Press Conference with Paul Wolfowitz World Bank President Addis Ababa, Ethiopia, July12, 2006 PRESIDENT WOLFOWITZ: Thank you, and thank you for coming at this late hour. I just finished two very full and very informative days in Ethiopia. It’s a remarkable country with its extraordinary history, its extraordinary culture. It’s a beautiful country. Most impressive of all are the people here. I take away a lot of information and some important memories, but memories particularly of the people I’ve met here, including some of the very poorest people I met, who impressed me with their courage and their dignity, their determination and their intelligence. Yesterday morning in a small village in the Amhara region, we among other things, talked to a young boy who had just received the award for being first in his first-grade class. This kid was 12 years old, going back to school -- or, going to school for the first time, determined to get an education and courageous to do so and obviously working hard. I remember an 11-year-old girl who told a story about refusing to be farmed off into a forced marriage and the support she’d gotten from her school and her church to resist that. We talked with a farmer who’d quadrupled his annual income after losing three-quarters of his land by finding new ways to improve his output. So -- and I guess you should know that I had a chance to talk to a young man who was plowing a field with oxen. I decided to try my hand at it, but not too successfully. The oxen were smarter than I am, but not smarter than the kid. So I think I’ll stick to my job at the World Bank. This weekend, I’ll be going to St. Petersburg for the Summit of G8 countries, and I’m going to be taking the message, the message of the Ethiopian people and the people of Tanzania, where I’ll be visiting next, and from people all across Africa, that the world’s richest countries made some important promises last year at the G8 Summit in Gleneagles. They made good on their promise to cancel the debt of the most highly indebted countries. But there’s still a long way to go in terms of commitment to scaling up aid, and particularly aid for Africa. The World Bank is a global institution, but Africa is the part of the world that needs us the most and is our highest priority. And Ethiopia is a very important part of that picture, partly just because of Ethiopia’s sheer size. It’s one of the largest countries in Africa. It’s also one of the poorest countries. But I think it has a huge opportunity to succeed because of many aspects, but particularly the talents of its people. Too often in the past, Ethiopia’s prospects have been damaged by civil war and war and conflict. I think if some degree of stability and harmony can be achieved, this country could go a very long ways. It would be good not only for the 77 million people of Ethiopia; but it would be an important engine of growth for all of Africa. During this very busy schedule, I met with schoolchildren, with Civil Society leaders, with businesspeople, with health workers and parliamentarians across the whole political spectrum with local officials and Ministers. And I had an excellent meeting now with Prime Minister Meles Zenawi. One of the subjects very much on my mind and on our mind is how to continue, in a transparent and equitable way, to help deliver basic services to the poor. And I’m very happy that the Ethiopian Government has come up with this plan. It’s called the Protection of Basic Services. It’s a little bit of a misnomer, because actually we’re projecting a 30% increase in basic services, which is quite impressive. But protecting delivery of those services through innovative mechanisms to ensure not only that those services are delivered in a fair and equitable way without regard to political differences across the country, but also with mechanisms of accountability and the involvement of Civil Society in providing that accountability that are quite innovative and could set a really good standard for the whole developing world. If we’re successful -- or, maybe I should say when we’re successful, because I’m determined that we will do our part to make it successful, and everything I’ve heard from the Ethiopian officials confirms their commitment to it, as well as from Ethiopian Civil Society. The program focuses on primary and secondary education, on health, on agriculture and on water. The $215 million that the World Bank is committing to this program over the next two years is in addition to $262 million, over 3 years, from the UK (DFID) and additionally from other donors. And the Ethiopian Government has committed that this will be in addition to a 10% increase in their own funds. In addition to that they’ve committed to additionality, they’ve committed to fairness, to transparency and accountability and to fiduciary efficiency. That’s part of an overall lending program for Ethiopia that funds for development $500 million each year. ….concessional financing arm the International Development Association. I think I want to just conclude and say that I’m very aware that Ethiopia has been through a difficult year politically, that it’s attempting a transition to a genuine democracy under challenging conditions, and that doesn’t always go smoothly. As a development institution, our focus has to be on development and poverty reduction; but we can’t ignore the political environment in which it takes place. And it’s very important that efforts continue to have reconciliation among the political parties, and to achieve the kind of harmony and stability that will be essential for Ethiopia’s growth. I think, with that harmony and stability which has been sadly lacking in the last 30 or more years that this country’s history, Ethiopia could go a very long way. And I think it’s not out of the question that where this country might be ten years from now if it can sustain high levels of growth, if it can continue to have transparent and accountable delivery of services to its people and equitable distribution of that growth, that this country could really set an example for all of Africa. And it’s something that’s a little bit of a dream, but it’s not an unrealistic dream. Somebody told me that the great Ethiopian runner, Haile Gebreselassie, another one of these enterprising young Ethiopian school kids, who had to work and eventually ran marathons, his saying was, “It can be done or YITCHAL.” And it can be done, and I hope it will be done and the World Bank is here to do our part to try to help make it happen. Thank you. SPEAKER: Thank you Mr. President – I work for a weekly business newspaper called (Fortune). I have two questions, if you don’t mind about the Bank itself and about relations with Ethiopia. Yesterday, I think you were visiting Quhara and the Government wanted you to see a success story of their economicpolicy. And I think that I have a question – did you see such a story? The Government seems to be unhappy with the Bank, because they like to see the support being consistently sustained. Are you promising today to make it consistent and sustained? SPEAKER: I believe you met the Prime minister and you mentioned in the translation, that you would like to see a sort of a political dialogue that would lead to a reconciliation. ……and whether you were convinced by his answers. So I’d be curious to know, exactly what do you mean by reconciliation? What exactly would you like to see happen? Thank you. PRESIDENT WOLFOWITZ: I’m going to say that I wouldn’t intend to try and draw conclusions from a short visit to any part of a big country like this. I really do think that the evidence of the larger statistics over the last couple of years suggest that, broadly speaking, economic policy here is on a good track. But two or three years of good results, some of which may be the product of good weather doesn’t, isn’t enough, it has to be sustained. That’s why I talked about a ten-year horizon. If you sustain it consistently over ten years, you can make a very big difference. And I do think that from what I’ve seen and what I hear from my own staff here, that this Government is doing an effective job of delivering services to poor people across the entire country and doing it in a way that is, by the standards of any developing country, reasonably transparent and accountable. I think we have shown enough support to this country. It has been sustained over a significant period of time and it will be sustained; but it also requires the right atmosphere and the right conditions in which we forward; and as I indicated earlier and as I indicated to the Prime Minister, the events of last year required us to step back a little bit and to think about how we could operate in this environment to make sure that we were doing for the poor what needs to be done for the poor, but doing it in a way that contributed to political harmony in this country. And I think that the Government came up with in terms of planning for protection of basic services demonstrates a serious commitment to involving Civil Society without regard to political makeup in a way that will bring effective services to the poor. You asked what exactly do I mean. I don’t mean anything exactly. I think political harmony is something that you can sense when it’s there, and you can clearly tell when it’s not there. It depends on compromise by both sides. My impression is that at least in the last few months, there have been compromise made by the both the Government and the opposition, and I would encourage people to continue to do that. It’s perhaps easy as an outsider to say, but it feels to me as though the differences that separate the various political factions in this country really are quite small compared to the stakes involved in providing for economic development for the people of Ethiopia. This is one of the poorest countries in the world, and there is no reason it should be one of the poorest countries in the world. Its people are talented. It has a great deal of resources that can be mobilized. But its conflict that has held Ethiopia back repeatedly in recent decades, and I hope that the different political factions here can see the importance of rising above those conflicts and looking at a brighter future for this country, which I think is real and can be realized. SPEAKER: Hello. My name is Bruck Shewareged from the Reporter newspaper. I would like to know if you discussed with the Prime Minister about the jailed journalists media being one of the vital tools to check the Government… Aren’t you a little concerned that this time around many newspapers are banned and many journalist are behind bars?. PRESIDENT WOLFOWITZ: I think -- I am concerned any time journalists go to jail. And I cannot as an outsider judge the fairness of the charges against them. I do think it’s very important that those accusations be resolved in a timely and open manner. And if there are charges they should be based on solid evidence. And let me say something more broadly. I believe very strongly that successful development in any country, and I think very much in this country, depends on people wondering what the Government is doing with their money. And it is their money, because it comes from the World Bank or comes from other donors, it belongs to the people of Ethiopia. And a free press is one of the ways of guaranteeing that the people know what’s happening to their money. So I hope that whatever happens with respect to these specific trials, that everything can be done to encourage the development of free and open press in this country. It will help development. SPEAKER: Thank you. Ghion is my name and, and I represent German Press. Mr. President, since early this year, donors have discontinued direct budget support to the Government. Now, the Government has plans for delivering servicesas you mentioned earlier in eductation, health ….. And how do you intend to check that these funds are properly utilized. How do you check accountability? Thank you. PRESIDENT WOLFOWITZ: We’re very much counting on participation of Civil Society in the process. We’re also counting on the Government to publish clear and transparent numbers about how the funds are being allocated and what sectors are being allocated in what districts. We talked to the Parliament about having the Parliament participate in providing that kind of information to the public and we’ve talked to the Government about the importance of their commitment to involving Civil Society in this process. It will be, I think, a change. I mentioned, as a former government official, it’s not always fun to have either the press or Civil Society critiquing what you do. But you get a much better result when you open yourself to that kind of criticism. And I think it would benefit the Government of this country to be able to listen to its people and it’s essential for us to know what happens to the money that our donors give us that you people have a say in the visibility of the process. SPEAKER: The objection to finance * (inaudible) by printing money and causing inflation is often hazardous. Could you share your practical experiences with regard to the African countries? PRESIDENT WOLFOWITZ: Some years ago, I think, people used to think that there was a … inflation was a necessary price to pay for growth and that if you had inflation, or, if you wanted growth, you had to live with inflation. I think the experience of many countries, including the successful developing countries is that inflation is really a disease that interferes with growth and makes it very hard for the businesspeople to make rational decisions and that a single monetary policy -- a sound fiscal policy, a stable monetary policy are the right environment for growth. I think this country has been doing pretty well in that regard, and it’s always a challenge to maintain that kind of discipline; but it’s something that I would encourage the authorities to continue doing. PRESIDENT WOLFOWITZ: Okay. Thank you very much. | 
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