Interviewer: Mr. President, thank you for receiving us today, despite your tight schedule. If you were to sum up in a few words the International Conference’s main achievement, what would you say? President Wolfowitz: I think what we saw in Paris today was extraordinary support from the international community for the really remarkable efforts that the Government of Lebanon has put together to move the country past the terrible damage of the war last summer and actually get it on a path to real economic success and prosperity. The plan that Prime Minister Siniora and his Government presented to the donors today is a very ambitious one. In the view of the World Bank, it really meets the needs of the country. And I think you had around the table today $7.6 billion of promises from people who say, “It’s an impressive plan, and we want to support it.” Interviewer: In your statement to the assembled donor community, you praised the Government’s reforms package, as you are saying now, as “ambitious, comprehensive and coherent, Were there weaknesses or shortcomings that you would like to explain? President Wolfowitz: You know, I’m sure any plan can be fiddled with or argued about here or there at the edges; but this one really has all the key pieces. It’s, first of all, getting the Government’s budget in order and getting it so the Government is living within its means; secondly, making the changes in the economy that are essential to getting Lebanon growing in the long term; and, third - and I stressed this this morning as being as important as the first two -- is making sure, particularly in what’s going to be a somewhat difficult period of transition, that the burdens of this program are shared by the whole population and the benefits are shared by the whole population. Those are the key things, and now the real challenge is not to improve the plan further; the real challenge is implementing the plan, and that’s going to take effort and commitment and some sacrifice by everybody. Interviewer: How was this Conference different from Paris I and Paris II? President Wolfowitz: I think because of the seriousness of the Government’s program. My sense of Paris II is that you only had one of those three pieces there. There was a fiscal adjustment program; but you didn’t have the other two pieces, and maybe that’s also why the fiscal adjustment didn’t really take place as it was supposed to. I am more hopeful that this one will be implemented, because the three different pieces support each other. Interviewer: Mr. President, at the Conference today, you revealed that the World Bank was ready to extend an additional $700 million in financing. This brings the World Bank contribution, including the IFC, to over $1 billion since the war in summer. Is the additional sum in the form of loans or grants? President Wolfowitz: First of all, as I also said, this is an extraordinary effort on our part, and it’s a recognition of how significant we think this program is. It’s in the form of loans, but loans on the very best possible terms. So I think from the point of view of Lebanon’s finances, it will be a real boon, a real benefit. Interviewer: For the year 2007 or for the next five years? President Wolfowitz: It’s three years. Interviewer: Three years. President Wolfowitz: But we’re looking to commit as much as half of that in the first year. We realize the more we can address the needs early, the better it will be. Interviewer: What are the World Bank’s condition for extending the extra financing? President Wolfowitz: We’re not imposing conditions. What we are saying is, the Government’s program is a good program.It deserves our support. As long as the Government proceeds with implementing the program, we will continue with our part of it. It’s promises from both sides, not conditions. Interviewer: Mr. President, what does the Bank expect from the Government of Lebanon in terms of action in the short and medium terms? President Wolfowitz: A significant amount of adjusting the budget so that the size of the deficit is reduced; some very important measures to begin stimulating economic growth, and one of the most important and most difficult is going to be reforming the electricity, the power sector; and, third -- and this is where we put particular emphasis -- is constructing the kind of framework to give support to the poorest parts of the population. These are the people who potentially can be hurt the most in the transition to a successful economy, and that shouldn’t happen. They should get taken care of. Interviewer: You have mentioned the necessity of reforms in the program of the Lebanese Government. What are the chances of implementing such reform steps under the present climate of political instability? President Wolfowitz: First of all, I should emphasize, the World Bank is an economic institution, not a political one, and I don’t know anyone who could really predict the future in any case. What I think we can say with confidence is that if this program is successfully implemented -- and now, with $7.6 billion of donor support -- it has a real chance of success. I believe it’s in the interests of everybody in Lebanon to help make this succeed. And I hope as the political debate proceeds, that people would be pushed by the population to say, “Whatever your political views are, let’s support this economic program, because it helps all of us.” Interviewer: In your statement today, you welcomed the Lebanese Government’s support of an IMF program. Do you think the Government will be able to comply? President Wolfowitz: We’re going to see, because the IMF is looking at the Government’s program right now; but my understanding is that the IMF is quite hopeful that if the Government implements the program that it says it’s going to implement, that the IMF will be very comfortable with lending money -- not large amounts of money, but lending money to Lebanon. The real significance of that is that it gives the international community, especially the international financial community, confidence that Lebanon is on a path to economic viability and that, in turn, for a country that depends so much on its financial system and its attractiveness as a banking center, that’s very important to Lebanon. Interviewer: Having a program with the IMF… President Wolfowitz: The IMF program is a kind of vote of confidence from a leading international institution that the economy is on the right track. That’s why at the World Bank we were so pleased that the IMF decided to do this. Interviewer: Do you think the financial support will be enough to put Lebanon on the track of economic recovery? President Wolfowitz: If the Government follows through on its part of it, yes.But the problems of Lebanon can’t be solved by any one person or any one institution or just by international support. It takes all of them coming together, and it really does require that the burdens of this program be shared by the international community and by all the people of Lebanon, and the benefits need to be shared by all the people of Lebanon. Interviewer: And do you think the donors will do the same? President Wolfowitz: You know, a part of our job at the World Bank is to make sure that when Lebanon keeps its promises, the donors keep their promises. We’ll do our best. Interviewer: So many Lebanese wonder why all this sympathy for their country, which is small in size and population? So what is your explanation for that? President Wolfowitz: Well, first of all, I think the international community is more generous in general than sometimes people recognize. I remember I used to be an American Ambassador in Indonesia, so I was very aware two years ago when the disaster of the tsunami hit a province of Indonesia that’s much smaller than Lebanon, and there was a huge outpouring of international support. So part of it, frankly, is just that people don’t like seeing innocent people suffer, as so many in Lebanon have suffered. But beyond that, I think there’s also a sense that Lebanon is a country with enormous economic potential. Almost everyone knows in other countries in the world of the success of Lebanese in financial and commercial matters. And I would put some weight, too, on the fact that it’s a model of diversity in a part of the world that could use models of diversity. And I was struck at this Conference at how many of the leaders of Arab countries were talking about Lebanon as a very important model of diversity for the region. So I think all three of those reasons: a country that needs it, a country that deserves it and a country that can be a model for others. Interviewer: Do you believe so? President Wolfowitz: Oh, I believe it very strongly, yes. Interviewer: So there are no political conditions attached to this support? President Wolfowitz: I think everyone would be delighted if Lebanon were a successful country making up its own mind what its politics is going to be. Interviewer: ‘Because always, it’s related to the political situation in Lebanon, this is why I am asking. President Wolfowitz: No, I realize that; and I just hope, as I will say again, I think there’s a real chance here for the people of Lebanon to have the peace and prosperity that they deserve, and I just hope politics doesn’t get in the way. Interviewer: Finally, Mr. President, from where you are at the head of this big Institution, what is your advice to the Lebanese Government and for the Lebanese people? President Wolfowitz: Make sure that everyone has an equal share. The burdens of this program need to be shared equally, and the benefits need to be shared equally. And I think then, they can make it work. Interviewer: Final word … your schedule being very tight, so … President Wolfowitz: Well, I just wish all the best to the people of Lebanon. The recent history, especially the war last year, is just tragic, and the country deserves so much better, and I hope it will see a better future. Interviewer: Thank you, Mr. President. President Wolfowitz: Shukran. Interviewer: Thank you for your support, and thank you for your time. President Wolfowitz: Thank you.
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