Press Conference with Paul Wolfowitz in Benin

Press Conference

with

Paul Wolfowitz

World Bank President

Cotonou, Benin, July 19, 2006

Good evening. It’s been a very busy intense day here in Benin for me, and I wish I had more time because it’s a very exciting country right now. I’m very impressed by the  developments that have taken place here over the last year, culminating in a peaceful democratic transfer of authority from one president to another. That’s a difficult process in any country and it’s thought to be even harder in a relatively poor country like Benin,  but it took place here from what I can understand in part because of a very active civil society, and that’s a real treasure to have that kind of citizen participation.

And I had a very good meeting with President Yayi Boni, and I was deeply impressed by his commitment to reform, his commitment to take this country into a new level of development, and the team that we met with – which we’ll be meeting with again at dinner – seems to be very professional, very capable, very committed. Benin has a lot of challenges, but I think that with the kind of energy that the people have displayed in this recent election, with the kind of professionalism and commitment that the new government possesses, and with strong support from many donors – including my institution the World Bank – that this country has a chance to really show that democracy can work in Africa, that it can produce results for the people, and that Benin can not only in the process do a service to its seven million citizens but I think set an example for many of its neighbors.

So it’s very exciting for me to be here, and I am going to leave here prepared to tell many people that I see who don’t get much news about this country that this is a country they should pay attention to. It’s a country where important things are happening and even more important things can happen if Benin gets the support that it deserves to get from donors like the World Bank.

I also want to thank Diarietou Gaye, who is finishing a distinguished tour here as the head of the World Bank Group, and wish Joseph Baah-Dwomoh all the best of luck. You have big shoes to fill, but I know you’ll do a great job.

I can take a few questions. Actually, before the questions I’m going to just mention a little bit on the development agenda.

Clearly, one of the challenges is in the area of health, and we saw an extremely interesting project this afternoon at the voodoo convent, where traditional voodoo leaders are being encouraged to educate their followers in how to take the kinds of simple but difficult steps that can prevent HIV AIDS or lead to its proper treatment when it’s detected, and even visited a clinic there where women from that group were undergoing voluntary testing.

My understanding is the infection rate here is still relatively low compared to some other African countries, but there are disturbing signs that it might suddenly grow rapidly, and I would really encourage everybody to pay attention to those simple points about using condoms and not having human blood mixed together, and most of all not stigmatizing people who have the disease. It’s a treatable disease. People should be encouraged to come forth and be tested. If they find out they have it there’s something that can be done about it. It’s often something they were helpless to prevent, and society should embrace them, not stigmatize them.

Another area that obviously in my view needs work is improving the climate for business here in this country. The World Bank Group – our private sector arm, the International Finance Corporation, specifically – does an annual thing called the “Doing Business” report that surveys the regulatory climate for business in 155 countries in the world. And Benin unfortunately ranks 129. I say unfortunately because it means that there are a lot of obstacles in this country that shouldn’t be there to starting a business, to growing a business. These are mostly obstacles that confront small local business people. Not so much the kinds of things that a big foreign investor would worry about. I give you one example. The cost of starting a business is 190% of per capital income here. 190% is a staggering number, but of course if you say per capita income is relatively low so 190% is what, something like $650. For any large multinational organization that’s an insignificant sum, but for any woman, let’s say, or a man in this country who wants to take a sewing machine and start a small repair shop, it’s two years income and they probably can’t afford it and one of the results is either they don’t start the business, or if they do start a business it stays in the so-called informal illegal sector, where they can’t export effectively, where they don’t observe the labor laws, where they don’t pay taxes.  The country loses in the process one way or another, sometimes both.

The good news is that many of the things that are identified in that report can be changed very easily, and the reason we do this report, frankly, is to call attention to these problems so that governments can do something about it.

I was in Burkina Faso last year and I called President Compaoré’s attention to the report, and I’m happy to say that this year Burkina is going to come out as one of the best reformers in this area.

The President of Tanzania was in Washington a month ago, and I pointed out that they’re even lower on this list. They are 141 out of 155, and he’s told his officials “I want us to improve.” He made a public speech about it.

So we call attention to this not to criticize, but to put a spotlight on where changes can be made. Changes that will benefit the whole country.

And there are two other to me obvious needs just from this short visit. One is in the area of education. Whereas I understand that the enrolment rates are high, which is a good thing, but the quality of education is poor and the dropout rates are also high, which is a very bad thing, and I think we all need to work together – donors and government – to try to make sure that the children of this country are educated in a way that allows them to have the future that they deserve and the country deserves. If you lose a generation to bad education its something you can never make up.

And finally there’s a lot of need for infrastructure, the drainage project that the Mayor of Cotonou, Nicephore Soglo, showed us this afternoon – and its just one of many challenges.

But I can tell you, having met with a group of representatives of the donor community, that both the World Bank Group and many of the bilateral donors really believe that this country has a real moment of opportunity now, and the donor community wants to support this new government in its efforts to take advantage of that opportunity.

Thank you.

REPORTER:   Thank you.  During your speech you mentioned some of the challenges we have to face and so far your institution has been making some additional effort to help Benin. I want to know, what are the additional efforts your institution is ready to make to help Benin face those key challenges that are hindering its development?

P. WOLFOWITZ:   I’m going to repeat too. It’s not only the World Bank that’s prepared to help, but many of the other donors, and I believe Benin is now qualified for the U.S. Millennium Challenge account grant, which is very substantial. I think that the first thing – and it’s I gather coming fairly soon, and I’ll be talking to the government more about it tonight – it’s not for the donors to come and say this is what we’ll help with and this is what we won’t help with. It’s important for the new government to come forward with its set of priorities, and I think donors should do their best to line up behind those priorities. Some donors may prefer to fund anti-malaria programs, and some other donors may prefer to fund education programs. I’m sure there will be plenty of things for donors to fund, but they should be the Beninois malaria program and the Beninois education program. And I know that the government is open to getting advice from donors, and we have views on many subjects, but I have not forgotten a comment that was made to me by a governor of a state in Nigeria when I visited last year. He said “I’m tired of PhDs from American universities,” he said, “that come here to tell me how to solve my problems and they don’t even stay long enough to learn what my problems are.” This has to be a partnership, and the government – the Beninois have to be in the lead.

REPORTER:   Mr. Wolfowitz, just looking at the region – do you think that the sort of democracy that we’re seeing taking place here, that there’s any chance of that taking legs and moving on through the region, or do you think that this is still quite a long way off?.  Just give me your assessment.

P. WOLFOWITZ:   Both could be true, I mean in the sense that if this country becomes a model for other countries, it’s not something that’s going to happen in a year or two years or overnight. I spent a lot of time in East Asia, and specifically in a country called Indonesia, but also working with many others. And East Asia has gone through an extraordinary development over the last 40 or 50 years. But very little of it happened overnight. It was 4 percent, 5 percent a year – year after year – and those kinds of changes build up. And I think it’s going to take some number of years for this country to show that it’s a success. In fact, I have a little bit of a feeling, having been here for one day, that everybody’s a little bit too impatient, and expectations here may be a little bit too high. You don’t solve problems like the ones this country has overnight. You do solve them by making steady steps forward, and I hope that’s what happens. And if that happens – and I do think it is going to be important in other countries – that if Benin can realize its vision of a clean, honest, accountable government that is responsible to its people and holds itself accountable in elections, it’s going to be harder for a corrupt leader in some other country to say, you know this is the way it is, its because of our colonial history or some other thing that’s fated us this way. I think these examples make a difference. I’ll just give one more story here. We had a discussion with a group of economic policymakers from five different continents, including China, India, Korea, Singapore, Brazil, Mexico, Nigeria – an impressive group of people around the table at dinner – and the subject of, “does it make a difference to have countries in your neighborhood be successful?” And the general consensus was it makes a very big difference. And then the Indian Minister of Planning said in India it even makes a big difference to have a neighboring state be successful. India, of course, is made up of states some of which are 10 times larger than this country. The state of Andrah Pradesh in India is 78 million people. But a successful state can demonstrate to the unsuccessful states, here’s what you need to do to succeed. And I think that makes a difference. But it’s going to take time. It’s not going to happen overnight.

REPORTER:   Thank you very much. We are an underdeveloped country where people believe that elites or white-collar workers are accomplices of the Bretton Woods institutions. Now do you think that these Bretton Woods institutions are really sincere to help lift these countries out of poverty and underdevelopment? Thank you.

P. WOLFOWITZ:   Yes. And as I go around the world I find what seems to me a certain degree of exaggeration – bordering on mythology – that the Bretton Woods institutions are imposing their views. And I think sometimes it arises because we are a convenient excuse for governments that want to do something but don’t want to defend the policy, so they say the World Bank made us do it. It’s true that there are policies that governments may adopt that we will not want to support, but I don’t believe we should be imposing our views, number 1.  Number 2, I think we should all be careful about thinking that we know what works in this business. What works in China may not work in Benin. And what works in India may not work in Brazil. And I still think there’s enormous wisdom in what an old communist, a Chinese communist named Deng Xiaoping said, “It doesn’t matter whether the cat is black or white – as long as it catches mice.” And he meant as long as you’re developing, it doesn’t matter what doctrine you are following. And I think that’s true of all doctrines. But I can tell you very strongly that for the World Bank and for the other donors, its so much more satisfying to be working with a government that has a clear idea of where its going and is prepared to follow policies, even if it requires difficult decisions, than to be feeling that you are dealing with a government that is stuck in the past, that perhaps is defending – even in some respects, defending corruption. It’s a difference between trying to accomplish something by pushing on a door that’s locked. You never get anywhere that way. Versus trying to accomplish something by putting a little extra weight on one side of the scale. When there really is leadership in a country that has a vision of where it wants to go, our role should clearly be the supporting role. And I think we’ve learned that lesson also over many years. And having just met with a group of donors, I can tell you that the entire group around the table said the best way to get the donors coordinated – which is a challenge in every country – is if we will all follow the leadership of the government, then we’ll be following one policy instead of eight or nine different ones. Thank you very much and good luck to this country.