January 30, 2007 Carl Hanlon: Good afternoon this is Carl Hanlon, Communications Manager at the World Bank, thank you very much for joining us. The purpose of this call is to give you a brief update on the governance and anti-corruption strategy and the stakeholder consultations that concluded last week. In a moment I will turn you over to World Bank President Paul Wolfowitz, and Eckhard Deutscher, Executive Director for Germany. They will make brief remarks and then take your questions. We have invited only a few reporters who have been covering this issue closely so please simply refer to this as an interview or conversation with Mr. Wolfowitz and Mr. Deutscher. Their remarks are on the record unless otherwise noted. I will now turn you over to President Wolfowitz, please go ahead sir. Paul Wolfowitz: Thank you Carl and I should explain also Eckhard Deutscher is here with me is not only the German representative on our Board of Directors but also is the Dean of the Board, which is a tribute to his longevity but also his skill. As Carl said this is to give you an update on the governance and anti-corruption work of the Bank. One of the most important pieces the Development Committee asked us to do in September was to consult with a broad range of countries and groups and individuals who have a stake in this work of ours. We just conceded these consultations and today we present its preliminary feedback to the Bank’s Board of Executive Directors. The goal of the consultation was to try to make sure that our work on governance and anti-corruption is well rounded in the realities of the countries that are working in. The consultation was run by Bank Country Teams. We had a total of 51 sets of consultations. 35 in developing countries, 12 in donor countries, and four were events with global audiences. In addition we received feedback from 180 external respondents through postings on our Website, and one half of those were from developing countries and we estimate that more than 3200 individuals have been reached through this consultation process. We’ve been trying to make the effort as transparent as possible and summaries of the points that have been raised in the consultation have been posted on our Website. If you want to go to the website it is www.worldbank.org/governacefeedback/ . So, what have we learned? I guess in some way it is almost surprising how strong the consensus was around a number of issues and the consultations also revealed certain areas that can be refined or strengthened. Let summarize the key messages under five headings : Number 1, that the Bank decides to stay engaged even in poorly governed countries. The core message you might say is don’t let the poor pay the price, to suffer not only from the governance but from the consequences of donors withdrawing because of the bad governance. Second, work with governments that engage more with the private sector, with civil society, and with media, and I think its worth noting here that the private sector sets a strong message and I am quoting here “Integrity is good for business.” Unquote. Examples of working with business associations with the national and industry-wide level is one way that we can advance the governance agenda, there are many others. Third, the bank should work to strengthen rather than bypass country systems. Fourth, the governance monitoring should be linked to governance reform, and Fifth, that co-ordination and harmonization among donors are essential; or to put it another way, the Bank shouldn't act alone. With that brief overview maybe I’ll ask Eckhard if he might give his view of how the Board briefing went today. Eckhard Deutscher: Thank you Paul, I think this was excellent Board Meeting we had; we had a broad consensus; there was widespread praise for the extensive and intensive consultations that the World Bank teams in the field and in Washington were able to carry out over the past few months. One colleague said this was maybe one of the most comprehensive consultations in the history of the World Bank. There was also a broad agreement that through the consultations, the Bank is addressing the concerns that were raised in the Annual Meeting in Singapore. There was also a consensus that the overall objective of the strategy was to find ways to strengthen the ability of developing countries to fight poverty. There was a broad agreement that the effort should be directed towards developing broad principles to guide implementation and help to ensure that strategy is applied coherently by remaining sensitive to individual country situations and we spoke also on the situation of several states in this context. Hence there was also the acknowledgement that the primary role of the Bank would be to support country and government-led initiatives in fighting corruption and that engagement on governance issues was a dynamic process and as a German ED, I added -- I had reactions and an echo from the German bilateral organization and from embassies on the consultation process in several countries and this was a complete positive echo - that was really recognized. Carl Hanlon:Okay, we’ll now open it up to questions please. One at a time, if you could, and please identify yourself and the name of the organization before asking your question. Audience:Hello. Carl Hanlon:Yes go ahead please. Speaker 1:What happens now? Paul Wolfowitz:Well, now we take all the results of this consultation process and over the course of next month we’ll go back and revise the strategy paper for presentation to the Board in its -- if you want the technical term it the committee as a whole, the Board was tasked by the Development Committee to come back with a new paper for the spring meetings in April and the main any point is to incorporate comments and suggestions and ideas that we got from the consultation process. Speaker 1:Just to clarify, I believe in Singapore you said that the original paper was approved and I remember asking about the nature of the way it was approved. So, is this process intended to make that approval more formal and complete with a final document that actually is formally adopted, is that what you’re trying to do? I'm a little confused. Since the last time it was approved, but now it’s going to be revised and approved again. Paul Wolfowitz:I think it’s a fair question and there is some debate doubt about which verb gets used - whether it’s approved or welcomed, or endorsed; but what I tried to convey in Singapore and I think it’s correct, which is that in Singapore we had an agreement on broad principles, pretty extensive principles, but I think what concerned some the Development Committee was to see some of this refined more precisely and it’s so much of the -- you could say -- I guess this is a German phrase “The devil is in the details” and the principles are one thing and how you apply the at a country level may become more complicated which is why doing this consultation in so many countries and with many so stakeholders is very important. So, I think it’s probably fair to say that the paper that will come back to the Board in April will be a refinement of the paper they saw in September not a radical revision and most of all, it will incorporate a lot of the new ideas that we got from this consultation. Speaker 2: Did I hear you correctly President Wolfowitz say that there is - point number one is a consensus to stay engaged even in poorly governed countries? Paul Wolfowitz:Correct. Speaker 2:Given that point, and this discussion of not bypassing governments, this has to be a fairly significant step down from where you were when you launched this initiative, No? Paul Wolfowitz: No, in fact I think you go back and read the original paper that talks about the importance of remaining engaged but how you engage does depend on the conditions of the country you’re working in and I think one of the things that we found in this processes is that the Bank has already been a leader in developing mechanisms that allow you to provide for accountability and transparency even in conditions of fairly weak governance. The whole process that we call Community Driven Development that involves monitoring, down at the recipient level, is one such mechanism - and it doesn’t bypass government but it compensates to the fact that the government structure that we… Speaker 2: Well, then when you talk about revisions what’re the key revisions that we’re looking at? Paul Wolfowitz: Well, as I said first of all they’re not radical ones. I think the main thrust of the paper is strongly endorsed. I mean even on the somewhat controversial point about how much we should work with Civil Society, there were a number of governments including Mexico, Morocco, and Georgia who very explicitly said this is an important part of the work the Bank does in their country. This is coming from governments, but until the paper is revised, I cant tell you but if you’re -- I would not lead you to expect major changes, it is a little early days to say exactly how it would come out and obviously the Board has to make its decision. I think based on this consultation we’ve a pretty strong consensus on the main points. Eckhard, do you want to say anything about that? Eckhard Deutscher: I agree with your last point, we coming back to where we are. When you’re reading the Development Committee communiqué you can read -- the report should provide report to the governors. This is what we are doing and then we have to have a look at this partly in the discussions this morning one point namely the implementation and this is what we expect that there’s ongoing work to elaborate the implementation, but here I think we need a little bit more time; this means not months but we had an agreement that end of this Fiscal year, this means end of June we’ll have also implementation and then I hope that the process of this strategy of governance and anti corruption is a strong instrument in the World Bank’s work. Operator: Thank you, sir, and next question please. I’ll ask you to please limit it to one question so we can through the list. Go ahead please. Carl Hanlon: Maybe it is a short list. Speaker 3: How will this process change the way that the Bank operates and then in April if the revised paper is approved then what would be the next step there? How would that change as I said, that the way the Bank operates? Paul Wolfowitz: Well, let me try an answer and Eckhard you should step in here as well because I don’t want to presume what the outcome over the next couple of months the discussion is going to be, but I think it is pretty fair to say, first of all, the Bank has been doing this kind of work for a number of years now. It’s not brand new to be doing governance and anti corruption work. In fact by one estimate 30% of our lending has large governance contributions and components in it and I was just in Turkey and one of our important issues there is working with the government and involving civil society and monitoring local government expenditure for example, and that’s a project we started a couple of years ago. I think what the implementation that should follow on the Development Committee meeting this spring will be really taking more of those efforts to a higher level, probably putting some more resources into that work although we also want the resources that don’t -- there’re lot of other priorities and we want to be careful that we’re using it in a high priority way, and that’s circulating some of the new ideas that are coming up here. One of the Board members today said, this consultation process is remarkable and no other organization could have done it on a global scale the way we’ve done it. And I think ideas in Indonesia about Community Driven Development being taken to Ethiopia and used there I think ideas about eGovernance being taken from Mexico and used in Brazil or even in Chad. So, one of the greatest (inaudible) of the World Bank is its ability to take good ideas that are developed in one developing country and apply them elsewhere and this process should give us a better grasp on what the most successful ideas are. Eckhard Deutscher: Well, I think the continued and I think when you ask what will change the operations of the Bank, I think this would be one part of the implementation but everybody knows that the strong cooperation between the Bank and the government on good governance issues - that it is a very strong part of the work of the Bank’s cooperation. What I can imagine is that there are more differentiated focuses depending on the different countries that this anti-corruption and governance strategy takes more part but let me highlight one period of the whole exercise we did and this is my strong impression of the discussion this morning. This all is based on dialogue and not on condition. I think there are when this is supposed, that it is very transparent consultations, this was an open consultation, and with a lot of appreciation of stakeholders in partner countries. Paul Wolfowitz: If I could add too - I think one thing I’m hopeful will come out as processes - empowering staff in the field to have a stronger role in this processes and I think a key part of that is defining for them what is the right relationship between the Bank and Civil Society. I don’t think it’s at all correct that we should limit our work, solely working with governments and as I mentioned quite a few of the governments that we consulted within this processes even said that they want us working with civil society. I think sometimes that is inherited from the past, or a certain reluctant by staff because they feel we’re supposed to only work with government. I think by defining a little more clearly what our mandate allows and what it doesn’t allow, it should encourage I think a more effective partnership between the Bank, government, and Civil Society in a sort of a three-way partnership. Operator: Thank you, sir; we’ve time for another couple of questions. Okay if that’s the end of the questions. Last opportunity. Okay, well gentlemen and ladies thank you very much for joining us this afternoon. Paul Wolfowitz: Thank you. Eckhard Deutscher: Thank you. Carl Hanlon: Thank you.
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