Islamabad, Pakistan
Wednesday, August 17, 2005 Also available: Audio of Opening Statement
Audio of Full press conference (RealAudio) MR. SALMAN SHAH (PAKISTAN PRIME MINISTER'S ADVISOR ON FINANCE) : Let me welcome Mr. Paul Wolfowitz to this press conference. It's a pleasure to have received him, and this is his first major trip to South Asia and the first time he has visited Pakistan. President Wolfowitz is a true friend of Pakistan and has always been very, very supportive of Pakistan, and he is well known in Pakistan. He has an excellent relationship with our Prime Minister and our President, and during these last couple of days, we had extensive discussions with the Government of Pakistan and the World Bank on all facets of the relationship with the Bank, and we discussed the excellent turnaround in Pakistan's economy the past six years, the reform agenda which the government has pursued in the past and the agenda which we are pursuing into the future, the economic strategy in Pakistan, to sustain the growth which we have achieved, to sustain that growth well into the future and to make it an equitable growth for the benefit of the people of Pakistan. The President and the Prime Minister were pleased to receive Mr. Wolfowitz and had extensive discussions, he had a field trip to Ghazi Barotha hydro project. He met with the economic team, the education team, the governance team, the National Accountability Bureau, NRB, auditor general, and he had also meetings with civil society, NGOs, parliamentarians, donor community, media interaction, both print and electronic, and he discussed the modalities of the scaled-up World Bank program in Pakistan of $1.5 billion a year, and this under the Country Assistance Strategy of the World Bank. The discussions were also held on the launch of major initiatives in the infrastructure side. Where we talked about physical infrastructure on the North-South corridor, the Karachi-Lahore corridor, its transport and logistics facilities, with the idea of reducing the logistic time to less than 24 hours. We also talked about the requirements of water in Pakistan over the next 50 years, the Bank's support and assistance in rehabilitating our irrigation system, development of new water storages. We talked about the development of urban infrastructure, the development of rural infrastructure, human resource development initiatives, initiated some business climate in the country in the country, public-private partnerships. So the whole gamut of our relationship was discussed. We also discussed the launch of a trust fund for areas bordering Afghanistan, and this is something which the President of the World Bank has indicated personal interest, and this will be something which we will develop with the assistance of the international community. Overall, I think the areas of capacity building of the government and the second generation reforms which we are pursuing also were discussed. So I think we have a very, very important partner in development in the World Bank, and we have enormous human resources and capital resources, and I think this partnership will grow in the future for the betterment of the people of Pakistan. I would like now to request President Wolfowitz to give his impressions of what he saw while he was here and the direction in which he will be going. Thank you. MR. WOLFOWITZ: Thank you. As I listened to that account, it's hard to believe we've only been here two days. We've covered a lot of territory and are very much looking forward to visiting Lahore later today. But, first of all, let me express my thanks to Dr. Shah and his team--Salman, if I may call you that--and to the Prime Minister and President for the wonderful hospitality that's been extended to me. I'm very excited to be able to visit South Asia so early in my tenure at the Bank, and it's a very important visit to me because I think this region of the world is perhaps the most important engine of growth in the developing world in the coming decade. It certainly seems to be on the edge of a new era with enormous potential gains--gains for the hundreds of millions of poor people in this part of the world, that's perhaps the most important thing, but I think also gains for the whole region. And in the case of Pakistan, I've said there are 150 million reasons to be concerned about the development of this country, and it's the 150 million people of this country. But I think also Pakistan is not only a leader in the region, it's a leader in the Muslim world. And I think Pakistan's success--and I'm hopeful that this country is on a path to success--can point the way for 1.2 billion people in the Muslim world. I was very struck when we met the other day with some villagers from a village outside Islamabad called Dhok Tabarak, and we spoke to this one woman. She didn't speak English, but she certainly expressed herself very well in Urdu. And I asked whether the success of their small project in their village could be reproduced elsewhere in Pakistan. And she said, with enormous passion and conviction, she said, "Why not?" She said, "The Japanese have done it, the Chinese have done it. Why can't Pakistanis do it?" And I think the answer is there's no reason Pakistanis can't do it. As Dr. Shah has gone through, we really discussed the whole development agenda here. One can talk a great deal about progress, and I think there's been a great deal of progress. One can talk at equal length about the problems that remain to be tackled. It's a situation--if you know the expression in English--that the optimist sees the glass half-full and the pessimist sees it half-empty. But I think the realist looks to see whether the glass is filling or emptying, and in my view, there's no question that the glass here is half-full and it's filling up. And I think it's important, particularly for the poorest people of this country, for that growth to continue and for the benefits of growth to be spread more equitably. That's a challenge that all the government officials I spoke with recognize. It's a challenge that my very capable World Bank staff is very conscious of. And I think one makes progress in these situations one issue at a time, one project at a time. We talked about quite a few areas here where I think the World Bank would scale up assistance, and as you probably know, we expect that our lending to Pakistan will increase by about 50 percent this year, from about a billion dollars in the past fiscal year to about $1.5 billion in the coming fiscal year, and that that can be applied to a number of projects that can clearly benefit the poorest people in this country. I think the challenges are enormous, but I must say I am impressed in both the confidence and the dedication of the economic team that I was privileged to meet with, and I'm very proud of the role the World Bank has played here and want to see that role continue and be strengthened in any way that it possibly can. I think we'll open it to questions. MR. SHAH : Stand up. QUESTIONER: [inaudible]. MR. SHAH : I think the discussion which we had on the water side was not focused on any specific project, but it was focused on the entire sector, the entire water sector, which includes rehabilitation of the sector, which includes developing the system further, which includes developing of water storages and hydro power. But the decisions to implement any specific projects are the prerogative of the government of Pakistan, and the Government of Pakistan will decide what projects to execute, when to execute them, and how to execute them. The discussion we have had is on how to finance the water sector development which will meet the requirements of Pakistan over the next 30 to 50 years. So that's the kind of planning and thinking which has to go into it. As far as specific projects…are concerned, the government will make that decision, and the President of Pakistan has already constituted several workings groups and committees who will make recommendations and then we will decide, and after that the financing arrangements will be put in place. MR. WOLFOWITZ: I don't have a lot to add to that. I think it's without any question that the management of this country's water resources is an essential feature for successful development here and an enormous potential source of both clean and efficient energy. I think, if I can speak more broadly, the World Bank has had quite a lot of experience in the past, both good and bad, with large projects of this kind. I think there was a period of time in the 1990s when we probably went too far in getting out of any involvement in these kinds of large projects. But, increasingly, I think we recognize the need for them, the need for them to be done in a responsible way. And I think we have a good deal of expertise that can be contributed if your government wants it on the technical aspects of projects of this kind and how to implement them in
a way that is most efficient from a development point of view, that deals with the issues in the environment and of the populations affected, and we've had, I think, some successes in recent years and some experience that we'll be happy to share with your government. But as Dr. Shah said, it's a decision of your government as to what projects ultimately to implement.
QUESTIONER: Have you discussed Baglihar issue…? MR. WOLFOWITZ: My colleagues can correct me if I'm missing something here, but I believe the Bank's role in that issue has only been to--we were requested by the government of Pakistan to appoint a neutral expert, which I believe is our mandate under the treaty. And we did so, and it's now up to that expert to come up with his judgments. I would say more broadly, not with respect to that specific issues, but with respect to relations between India and Pakistan more generally, I sense that there's been an improvement, and not only in the atmosphere but also in the substance in the last couple of years. I hope that can continue because I think the potential for productive interaction between these two big countries is really enormous, and if that can be realized I think the hundreds of millions of people in the subcontinent stand to benefit in a huge way. So I hope all of these issues can be addressed with an eye on how big the potential gains are for everybody here. QUESTIONER: (Question about money sent illegally to overseas accounts). MR. WOLFOWITZ: Let me say that our discussion on that point was more of a general kind, and what learned from our discussions was that there are a number of countries that hold those assets and which are talking about the hearing, and then that it's a very slow process. And I said, if there's anything that we can do as an institution to help speed up that process, I think it's important. I'm not--had no specifics in mind. I know in the case in Nigeria and Switzerland, I know Switzerland has offered to return a very substantial amount of assets that were stolen by the former dictator in Nigeria, and the Bank is playing a facilitating role. That process isn't quite concluded yet, so I know that it's not as simple as it might appear to be. And in many other countries there are legal issues involved. But I do think that this challenge of combating corruption is a worldwide challenge. It's not just developing countries that have the problem. Developed countries are involved in these transactions. I've often said that every corrupt transaction has a corruptor, there's always a corruptee. I don't know if "corruptee" is proper English. But I think the whole world has a responsibility to crack down on this disease which I think is a real retarding factor to development in many parts of the world. QUESTIONER: [Inaudible]. MR. WOLFOWITZ: I'll let my colleagues comment in more detail, but education is one of the major areas where the World Bank is placing its emphasis, and one of the encouraging things I heard during my short time here was that there's been a real change in attitude about the importance of girls' education in this country, which I think is a very positive development. There's no way that you can have really healthy development if half the population is not fully participating in that. I think quality of education is part of the challenge. It's not just a matter of having more schools, it's having more capable teachers to teach in them. I've heard that when the schools are good they're filled here, and if they're not good, even poor parents are smart enough to recognize that it's a waste of time to send their kids to schools where they're not learning. But I think it's--human resource development is one of the most essential factors in sustaining the growth of this country, and the Bank would like to participate in every way that we can. Praful (Patel, World Bank Vice President of South Asia), do you want to add to that, or Abid (Islam, Country Director Pakistan of World Bank), do you want to add? [Inaudible discussion.] QUESTIONER: One of your predecessors, [inaudible], was very passionate about one thing, and this is [inaudible] Pakistan, and in Pakistan [inaudible] access to drinking water, and [inaudible] by end of 2007, Pakistan will have 100 percent access to drinking water. So if as you mentioned, this project will [inaudible] and do you think that [inaudible] can help Pakistan [inaudible]? MR. WOLFOWITZ: Yes, the President did mention that, and it certainly makes compelling sense to me that this is something extremely important, something that it seems to me can be addressed early on as a priority. And when we talk about scaling up World Bank assistance in this country, that is certainly one area where that assistance could be applied. MR. SHAH : I think in this we have had discussions and there are lots of programs of community development, infrastructure for communities which the Bank is involved in. And we are also talking with the Bank about its Participation in the Peshawar Pakistan farming program, which [inaudible] could be diverted to such basic needs. MR. : The man in the front, you have a question, sir? QUESTIONER: [Inaudible] from the Associated Press. I understand recently [inaudible] President Musharraf [inaudible]. Do you think the high-level spending on defense [inaudible] is hurting the country's efforts to fight poverty? MR. WOLFOWITZ: I'm speaking as a World Bank official, not as a former U.S. official. I think there's no question that the more Pakistan can invest in fundamental needs like education, like clean drinking water, the better it will be for the future of this country. How you balance those needs against absolutely critical security needs as well, is, I guess I'm happy to say, not one of the tough calls I'm going to have to make. The President of this country has to make it. But I think it's certainly a reason more broadly to hope that this improvement in relations between India and Pakistan that I referred to earlier can continue because I think the more the environment around Pakistan can improve and become more peaceful, and the less money that has to be devoted to defense expenditures, obviously, it means more resources available for basic human needs that are absolutely critical. MR. SHAH : Last question? QUESTIONER: [Inaudible]? MR. WOLFOWITZ: Can you repeat the question? QUESTIONER: [Inaudible]? MR. WOLFOWITZ: Can you help me out? MR. SHAH : Can I just--I think we has a full session on governance which included the accountability process, the devolution process, the civil service reforms process, the accessibility program, you know, financial management and [inaudible] type issues, and the idea of further building capacity in the civil service reform area, these are in discussions we had, and what impressions the President got out of this discussion, I ask him to give you those impressions. MR. WOLFOWITZ: I just had trouble hearing your question. I think you were asking what are the reasons for bad governance here? You could also ask what are the reasons for good governance. There's a mixed picture here I think. I think there's no question though that one of the challenges in this country, as in many countries--and I was about to say many developing countries, but the truth is it's in many developed countries as well, is the challenge of corruption. But a big country like the United States can carry the burden of some incredible corruption scandals--we know the names of them--and it doesn't have a huge impact on economic growth. In a country like Pakistan I think it's a big retardant, and I think this government is taking on the issue in an impressive way, but it's not something that's easily done, and it is something where cooperation from the developed countries is acquired I think. I think one of the things that was impressive to me as we talked to these villagers who were participating in the program of the Pakistan Poverty Alleviation Fund, is that when resources are put in the hands of villagers and they make the decisions about how those resources will be used, and they can see where the money is going, and they can see the results, it seems to have a beneficial effect in many ways in empowering people to think about issues of governance and how to make decisions about their own future, but also to provide very direct accountability for money and funding. I must say I found that program to be extremely promising, and I'm very delighted that the Bank has had an active role in it. We'd like to see it scale up if we can. MR. SHAH : The President has to fly to Lahore and I think we would like to take more questions but okay, one last question. QUESTIONER: (Inaudible). MR. WOLFOWITZ: I'll certainly take your request under advisement, but as I said earlier, we played our role in appointing a neutral expert, and I think we have to wait and let that neutral expert report before we think about anything further. I think that it's in his hands at the moment, and I hope he'll come up with a good judgment. Thank you. |
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