Media Contact: Washington: Amy Stilwell, (202) 458 – 4906 Astilwell@worldbank.org WASHINGTON, Monday, April 24, 2006 - World Bank President Paul Wolfowitz made the following statement at the final press conference of the IMF / World Bank Spring meetings today: “We had a really excellent session, and I want to thank Chairman Carrasquilla for a terrific job in your first time in this assignment. Thank you very much.
I'm going to confine my comments to the main subject that we discussed with respect to the Global Monitoring Report, and that is the twin issues of aid effectiveness and governance. Last year, donors generously pledged to double aid to Africa and substantially increase aid overall, with the promise to improve our coordination and effectiveness to deliver concrete results. In return, recipients committed to strengthening governance, accountability, and transparency in managing resources.
Efforts to improve aid effectiveness cannot be separated from strengthening governance systems. When governance systems fail, service provision weakens, corruption increases, and growth is undermined. The Global Monitoring Report proposes a framework that helps to define governance and proposes tools for monitoring it. The Report also argues compellingly that the best check against corruption is to strengthen governance systems supported by regular monitoring.
Simply uttering the word corruption drives headlines, but the real issue that we are addressing at the World Bank Group is how to promote good governance and accountability within our lending and project portfolios and in step with our development partners so that we can drive results for the poorest people in the world.
I agree strongly with the comments that I heard today from many of our partners on the need to develop a common approach to improving and monitoring governance. If each donor and each partner country has a different policy and a different system, we will have no policy at all.
Over the coming months, we are committed to working with all of our shareholders to develop the framework of such an approach that can be discussed at our Annual Meetings in September in Singapore. But we have to be realistic. We can't expect that a single anticorruption standard would work in the broad, complicated development environment that we operate in every day. And we should not confuse having zero tolerance for corruption with a requirement for perfection in order to work with us. No country has achieved perfection when it comes to corruption; it is doubtful that any ever will. But what we can expect is progressive improvement over time.
In conversations over the past few days and in the meeting this morning, I've listened to a number of good ideas that I think can help bring us closer to reaching a consensus on governance. Let me summarize them along four key issues: first, the European Development Commissioner, Louis Michel, urged that we work on a common diagnostic tool. In the decades since Jim Wolfensohn first called attention to corruption as a cancer on the development process, indicators and tools and analytic approaches have proliferated.
But if you ask six members from any multilateral development bank, six staff members from any multilateral development bank how they would identify and analyze the building blocks of good governance, I imagine you would get at least six different answers, maybe seven. So we need to think about what policy tools can be used and which ones can be improved.
Which leads me to the second point: we need to focus on building policies and institutions that prevent corruption before it undermines development. Punishment after the fact can never keep pace with the human temptation for self-enrichment. Institutions and practices that prevent and deter are much more important for long-term success.
Third, improving public financial management is essential for good governance, and that includes a range of activities, from training auditors to computerizing public payrolls. And engaging civil society is also a key ingredient. Parliamentarians, NGOs, the media, and a wide range of other groups must have access to information in order to be able to track funds and hold officials accountable.
In my meeting with the African Governors of the Bank yesterday, Nigerian Finance Minister Ngozi highlighted the importance of improving countries' ability to trace and recover stolen funds. An effective system for doing so would help deter large-scale corruption and provide justice for countries that have been harmed in that way. It would also, I might point out, underscore the fact that dealing with this problem is a responsibility of the developed countries every bit as much as the developing countries.
Finally, it is important to recognize that suspending lending is a stopgap measure, not a long-term solution. I am convinced that we cannot merely impose our own solutions. We need to work in partnership with countries to develop mutually agreed solutions and support developing countries in taking ownership of the process.
As Hilary Benn noted this morning, this phase of the exercise may be the most difficult, because we need to weigh how to address an issue such as fraud on a project that otherwise seems to be delivering significant benefits to the poor. But as I have said many times before, we need to keep in mind that corruption is not just a developing country problem. Developed countries carry an equal responsibility. For every bribe-taker, there is a bribe-giver, and often, that comes from a developed country.
We need to do more to address that issue and to hold private corporations accountable for exporting corruption to developing economies. At the Bank, we have been publicly blacklisting firms from both developed and developing countries that engage in corruption in our projects. These lists are available to our development partners and to stakeholders and to the public on the World Bank Website.
These are complex and nuanced issues, but as the African Governors said to me yesterday, we must to develop a common approach if we want to deliver results for the poor. It is an effort that will take some time. When the Bank Group took on the question of developing a safeguard policy for protecting indigenous peoples, it took nine years to reach agreement among stakeholders. Work on the Extractive Industries Transparency Initiative took three years and, in fact, is still a work in progress in terms of signing countries up to implement these standards.
Good governance is perhaps an even greater challenge in terms of the number of stakeholders, the variety of challenges in country conditions, and the complexity of the issues. Corruption will continue to attract headlines, but governance and accountability are the real story, a story with the power to transform the lives of the world's poor.” |
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