with
Paul Wolfowitz
World Bank President
Monterrey, Mexico, April 26, 2006
Good afternoon, and thanks for coming. It is a pleasure to be here in the city of Monterrey, and it's a pleasure to be here in Mexico. This is my second visit to Latin America as President of the World Bank and the first one to Mexico and Guatemala. Both countries, in very different ways, exemplify the diversity of this region, in their achievements and in the development challenges they face. Both countries also share the legacy of ancient traditions - the Aztecs and the Mayans - whose sophistication and richness continue to fascinate people today. Here in Mexico, Latin America's largest economy and a leading player in international trade, I've had a chance to understand more about the successes of the country and also about the challenges that it still faces. Mexico is the second-largest borrower of the World Bank, a member of the OECD, the group of advanced countries. And Mexico enjoys one of the highest per capita incomes in the region and in the developing world. But, of course, the income distribution is very unequal. Mexico has some of the wealthiest people in the world and also half the population living below their poverty line. There's been some progress in that regard in recent years but much more needs to be done. In Mexico City I had the opportunity of witnessing some projects that represent significant advances in more transparent and accountable government. I visited the e-procurement system for government purchases, and heard a presentation about the government's anti-corruption campaign. I was particularly impressed by IFAI, the autonomous agency which gives ordinary citizens access to public information. I met with three different groups that made excellent use of the IFAI system to push important issues with the government. I must say that the energy, initiative and courage of those individuals were quite impressive also. I would like to congratulate Mexico on these initiatives and applaud the strength of civil society in pushing for this kind of increased transparency. I had an excellent meeting yesterday with President Fox and his economic team. They gave me a first-hand vision of the modernization of the Mexican economy. They were also very open about the challenges of increasing Mexico's economic competitiveness in an increasingly global economy. Indeed, I think in most of the conversations I had with members of the private sector, entrepreneurs, women leaders and state Governors, and with intellectuals, they almost uniformly expressed the importance of improving Mexico's competitiveness and increasing Mexico's growth rate. Part of the answer to that challenge of poverty is to get more growth from the private sector that can create jobs and opportunities for the poor. Here in Monterrey, I have seen the great potential of Mexico and its ambition to compete with the best global skills, global knowledge and global experience. I saw one impressive example of what an energetic government can do to reduce the red tape for small businesses. I saw examples of where innovations can make efficient use of waste materials to produce energy and to reduce greenhouse gases. And I saw a very impressive private housing project that was providing homes for low-income people, and I was very struck by the effect that ownership has on people in terms of building pride and confidence, and the way they take care of the property they own. Tomorrow I'm going to Guerrero State and I will be seeing very clearly the challenge Mexico faces in the fight against poverty and inequality. Mexico has made great progress in reducing poverty thanks to remittances from countries outside the country, and thanks to innovative conditional cash-transfers programs such as Oportunidades. But all the Mexicans I've spoken to have said that much more needs to be done. In Guerrero State I'll be visiting poor municipalities, meeting with indigenous groups and young farmers who have returned to the community land that was owned by their parents. Throughout this visit I have heard from both officials and ordinary citizens about the value Mexico gets from working with the World Bank, and I've been able to learn how much we benefit from knowledge and experience that is acquired here that can be useful for other poor countries. We share a common goal of fighting poverty not just here in Mexico but around the world, and for creating the opportunities for the poor people of the world that they actually deserve. Mexico is a wonderful partner for the World Bank in that fight and I benefited greatly from the exchanges I've had in this visit. Now I'm happy to take some questions. REPORTER: I'm from Reuters. I understand that there's a mission of the World Bank right now in Iraq. Are you considering the possibility of opening an office of the World Bank there. And as well, if you could speak briefly about what you think would be the effects of a tougher migration law in the United States on the economy of Mexico and on poverty? MR. WOLFOWITZ: I think there are clear benefits that come to Mexico from the remittances Mexican workers send back from the United States and from other countries. And I've been very impressed by successful efforts made by the authorities in both countries and by private banks to reduce the cost of remittances that Mexican workers are paying. I think that's been a very positive gain in the last year or two. But I also think clearly reducing poverty in this country, and creating jobs and creating opportunities for the poor here is something in the interest of both countries and that is a reason why I believe is in the interest of the United States, like other rich countries, to support the kind of efforts the World Bank does here. On Iraq, we have a presence in Iraq, it's managed out of an office in Jordan, currently, and we have looked at the possibility, both cost and benefits, of opening an office in Baghdad. We are assessing that currently and now that there is the prospect of an Iraqi government we'll probably discuss it with them. (Break in recording) REPORTER: You are going to Guerrero tomorrow, and there have been problems of violence and drug-trafficking. What's the World Bank's view on this? Is this a problem for investment? MR. WOLFOWITZ: On the second question the answer is clearly yes. And not only for investment. I think it is a destabilizing factor in many ways and I think it's the poor who suffer when there's too much violence. On the first question, it's for the people of Mexico to choose their president, not for the World Bank. We look forward to whomever is the president of Mexico, in working with the Mexican authorities at all levels to deal with these challenges which are really…fighting poverty but also we believe that part of fighting poverty is to improve the climate for business here, especially small and medium enterprises. And that also includes advancing in the issues of transparency and accountability. It includes investment in infrastructure, which this country badly needs in many ways. My guess is that these are objectives that any Mexican government would share, and I hope we can find ways to cooperate with whomever is the new government. REPORTER: What were the results of your meeting with President Fox? Did you reach any agreements? The second is that there are many criticisms from intellectuals that if we hadn't made progress in poverty, it's because of the Washington Consensus and some of the policies of the IMF, and also, in some instances, the World Bank. What would you say to the people who want a change of model k is doing hereto be able to get out of poverty? MR. WOLFOWITZ: Generally speaking, President Fox and I agree on the general outlines of the work that the Bank is doing here, and I think we continue to be strongly supportive of Mexico's development. On the challenge of poverty, all the people I've talked to agrees that it's not an acceptable situation but I think everyone also is a little bit puzzled on what the answers are, but we've seen successful efforts. The Oportunidades Program, which provides with direct cash to poor people in return for their commitments to the education of their children seems to be a significant success and indeed it is a successful program that has been adopted in Brazil and other countries.
(Break in recording)
MR. WOLFOWOTZ: …and how optimistic people have when they see when their children will do better in life. And the other thing that was very gratifying was to see the sense of enthusiasm from all the children I saw and talked to, their enthusiasm for school and studying. We went into one small house, basically a two room house with the kitchen and five children, and I asked the father how did they studied in this small house and he said they sit around this table, and I said, well, they must be very quiet. And he said yes, that's right. So these are children with less advantages than more wealthy children who have their own room, and yet they take advantage of every opportunity that is given to them. And there's no question that the best part of my job, and I think the best part of Isabel's (Isabel Guerrero, World Bank Country Director) job is when you see that something the WB has done can make that sort of difference in the life of young people that have so much to give in the future. REPORTER: The last name of this family is De la luz, which means light in English. MR. WOLFOWITZ: That's nice. By the way, I'm also impressed by the way that when I ask children what's your favorite subject, quite a few say mathematics, which is quite a difficult subject. And I asked some what do you want to be when you grow up and the first one I asked said she wanted to be a singer, the next kid a football player. They were about eight years all and I said have you ever thought of becoming a teacher? But later I met two 15 year-old girls and both of them said they wanted to be teachers. So maybe they get wiser as they get older. REPORTER: How worrying is it for the World Bank the current debate on immigration in the U.S.? In particular, regarding the Mexican workers who live there. And my second question is regarding the issue of competitiveness in Mexico. Some people blame monopolies and telephone companies, and oil firms to concentrate all the resources. Do you share this same view? What do you think is the real problem of Mexico on competitiveness? MR. WOLFOWITZ: On the subject of migration I wouldn't see it as a problem, but I think to the extent that it is a problem the solution is more prosperity and more economic growth, and good jobs here in Mexico, not building walls between the rich and the poor. I would say that as a general matter, though, monopolies really are a drag on the economy and a drag on job creation. And it's hard to be competitive in the global economy if you have to pay non-competitive rates on telecommunications or utilities or anything else. Muchas gracias. |
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