Paul Wolfowitz
World Bank President
October 18, 2006
Paul Wolfowitz: When I joined the World Bank 16 months ago I said that Africa and the challenges that it confronts simply had to be our first priority. And I said that based on the appreciation of the enormous needs of Sub-Saharan Africa. But, every time I set foot in a new corner of Africa, and I now have been able to visit 11 countries so far, my commitment to this tremendously important continent has been reinforced, not just by the needs that I have seen, but reinforced by seeing the extraordinary energy and ambition of Africans and by seeing their enormous potential to transform the subcontinent. Africa is not the only part of the world to be confronted by the daunting challenges of poverty. More than one billion people around the world are living today in extreme poverty, which we define as struggling to survive from one day to the next on less than $1. As we here go back to our elegant hotel rooms tonight or our comfortable homes we need to remember that they’ll be going to bed sick, hungry, and uncertain about their future. Surviving on $1 a day is very, very painful. But, there is good news as well. In many regions of the world people have found a path out of poverty. In fact, the past-quarter century has to count as the most successful 25 years in history in the fight against poverty. 400 million people have been able to find an escape from that condition, and in the next decade it is predicted another 400 million are expected to join them. The bulk of those have been in East Asia, with increasingly people in South Asia and Latin America have been following that path as well. The one region that has so far been conspicuously left behind by that progress is Sub-Saharan Africa. The number of people living in extreme poverty has nearly doubled in the last 25 years, from more than 160 million in 1981 to roughly 300 million or roughly half the population of the sub-continent today. The desperate need therefore is undeniable. But, there is also real opportunity. In countries like Ghana and Tanzania, Rwanda and Burkina Faso - a growing economy is making it possible for more people to escape poverty, putting more of their children in school - more mothers are healthy, with healthy babies. And those four countries aren’t alone. There are 17 African countries in all. They have achieved consistent growth year after year for the past decade, at 4% or better. Some have reached averages as high as 7% or 8%. And investors have started to discover the economic value of Africa. They have increased private investment flows to the continent from $10 billion six years ago to more than $28 billion last year. There is even hope for these countries facing some of the toughest challenges - countries that had recently emerged from years or even decades of severe conflict. In Rwanda, after a horrible genocide, slightly more than ten years ago, there are now more children enrolled in school than there were before the genocide in 1994. In Mozambique, another country ravaged by civil war, infant mortality has fallen by fully a third since 1995. The people of Africa are hard at work building a more hopeful future for their continent. They don’t want charity; what they want, and what they deserve is opportunity. I believe there is no shortage of energy, ambition, or entrepreneurial spirit. Unfortunately, what are most severely lacking are resources to support good plans and good ideas. Of course, money alone won’t solve the challenges of Africa, but money is desperately needed. More and more countries are using development assistance to benefit their people, and we at the World Bank Group are lending more than ever before even though we are lending more carefully than before. For Africa and the poorest countries in the world a critical source of development funding comes from the International Development Association or IDA, I guess in French "AID", the Bank Group’s concessional lending arm. The last fiscal year, IDA support to the poorest countries reached a record level of $9.5 billion, with half of that going to Africa. Two months ago, we committed nearly a billion dollars of World Bank income from the other portions of the Bank Group to IDA; that too is a record. But, that still leaves a big gap in our need for IDA support, a gap that we can’t fill alone. Talks on the 15th Replenishment of IDA funding, we call it IDA15 will begin next year. We have to aim at replenishment that will give African parents the resources they need to create the future that their children deserve. We need to aim for a higher level of commitment from donors to match the ambitions and aspirations of African people and of poor people all around the World. France has been a leader in IDA in the past, and I hope France will lead the effort this time to keep the promises made at the Gleneagles Summit of the G8 countries last year to double aid to Africa. In the World Bank we have responded to challenges and opportunities of the subcontinent with what we call our ‘Africa Action Plan’. Let me briefly discuss four key areas in which we are focusing our support - Education, Health, Private Sector Development, and Infrastructure. First, too many African children can’t even take the first step on the path out of poverty, because their way is blocked by the lack of education. One-third of boys and nearly half of girls in Sub-Saharan Africa don’t even complete primary school. We have joined with other donors in pioneering something called the ‘Education For All’ - Fast Track Initiative, to accelerate progress to quality primary education for all children by 2015. The idea in the fast track initiative is to give poor countries the assurance they need to be able to invest in education for the long-term. It is pretty hard to expand your school system and to hire teachers if you are going year-by-year not certain about how much the donors will give. So, in return for clear solid plans we are trying to get clear solid commitments from donor. The fast track Initiative has encouraged a growing number of countries; the majority of them in Africa, to develop credible plans to increase primary schooling enrollment, and particularly enrollment for girls. That initiative could fulfill the dreams of 70 million children in some 16 countries who need and yearn for an education. I have seen first hand how powerful that desire is. I was in Ethiopia in July and visited a primary school in a poor rural area, and they were handing out awards to the best students in each class and they started with the first grade. And the best student in the first grade class was 12 years old, who had gone back to school after working in the fields. It is difficult enough to learn to read and difficult conditions. The textbooks there are terrible, they are almost non-existent. It is even more difficult to learn when you are six years behind your classmates. But, those kids are struggling to do it. The ones who finished the fourth year, I believe it was at that primary school, now have to go some 14 kilometers each day to get to a secondary school, another huge obstacle. But, they do it; they do it with eagerness, because they are sure and I am sure it will improve their lives. Second, even for Africans who were able to get into a classroom, disease may hold them back from leading healthy and productive lives. The two largest culprits in this regard are of course AIDS and Malaria. Nearly 60% of all the people around the world living with HIV live in Africa. Some of the hardest hit countries are in Southern Africa including Botswana, South Africa itself, Swaziland, Zambia, and Zimbabwe. The World Bank Group is part of a global coalition to fight HIV/AIDS, an effort that increased eight fold the number of people with access to anti-retroviral therapy in just two years. But, despite that significant progress more than 80% of the people who need treatment are still being left behind and more resources are needed, if we are going to reach them. AIDS grabs more headlines, but the biggest childhood killer in Africa is malaria - a completely preventable and treatable disease. In fact, I am told 100 or more years ago, I guess late 19th century, diplomats in Washington got hardship pay, and particularly because of malaria in Washington DC. It has been wiped out. It is harder to wipe it out in Central Africa for various climatic and epidemiological reasons, but it can be done and it must be done. Malaria each year is killing more than a million people around the world, 90% of those are in Africa and the great bulk of them are children. A million people a year, if you stop and think and do the division is 3,000 a day - one World Trade Center every day from a disease, which can be prevented. In Tanzania, I met a mother of five children who was getting a bed net for the first time in her life. She wanted to make sure that her children were safe from malaria and she was contributing some of her own money on top of a government provided voucher to get that bed net. Through what we call our new malaria booster program, we’re hoping to reach over 125 million people, like the children of that young mother. Third, in many countries, excessive regulations choke businesses before they have a chance to even get started. It takes more than a year to register property in Ghana compared to just one day in the lead country Norway, or 14 days in Finland. When I visited Burkina Faso last year, I noticed from our ["Doing Business"] report that it cost one-and-a-half time’s per-capita income to register a business. Now some of you might quickly point out to me that per-capita income there is so low we’re not talking about a big number, maybe its $500. For Total or Chevron, that’s not even an expensive lunch. It’s probably a cheap lunch in Paris, but for a young woman or young man in Burkina Faso who’s trying to get a business started, it’s prohibitive. They either don’t do it or they do it in what’s euphemistically called the informal sector; more properly called the illegal sector, and indeed in a country that has I think 12 million people, less than a hundred thousand are working in the formal sector - a huge handicap to developing private business. Each year we publish something called the doing business report that measures the ease of doing business, now in a 175 different countries. Among other things it looks as at such factors as how much it costs to get a business off the ground, how long it takes to enforce a contract, how difficult it is to get access to finance. African countries are making their regulatory environment more business-friendly. For example Burkina Faso itself which I just mentioned has reduced the number of steps and the number of days required to starting a business. While most African countries are in the bottom 25% in terms of the climate for doing business, they’re also among the fastest reformers. I have been really quite delighted at the experience when I point out to visiting Ministers and even Presidents and Prime Ministers, that their countries have real problems in terms of the business environment. The reaction is not to argue about the facts, the reaction is to go home and tell their people to do better. Last year, Africa emerged as one of the fastest reforming regions in the world; Tanzania and Ghana are in fact among the top-ten reformers world-wide. Of course the regulatory environment is only part of what it takes to get private businesses going. I was absolutely delighted that the Nobel Peace Prize Committee this year had the wisdom to award the Peace Prize to Mohammed Yunus, a real pioneer in the area of providing finance for poor people. I’m proud to say that the World Bank is co-host with AFD and with UNDP on a conference here in fact starting tomorrow of what’s called the Consultative Group to Assist the Poor; a group that’s helping to substantially expand microfinance which is not only micro credit, but various other aspects of access to finance for poor people. - absolutely critical if small businesses are to be created, and small businesses grow into medium businesses. And fourth, in too many African nations, poor or non-existent infra-structure blocks the path out of poverty. Today an entrepreneur in Central Africa pays roughly three times what his Chinese counterpart pays to transport a container the same distance and the odds are that he has to transport his goods a good deal further than his Chinese competitor. For that entrepreneur, the path out of poverty is literally a paved road. Africans already know what infrastructure they need, they have innovative plans for building it, what they lack are the resources. That’s why we’ve been supporting our African partners by substantially increasing investment in Africa’s infrastructure. Just the last year alone, we increased our infrastructure lending by 15%; it’s still way short of the need. Some of you may ask and I know many Congressmen in the US and Legislators in Europe ask, why should rich countries increase their assistance to Africa? - when so much aid went to the sub-continent in the past, with so little to show for it. I think that’s a valid concern, but I’d like to argue that it’s out-dated and misdirected. Two days ago I was in Oslo attending a conference on what’s called the Extractive Industries Transparency Initiative, that’s a tri-partite partnership among government, corporations and civil society to encourage companies and governments to publish what is paid and what is received in oil revenues and other revenues from extractive industries. At that conference, Nigeria’s very dynamic Minister of Education, Obiageli Ezekwesili talked about the efforts that Africans are making to improve accountability. She talked about something that deserves I think even more publicity and attention than it gets, something called the African Peer Review Mechanism where African countries are evaluating each other’s systems and holding themselves accountable. Transparency, Oby said, is not an end into itself, reducing poverty is the end. That’s just one example and I’ve run into many, many of a growing recognition in Africa and in many poor countries that the path out of poverty can only be built on a solid foundation of good governance. All policy reforms, whether in health, education, private sector, infrastructure, depend on good governance. Some may argue that good governance and the fight against corruption are luxuries; luxuries that poor countries can’t afford. I’d say that’s absolutely wrong. African leaders themselves are increasingly saying that they can’t afford not to improve governance. We’re seeing an informed African citizenry increasingly demanding change. We’re seeing leadership that is increasingly aware of its responsibility to its people. Leadership that pushes for reforms and in some cases does so at significant personal risk. One such person who I admire enormously is a young Nigerian Nuhu Ribadu. He is in the government, his position is Executive Chairman of the Economic and Financial Crimes Commission; something by the way, the World Bank is proud to have helped fund in its initial start-up. Nuhu Ribadu is leading bold efforts by the Nigerian government to confront corruption. Their efforts by his estimate, I can’t confirm it entirely, he says they’ve recovered some $5 billion in stolen assets from corrupt officials and individuals. I can confirm that they’ve recovered at least $500 million from Swiss Bank accounts belonging to the former dictator Abacha which the World Bank had some role in facilitating and he does this at serious personal risk; even after two of his people have been murdered probably because of the work they’ve been doing. In our meetings in Singapore Nuhu Ribadu said, I quote him, "We know what corruption has cost us, it is denied us the value of our resources both human and natural. It breeds injustice, it causes killings, it causes the diseases that ravage almost everywhere. This is not what we want, and this," he said, "is not what we’re going to allow to continue," and he’s not alone. Last year’s widely respected Commission on Africa report that included among its members the Prime Minister of Ethiopia and the President of Tanzania, concluded that without governance, all other reforms will have limited impact. Thirty-three countries in sub-Saharan Africa leaders signed or ratified the UN Convention against corruption and throughout the continent, more countries are adhering to their own constitutions. The voices of civil societies and parliaments have become stronger and people are demanding stronger public governance and accountability. Liberia the country that I to be honest thought never had a chance after years of watching it sink deeper and deeper into civil war and horrible conflict. After more than two decades of devastating war and conflict, thanks to a successful intervention by international peacekeepers, the people of Liberia were able to vote last year in their first elections in decades. They elected Africa’s first female President and economic reformer, Elizabeth Johnson Sirleaf who’s committed to fight corruption and re-build that country. Increasingly, I’ve heard from African countries and developing countries who are stepping up to their responsibilities, that it is time for the rich countries and for development institutions like my own to step up to their responsibilities also. We need to support their efforts with capacity training and the other resources needed to strengthen their public and civil institutions, but we also need to address corruption within our own borders. For every bribe-taker, there is a bribe-giver - unfortunately often there is more than one bribe giver and the bribe giver often comes from a rich country. That needs to be disciplined. Good governance is our most important assurance that every development dollar goes to its intended purpose to fight hunger, to fight poverty and disease. For that reason, the World Bank group is committed to supporting champions of reform, they exist in both governments and civil society; they include Members of the Parliament as well as the executive branch, members of the court, and champions of free press. Corruption is a disease, a disease that thrives on darkness. Transparency, participation, and accountability that come from an empowered citizenry are the strongest antidote to corruption. So, promoting those essential values and institutions is critical if we're going to succeed in fighting poverty. Let me say a few words about, perhaps an even more important issue, and that’s trade. The opportunities to help Africa on the path out of poverty are tremendous. But, aid alone isn’t the answer. African sugarcane and cotton farmers deserve a fair chance to compete in international markets. They don’t have it today. Africa’s share of global exports was already low in 1970 at three-and-a-half percent, but today it’s less than half of that. Just to get back to the share that Africa had in 1970, it would bring Sub-Saharan Africa another $68 billion in earnings each other. That’s more than the total of development assistance that goes to Africa in a year. The potential for African exports is enormous. You can buy high quality roses from Kenya at the Marks & Spencer in London. You can buy excellent cherry tomatoes here in France that come from Senegal. The future of the Africa depends on reaching a Doha agreement that takes the needs of the poorest global citizens into full account. To the extent that the future of a healthy and stable global economy is tied up with the fate of Africa, and it is a positive conclusion that the Doha around is vital for all of us. Without it, trade barriers will remain major obstacles on the road out of poverty. The development challenges that African confronts are huge. We can only address them if organizations and governments work closely together in Africa. France has been an important partner; as a trader, as an investor, and as the leading bilateral donor to Africa. Your country has also played a leading role in seeking out innovative ways to fight poverty - like the International Drug Purchase Facility financed by airline the ticket levy that will provide access to medication for HIV/AIDS, Malaria, and Tuberculosis. The World Bank values our partnership with France and not just because of France's generous support to IDA. We work closely with France in countries on the 'Education For All' initiative. In counties as varied as Benin, Burkina Faso, Guinea, Madagascar, Mali, Mauritania, Senegal, Niger, and Tanzania. We’ve also worked with France to reduce poverty in Ghana and to bring water and cheap electricity to more residents in Ouagadougou. France’s priorities match with the World Bank Group agenda in Africa, particularly in education, health, water and sanitation, rural development, food, security, infrastructure, and the environment. That’s why we’re very keen to strengthen our cooperation with France, particularly in Africa. By building partnerships in these sectors, we can deliver greater results and create greater opportunities for Africans to take control of their own destinies. Nearly half of all Africans are under the age of 14. Those children deserve a future of hope, free of the tragedies of poverty and disease. They are the ones who’ll benefit most from France’s involvement in Africa. President Jacques Chirac has wisely said "More than any other, the African continent, still marginalized in international trade and suffering from a series of handicaps, bears the brunt of the imbalances; imbalances that are in conflict with the most basic morality; imbalances that seriously threaten global peace and stability. It would be irresponsible" he said "to ignore this and not take action." This call is our promise to keep; with our help the people of Africa have a chance to bring that important region on the path to a brighter future, which the children of Africa deserve. Thank you. ### Q& A Session |
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