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Development Committee Press Conference

Saturday, September 28, 2002
Washington, D.C.

Also available: Video: RealVideo & Window Media
Development Committee Communique

PROCEEDINGS

MS. ANSTEY:  Hello, and welcome to the press conference for the Development Committee.

I hope that by now you all have copies of the Communique.

Let me introduce the panel.  In the center, of course, Trevor Manuel, Chairman of the Development Committee, and Finance Minister for South Africa.

To his right, my left, Jim Wolfensohn, President of the Bank.

Further left, Massood Ahmed, Deputy Director of PDR in the Fund; and to his left, Tom Bernes, who is Executive Secretary of the Development Committee.

I'll ask the Chairman, Minister Manuel, to make some opening remarks, and then we'll throw it open to questions.

CHAIRMAN:  Thank you very much, and thanks to all of you.  You are exceedingly patient holding on for this this afternoon.

The spirit of the meeting was essentially that we have had a number of important summits.  Clearly, Monterrey was important; the direction given by Doha before that; and of course, Johannesburg.

What these big meetings have done has been to give substance to the development challenge, and so there is a sense that we have jawed about this enough and we must now focus on issues of implementation.  And that comes through very strongly in the way in which the Ministers participating in the Development Committee responded to the two broad themes.  One is implementing Monterrey, and the other is an examination of HIPC issues.

In respect of the implementation, a series of issues raised about how we measure and what we can't measure and how there needs to be coherent funding that deals with the undergirding for development, things that relate to governance and ensuring that systems work, ensuring that developing countries have better statistical systems so that the measurement of change can improve.

Also, exhaustive discussions on policy changes; points that were raised over the last while.  Nobody in the institution is stuck in anything called "the Washington consensus."  So we need an open-ended approach that allows us to evaluate the direction given by the big summits, the notion of what was called "heterodox policies" and an understanding that change will require long-term commitment to countries.

One of the themes which was there in the Spring Meetings in April carried through--Education for All--and it is a Millennium Development Goal.  To effect changes in education, you can't look at once-off donor aid; you must in fact make a commitment.  And the partnership that we are looking for is the kind of partnership that will carry children through what one delegate said, at least 10 years of schooling.  So clearly those kinds of issues are going to be important.

Also, trying to examine the relationship between donors and recipient countries, and looking at the international financial institutions within that--a sense that we must resist the temptation to micromanage in developing countries; issues relating to improving on the institutional collaboration and coherence between the various multilateral institutions; and issues relating to the need to ensure peace and development, because they need each other.

So I think the spirit and the detail of issues discussed was certainly reflective of the fact that we have had these agreements struck both in Monterrey and Johannesburg, and a sense of direction that we now must fulfill by way of a program of implementation.

The Communique that you have received I think reflects exactly that spirit.

Thank you.

MS. ANSTEY:  Thank you.

We'll throw it open to questions.  There are some roving mikes, so that when they come around, if you could state your name and media outlet for the sake of the transcript.

Yes, in the front row--Anna?

QUESTION:  Anna Wiloff [phonetic] from Reuters.

Do you think you've got the $1 billion you need to fill the HIPC fund; and what about the several billion dollars you need to get the 12 countries going on the Education for All program?

MR. WOLFENSOHN:  Well, I'm under the impression that the billion dollars for HIPC looks to be very well taken care of.  We don't have the final results, but my impression at the meeting was that it is well in hand; I don't know whether that's the impression the Chairman got, too.  But I'm not worried about it at all at the moment. 

I think one of the things that came through today was really a new sense of commitment in a real sense of writing checks, and I think that--I don't think we're kidding ourselves on that; I think it was a very real commitment.

The second thing on the commitment for Education for All, we didn't get a commitment, and we didn't ask for it.  But what we did get was a commitment to move forward on exactly the fast-track program, so that by the time we come through next time, we'll be looking at the fast-track program on  education, we'll be looking at AIDS, and we'll be looking at water.  And I believe that--I think there was a very good sense that we should get on with it, and they're now looking to us to come back and ask for what is needed.

CHAIRMAN:  But I'd just like to get in a commercial.  The Development Gateway is an important project.  It speaks of  more than 400,000 various projects.  Amongst those, you will clearly pick up and be able to distill trends in education.

Now, the reality of the discussions here would reflect that it is not just the amount of money involved, but also, there are already a number of lessons that have been drawn.  In some instances, donors have tended to spend on the building of classrooms and schools to the exclusion of books and teachers' salaries.  In other countries, we have found that the differences in the cost of building programs, for instance, have differed so vastly.

So it is not just about throwing money at the problem; it's also trying to improve on the effectiveness of aid, and I think it's important to see the implementation programs tied into a very strong focus on aid effectiveness.

MS. ANSTEY:  In the front row.

QUESTION:  Eric Toure Mohammed, Final Call Newspaper [phonetic].

Going through the Communique, you do state in point number 8 about how you all have recognized the special challenges facing Africa in meeting the Millennium Development Goals, and you expressed support of the efforts behind NEPAD.

There is also great talk amongst the African Ministers, the Finance Ministers in particular this morning and some of those who were associated with G-24 yesterday, who talked about the concern of conflict, particularly the Middle East, and how they feel it is going to affect--if the situation is not resolved, it is going to affect sustainability in their region as well as the support that they are looking for out of the Fund, out of the Bank, on the initiatives that have been agreed on.

One, I want to get your thoughts on that; and secondly, whatever thoughts you may have on the African Union as well and how that may help to effect some of the goals or initiatives that you have in place.

CHAIRMAN:  Thank you.

I think the first point is the interrelationship between peace and development.  And the commitment to peace is certainly one of the important pillars of NEPAD, and within the context, the work that we have been able to do to deliver a settlement in the Democratic Republic of Congo, which has seen a very important peace agreement between Rwanda and the DRC, but also subsequent to that, the withdrawal of troops back to Angola, to Zimbabwe, to Rwanda and Uganda, allowing peace to arrive in the context of the DRC.

This then places the DRC in the position to join the countries who might benefit from HIPC.  They couldn't do so as a country in conflict.

Similarly, the Sudan, where work is going in to ensure that we can secure peace, and then in Burundi.  Angola has almost four decades of war behind it now, and that peace is going to be important there as well.

So within the context of the African continent, peace becomes important, and it becomes a [inaudible] to draw in additional development assistance.

One of the countries close to decision point on HIPC is a country affected by a current spate of civil strife, and that is Cote d'Ivoire, and that is rather unfortunate.  So part of our engagement with the Ivorians would be about ensuring that they don't limit the prospects of their own people to development assistance because of trends taking place there.

Having said that, clearly, the difficulty that confronts all of us is that if there is a risk of war, there is going to be an oil price spike.  Most developing countries are oil importers, and this is going to impact on growth, probably impact negatively on inflation, and therefore on quality of life.

But outside of those kinds of issues, the concern that was expressed in the meeting here was that when countries gear themselves for war, it is fairly easy to spend on a war machine, far easier to spend on the war machine than to spend on commitments that may have been made in the summits, commitments which deal with development needs in countries other than their own.

So these issues clearly have been considered in the course of discussions of the Development Committee, and I think we remain mindful and committed to securing peace as a precursor to development.

MS. ANSTEY:  Thank you.

In the second row, Anthony.

QUESTION:  Anthony Rowley, Emerging Markets.

How much progress has been made on measurement of development, and is it sufficient to satisfy major shareholders of the Bank?

MR. WOLFENSOHN:  Well, I think we have got to be very careful on this measurement question.  There has been measurement going on for a very long time on projects.  OED in the Bank itself is 20 years old; the Quality Assurance Group is 6 or 7 years old.  So the issue is not measurement as a new invention.  The question is how do you have measurement against the context of the Millennial Goals, and how do you relate what an individual or group of individuals or donors are doing in the context of those Development Goals.  That poses very difficult problems of measurement, because the results of an individual group's involvement can be deeply affected by many other groups' activities, or the non-activities of other groups. 

So what we are engaged in now with the Development Assistance Committee, the DAC, and with the regional banks, is to try and see how we can get our arms around this; how can we monitor progress.  And it is an issue also which the United Nations has given over to the--the UN has taken in relation to the Millennial Development Goals to monitor progress.

So I think all of us at the moment are looking to see how you can do the measurement.  It is by no means a finished or an accomplished procedure, but I think all of us are now looking at how you can look beyond projects and programs to measure progress  against those Goals, and it is not yet done.

MS. ANSTEY:  Thank you very much.

Yes, in the front row, please.

QUESTION:  [Inaudible] with German Press Agency.

I'm a bit puzzled on this education initiative.  You say the Bank is asked to report on results.  How is that possible if the funds are not there?  I mean, what sort of progress do you expect between now and the spring, if the funds haven't been pledged?

MR. WOLFENSOHN:  Well, the program that we are seeking to do between now and the spring is to take these countries, present the programs that they have, and fund them.  And what we have to do is to try and determine whether we are funding them, whether individual donors are funding them. 

We are coming to terms with the first time with how do you get a  coordinated approach to funding of the Development Goals as distinct from a set of individual involvements in education.  And that is a new thing for us to do.  We are starting by saying let's go now to the total goal of Education for All; we have taken a series of countries, we have found that there are certain gaps, and now, essentially what we have to do is to go around and test the donors in their individual ways as to how they might help us providing the education that is needed, and to do so and commit for a 10-year period, because it is not just a one-year period which solves education.

What we are not looking to do at the moment is to create a huge education fund.  What we are trying to do is to see how you can get a coordination of effort and a commitment to effort by people that will meet the needs of that country.  And let me tell you that is new ground, and when they say report back, they are asking us to report back on our progress in doing that next time.  And hopefully, we'll be successful.  If we are unsuccessful, we'll report it, and we'll find ways in which we, I hope, can deal with it.

But we are now being put to the test.  If we are asked to do Education for All, we know who the players are, we know what the gaps are,  and we have now been asked to get on with it and come back and report next time.  And I am hopeful that we'll be able to do it.

MS. ANSTEY:  Yes, in the second row.

QUESTION:  Quentin Ray [phonetic], Business Report, South Africa.

Minister Manuel, did you discuss the living [phonetic] food crisis in Southern Africa, and would you like to comment in any way on what can be done to avert it, to stop it becoming a major humanitarian crisis; and if you'd like to comment on your thoughts on some of the causes of it and what can be done to ensure that this doesn't happen again?

I'm talking particularly about the Zimbabwean land reform process in that regard.

Thank you.

CHAIRMAN:  You've come a long way to ask a question.

I think that in looking at the food crisis in Southern Africa, the first point to recognize is that a number of countries are affected by drought, and this touches certainly Malawi, Zambia, Zimbabwe, parts of Mozambique, Lesotho, and a big swathe of Swaziland.  So there is a grain deficit, a maize deficit, of about 1.2 million tons at the moment, and it is this that Quentin refers to.

The World Food Programme is involved in the distribution of maize.  There have been a series of interesting discussions about availing genetically modified maize and so on, and a lot of the decisions there have been taken by sovereign countries, but the World Food Programme is a multilateral under the UN in own name and right.

We didn't spend a lot of time talking about those issues.

On the climatic conditions that created the difficulty, I suppose there isn't too much that we can do, partly because there is in fact a drought that is affecting part of the Midwest, the grain basket of the United States, as well. 

So these issues happen.  Clearly, the matters discussed at the World Summit on Sustainable Development dealing with global warming and so on are likely to have to be considered in respect of some of these issues going forward.

Those drought conditions, of course, impact on prices.  You have seen a pickup in maize or corn prices globally in the last year, and that has impacted also on the ability of countries to afford to provide a stock of grain to feed people.  The issue of Zimbabwe is of course compounded by insecurity in respect of land tenure. 

But I think that what we are seeing in respect of all the countries affected by the drought is that you have had two successive seasons of poor harvest, because the grain being eaten now was in fact harvested about 15 months ago.

So that's a difficult issue that we have to deal with.  You would know that in South Africa, where we are in fact in a maize surplus, we are also affected by prices, partly as a result of deprecation and partly because global prices have ticked up.

So there are issues that we must remain engaged with, and I think you are going to find different sovereign solutions to the problem, and the multilaterals will have to be involved as the World Food Programme is.

MS. ANSTEY:  Yes, sir, in the front row.

QUESTION:  Parasuvrama [phonetic], India.

Do you see more support for the achievement of these Development Goals this year than you have found in previous years?

I also wonder whether it is too early to ask what the dollar cost will be for this, and how much of it will be raised within the countries, and whether you will make sure that the taxes due are collected in the countries, and they don't depend ont he World Bank and the IMF to fund the money.

MR. WOLFENSOHN:  I do think that Monterrey and Johannesburg reaffirmed the Goals, and I think that there was an indication of additional funding both by the United States and Europe in the first round of an amount of up to $12 billion.

My own judgment is that at this minute, the question is not additional funding.  I think if we can get the funding that is promised at the moment, we have enough to keep us going in the near term to try and move forward on the development agenda.

I don't doubt that down the line, if we are successful, significantly additional funds will be needed, and indeed, originally, as you know, the countries themselves indicated that they would go to 0.7 percent, and they are now at a little under 0.3.

So everyone has envisaged substantial additional funding allied with openness of markets and reduction of subsidies, because it's not just the money that is given; you need the other side as well.

So my own view is that I am proceeding  at the moment on the basis that we have enough money at this minute to get launched on the Development Goals, but I believe that once we get launched, we're going to need a lot more money--but I think the time to go for the money is when we prove that we know how to spend it effectively and in conjunction with the developing countries that are concerned.

So I think the issue now is to get started in an effective way, and if we then run out of money against what has been promised, then we'll come back and take another look at it.  I believe that day will come, but I'd like to get started first.

MS. ANSTEY:  Yes, in the front.

QUESTION:  I have a question for Mr. Wolfensohn.  Alex Brommer [phonetic], from The Mail of London.

Isn't it very frustrating that developed countries make commitments at the various summits--they go to Monterrey, they go to Johannesburg, and they make these commitments to provide funds for the Development Goals, and then those funds never arrive, and you have to move around at these meetings with a begging bowl each time--and also that we have so many different pots into which the money goes, and each time, they create a new pot, so that these pots are all competing with each other for the funds to do the job that you need to do at the Bank.

MR. WOLFENSOHN:  Yes.

[Laughter.]

QUESTION:  You can elaborate.

MR. WOLFENSOHN:  Well, if you want me to elaborate, I'd say it is frustrating, but I would say that this time--and I'm really not kidding--this time, I got a sense of much more commitment to action and to writing checks than I had seen before and a much more serious approach to the issues of trade and subsidies.

Now, all that has to happen, but I sensed a rather different mood this time in terms of at least talking about it and, in the case of the HIPC moneys, it looks as though that has been delivered rather speedily, and major countries have already indicated significant sums that they are putting into the  HIPC relief program.

So I think that is a positive development.  When I last heard, there were 15 countries that had indicated that they were part of this process, and they are just passing the hat around now--and I personally am sleeping very well about the HIPC funding.

Would you not agree, Trevor?

CHAIRMAN:  Yes.  I think the initiative was taken; it was bold.  When we spoke about it a few days ago in London, I think that we were still a bit nervous, but I think that we all have a sense of assurance that the commitment is there to fill the gap.

MS. ANSTEY:  Thank you, ladies and gentlemen. I'm afraid that's all we have time for.

CHAIRMAN:  You know, there was a question that I didn't answer, and the question was whether the Development Committee is of the view that the African Union helps our goals.

Now, we didn't talk about it, but I think it would be fair to say that if you have institutions that function well, it facilitates the communication.  If you want certain parts of NEPAD to work, like the bold statement on the peer review mechanism, then, an institution at a political level that supports that kind of initiative facilitates the ease, or facilitates the links between donors and where the money would get to, because the focus of NEPAD is partnership.  So you need a strong institution to match the partners on the other side of the equation.

Thank you.

[Whereupon, at 7 o'clock p.m., the press conference was concluded.]





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