Q& A at the Institut français des relations internationales (IFRI) :“Africa: The Road to Opportunity”, October 18, 2006

Q& A at the Institut français des relations internationales (IFRI)

“Africa: The Road to Opportunity”

Paris, Oct. 18, 2006

Thierry de Montbrial: Thank you very much Paul for this extremely stimulating speech. We’ll ask the first question and then we’ll open up the debate. I think we've about 40 minutes until about 07:30, let’s say. I would like to -- try to go a little deeper in the concept of corruption.

Corruption is obviously not an easy concept, so I would like to ask you also from the conceptual viewpoint to try and define a little better where does corruption start? And we’ll give you an example which tries to deal with Africa: one of the most respected chiefs of states from Africa of the last generation was Félix Houphouët-Boigny; maybe you met him yourself, even though you were probably quite young when he…

Paul Wolfowitz: I met his grandson.

Facilitator: His grandson. But Felix was highly respected and when he died I read a very interesting article in ‘Le Monde’ maybe when Andre Fontaine was the editor of Le Monde, I am not sure about the dates, saying that you should know, Houphouët-Boigny had -- wanted to built in his, in the place where he was born, a church which happened to be a replica of St. Peter’s of Rome but bigger. And that place -- the name of that place is Yamoussoukro and I suggest that whenever you go to the Ivory Coast, you ask to visit Yamoussoukro.

So, now there exists this replica which is bigger than Rome, than the St. Peter’s Church in Rome but the interesting point I read in Le Monde was an article which certainly escaped the attention of the editor at the time saying with great admiration, that President Houphouët-Boigny had paid the expenses for this construction from his own pocket, and everybody seemed to find that natural. Of course it was in the name of God, so -- but behind this anecdote there is a point, because I think that for most people in the Ivory Coast and perhaps even you know, he was highly respected and after all, nobody was really asking where that money was coming from and many people found that after all to build such a church was not necessarily critical.

So, this is a just to illustrate the difficulty of the problem. So, could you comment a little bit, not particularly on the anecdote, of course…

Paul Wolfowitz:            They called them presidential libraries where I come from. On a different occasion you can explain to me whether there is any line that goes from that church to the condition of the Ivory Coast today, I suspect there might be. It’s a complex subject; first of all, I think it’s very important emphasis that good governance is about more than just preventing corruption. It’s about making sure that government institutions can effectively deliver to the people what they and it is also about government intuitions that know the right limits of the role of the government, because you could have a marvelously non corrupt government that is relatively efficient at building dams and power plants but makes it impossible for private business to grow and that would be bad governance.

So, it’s a complex subject. Actually we -- in something called the ‘Global Monitoring Report’ published last year, we do it annually, but last year they focused on looking at historical indicators of governance and I believe they used ten different dimensions for trying to measure the subject. Corruption itself is a complex subject. I was American Ambassador in Indonesia 20 years ago for three years.

One of the first things I heard was the definition by a very respected Indonesian General who was regarded as relatively clean, all things are relative, related to the Yamoussoukro probably. He was famous for saying, “Up to 10% is biasa, and in Indonesian that means normal, more than 10% is corruption,” and there is a – I mean I am not defending the less than 10% but there is certainly a scale that makes the difference. Beyond that, it gets into some other things. I at that time was given a tutorial by a man named Bernie Bell who was long time World Bank expert on South East Asia, particularly Indonesia and the Philippines.

He said, “Suharto is an amateur compared to Ferdinand Marcos. Marcos can call up any individual in any ministry and tell them to write a check to anyone he wants to and the check gets written. Suharto at least has to go through the motions of doing things legally.” This was 1984 or 1985 when he told me that and it’s sad to say that ten years later Suharto had learned how to do everything Marcos had done and a good deal more unfortunately; but I mentioned the Indonesian thing because in some ways Suharto did some good things for his country.

There’s no question about it. Maybe 70% of Indonesia’s oil revenues went into real development efforts and you can see it even today in a rather successful agricultural development in Indonesia. I thought 70% wasn’t terribly good, but people say go look at Nigeria, its zero percent there and unfortunately that has been the case. But I think people who said, ‘well 70% is good and the 30% doesn’t matter,’ need to go back and look at what happened when the Indonesia banking system collapsed in 1998. I think in 1997 in large measure because of corruption that had undermined the foundations of the banking system. So, it comes at different levels and different countries can handle it more easily than others. I mean, I don’t know of a developing country that’s had a corruption scandal as big as Enron. But Enron was  at worst a very mild cold for the American economy. Much milder cases can actually, I don’t know, maybe the Ivory Coast is an example that not just hurt the economy but literally tear the country apart. And I think the worst effect it has of all is the demoralization that sets in. One of my Bank staff from an African country said that corruption in my country has destroyed the middle class. The only way you can really take care of your family properly is either to join the government and participate in corrupt activity or leave. That’s a terrible situation when it’s created and what I’m convinced is that more and more people in poor countries understand that and they don’t want the condescension that goes with saying, ‘Oh, well you’re poor so we expect you to behave that way.’  In fact what they’d like is, for rich people to say, you understand that rich countries have some responsibility in this too. So, to make one last comment which I didn’t have in my remarks; it has to do with what can done about dealing with this problem. I think we need to pay more attention to helping poor countries recover their stolen assets; not only does that get the money back to where it hopefully belongs, but it becomes, I think, a really disincentive for people to loot in the first place and that scenario where its very tough, every country has laws in this area that correctly and properly, protect private property. But there should be a way within the law more expeditiously, I believe to trace stolen funds and have them returned.

Audience:   Thank you very much. I would like to follow exactly the point that you made about the responsibilities of rich countries, developed countries and of international organizations like the World Bank or the IMF in stopping corruption because to teach morality and to teach the way to behave correctly to the poor is part of the problem and perhaps the smaller part of the problem. Because we have our own private institutions, our bank, our financial system that have benefited a lot from this corruption and on governance which is an authoritative fact. You are rather unique in what you have started since you took office at the World Bank by applying conditions to the continuation of support to serious efforts to fight corruption. Our own governments in my view including (Inaudible); Second, it is clear that this is a major challenge that has never been addressed; to seize the challenge or the capacity of the beneficial owners of various financial structures in the western world. First in the Anglo-Saxon countries, the Caribbean, the Channel Islands, specifically, if you need a partnership in continental Europe in the city of London, limited liability companies in Delaware, all these structures corrupt leaders, benefit from heightened corruption, especially, in the extractive industries, in mining companies, in oil producing countries to hide enormous amounts and without any (Inaudible) because there is no limit on these financial structures or transactions. So I have two questions. Don’t you think that these international communities, starting with your sister organization the IMF should seriously start to fight (Inaudible) for financial accounts and all the privileges of off- shore island countries. And, second, don’t you think that the World Bank should have the legal capability to sue banks to try to recognize money that has been diverted by beneficiaries of World Bank support and have diverted this money for their own private gains? And it’s clear in my view that the World Bank would have more legal capabilities to recover assets than the government of Equatorial Guinea or Nigeria.

Paul Wolfowitz: I guess my answer to both is probably yes but, they’re -- and I think those are exactly the kinds of questions that we should be addressing and addressing seriously and I don’t think we have yet.

I would say that first of all, it’s not our job -- I think you used the word to teach poor countries -- we’re not in any position to teach and when you hear somebody like Nuhu Ribadu and by the way, I really will encourage you, if you go to the World Bank website you can find the transcript of the panel discussion that he participated in with Paul Volcker and the chairwomen of Transparency International, in Singapore. It’s really quite stunning but he is the best of a very distinguished group. I mean this is a person who can teach the rest of us, he doesn’t need teaching from us and he’s got his life on the line. I think, that it is very important that we set an example and I think it’s of also great practical importance that we make it as difficult as possible for people who hide this kind of money and after all, the fact that it’s difficult to find it should not become an excuse for not making the effort. I don’t think anyone would say that because it’s difficult to find drug money or difficult to fight terrorist laundering that therefore we should just let narco-lords and terrorists move their money freely around the world.

We should make it as difficult as possible; we might even make it very, very difficult. And in fact I do think there’s some promise because the phenomena of money laundering, both for narcotics and for terrorism I think it made people a little more open to looking at this issue of banking secrecy in a -- what I think is a more appropriate way. So, I think the answer particularly on your 1st question is probably yes, but it’s complex we need to figure out how to do it.

On the question of whether the World Bank should be in a position to sue, I’m not as sure. We do have means of getting recovery from governments, but that only then puts the burden on them to get the recovery from culprits and frankly sometimes we’re up against the problem that the evidence that we have is evidence that we have to keep confidential. So, I will definitely look at I mean I -- as I said earlier, I think these are very important issues and if we can show progress on it in addition to being valuable in itself, it’s I think great moral encouragement for people who are dealing with this problem on the front-lines in more difficult ways.

By the way, one more thing though if I can say; just to say that, I mean I was in Norway just on Monday and the Norwegian State Oil Company was caught out, giving a bribe to officials in Iran I believe it was and they’ve been fined by the Norwegian government and fined by the US SEC and those fines will not now be written off on their tax forms. Seven or eight years ago they could have claimed tax exemptions for those bribes. So, I think there has been progress, I think the UN convention against corruption is progress and it’s essential to underline this, because it is such a tough problem and it never goes away completely. I mean human greed doesn’t go away, so people will look for opportunities in all countries to do things they shouldn’t do. So, the only way you make progress is step by step but that shouldn’t be a reason not to take the steps. Thank you.

Host: Thank you very much.

Speaker:   Philippe Montigny a member of the French Council of Investors in Africa and I am the chairperson of its working group on preventing corruption.

First of all, I am happy to report that we have excellent discussion with your colleague Pascal Dubois today at the MEDEF and yesterday on your action to fight corruption. It was actually very very convincing.

I would like to share with you a concern. We French companies do share your commitment to fight corruption. We all know that there is direct link between corruption and poverty, that corruption is a great handicap against progressing. Now, we have a major concern in Africa and we observe that many of our French companies are (Inaudible) to them. The market of the African countries is usually quite small, the risk of corruption is very high and in front of us we have companies coming from countries like China, Pakistan, India, and (Inaudible) convention that prevent corruption. In France as of September 2000, paying a bribe is now a crime, it was before (Inaudible) now it is a crime. So, doing business with Africa is now more and more difficult and what we observe is that companies which want to be clean have more and more difficulties to do business and they are giving a premium to companies from China or from India who do not respects the rules and moreover who do not respect rules concerning the empowerment, social rights and so on. What do you think you can do to speed up the process because I’m quite afraid that in the coming years those companies will be more and more numerous. And, while I am here, I am happy to give you this book which I just finished last week on enterprise and anti-corruption and which shows French commitments of French companies to follow your action. Thank you.

Facilitator:   So, that will help Paul to improve his French. But, Paul before you answer that question I would like to add a footnote, because you alluded to China and other foreign countries you know are trying to develop their activities in Africa, but of course in China itself the problem of corruption not only in China is very important and Hu Jintao himself has declared fighting corruption as one of his highest priorities for the next 10 years. But if I mention that it’s for two reasons, one is the problem about the specific problem your raised the other one is the example of China and other examples the extra style in other countries in Asia show that including, but the way Indonesia when you where there, show that a certain amount of corruption does not necessarily impede growth, economic growth. It may have an impact on the income distribution and other aspects but I think it would just be wrong to say that corruption as such plays systematically against economic growth. That was a remark in passing but perhaps you can also comment on that.

Paul Wolfowitz:   Let me take that one just first quickly and I think -- I’m quite aware that some countries have done quite well with reasonably high levels of corruption, but any country would do well with a 48% savings rate like China has and I suspect that if China had no problems with corruption that -- believe it or not, they’d be growing even faster. It’s hard to believe, but I think they would, and any country that saves 50% of the national income is going to grow fast. And it’s interesting and striking to me when I press Chinese officials about, “What have you found most valuable over the years working with the World Bank?” They most often tend to talk about things that we’ve helped them with in the area of governance; things like improved procurement practice, things like improved accounting systems. The leading economic reformers in China from my contact with them understand that good financial governance; good economic governance is part of their success. It doesn’t mean they don’t have a long way to go but they have come a long way already, and I think that’s important; and I would also add and this now gets in partial answer to your question but only partial. Not all Chinese agree on Chinese policy that may amaze you but unlike France where everybody agrees with the government, in China some people actually don’t, or the United States. I’m sorry I tend to be facetious I hope it’s taken in the right way. I have actually had Chinese officials express concern to me that what some of their people are doing in Africa is harmful.

And I think what is very important is to try to work with China particularly, but with every country that’s sort of new in the development business and maybe tell them look we prefer you not go and make the mistakes that the United States made when Mr. Mobuto -- there are other ways to get access to resources, you don’t have to throw $5 billion into somebody’s Swiss bank account. And I think the general proposition is that transparency, and exposure, and shaming people has a reasonably powerful effect. It’s not magic, but I think it is possible over time to try to work to bring some of the outliers into these systems.

You mentioned environmental standards and I think that to some extent does present the sort of dilemma. We have led the way in articulating these things called the equator principles, which are principles on which banks will, among other things, decide which infrastructure projects they’ll lend to depending on the environmental standards that are met. And I think something like 80% of commercial banks in the world I don’t know whether it’s by volume or by number have subscribed to the equator principles. The big concern is the other 20% will now get all the lending because they have lower standards.

You don’t want to set the standards so high that, that happens, but you don’t want to have no standards at all. And I think sort of getting that balance right is important. I do think that when it comes to anti-bribery laws, at the end of the day, the things that the French companies, or American companies, or other companies that are not offering bribes, the things that they bring of different value, and I think particularly with technology and human resource development, can to some extent compensate. Again I go back to what I observed in Indonesia. I was kind of surprised given this was 20 years ago, and American companies were unique in being under the Foreign Corrupt Practices Act. I was surprised that they had as powerful a position in the Indonesian Oil sector as they did, and the explanation seemed to turn out to be number one, they had the best technology and Indonesians wanted it, and secondly they trained Indonesians to do the work; so that you would actually find in the Chevron subsidiary in Indonesia the CEO was an Indonesian, unheard of in the Japanese companies. I am sorry if I offend anyone but that was a fact. You would find shop foreman who were imported from Japan. Yes, they would have to pay a bribe to the Labor Minister to get these people work permits but they did that.

I guess what I am saying is that where bribery is a problem, rather than succumb to saying we all have to bribe I think it’s much better to try to compete in other ways. And I think eventually, you know, again, to take your Indonesian example. Indonesia is paying a very high price now for corruption and they know it. Their levels of foreign direct investment in Indonesia are way below what they could be and probably would be if there were a better climate for investors and particularly more honest legal enforcement. So, there is a kind of market that works here and it’s not all the forces that are negative. but I’ll ask my French teacher to help me with your book.

Speaker:   Just read the book (Inaudible).

Facilitator: My name is Michel Petit. I was the Director of Agriculture in the World Bank in the 90’s. I have two questions if I may. The first one is to do with agriculture; you barely spoke the word, even though your credential as a supporter of agriculture are well known. So I was a little disappointed. That’s not important. Can you explain why this disconnect? And the second question, in your examples of reasons for books you mentioned quite a few countries. I noted that out of the francophone counties you mentioned only Burkina Faso. And it brings in a single bound danger bell in my own mind, my own impressions, and are only that. Clearly in several of the examples you gave, show that there is a movement towards good governance several forces taking part in various dimensions. That movement, in my sense, is taking place in the Anglophone countries and some but much more little is taking place in the francophone countries. And if I am right in that, I would be happy to get your judgment from that, that’s my question. If I am right this is worrisome for the francophone countries.

Paul Wolfowitz: Okay let me try both. I could just say I didn’t have time in a short speech to mention everything and I didn’t, but it’s more than that unfortunately, I think. When I came in the Bank last year, a friend of mine who is an agriculture economist whom I have known for a long time and who worked for the Indonesian government for a while, brought to my attention the enormous decline in resources -- in the World Bank and even worse in USAID and I don’t know about other development agencies – and a decline in the emphasis on agriculture. He taught me a term that I never heard before which is orphan crops which are Africa’s specific crops for which no one spends the time or money to develop miracle versions because they are only grown in Africa and people ignore them.

Maybe there are more sophisticated analyses that say something different but it seems to me it’s pretty hard to look at what happened in East Asia and not say that it had something to do with the rice miracle and the whole development of agriculture that provided a foundation on which a lot of other development took place. So I actually said in my speech in the annual meetings last year that I though we needed to increase our emphasis on agriculture and as you might imagine all 10,000 of my staff members saluted smartly and said, “Yes Sir” and didn’t do anything. It’s not quite that bad but I had to admit to the annual meetings this year that I felt we needed to do better in that area; that progress has been in my view disappointing; maybe it’s hard to do.

I hope if I am here next year I can give you a better answer to that question I really do believe it’s important and maybe if you have ideas in this area, you should write me about them because I am looking for help.

I have compared the World Bank to a great ship like a super taker and fortunately, it’s generally headed in the right direction because if it weren’t, it’s very hard to steer it off to change course and my main effort is to try to get us to speed up in general on the things that we are doing, but in the case of agriculture at least a modest score shift I think would be in order. I did mention Rwanda which some people consider francophone. I could have -- I don’t think I mentioned Mozambique, I could have -- that’s neither Anglophone nor Francophone; I don’t know if there is something systematic.

If you think about -- which four did I choose and it was slightly random but not entirely --- I had Tanzania, Ghana, Burkina, and Rwanda. Okay so, if you stop and think about that I mean actually the amazing thing is that Rwanda could make the list at all after it’s history. What is less amazing is that you stop and think Ghana, Tanzania, Burkina Faso, whatever problems they have had, and they have had some unbelievably bad economic policies over the years; especially Tanzania, and Burkina. They have had astonishing degree of social peace and harmony and when I went to Burkina last year and first, I learned a term I never heard before, which is Burkinabe nationalism and I learned that the Burkinabes are fiercely nationalistic, well that was news to me.   I told you what I didn’t know. Then I leaned that they have 64 different languages and the population roughly evenly divided between Muslims and Christians. So I thought well this is an interesting variant of nationalism when there is a sense of national identity across such differences. And I looked for explanations I am not sure that any of them are completely satisfactory but the fact is that this is a country that has enjoyed not total -- but an impressive degree of peace and stability over a long period of time. So has Tanzania, so has Ghana.

One of the problems for many African countries is the wars that have ravaged them and many of those I’m afraid to say are the product of the cold war maybe that’s why the number has gone down. One set of numbers I used as it was 16 five years ago - it’s five today. You can count in different ways, but Sierra Leone and Liberia now have a chance to make progress that was impossible when war was raging there. And when I think about Ivory Coast, Chad, and Central African Republic and by the way one could put Senegal on the list of countries that are on the good performing list.

I have to look at the total list and see if there is something systematic there I don’t know if there is but  -- let me just stop with that. I think it -- no I won't stop with that -- I think what the question you have raised in a broader way would be if we look at the 15 or 17 that have been doing well. Are there factors that have put them on that list? They could be factors that we can influence in other countries and I think that’s the important question.

Speaker: (Inaudible) on this question of national identity and diversity, in particular in linguistic diversity that is also a very interesting case although it is not in Africa, that’s India of course and just in passing how would rate India in the scale of governance?

Paul Wolfowitz:  I am not sure that -- I’ll retreat to my multidimensionality. There are many different dimensions and they don’t aggregate very well. I think one thing that is just very impressive about the Indian performance and by the way this is also true about Tanzania is about 15 years ago they realized that the sort of state centered, central planning concept that they had was failing. In their case they looked at the Chinese and they said, “Wait a minute, the Chinese have learned something and let’s learn from them.” And they have instituted some very impressive economic policy reforms; that’s a case of good governance. If it comes to their legal system, their courts are absolutely clogged. It’s almost impossible to get a case decided in India so that’s a dimension on which they have a lot of work to do. I have said jokingly to my Chinese and Indian friends as well as you’re doing, China could do even better with less corruption and India could do even better with less bureaucracy and I guess I’ll leave that there.

Facilitator:   Well of course there would be a lot to sell. We have now about 10 minutes so we will take two or three questions and perhaps, Paul you can answer and wind up together. So, sir, you’re the first one, then behind you.

Speaker: Thank you very much. My name is (Inaudible – Richard Nana?). I am an international consultant. I work with the financial art corporation that worls towards promoting good business in Africa. And I also run a small political anti-corruption issues group for the majority part in France and the group that hopes to be the majority group after next year’s election. My question to you is that I’ve listened carefully to your speech and I think you have set the right priorities for Africa and you’ve said most of the right things but my point is that all the high-level officials such as yourself have said the right things to (Inaudible) and on the ground we haven’t seen many results. And you of course know that the development of African depends mostly on Africans themselves, not necessarily on policy or representation, but on your level, at your position as the new President of the World Bank, what do you think makes the basic difference now that we will go past beyond saying the right speech and making things improve on the ground. Because even in your speech, you’ve said some statistics that show on poverty issues African is still very far from reaching its goals.

Facilitator: Thank you, so that’s question number two behind you.

Speaker: Jean-Claude (Inaudible) professor of economy at the Sorbonne. Mr. President, when you talked about the health problems, you mentioned what you called the big three: HIV/AIDS, malaria and tuberculosis, which are those diseases which make the headlines.  But, when we look at infant mobility, there are lots of other diseases such as respiratory infections that have a very strong impact on the health of children and the impact on development. My question is, what would be the right balance in your strategy? Would it be to concentrate on the big three which may cut out the other sectors of the health system, which we have observed in many countries, or will you also pay more attention to the other diseases?

Speaker: Thank you very much. And, the last question at the back of the room.

Speaker: Yes, Patrick (Inaudible) from NATO. I just want to say one thing, that good governance was a very critical issue, but indeed when we are talking about good governance, do we also and are we implicitly thinking to see the civilian part of the development and the administration? After all, what about the security sector? I’m thinking about the armed forces and also about the police. And I have a few questions for you. Do you think that the issue of good governance of the security sector is critical or less important than the (Inaudible)? Second question, do you think an institution, like yours, the World Bank, acts on the good governance of the security sector and (inaudible)? And third, do you think that the international community of institutions specialized in aid and development is sufficiently helping the issue of the security sector? Thank you.

Facilitator: So, again you’ll ask -- I will add a footnote.

Paul Wolfowitz: Yes, no, no.

Speaker: So, perhaps you can elaborate a little bit further. And talking about the relationship between civilian and military, what do you think of countries such as Thailand or in Africa, on the African continent, Algeria where the relationship between business and military activities is to say the least ambiguous. In fact it is not ambiguous.

Paul Wolfowitz: You can add Indonesia to that list. Let me take the first question last because in a way it’s the most important question the one you asked. The question about the balance and health strategy is a very important question and in illustration, I think an anecdotal illustration of just how bad it can get if you do it the wrong way was a story someone told me, and I’m told its true of visiting a clinic somewhere in Africa and there was a refrigerator full of anti HIV/AIDS medicines paid for by the Global Fund and shelves stocked with medicines that needed to be refrigerated that weren’t paid for by the Global Fund. That when you focus entirely on just one problem, it not only that you may neglect other problems, you may actually make the other problems worse was the point.

Put in a less dramatic way, there’s a lot of attention to what in the development business people call vertical funds which are funds that are aimed at a particular disease and not enough attention to the health systems as a whole, which in a way goes even beyond your question about minor diseases. Even if you’re going to treat HIV/AIDS effectively, if you don’t have doctors and nurses to administer rather complicated treatment, you will actually make the problem worse because, as I understand at least, the virus begins to mutate if the anti-retro virals aren’t administered the right way and you get something that’s even harder to treat over the long term.

So having effective health systems is critical and in most African countries the health systems are really deficient. In some ways, from a sort of a strategic point of view in the World Bank Group we think of that being our principal response, not responsibility.I am hesitant to say that because it’s more than we can’t be accountable for, but at least our principle focus needs to be on trying to strengthen the health systems. But, I also think that if we could take one disease and malaria strikes me as one of the most promising and begin to track what’s actually happening in a way that nobody does today on any disease.

So, you have all these donors doing different things and at times it -- I guess, this is again another way of putting your question, at times it feels like watching eight-year olds playing what you call football, and what we call soccer and the ball goes to one part of the field and 22 players including both goalies go chasing the ball. If the ball is HIV/AIDS this year then everything else gets neglected. But, we don’t even keep track of what people are doing and I think, if we’re going to get that kind of balance right then what we need that we don’t have now is a statistical base of what different actors are doing in each country and I’d like to start and try to do it on malaria. We’ve pushed very hard, we’ve made some progress in that regard. I was just in Geneva yesterday at the WHO getting briefed on the work we’ve been doing collaboratively with them to develop what we call the ‘Malaria  Scorecard’. If we can get a malaria scorecard maybe we can also then get a scorecard for other diseases and begin to do this systematically. But, I don’t have -- there’s no magic answer here.

I do think there’s one other point to be made about balance and health strategy and that is the people that are the most likely to get it right I think are the people in the countries themselves. And one of the best coordinated HIV programs that I have encountered is in Rwanda because the woman who runs the Rwandan HIV program is very strong willed and very effective, and she tells the donors what to do instead of what happens sometimes when the donors pick their separate targets. There’s no substitute for well-trained capable people in the countries themselves who will take the lead and then the rest of us should try to follow because I think they’ll have a better sense of where the holes are.

I think the security sector is critical. I think partly I have said it already when I talked about the fact that I think things have done better because the number of conflicts in Africa has been reduced (Inaudible)…

There’s nothing, I think, more harmful for good governance not to mention corruption then a lot of people with guns and no money, they’re not much better when they have guns and money. So, some degree of reform and discipline is needed there. Can the World Bank influence it? We do some important things a bit at the margins but we administer some pretty successful demobilization and disarmament programs; one in the Great Lakes Region; one I believe in Sierra Leone. So, that’s not a minor thing getting people in post-conflict situations to willingly give up their weapons and go into productive employment. But, I think one of the problems is that people who go into development work, and I understand the sentiment, would sort of like to leave these messy issues in somebody else’s hands and the people who deal with these issues tend not to think about development enough. I think it’s a gap and I think again I think there has been some progress in filling in. I think the end of the Cold War actually helps in this respect, but I think more work needs to be done.

And I think I am going to avoid your question about military and business because I am not sure where I would go with that. Finally, why is this different? I came back from my first trip to Africa and I had a town hall meeting at the World Bank with -- about as many staff present as were in this room and I made the mistake, first person I called on I should have called on a younger person and I am actually -- I am the only person, never mind, I won’t talk about age -- I was older than anyone in that room I thought, except this man was a retiree so he was actually older than I was. And he asked a question something like, you know, I have been around here since 1920 something. I exaggerate only slightly. And we’ve heard all this before and we’ve seen all this before and nothing is really very different. And the answer I had to give him was maybe you’re right.   I know things didn’t get bad by accident, I know that people have been trying very hard for many years to help Africans improve their lives as other people around the world but I think something really is different and I believe that it’s a new generation of African leaders. I think you would not have found as many African leaders who were willing to take on the challenge of governance, as many African leaders who were willing.

Paul Wolfowitz: But let me just say, I think its different and the finance minister from an African country said to me and I thought this was just a wonderful thing to hear, he said, we have to stop talking about our terrible colonial past, yes it was awful, yes slavery was awful, but our future is in our hands now and we have to do something about it. And I think if you look at countries that have made progress, take China as a stunning example. I mean, the colonial history of China included a war to keep China open to drug trade, it included the Japanese invasion, it was absolutely horrible but the Chinese said okay, our future is in our hands. I think more and more Africans are saying the same thing and what they need now is -- to use some American slang is a hand up -- not a hand out. Thank you.

Speaker: Thank you very much. I would like to end quickly with two or three words. First of all you, are the only one who mentioned the Pentagon. Second, you said that there is at least one question that you did not answer and you said that you’ll think about it and give us the answer next year, so I invite you to come back next year. And last, although I did not expect it, I would like to tell you and our friends, the title of the book of mine which will come out next month and the title in French is Il est necessaire d’esperer pour entreprendre, that is something like “hope is necessary to undertake anything” by the way, and I think you illustrated that very well. So, thank you very much.

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