Interview of World Bank President Paul Wolfowitz

with Brian Walker of Associated Press Television News
Washington, D.C., July 5, 2005

			> Print Quality

But it also marks I guess one month since you've come in and taken office here, and if I could just be a little off the cuff, I guess, I know that talking to some of my friends who work here at the Bank, there were some jokes going around that they expected you to trade in the limo and start shuttling around Washington in an Apache helicopter.

[Laughter.]

I'm guessing that there might have been a little bit of a sense of two different cultures coming together here.

I'm wondering how it's been so far in terms of meshing with the institutional side of the Bank.  To develop that a little bit further, what do you want to see done differently here?

MR. WOLFOWITZ:  Well, it's a very familiar culture to me partly because there are certain similarities to both the academic world where I spent 7 years as a dean and partly to the State Department where I spent 8 years.  But most importantly, at different periods in my career including when I was Ambassador to Indonesia, I spent a lot of time on development problems including with World Bank officials.  So I know this institution and I know the very high quality of the staff here.

I think one of the challenges for this large bureaucracy, I suppose like any large bureaucracy, is how to relate the activity day to day to the results that you want to achieve, and I think everyone here would acknowledge it's one of our biggest challenges in part because the result you're really interested in which is poverty reduction and economic development take time to deliver and yet you want to measure your results on an annual basis, and people are working on it and we'll have to keep working on it.

QUESTION:  Have you set some tangible goals though of what you would like to accomplish in terms of poverty reduction?  Say, for example, do you believe that you could match the U.N.'s goal of ending extreme poverty by whenever it is, 2015?

MR.WOLFOWITZ:  These so-called Millennium Development Goals that are part of the U.N. agenda, I think all of us in the development community including the World Bank would like to see as much progress toward achieving them as possible, and they do introduce a standard of performance that wasn't there before to measure how well you're doing.  In some countries people are doing quite well, in others, unfortunately, they're falling behind, and I think measuring that progress or lack of progress is an important part of measuring results.

But you also have to find some intermediate measures of results because you may do a road project and it may be very hard to measure its long-term impact on let's say poverty reduction in a country, but you need to measure whether it was an effective road project or not.

QUESTION:  Some of the criticism in the past of the World Bank's activities have been that there was too much focus on large-scale infrastructure projects, just keep on shoving money down the tube.  Is there a sense, of what philosophy do you want to push as head of the World Bank?  Is there a different sense that you want to get out there?

MR. WOLFOWITZ:  Well, there is no question we need to measure outputs rather than inputs.  An input is how much money you've lent to a country and some of that may actually be loaned to the country or loaned to the wrong people or loaned for the wrong project, and unfortunately it is true that in the past some of that even ended up in Swiss bank accounts or it ended up in white elephant projects.

The truth is I think if anything though, people overreacted and in the 1990s the World Bank largely got out of infrastructure projects, and now we're discovering and we're getting back in, people do need clean water, they do need electricity, they do need roads, and these are generally speaking services that the private sector isn't going to provide or certainly isn't going to provide without some help from the public sector.

So the World Bank is getting back into projects, I think we're trying to learn the lessons from the past, and I think it's important to do that, but it's important to keep at it and figure out how to measure your performance.

QUESTION:  Let me ask you, recently you've been talking about the idea of what Africa particularly needs is not necessarily foreign investment, but domestic investment.  Can you detail a little bit about what exactly you mean by that?

MR. WOLFOWITZ:  Well, it needs both, but there is sometimes a tendency to talk about encouraging investment or even people saying encouraging foreign investment as though the goal was to create opportunities for multinational foreign companies to come and invest.  The goal is to create jobs and especially jobs for the poorest people of the world, and those jobs are going to be created, for the most part productive jobs, by the private sector, but I think experience in successful developing countries says the bulk of those come from domestic private investors, not foreigners.

The two go together and sometimes creating a good climate for foreign private investment helps to create a good climate for private investment in general, but I think it's important that we keep our eye on the whole ball and not just think about what might look like the interests of just large multinational corporations.  I'm not against them, but I think if we remember the goal is to create jobs for the poorest people of the world, then we'll think about it the right way.

QUESTION:  Another term that's been tossed around quite a bit recently is trade not aid.  Again, could you give me a little bit better an idea of what exactly that entails, specifically looking at the idea that agriculture subsidies in the E.U. and in the United States put a lot of pressure on farmers who are especially exporters of food and agricultural goods and such things.

So what can the World Bank do to put pressure on agricultural subsidies but also to encourage trade not aid?

MR. WOLFOWITZ:  Of course, one way to think about this whole subject is the old parable that if you give a man a fish, you feed him for a day, if you give him a fishing pole, you feed him for life.

You want to give people productive means of taking care of themselves, and what was so impressive to me on this recent trip to Africa was how hard people work, how much energy they have, how much intelligence they have, and I'm talking about poor farmers all the way up to business people and ministers.

Those people need an opportunity for the fruits of their hard work to produce a better future for their families, and when they grow cotton and the market for cotton is destroyed by cotton subsidies or they grow sugar or coffee and the market for those products is destroyed by import barriers in developed countries, we're taking away a real opportunity for them to be self-sufficient.  Then you're sort of guaranteeing handouts and permanent dependency which is not what aid should be about.  It's not trade, not aid, it's both, but the ultimate goal is productive employment, and especially for the poor people of the world.

QUESTION:  How optimistic are you?  Obviously, agricultural subsidies have been a huge battleground for decades across the Atlantic.  How optimistic are you that anything can really be done on that?

MR. WOLFOWITZ:  I admit that it's challenging, to put it mildly, but I think it's very important to keep stressing what a problem it's creating for the poor people of the world.  We're getting a lot of attention on the importance of tackling poverty, this is an important part of tackling poverty.  It's after all the taxpayers and consumers of the developed countries who are paying the bill on the order.  It's more than $200 billion a year by the time you combine the direct subsidies and the effective increased prices.  So there ought to be a possibility of some progress.  You're not going to eliminate them overnight, but at least let's start moving in the right direction.

QUESTION:  Recently you've taken to calling corruption a disease in Africa.  It's certainly discouraging I think to conservatives or to anybody who's been following the issue to see how much friction really is in Africa and how much money comes off the wheel as it's traveling over there.

If we take that analogy a little bit further, corruption as a disease, do you see yourself as more of a surgeon or more of a pharmacist?

MR. WOLFOWITZ:  That's a good question, but I've seen corruption as a disease now for more than 25 years starting with close exposure to the problems of the Philippines under Ferdinand Marcos where the corruption was literally destroying the economy.  There are levels of this problem, but I think what is impressive is how much leaders in Africa recognize that it's their problem and they need to work on solving it.

Having said that, it's not just their problem, it's a problem that I think developed countries have a big responsibility for.  If you start and think about it, every corrupt transaction has two parties.  There's if you like a corruptor and a corruptee, and frequently the corruptor is some company in a developed country or some developed country or even a multilateral institution that made a loan to people they shouldn't have made a loan to.  Some of these debts we're forgiving now because they were loaned to the wrong people.

I'm not sure I'd take the medical analogies too far, but I think what is appropriate is to think about analogies from the world of accountants, just keeping an eye on where the money goes, public exposure, transparency, and, by the way, a free press.  I think when people try to say there's a sharp differentiation between economic development and political development, they ignore such things as the fact that when you have a free press you have a check on corruption that isn't there when the press is muzzled and controlled.

QUESTION:  AIDS and malaria, it's certainly become a very important aspect of President Bush's thinking about what to do in Africa.  Can you give me an idea what do you believe that the World Bank can and should do to help some of these regional problems and help develop initiatives?

MR. WOLFOWITZ:  Malaria is increasingly recognized as a killer of almost the same order of magnitude as HIV/AIDS, at least in parts of Africa.  In fact, I was just in Burkina Faso where malaria is an even more serious problem than HIV/AIDS, and I would say it hasn't gotten the attention--probably relative attention that it deserves and I'm glad that it's getting that kind of attention.

I think one of the responsibilities of the World Bank is to keep pointing out to people that you can't just address one problem at a time, you have to put it in the context of an overall country approach.  You have to build up the capacity of countries to manage these problems.  That means if you want to deal with malaria and HIV/AIDS, you also have to have roads so that supplies can be delivered to clinics and so that people can have jobs because when people have jobs they're healthier and they're less susceptible to these diseases.

So addressing it as a system I think is very important.  At the same time, you have to make sure that in that system the right priority is attached to special issues like AIDS.

Education is another major issue, a major priority.  I was very pleased to learn that Mrs. Bush is going to be going to Africa after Gleneagles because knowing her, she is going to call a lot of attention to the challenge of girls' education, and in my view, that's a very important piece of the development picture.  Sometimes when we talk about girls' education or we talk about empowering women, I think some men turn off and they think this is a women's issue.  They're wrong.  It's a development issue.  There is no country that can expect to make full progress if half its population is held back from achieving what they're capable of.

This was expressed to me very powerfully when I visited a small Muslim village in northwest Burkina Faso and I was introduced to a young woman in her early thirties who had taught herself to read in the local language which is called Jula.  She had written out her little speech and with the sort of irregular letters that frequently people who have learned to read late in life tend to use.  I was told she had been elected secretary of her village.  I asked her is it difficult in a Muslim village for a woman to be elected secretary and she said--it was so eloquent I want to repeat it, she said there is no way we can make progress if women don't have equal opportunities.

QUESTION:  I know that was the last question, but my editor will kill me if I don't at least get the basic question that I should have led off with which is you're traveling to the G8 in Gleneagles.  Tony Blair has pushed this issue very strongly.  This next year it goes on to some place else.  What would you want to see at the G8 summit this time specifically.  Then finally, how do you sustain that over the course of every year you've got somebody who's got a different set of priorities?

MR. WOLFOWITZ:  It's important to lock in some of the progress that's been made already, and when people assume that because the debt relief deal was started at the London Finance Ministers' summit that it's a done deal, but in fact those eight countries that were represented in London are just maybe 70 percent of the total.  The other 30 percent have to be brought on board, and having a commitment from the heads of government to doing that would be important, having the commitments reaffirmed to increasing development assistance and particularly for Africa is important.  Hopefully they'll take it a step further.

I think our challenge in the World Bank will be to create a framework in which these increases in assistance can be delivered effectively and in which people will keep this overall framework in mind and remember that it's not just assistance by itself and these other agendas like trade have to move forward.  In that regard, we have a big challenge coming in the Hong Kong Round in December of the Doha Trade Negotiations where it's going to take a lot of work to make progress, but there is no question in my mind that the trade agenda is at least as important as the aid agenda if we're going to help the developing world achieve its potential and help the poorest people of the world have the opportunities they deserve.

QUESTION:  And keeping that momentum going?

MR. WOLFOWITZ:  I hope that Gleneagles will be an opportunity for the leaders of the eight most--I wouldn't say the eight most important countries, there are a lot of important countries, but the eight most developed, richest countries of the world to take on their responsibility to assisting the poorest countries and the poorest people of the world and to do it in a way that hopefully will be sustained in the coming years.  It's a great opportunity.

(INTERVIEWER) Thank you very much.