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Development Committee Press Conference

Washington, D.C., April 21, 2002

 View the press conference using Windows Media Player

PROCEEDINGS

MS. ANSTEY: Hello, ladies and gentlemen. Thank you for coming.

Welcome to the press conference of the closing session of the Development Committee.

Let me introduce you to the panel. In the center is Minister Trevor Manuel, Finance Minister of South Africa, who will be making some opening remarks on the Communiqué that you all read.

To his left is Anne Krueger, First Deputy Managing Director of the IMF; and to her left is Tom Bernes, Executive Secretary of the Development Committee; and of course, to my left, Jim Wolfensohn, President of the World Bank.

Minister Manuel.

MR. MANUEL: Thank you very much.

Good afternoon to all of you.

The focal issues for the Development Committee were, broadly, to examine aid effectiveness. Here, I think the timing of this meeting, coming as it does so soon after the Monterrey Conference, is important. The Consensus was very widely considered and very widely supported because the Monterrey Consensus is about establishing partnerships, and it is about enhancing the situation where developing countries take ownership of events in their own countries and use that for going forward.

And then, a very important element reflected in the Communiqué as well is NEPAD, the New Partnership for Africa's Development, as a model for the kind of partnership we talk of going forward.

Clearly, the sense that one has coming out of this Development Committee now is that we need to move beyond the broad and general theoretical discussions. We need to get into practical issues. We need to examine the way in which we measure, and we need to in fact expand on some of the changes that have taken place within the work of the Bank and Fund over the last few years.

In particular, the introduction of the HIPC initiative created an approach where countries started to take ownership very strongly through the Poverty Reduction Strategy Papers, the PRSPs. That is a very important methodology. It has developed organically within the institution, and that kind of method now presents itself to us as one of the ways in which you can actually measure change directly going forward.

I am sure that Mr. Wolfensohn may say something about that in a while.

The other issue that we looked at beyond aid effectiveness is of course Education for All as a key brick in the building of development and democracy but also as one of the Millennium Development Goals. And very strongly, the Committee today asked that we put in place what we can measure, changes that we can measure, and that we return at the next meeting with some positive changes and a program that would allow for the direct measurement of improvements in education in a number of pre-selected countries.

Thanks.

MS. ANSTEY: Thank you very much.

We'll throw it open to questions. Please don't forget to state your name and media outlet for the transcript. There are some mikes around the room, so if you can wait for them to come around.

It is very difficult to see with the bright lights beyond the second row, so if you are in the back, you need to wave something.

Yes, in the front row here, Harry.

QUESTION: Harry Dunphy from AP.

This is a question for Minister Manuel. I'd like you to confirm what I am told that you said in an interview that with regard to IDA, you feel that the developing countries were not sufficiently consulted with respect to the differing views on whether there should be grants or loans, and that in some quarters, this is viewed as some kind of plot to do away with the World Bank.

MR. MANUEL: Well, I said that the discussions on IDA and the percentage of grants versus loans has tended to be a North Atlantic discussion. It is important that developing countries be part of that, because the earlier in the process we can get developing countries and grant recipients, or recipients of countries or of concessional finance involved in the decisionmaking, the stronger the basis for development going forward.

MS. ANSTEY: Yes, the gentleman here in the second row.

QUESTION: Mr. Wolfensohn, you made some comments critical a few days ago of the increase in U.S. steel tariffs, and your statement here talks about the need for coherence between trade and aid. Has this issue been brought up in the G-7 meetings? I saw no mention of it in the statements.

Have you pressed the case for reducing developed country obstacles to developing country exports? You were saying yourself that it is almost--that the advantage of pressing on with greater aid--and you've got some very fine initiatives, like the education initiative--is eroded somewhat if you don't also make this effort to open up developed country markets.

Has there been progress on that?

MR. WOLFENSOHN: Well, I wasn't at the G-8 Meeting, so I don't know what was said there in relation to steel. I can tell you that I have vigorously asserted the need for open markets on trade. I did so at my earlier conference here, and I will continue to do it during these meetings.

But I think that there was a general consensus at the meetings that trade, openness of trade, is a necessity if you are going to deal with the question of development. And I certainly did not diminish my efforts on that subject, but I have to tell you that it was constantly raised by many of the people around the table, including many from the developed world.

So I believe that now there is a call for action. The issues are very clearly on the table, and we have to see the results of Doha, but I hope very much that there will be results before Doha.

MS. ANSTEY: Yes, in the second row.

QUESTION: Christiana Urli [phonetic], German Press Agency.

What happened to the fast-track plan on education, 10 countries getting money to serve as a role model for Education for All by 2015?

MR. WOLFENSOHN: A great deal. We got total acceptance of it at the meeting. We have agreed to come back in September. I have to tell you that I was extremely heartened by the support from everybody, including from the United States and from the European--well, really, from everyone--that we should select these countries and bring it to the meetings in September.

There were early indications of support. We were not looking for any particular sum; we were looking for a green light, and we got it very vigorously from everybody. And it is up to us now to come back and work with the 10 countries on the fast track.

So I took it as a total endorsement of the recommendation.

MR. MANUEL: But in fact, the spirit of the meeting was taken further and is captured in the Communiqué, and the spirit was how do we explain to others that we have waited until 2015. So some issues in primary and secondary education and a very strong gender focus should be brought forward, and we must develop a set of very clear targets for 2005, and that is what we have to come back on. So the spirit in essence has in fact gone further than just the Millennium Development Goals.

MS. ANSTEY: Yes, in the second row.

QUESTION: This morning from this table, we heard a request for a billion-dollar down payment for education. Was any money specifically set aside, or is there no need at this point for that?

MR. WOLFENSOHN: We made no such request. Our colleagues from Oxfam did. There are already a couple of volunteers. I have learned that we are better-off to come with the program before we ask for money. And frankly, I am not at all disappointed by this morning's discussion. I took it as a very, very positive endorsement, with no strings attached, and I think it is up to us now to come back in September.

There were already some--two countries voluntarily said that they were ready to support, but we did not go around the table calling cards.

MS. ANSTEY: Anna?

QUESTION: Anna Willard from Reuters.

You say nevertheless you need $2.5 billion or $2-$5 billion for education and some more money for HIPC as well. Do you think you are going to get any of this, and when do you think you are going to get it?

MR. WOLFENSOHN: Are you asking Mr. Manuel or me?

MR. MANUEL: Carry on, Jim.

MR. WOLFENSOHN: I think that the mood this morning, there is a lot of evidence that we are going to get the money that we need. I mean, the international community is absolutely at a point where it either supports these initiatives, or we fail. And I think what we saw in Monterrey was that there is already evidence of real money coming forward, and it is in the amount of between $9 and $20 billion a year, and certainly if that is provided, we have the money for those two initiatives.

I hope that what will happen is that we can demonstrate a demand for projects that exceeds the amount of money that we have and that we can go back and ask for more. But I think we now have an ample amount to move forward, and it is my hope that we can make effective the promises that were made, and I am proceeding on that basis.

MS. ANSTEY: Yes, over here, please.

QUESTION: Marisa Laredo [phonetic], Latin American News Service, TPA.

This is a question for Anne Krueger. I would like to know your opinion on the Action Plan that the G-7 adopted yesterday about restructuring of sovereign debt, please.

MS. KRUEGER: As you know, the Action Plan endorses going ahead both with seeing what can be done to get collective action clauses or some kind of contractual linkage between issuers so that that would make it easier to get creditors to get together in the case of debt restructuring and to continue work on sovereign debt restructuring.

Both the Action Plan, the G-7 Communiqué, the G-10 Communiqué, and the IMFC Communiqué all endorse going forward regarding the two approaches as complementary, and we are quite happy with that.

MS. ANSTEY: Yes, Barry.

QUESTION: Barry Wood, Voice of America.

Minister Manuel, would you speak about NEPAD and how NEPAD, the African Partnership, can work with some of these initiatives that you have been talking about this weekend?

MR. MANUEL: The essence of NEPAD is a partnership where the reciprocity is constructed between what we can deliver as African countries--largely matters relating to governance, better planning, and better measurement of outputs--and on the other side of it, clearly, a relationship with donors to be able to assist in the enablement of African countries to deliver against those issues.

In the systems and structures, there a great many new initiatives, including a kind of peer review and measurement issues relating to governance and so on, so that it is not only the end products like education.

We will in the course of the next period develop codes and standards to ensure that we are in fact dealing with the rising flow of what is possible in countries that have been poorly governed, and that becomes the key responsibility of Africa, and the change I'm saying would come through better flow of donor aid.

The second issue is to place all of that in the context of the Millennium Development Goals. On some of those goals, you might stand back and say, "Is that all you need to achieve by 2015?" because in truth, some of the objectives in health, be it infant mortality, be it maternal mobility, they are actually so far off where the rest of the world is. But it is something worth striving for, and it is about changing the interrelationship, it is about taking more responsibility, it is about taking greater ownership earlier in the process, and that is essentially what the work is that is going into NEPAD now.

I am greatly satisfied that both in the meetings here, the Development Committee, but also in the IMFC meeting, NEPAD was used or referred to strongly, but in the same way, the Monterrey Consensus recognizes that as a change in developmental thinking, a change in the definition of partnerships, and that I think is what will continue to incentivize the work that we are now putting into the shaping of the partnership.

MS. ANSTEY: Mark, and then the woman in the third row.

QUESTION: Mark Drajem, Bloomberg News.

Just to go back to the grants versus loans issue, how far off is an agreement among the different parties on coming up with some number, some percent, on how much grants IDA will have; and to what degree are both of you gentlemen worried that as this debate drags on, it could endanger IDA funding?

MR. MANUEL: Jim may know more about the range of negotiations on percentages. But I would be concerned about IDA. It is very important that we are able to conclude the replenishment, that we are able to understand that there are some countries that are so far off the curve at the moment that highly concessional funding, provided in circumstances that would allow for well-measured outputs, not just the inputs--if you say education, some of the measurements may take some time, because you are not going to measure educational outputs at the end of 12 months. If it is education to the age of 10, then you may in fact have to wait four or five years to see the nature of the changes. But it is putting those kinds of things in place that I think begins to change the interrelationship, and I'd like to believe that some countries coming through HIPC that have demonstrated strong Poverty Reduction Strategy Papers are now in a position to report in a lot more detail on measurement which previously was absent. And that is going to be important.

If you take away--if you threaten instruments like IDA, I think you threaten the ability to drive those kinds of changes, because grants come at the front end; lending relationship, albeit concessional, is about building sustainable change. It is in that regard that I express concern about anything that would erode or corrode the strength of a facility like IDA.

Jim, would you like to take up on the percentages?

MR. WOLFENSOHN: I don't know what is the answer. I think it is close, and it is a matter for the shareholders to decide.

The one thing I am sure is that on all sides of the case, there is a real commitment to keep IDA strong and going, and that is not at issue. The issue is purely the philosophy of what should be done through IDA, not the diminution of IDA. I think everybody has agreed on that.

The other point is that for many of the people who are debating this, they are saying that the majority of the work that they do already is grants and that IDA is only a small portion of their development activity. All this has to be worked out by the shareholders.

Certainly from the point of view of the Bank, we are very interested, but the thing that we want most is to ensure the continuity of IDA, and I was assured by everybody that the continuity of IDA is not in doubt.

MS. ANSTEY: Yes, ma'am, in the third row.

QUESTION: My name is Aurora Nasia [phonetic] from Reuters, and this is a question for Ms. Krueger.

I would like to know to what extent you think it is realistic to think that a new IMF mission in Buenos Aires could reach Letter of Intention with the Argentine Government in May and to what extent do you think that the Argentine Government is able to implement the reforms?

Thanks.

MS. KRUEGER: Well, those questions are of course to some extent interrelated. The mission, as you know, came back from Argentina I think it was on Thursday--yes--and left at a time when the government, or I guess the provincial governors, had said that they could no longer implement the pact they had agreed to. The next step therefore has to be for them to implement a new pact, and as soon as that happens--or, to reach and then go forward with a new pact--and as soon as that happens, our people will go down. If that is agreed, we think we can fairly quickly get to the stage of negotiating a Letter of Intent. And certainly the mission getting back there in May can be achieved quite quickly once there is action on the agreement with the government.

QUESTION: And what about the second question?

MS. KRUEGER: The Argentine authorities--the Argentine authorities tell us they are confident that they can get an agreement with the governors. They have already, as I understand it, submitted the repeal of the economic subversion law to the Parliament of Congress. We understand they expect there to be no problem with that. They have submitted a new bankruptcy law. We believe there are still some problems with that; they say that can be amended next week. So we believe that there is good reason for the authorities to believe that they can bring forward the things that need doing so that we can reach an agreement.

MS. ANSTEY: Yes, sir?

QUESTION: Peter Willett, Social Development Review.

In light of the debate of the press conference this morning, could you please flesh out what is meant by the statement in this Communiqué with respect to education: "We committed ourselves to work together in a much more coherent way." What does that mean in real terms?

MR. MANUEL: I don't know what you raised this morning.

MR. WOLFENSOHN: What I can say to you is that without reservation, what I hoped to get today on education and on the fast track, I got. There are not subtleties in the Communiqué. I asked for fast track, I asked for cooperation, and I asked for support, and we volunteered to come back in September on how it was going within the framework of the PRSPs, and I got it in every sense that I wanted.

So I wouldn't read anything into the Communiqué. It was a whole-hearted endorsement of the fast track, and I am actually very--I am very, very happy with the way it went. So that's all I can say to you. I really wouldn't read anything into it. There was no subtlety that I am aware of in the Communiqué.

MS. ANSTEY: Yes, in the front row.

QUESTION: Greta Cruise [phonetic], Channel 7 News here in Washington.

I would like to ask Mr. Wolfensohn on a local level here, for the folks who do live here in Washington, dealing with all of these protesters in the past couple of days with a whole litany of concerns, did any of their presence or any of their arguments in any way impact what you all discussed or any decisions that you made? Did they make any difference, in other words?

MR. WOLFENSOHN: Well, I think the people--first of all, the many protesters--not a large number of them were about the Bank; they were about other things this time, and that was a welcome relief to us.

On the other hand, we did have meetings with members of civil society here that were, I thought, very constructive. We don't agree on a lot of things; we do agree on a lot of things. And we have agreed to meet again on a number of issues. And they do have an effect. The simple fact is that the Bank is a different place than it was five years ago.

So there is movement, but I would expect in five years' time and in 25 years' time that civil society will still be complaining about the Bank but for different things, and I think that's not a bad thing that there is an outside group that is constantly watching, constantly pushing.

So I think that they do have an effect; I welcome it, but I think it is better when we discuss it rather than to have them outside. And on this occasion, there weren't that many that I saw that were demonstrating against us. But I make no predictions about next time; maybe there will be many more.

MS. ANSTEY: Thank you very much, ladies and gentlemen.

That concludes the press conference.

[Whereupon, at 3:46 p.m., the press briefing was concluded.]

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