week or two, we will have the first round of needs assessments. I think it's important that we not be driven by the numbers of the possible supply but that we start with the issue of what is the demand, what are the real needs, and what is the phasing of the needs. I think you know that the UN estimated something over 900 million for the emergency, and they were able to raise something over 700 million yesterday in the meetings in Geneva. We are not yet sure what the total amount will be for reconstruction. It's probably weeks or months off before one can finally determine that. The Bank has already indicated immediate programs that we will do in each of these countries, and I must say that I am very proud of our teams who have worked 24 hours a day and given of themselves tremendously both in the countries and here at head office. So I come back really somewhat humbled by the power of nature, and very conscious of the fact that as we go forward, we need to support the governments. We need programs that will really deal with the issue of not replicating slums, but dealing with the question of poverty. As we move forward to try to improve the lives of people, that we put in practices and constructions that will deal with the emergency, that we support the governments in their efforts and, in particular, bring in community information and community services and community participation so that they own what is going on. And finally, that we implement these programs very transparently so that they can be a model for future emergencies in the implementation of the support. I might add just finally that--and just about everybody in our office has had somebody that was affected or lost. For sure we have one staff member who is still missing in Sri Lanka and so we feel it acutely ourselves. I'd be very happy to answer questions that any of you may have. If you could just say who you are, that would be great. Yes, ma'am. MS. HONG FINCHER: I'm Leta Hong Fincher from the Voice of America. Could you comment or give a few examples about why the poor were most vulnerable-- MR. WOLFENSOHN: Yes, certainly. MS. HONG FINCHER: --to the tsunami, and how you can reduce their vulnerability in the future? MR. WOLFENSOHN: Yes. The question that was put was why are the poor so vulnerable and can we reduce their vulnerability in the future? And the answer is that, and our experience is uniformly this, is that in the emergencies, particularly these physical natural disasters, it is the poor that are the most unprotected and generally in the most vulnerable areas. In this case, one of the great classes of people that were affected were the fishermen because in both Indonesia and Sri Lanka, they have habitually lived at or on the beach or near or on the beaches, next to their boats. And so they have these small fishermen communities which are just totally exposed to tides, and in the case of--that is true in all three areas that I saw--fishing being a major element in the income of each of the three countries in terms of the coastal areas, not surprisingly. And so these people were just devastated and then the towns supporting them are typically not very rich towns. They're fishing towns. And they too lack concrete structures or structures that are likely to be able to stand up to the physical force of a natural disaster, and we found that, too, by the way, in Hurricane Mitch, and we found it in the hurricane series in the Caribbean, and so it is that what Indonesia is looking at, for example, at the moment and Sri Lanka as well is trying to--well, particularly Sri Lanka is trying to see if they can put the fishermen then some distance away, 300 meters to a 1,000 meters away from the beach. But that is a huge cultural problem because the fishermen are used to being on the beach with their boats, and the suggestion was made that they should be put into apartments, three-story apartments, a kilometer away from the beach, and to tell them that they have hot and cold water and showers and everything, and it sounds great unless you're a fisherman. And so the social drama that will be playing itself out is how is it that you can mix both the protection with the social lives and the culture of these communities, and that's the drama that I was referring to before, how do you play out the human drama? But the fact that the poor are always most affected is a result of their vulnerability. The other thing about it is that, and this is something that you're looking at, is that when you think for the survivors that everything is gone, everything, how do you give them immediately their self-respect? We will come up with a cash grant program for many of the families, at least to give them something in their pockets, so that they can go out and get what it is they need, and we have done this in certain other areas, and I have no doubt that we will be doing it in Sri Lanka and Indonesia as well, to try and get people something so they can buy clothes or food or whatever it is they need. The support of services, by the way, for food and medical supplies seems to me to be admirable, but that's just the first run at the emergency. Yes, Harry. MR. DUNPHY: Harry Dunphy, AP. You said it will take weeks or months before reconstruction needs can be determined. I assume that varies from country to country, and who makes the call on that? Is it the governments or--and also you said something about not reconstructing poverty. I wonder if you could be a little bit more specific about that? MR. WOLFENSOHN: Sure. We've come up with programs that are immediate on reconstruction. We've signed already a memorandum of understanding with the Indonesian government for a program of some $300 million, which gets us started on the basic essentials of reconstruction. So when I talk about weeks or months, I'm not talking about delaying getting started on the most obvious things. You need power; you need water; you need bridges; you need roads; you need communications. You don't need to be a rocket scientist to say that you've got to be able to do that, and so those things I think you can gauge immediately. But if you have 100,000 homes destroyed, the question is where do you put the homes? What type of home? In what sort of communal structure when at the moment you don't know how much of the community is left in many of these cases? So you've got to give the community a chance to heal first, to describe how they're going to live, whether they have enough fishermen, whether they have enough women, whether they need schools? So this is not something that can be done in five minutes. You have to give time for the community to adjust, and then when you do it, you have to give the community time to work with the federal authorities to try and come up with an operating program. And none of this is because of unwillingness to work or delay. It's just my judgment that to hurry that process without getting the people involved is probably not going to work. There's no plan that we can invent a model city in Washington or in Tokyo that's going to work for these fishermen or for the agricultural workers or for the salt workers in the south of Sri Lanka. They have to come together and then decide what it is that they want, and so I think it's weeks or months for some of the more refined programs to come out, which is not to say that there are not immediate reconstruction emergency things which need to be done now, and on which we are responding immediately. But I personally am apprehensive or somewhat doubtful about the accuracy of the figures that are thrown around until we have the demands clarified. The amounts might be more or less. I don't know. But I think what is important is that there does seem to be a great atmosphere of readiness to support, and therefore I think a month or two or even three to fill in the details is something that we should expect. This is not a trivial disaster. This is something where they're starting from ground zero. When you talk about not replacing poverty, the point I'm making is that we don't go back to shanty towns and vulnerability for poor people if we can avoid it. If you're going in, then let's put it on a basis where they can have clean water and where they can have sewerage provided that's what they want. And that's where I focused on this idea of taking fishermen and putting them in apartment blocks. That is cultural leap that may or may not be possible. Yes, ma'am. MS. BECKER: Elizabeth Becker, New York Times. Mr. Egeland announced this week that PricewaterhouseCoopers is going to be following the money for the UN, so it will be as open, as transparent as possible, and obviously this is in the backdrop of the Oil for Food accounting. MR. WOLFENSOHN: Right. MS. BECKER: Is there going to be a similar sort of accountability system with you all? MR. WOLFENSOHN: Yes. What I have suggested to the governments is, first of all, that this would be an occasion on which we could have what I have said is an open box system, which we might work on, which basically is what has come in, from whom, and what has gone out for what? Not terribly complicated but transparent and available on line so that we can know in relation to the tsunami effort that a certain amount of money came in, where it went to, and then dig down and see whether the money was spent in an effective way. And each of the governments that I spoke to is now working on a methodology that within the context of their regular government expenditures would allow us to take out the tsunami efforts and make them transparent and public. And then of course, they're subject to auditing and everything else, but this is not the case of--this is not going to be a trust fund like the UN fund which needs its own audit. A lot of the money here is going to go directly in the governments as part of the normal or abnormal but within the framework of normal support for the governments, but I have suggested to them that the world community and they will be well served if we can separate out the tsunami funding in a transparent way and each of the governments seem very responsive. MS. BECKER: So it would be on each government's web site? MR. WOLFENSOHN: Yes. Yes. MS. BECKER: This would not be a World Bank--or would there be a World Bank link somewhere? MR. WOLFENSOHN: Well, we may when we get it together. I hope we'll have a World Bank link, but they've not finally agreed to this, but they all said that's a great idea and we're now working with them. Yes, ma'am. MS. ZIEGLER: Julie Ziegler from Bloomberg. Though you said it may take a few months to have a comprehensive needs assessment in place, is it likely that something will be ready for the G-7 meeting to at least address the issue of the debt moratorium, how long it should debt forgiveness? MR. WOLFENSOHN: Oh, yes. In each case, in each country, within two weeks, we're going to have a preliminary assessment. Some of them have fundraising meetings coming up. Some have general meetings with supporters and there is a short deadline of a couple of weeks in the case of each of the countries to get our arms around it. That will give you the first broad assessment of what is needed. But I'm talking beyond the broad assessment. I think this is not something--I mean I think we'll have some reliability with that. We'll know how many houses need to be constructed and we'll know what power needs are and what infrastructure needs are, but we shouldn't pretend that in countries that have been destroyed, in areas that have been destroyed, as they are now, and where in many cases a third to a half of the civil servants who were looking after those areas have gone, how difficult it is to come in and come up with a program. I know everyone would like to have it and say it's "x" billion, can we raise it? But I don't think it's that sort of issue. We'll get our arms around it. We'll give some estimates and the governments themselves will give some estimates, but I think to really work it through is two or three months. That's a personal view. MS. ZIEGLER: A separate question. Do you think is going to affect Bank's consultations with governments in other areas that are vulnerable but were not affected, vulnerable to the same kind of disaster, and how are you going to convince countries to take measures when this is a once in a 40-year occurrence or something like that, when they have more pressing needs? MR. WOLFENSOHN: Well, we have had a very active program for the last ten years on prevention because prevention is a hell of a lot better than fixing it after you've had a disaster, and we have put a lot into prevention and continue to do it, but while you've got a responsive government in most cases, you can't break their arms for a lot of this because they take risk. But I think the best example, of course, of a country that dealt with it was Japan. Japan was very subject to tremendous natural disasters and decided that in order to be able to move consistently, it needed to deal with the question of earthquakes, of building codes, and so the Japanese have given a wonderful example. What we're trying to do in the Caribbean and in earthquake affected areas is make sure that building codes and things meet the standards, and we're having some success, but I can't guarantee you total success. Yes, sir. MR. WOOD: Barry Wood, Voice of America. How would you characterize the relief effort? Not surprisingly, the media has focused a lot in the early days on all these financial contributions. How did you arrive at the $250 million figure that you initially mentioned? And it seemed that what we had in this unprecedented generosity was a kind of bidding war to be seen as doing the most. I wonder if you'd characterize that process, and finally was there immediate consensus that the UN would take the lead in relief and the World Bank in reconstruction? MR. WOLFENSOHN: On the last question, there appeared to be no argument, and it was decided in Jakarta, and it was reconfirmed yesterday at the meetings in Geneva. So I think that pattern which has been there for quite some time is now being established. I mean we can't do the emergency efforts. You need the UNHCR and you need the agencies of the UN, and I think they're doing by and large a good job in combination very much, and I must pay tribute to the military of various sorts who have done a fantastic job, and they're present everywhere. Singaporians and American Marines and others seem to me to be doing a superb job. So there has been no argument I think about that. As to the quantum, when we made the announcement of 250 million, the total that had then been pledged was 220 million by the whole of the rest of the international community. And it just seemed out of whack to us because our local officers were telling us about the needs, and we put in essentially $150 million at that moment for Indonesia, and 100 million for Sri Lanka, and ten or 12 million for Maldives, as what we could see immediately. And I was careful to say this was the first shot; this was not the end shot. We'll probably go to a billion, 1.5 billion by the time we're finished in reconstruction support. But I think at the beginning people were underestimating this crisis. You'll remember at that time, we were talking about 15,000 people, 20,000 people being killed. Our people were already telling me that it was 75,000. It's now 150,000. So the needs have been increasing. I'm sure that there is some element of Hollywood about the bidding process, but I actually think that on this occasion, it's more likely to be real than just putting out numbers. And one of the reasons is that I think the populations of many of the donor countries are affected because their nationals have been affected. You've had nationals affected from 50 countries. That is different from the sort of death and destruction that you have in Congo or in Darfur any many other places where frankly most of the donor countries don't have a clue where they are or who got killed. But in many of the newspapers in the West today, there are stories about their citizens who have been affected, so my guess is that this time there is a real willingness to follow through, and it would be my hope that we will be able to do it. Yes, ma'am. MS. GREGG: I'm Cynthia Gregg with BNA. My question is when you mentioned the preliminary assessments, you said that would be in about two weeks. MR. WOLFENSOHN: Yes. MS. GREGG: Could you just clarify? Are you talking only about those three countries that are the hardest hit or are we talking about just about everything that was affected? MR. WOLFENSOHN: They are the three that we, the international community, is agreeing to help. You know that India, which was the third affected, 10,000, indicated that they could handle it themselves. Thailand indicated with 5,300 deaths that they could handle it themselves. Maldives was next with 82 and they need help because of the huge damage that it had done to the vulnerable islands, but Malaysia, Myanmar, Bangladesh, Somalia, Kenya, Tanzania have all indicated that they are not appealing at the moment. Seychelles, as I understand it, from the discussions which are going on in Paris Club, is looking for a debt moratorium. This was announced by Monsieur Gaymard this morning. But the ones that I'm talking about are the ones that are looking for international relief and therefore need and needs assessment. The Indians have done their own and they're handling it themselves. MS. GREGG: So Indonesia and Sri Lanka? MR. WOLFENSOHN: The ones that I visited this time were Indonesia, Sri Lanka, and the Maldives. Yes, sir. MR. PARAMESWARAN: P. Parameswaran from AFP. After seeing the devastation yourself and assessing the damage, what kind of a model do you think the World Bank should use for the reconstruction as it's going to spearhead that effort? MR. WOLFENSOHN: Well, I think the model is, as I said before, firstly, I think you need to talk to the locals. I think part of the healing process in the communities is going to be deciding on their future. I mean these are people that are shattered and to give them hope, what you want to do is to work with them on what it is they want and make them part of the future. We've got to restore hope to a lot of these people and the best way of doing that is having them engaged. The second thing is that certainly in the countries that we've looked at so far, we want to work through the national governments because they do have structures in place and they all have decent governments. And I was really impressed by the way in which they were doing it. The third thing of the model is I think, as I said earlier, is let's try not to make a model which just puts poverty back where it was. You want to try to make an advance on where you were, but you need to do that with the cooperation of the people that are involved. And, fourthly, you want to do it effectively and transparently. These are three very different countries. Indonesia has 215 million people. Sri Lanka has 19 million. And the Maldives has 300,000. And if you look at the GDPs, they're comparable in terms of size, although the GDP in Maldives is four or five times the size of the others, GDP per capita. So they're not homogeneous these countries; they're quite different. And the impact of this is quite different in each of the countries also. So the principles I gave you are the ones that I would adopt, but I would remind you that these are very different countries. The one thing that is true which I have not touched on is that in Indonesia and in Sri Lanka, interestingly, in the areas that are affected, they were both conflict affected areas. If you look at Aceh, you know the efforts of the Acehnese essentially which are a very, very traditional group has been to look for a different form of relationship with the central government, and that's brought about quite a lot of conflict between the two. And in the case of Sri Lanka, you had this centuries' old rivalry of the Tamils with the Sinhalese and to a degree with the Moslem community, although not overtly with the Moslem community, but certainly the Sinhalese-Tamil conflict is very real. And so one of the issues in each of the countries is that one would hope when everybody is leveled as a human being and all equally vulnerable to the forces of nature, that maybe this will be a way in which one can bring about peace, but the early indications are not yet clear that that will be the case, although it certainly is our hope that we can do that. I seem to be going on too long, am I? On Monday this week, India asked the Bank and the ADB for our assistance in reconstruction needs assessment and we have said yes. That's on the assessment, but it's not on the money. MS. BECKER: And nothing in Thailand? MR. WOLFENSOHN: Nothing in Thailand. MS. WROUGHTON: Lesley Wroughton from Reuters. You've announced that you are leaving, and starting at the--no, no, this is tied to the tsunami. [Laughter.] MR. WOLFENSOHN: I knew the conference was going on too long. MS. WROUGHTON: I mean would you--you started this huge task. As you start winding down, would you like to see this construction project well underway or completed by the time that you leave? My second question is you've spoken of a transition period. Does that mean, would you think that it would be the best thing to have somebody in place quite soon and then work with you until you leave? MR. WOLFENSOHN: Well, you know, I'd like to get everything done before I go so that nothing is left for my successor. [Laughter.] MR. WOLFENSOHN: But I think that's unlikely either in the case of the tsunamis or the Congo or the Middle East crisis or a hundred other things I could tell you, so I don't think I should wait around to complete this or anything else. I think there will always be things for us to do. What I plan to do in the next five months is to work as hard as I can on every one of the issues which is before us. I don't intend to stop working till the first of June, and on the transition, it's really for the shareholders to decide. What I would be very pleased about would be if they can decide on the successor in time for me to be able to work with whoever that person is for a period of time to make a smooth transition. We're already preparing a transition manual which will be an ABC guide to how to run the Bank, which no doubt bootlegged copies will be made available to the press, and then you can all know the secrets of the institution, but in any event I'm going to try and get that together because it's something I lacked when I came in and I'd like my successor to have it. So I'm doing everything I can to prepare for whoever the successor is. Five minutes to go. See how I'm--before I announced my retirement, they never gave me these things, but now they feel I'm vulnerable. Are there any more questions? Take two more questions. MR. DUNPHY: After June 1, what are you going to do? MR. WOLFENSOHN: I'm going to have a rest. [Laughter.] MR. WOLFENSOHN: Anything else? Well, thank you all. Well, there's one more question. MR. PARAMESWARAN: Just a quick follow-up to what I asked earlier. I mean having experienced the Asian financial crisis, which was one of the most serious crises Asia faced before the tsunami crisis, how would you see the World Bank coming to respond to these pleas for assistance? I remember when the financial crisis struck, the World Bank and other institutions were very slow in coming to the rescue of some of the Asian economies where people were really, you know, out in the streets and governments were toppled, and there was a lot of criticism of the World Bank for their slow response. Do you see that there were some lessons that were learned before that helped the World Bank go quicker this time or was it something of a different magnitude? MR. WOLFENSOHN: Well, I was present at the time of the Asian crisis from beginning to end, and the first thing was that I don't think the World Bank created the Asian crisis. I think some responsibility has to be taken by the governments in those countries, and so I would reject the notion that we were at the cause of that crisis. I also think that we responded rather quickly, but at the front line of the crisis was the IMF. Just as the UN in physical crises takes the emergency, so in financial crises, the Fund takes the emergency. That's their role. That is understood. That is what they are there for. And I think the Fund reacted pretty quickly, and I actually think on the social and other aspects we reacted very quickly. I was in Indonesia and Thailand and all those countries just weeks after that crisis, working with the government, working, going through the affected areas where I remember the slums in Indonesia and the--I mean I just had a very extensive trip. So I actually feel rather proud of the way we responded then and maybe you should reread the history. Thank you all very much. [Whereupon, at 10:40 a.m., the press conference was concluded.] |
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