THIRTY-FIRST LECTURE OF THE
OAS LECTURE SERIES OF THE AMERICAS
ROBERT B. ZOELLICK
President of the World Bank Group
“A Conversation on the Inter-American Agenda”
Monday, December 8, 2008
Hall of the Americas
Organization of American States
Washington, D.C.
THE SECRETARY GENERAL (José Miguel Insulza):
¡Muy
buenas tardes! Good afternoon and welcome, bienvenidos a esta thirty-first
edition of the Cátedra de las Américas, and to this Hall of the Americas of
the Organization of American States (OAS).
Only a few hours ago we were here, at this building, celebrating a
very significant event in the history of country resolution in the Americas
with the signature of the Agreement between Belize and Guatemala to try
to resolve their territorial differences. We are very proud of this; that’s why
I’m referring to it. This is one of the roles of our Organization, which is to
promote peace and security in the region, and peaceful conflict resolution.
In the same sense, we are also a large forum for the Americas to discuss the
main issues that the region faces, such as democracy, human rights,
development, and social cohesion. These are precisely the issues, which
have to do with the Cátedra de las Américas.
We have the great honor today, on the thirsty-first edition, to have
with us the President of the World Bank, Mr. Robert Zoellick, and I wish to
say that this is one event—the first of a series—that we are organizing that
has to do with the preparation of our Summit, the V Summit of the
Americas, which will be held in Port-of-Spain, Trinidad and Tobago, from
April 17 to 19, 2009. The issue of the Summit is the future of our citizens
through the promotion of human prosperity, energy security, and
sustainability. Of course, it has a lot to do with the economic situation of
the region today, and President Zoellick is, indeed, one of the most relevant
persons to speak to us about this.
We have chosen a new format for the meeting today. President
Zoellick will have a conversation on this and any other topic that they deem
interesting with a person who is very well known in this Organization, Mr.
Bernard Aronson.
Mr. Aronson, as those who are better acquainted with the interAmerican system know, was Assistant Secretary of State for the
Hemisphere some years ago. He has been very active in matters related to
the Americas, and he will be sustaining a dialogue with President Zoellick.
I will leave you now with the Chairman of the Permanent Council,
Ambassador Reynaldo Cuadros, Permanent Representative of Bolivia, who
will briefly do the introduction. Thank you very much. [Applauses.]
THE
CHAIRMAN
OF
THE
PERMANENT
COUNCIL
(Ambassador Cuadros): ¡Muy buenas tardes a todos!
Quiero, en primer lugar, dar la bienvenida al señor Robert Zoellick y
al señor Bernard Aronson que lo acompaña. El Secretario General ha
explicado en realidad el propósito de este encuentro, así como la
importancia y la relevancia de hablar de estos temas ahora.
Todos ustedes tienen la biografía del señor Zoellick. No obstante,
quisiera destacar, puesto que las personas se conocen fundamentalmente
por sus ideas, que el señor Zoellick ha sido uno de los principales
promotores del mercado libre a niveles globales, regionales, bilaterales.
También ha respaldado mercados abiertos.
De 2001 a enero de 2005, el señor Zoellick ha servido como el
décimo tercer Representante de Comercio de los Estados Unidos. Ha sido,
de 2005 a 2006, Subsecretario de Estado en el Departamento de Estado de
los Estados Unidos y actuó como Oficial Principal de Operaciones. Desde
el 1ro de julio de 2007, es el décimo primer Presidente del Banco Mundial.
El Banco Mundial está compuesto de 185 Estados Miembros.
Anteriormente, de 1993 a 1997, el señor Zoellick se desempeñó como
Vicepresidente Ejecutivo de Fannie Mae, una corporación financiera en el
tema inmobiliario.
Tenemos hoy una oportunidad muy especial para conocer, de una de
las personas más famosas en el mundo, cuáles son las ideas que nos va a
presentar en relación a una nueva imagen o un nuevo papel que tendría el
Banco Mundial, después de que varias de las ideas que el Banco Mundial
promovió han sido cuestionadas a raíz de la caída financiera, incluyendo la
gran crisis financiera que se ha dado en los Estados Unidos y que ha
afectado al mundo entero.
El tema del mercado es un tema muy controversial. Tenemos,
entonces, un gran desafío. Aquí vamos a escuchar en palabras del señor
Zoellick cómo es la nueva visión regulada de los mercados y seguramente
también cómo vamos a poder progresar en esto.
El tema de la privatización ha sido un punto también que ha sido
estimulado largamente por el Banco Mundial, incluso en áreas como el
agua, la educación y la salud. Vamos a ver cuál es la nueva visión.
Finalmente, en la última sesión del Banco Mundial y del Fondo
Monetario Internacional, algunas de las cuestiones que han surgido sobre la
reforma necesaria del Banco Mundial es la participación en el mismo de los
países en desarrollo en igual número que los países desarrollados. La
India, por ejemplo, hizo notar su preocupación por la cual solamente 1.4 %
de los países en desarrollo participan en el Directorio del Banco. Por lo
tanto, vamos a poder escuchar directamente del Presidente del Banco
Mundial expresarse directamente sobre estos y otros desafíos, junto con las
nuevas ideas que puedan haber para resolver el tema financiero y la crisis
que están aquejando al mundo.
Tengo ahora el placer de dejar al señor Zoellick con ustedes, y
después la audiencia podrá hacerle preguntas. Muchas gracias.
THE INTERVIEWER (Mr. Bernard Aronson): It is a great pleasure
to be in this historic chamber, which has witnessed so much history that
was vital to our hemisphere, and it is a particular pleasure to be with my
old friend and former colleague, Bob Zoellick.
You have already seen his distinguished résumé. I would just add
one point. From the time we had together, on every matter that was vital to
Latin America during the time I was Assistant Secretary of State, whether it
was resolving the conflicts in Central America, negotiating the North
American Free-Trade Agreement (NAFTA), promoting debt reduction or
promoting democracy, Bob was always an extremely strong supporter and
ally of this hemisphere.
He remains so today in his new position as
President of the World Bank.
So, Bob, let me start by looking backwards and looking ahead. When
you and I were in government together from 1989 to 1992, Latin America
had just suffered a lost decade; hyperinflation was raging in many
economies; most of the major economies were suffering from a debt crisis.
From that vantage point, the region has made enormous progress. Today,
most of the economies are boasting fiscal and trade accounts surpluses.
Hyperinflation does not exist though there are a few places where it’s
present, but it has largely been controlled. Economies have been growing
in most part, so a lot of progress has been made.
On the other hand, the development gap that still exists, not just
between Latin America and the Caribbean and the United States, but even
with the Asian countries, persists.
The region doesn’t have the same
growth rates or savings rates, so I’d ask you two questions: Do you see the
glasses half full or half empty with regards to this hemisphere? And how
do you see this hemisphere closing that development gap and what’s the
role of the World Bank in that process?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
Thank you, Bernie. Let me just thank the Secretary General for his kind
invitation to be here with all of you. I’ve been in this Hall many times
before on different occasions, so it’s a real honor to be invited back as part
of these series. Thank you, Ambassador, for your introduction.
I can’t help at this point, Bernie, but be very focused on the months
to come. My major message, which I think everyone now recognizes, is
that we’re in a very difficult period that started out as a financial crisis and
then became an economic crisis.
unemployment crisis.
I’m afraid in 2009 it will be an
There are elements still dating back to the food and fuel problems
that make it very much a human crisis. And so, you are correct that the
region has made very important strides over the past decade, but I’m afraid
this is going to be a particularly stressful period that we are headed into.
Looking beyond that, I would say that as everyone here knows, you
really have to disaggregate into regions. So, you have some countries in
Latin America that have very much strengthened their fiscal and debt
positions, have had relatively open economies, flexibility in exchange rates.
Those are the countries that are best positioned to deal with the turmoil to
come, although many of them have been major commodities exporters, and
so, they are going to have to deal with what looks like to be a big
turnaround of commodities prices.
You have other countries that have not gone as far in taking on the
challenges. They have more rigidities, and those countries, I think, are
going to face more difficult days ahead.
Central America, which has been very much linked to growth in
North America based on remittances and on trade patterns, has less room to
maneuver the monetary or fiscal policy. I’m particularly concerned about
the Caribbean countries, because with the drop-off in remittances and
tourism, I think, they are going to be under special strains.
But implicit in your question is the idea—one that I have always
liked—which is: Can you take a moment of challenge like this and make it
into an opportunity?
And you were, I think, properly making an
observation that I often make to my friends in Latin America and the
Caribbean when I work in this region—since my career takes me to all
regions of the world; in fact, later this week I’m heading to China—which
is that they need to look beyond this, the Western Hemisphere, because
much of the competitive challenge is global. While many countries in the
region have strengthened their fiscal and monetary positions and their
effort against inflation, there are two major challenges that still have to be
undertaken and would help in a point like this.
One is some of the
structural challenges to allow a more flexible, adaptative, competitive
economy; and the other is the investment in social development, education,
some of the basic health care. I think the challenge for the upcoming
generation of leaders in the region will be how to go beyond this crisis and
look to continue to invest in those foundations for future growth.
There’s no doubt that there have been some very significant
developments. You can see it in poverty reduction in Brazil, Chile, Mexico
Peru, and others. We’ve learned some things from this. For example, the
program that Mexico launched on the conditional cash transfers called the
Oportunidades program. In Brazil, it’s the Bolsa Família. There are
versions of these in Chile and Peru, and elsewhere. In this crisis, we are
now looking with some Central American countries to see how one can
apply it.
Those programs are vital whether in good or bad times. In good
times, they help give a broader segment of the society a feeling that they
can climb the ladder of opportunity because, as many people know, those
programs direct cash transfers to those most in need, but they link it to
sending kids to school and basic health check-ups, which are very
important for women in particular. But, in a moment like this, they also
become the vehicles to try to put in support for those under stress.
I guess the last thing I will say that is particularly distinct about this
region is that, as you and I worked on some of the issues of democracy,
which are at the heart of the OAS and others, I think the structure reforms
relate not only to the economics but opening up to society. What we saw
was a more open political process, but many groups that have been cut out,
not just for years or decades, but for centuries, particularly indigenous
people, didn’t feel they had that ladder of opportunity. This created some
dangers that I think could be exacerbated under periods of economic stress.
I was just in Haiti not long ago. Here is a country that was one of the
first to show the threat of high food prices on social disruption. Then, it
was hit by four hurricanes. Since it is the least-developed country in the
Hemisphere, in some ways that’s a warning sign of what could happen to
others if this difficulty persists. My main thought today would be that 2009
is going to be a difficult year. No one knows how deep this is going to run,
and no one knows exactly how the recovery is going to come about, and so,
one has to be prepared for dangers.
THE INTERVIEWER (Mr. Bernard Aronson): So, if I am a Finance
Minister who accepts your diagnosis and your prescription for the agenda
of social development and market and trade opening, how does the World
Bank fit into that? How do other multilateral development organizations fit
into that agenda? What were you involved in and what are you focusing on
these days?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
One of the most important elements is that, fortunately, we had already
changed some of our lending policies for the middle-income countries,
which is what most of the countries in the region are, to lower some of the
prices, make it simpler, make the maturities more flexible, do local
currency financing. What we are finding now is that even some of the
economies that have done an excellent job of maintaining their fiscal
position and having very well-run budgets over the past five or ten years
are finding it hard to get access to international finance, in part because
many of the developed countries have put so many government guarantees
out there that it’s going to be hard to be able to access money for budgets if
you have to go to international markets.
If you combine that danger with the fact that one of the lessons of the
97-98 financial crisis is to try to help countries avoid contractionary
policies, you find countries—Mexico would be one example; Indonesia is
another—where they may want to run very modest budget deficits as a
percentage of the GDP. Mexico is still looking at, I think, about 1.8% of
the GDP. It is similar for a country like Indonesia. However, they are not
certain that they can get the borrowing to run that deficit. They are not
really in a position where they need to go to the IMF’s help.
We have various lending products. Some of them are contingency
lending products that we will use to increase our lending with Mexico,
Indonesia and other countries in the region. In Brazil, we’re expanding
some of the lending with the states, which are part of Brazil’s broadening
of its reform process, but what is important for people to recognize is that
many people associate the World Bank with money, because it’s called
“bank”. In reality, what the Bank does best is try to help bring and bridge
knowledge and learning from around the world. It may be conditional cash
transfer programs; it may be microfinance programs; it may be governance
and anticorruption programs; it may be fiscal management programs as
we’re using in some Brazilian states. And then, combine that with projects
that have reached beyond individual projects.
So, how can we build
markets, institutions, and capacity? That may be covert markets; it may be
microfinance markets. We are working with a number of countries in the
region to build their own local currency bond markets, so they have those
accesses. And then, we do bring capital to the game as well.
Let me bring this again home since it looks like you’ve got a folder
that looks like it is from Colombia. One of the things that we did recently
with Colombia was take advantage of the fact that we have longer terms for
some of our lending and local currency to help finance a student loan
program for poor students. And so, by having the maturity of our loans
match the maturity of student loans, you didn’t have to worry about an
asset liability mismatch. By funding it in local currency, we avoided the
foreign exchange risk.
So, this is an aspect of a social development
program that is also investing in the future, and so, we have a number of
those tools available.
In the Caribbean and in Mexico, we have developed, under various
models, insurance products for a natural catastrophe. So, whether it’s a
hurricane and wind and rain in the Caribbean and Mexico, whether it’s an
earthquake, as your experience shows and as a lot of people in this region
would know, they can do a very good job as some countries in Central
America did, but they would be extremely vulnerable to an earthquake that
could set them back in the course of years.
We also put in some special projects trying to deal with the stress of
safety net programs for food, and we have used that in a number of
countries in the region, starting with Haiti.
In general, what we’re trying to do at the Bank is understand our
clients’ needs and then approach these as a problem-solving exercise as
opposed to just an analytic one, and try to match the range of projects,
whether they be knowledge transfer, financing, or different models. This
includes not only the formal work that we do through the public sector side,
but also the International Finance Corporation (IFC). If you look at our
private sector work in IFC, you will see that we are trying to expand, for
example, trade finance facilities now, because you’ve seen a big drying up
of that credit.
One of the things that people have to be alert to is the nature of the
problem in the current environment. It is one that you can’t always predict,
so you saw a trade drop-off because of demand, but all of a sudden you
also saw people have a hard time paying their credit due to the credit
contraction. So, we are trying to move quickly with various partners to
deal with that sort of issue. Another area would be infrastructure projects.
One of the lessons again of the 97-98 financial crisis was
infrastructure projects can be good to not only keep people at work, but
they also set the foundation for future growth. We discovered a lot of
viable infrastructure projects. We are running out of funding mid-stream,
so we’re trying to set up a facility, through the IFC and also on our public
sector side, to try to support some of those projects.
THE INTERVIEWER (Mr. Bernard Aronson):
You know, it’s
interesting because I was waiting to hear whether the word infrastructure
would be mentioned; you got there at the end. Most people’s sort of
memory in the Bank was traditionally big infrastructure projects. That was
the mandate years ago, but it sounds like the focus has shifted enormously.
I just wonder what the relative balance in the region is between your
involvement in the financing of traditional infrastructure projects, whether
by helping existing ones that need financing or new ones, and this whole
new area of social development, development of financial markets,
insurance products, and the like. Is the Bank fundamentally gravitating, in
terms of its focus, to that new mandate, and what is the relative balance?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
We have to add another one, which is climate change. There is another
whole aspect that is related to that, and I think part of the challenge is: Can
you find win-win opportunities, particularly in a period of stress like now?
Let me just build on the climate change, because it is also related to a
broader concept of infrastructure.
We put together some $6 billion of new climate investment funds in
order to help with technology in forestation adaptation. Mexico may be one
of the countries first in line, and it’s not, in a sense, a technology that has to
be sort of developed.
This is existing technology to deal with
transportation systems. You can save energy; you can have reduction of
carbon; and you can also have much more efficient transportation systems.
And so, we are working with Mexico now on one of the first of those
projects.
What I would suggest would be different from the old view of the
Bank on infrastructure. In the McNamara early era, the Bank kind of did
the project. In a sense, what we now try to do is work with the public and
private sectors. What we are seeing now is where a year ago the challenge
was: How could we work with governments to develop private sector
projects for infrastructure? And where the challenge was: How do you
define the engineering terms and the financing terms to draw in private
capital? It’s different than the old days where you would go to a public
works ministry. They would have the engineering plans; they just put in
the budget year by year. You had to have the package as a whole, so we
would spend time talking with governments about how to create this in
different sectors.
Given the problems now with private capital, the challenge is: How
can you work with BMBS in Brazil? How can you work with the Mexican
development banks?
How can we help connect some of the public
financing, but with an eye towards also being able to draw a private sector
financing at a later point since the infrastructure needs in Latin America, to
become competitive with the East Asian countries, are enormous? Many of
you in the region know about the ports, the roads, the airports, the range of
facilities, and you can put the name of your own country in front of it—the
X cost of logistics and moving products around.
There is a huge need, whether it be electricity, whether it be road
transport, or others. There just isn’t going to be enough public sector
money to do all that, so if you can make it into an effective return, you
want to have a public-private mix.
In a sense, part of the message for today, but for the Bank in general,
is that we have to be alert to market conditions and changing needs of
clients to adjust that mix in order to meet the circumstances. Whether it be
an effort from our private sector side, or public sector side, or some
combination depends on the times and the circumstances.
THE INTERVIEWER (Mr. Bernard Aronson): Bob, you started off
your remarks focusing rightly on the financial crisis, and it’s no secret to
you because you pay a lot of attention to Latin America, that populism is
rising back up in a number of countries. The populists would argue that
this financial crisis is proof that the Washington consensus, the free-market
model, and neoliberalism are a failed project and that we need a new
model, which they offer, which is much more statist and authoritarian, and
“State control” and “State intervention,” because the free-market model has
failed. What would be your answer to those voices in Latin America who
make that argument?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
I guess I would give a couple of answers. One is, look at the countries in
Latin America that are able to deal best with the trials of the current
economies, and the countries that have used the market effectively, whether
it be the Chiles, the Brazils, the Perus, the Colombias. This isn’t to say that
they are not without their challenges, but I think what you will find is that
those that didn’t take those steps that we talked about in the fiscal side,
didn’t deal with the inflationary issues and didn’t manage their commodity
wealth effectively are going to be the ones that are going to find themselves
in difficulty. And you would certainly see that if you look around the
world.
Secondly, I’ll share with you an anecdote. I was meeting at the time
of our annual meetings in October with one of the up-and-coming Asian
countries that was asking these questions about markets and private
property, and how to use them and the challenges of these. I turned to our
Chief Economist Justin Yifu Lin, from China, and I said: “Justin, why
don’t you address this question”? He answered that we would have to be
very careful getting too far away from using markets. They are very
important, and you do really want to develop the property rights, so people
would invest. That’s at least the message from the Chinese economist who
has used this pretty well.
I think the third part is that it is natural, at any time of crisis like this,
that people examine the system, and that’s a healthy thing to do. We are
both old enough to have lived through a few of these crises, and I’ve seen
that people predict the end of capitalism, and then, the next day it starts
with a solely different form of capitalism again. I think there’s a message
there, which is, there is pragmatism about this. There is a role for the State
and probably everyone in this room knows that as you deepen that role, you
sometimes can run various risks. You run risks of corruption, political
influence, sometimes lack of competition.
Let me just connect this with one last thought.
At these G-20
meetings and others, in addition to talking about what the World Bank can
do like expanding its lending and some of the things that we are doing in
the IFC private sector side, some of the things that we are doing for the
poorest countries, I sometimes try to remind countries to look two or three
steps ahead.
So, for countries in this region, I’ve made the point to
developed countries to please be careful about all the guaranteed debt that
you have out there, because while I understand why you need to do it, at
this point, if you don’t discipline or have exit strategies, it’s going to make
it very hard for developing countries to borrow. But there is a point that’s
applicable to developing countries and developed countries, which is, as
you tighten up financial systems, please be very careful that the people who
don’t get squeezed out are those who have least access today. So, probably
many people in the room and others have worked on issues of
microfinance, microcredit and saving systems, and we are doing some
fascinating experiments about this in a way to pursue the goal that former
President Zedillo of Mexico once said to me. He said: “Look, the problem
isn’t often that we have too much in the way of markets; it is that we don’t
have enough markets reaching out to enough poor people to be able to
access.” As everybody know—and this region in particular has seen this—
the big guys can figure out a way to take care of themselves. They get
special access and special treatment, but if you tighten up the financial and
credit system too much, it is the little guy who loses out. The little guy is
often the indigenous person, the small business, the female-headed
business, and what I am concerned about is that those are often the big job
creators. So, if you are really thinking about job creation, you don’t want
to shut those out of the system.
THE INTERVIEWER (Mr. Bernard Aronson): As most people in
this room know, before Mr. Zoellick was President of the World Bank, he
was Special Trade Representative to the U.S. President, and during his
tenure, he paid particular attention to making progress in the Latin
American and Central American free-trade agreement, and Peru, Colombia,
and Chile. I suspect everyone in this room and everyone in Latin America
is wondering where the United States is going on trade. In a way, the
question is: Can we take a yes for an answer? And you are not just a smart
policy analyst, but you also understand domestic politics. How hopeful or
how discouraged are you that this new Congress, and this new
Administration is going to find a new formula to move the trade agenda
forward in this hemisphere, or are U.S. domestic politics going to steer us
in a different direction?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
I wouldn’t want to fool people. I think that domestic politics are going to
make it very difficult. You could see this in the discussions during the
campaign, not just at the presidential level, but at the congressional levels,
and people hear the debate out there. This is a bigger issue than the United
States and Latin America. I do feel that with the type of economic forecast
that I was suggesting, you are going to see price discounting, and this is
going to lead to a whole series of supposed unfair trade actions. We could
be in for a round of protectionism here, not of the formal type, but the
informal type. Now, to try to find a positive way to deal with this, I would
suggest one thing from the United States side and one thing from the
regional side.
On the U.S. side, I do think that you have to help people adapt to
change. I think that if the U.S. does certain things in health care and the
ability when you lose a job to still have access to health-care benefits, as
people have tried to do with mobility and pensions—and we have talked
about ways that you could have wage-insurance programs—that helps deal
with some of the anxieties, but it doesn’t deal with all the fears out there.
And so, we’ll take some strength of leadership. And here, I have just noted
that you have left several parties out like the Labour Party in Britain and
the Labour Party in Australia that have been very pro trade. So, there’s a
challenge there for those in that group to try to see that they can help deal
with worker anxiety, but not try to follow the false siren call of closing up
markets.
For the region, I just cannot emphasize enough that I think that the
new Administration and others want to get off on the right foot with the
region. They value the relationships, so they need to hear from the region
whether these things are important to them. Obviously, the Colombian
FTA, in some way, should be a no-brainer in terms of the benefits to both
economies and to the region as a whole. Based on that, the United States
would then have free-trade agreements with Canada, Mexico, Central
America, the Dominican Republic, Chile, Peru, and Colombia.
The
Panama Agreement is also one that should pass. That would cover twothirds of the GDP of the Hemisphere, not accounting the U.S., and twothirds of the people. Now, there are also great opportunities to reduce
barriers with Brazil and the other countries that are part of it, including on
things like ethanol.
So, there is an opportunity there, but I honestly think that it would be
important for people from the region to explain its significance. And then,
I wouldn’t stop with trade. The whole logic of the trade agreements was
that they are not operable by themselves. One of the things that I saw that
the Bush Administration launched in its waning days was an idea to try to
pull the countries together that have free trade agreements with the United
Sates and see how they could link these to their development agenda, their
business agenda, and their trade facilitation agenda. And obviously, I think
they also included the Caribbean countries, which were part of a
preferential trade arrangement. One shouldn’t stop with that. One should
look for ways that deepen the integration, and then look at ways with
which, one way or another, one could still reach for the goal of free trade in
the Americas.
THE INTERVIEWER (Mr. Bernard Aronson):
Is there also an
opportunity in energy in the inter-American system that the United States
wants to reduce its dependence on foreign oil from unstable parts of the
world? There are huge reserves of gas and oil in Latin America. You
would think that that’s a natural marriage, and of course, the United States
imports 30% of its energy from this hemisphere, but is there a chance to
vastly expand that in a win-win proposition? Is that something the Bank is
thinking about or playing a role in?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
Well, I think the greater issue there is the price of the barrel. Just to again
anticipate dangers here, one of the things we have seen is that when oil
prices were about $40 to $50 a barrel, food prices moved to almost a oneto-one relationship where it used to be maybe 20 cents to a dollar. I think
that one of the problems is going to be with the great volatility. You won’t
have people investing in some of the energy production. You don’t have
them investing in some of the equipment for energy production. That’s one
of the things that happened when some of the growth of the world economy
from China and elsewhere led to the surge of oil prices to $150 a barrel.
You could be back to that sort of environment in a matter of years. So,
what this would suggest is, frankly, if you could work out some greater
understanding, hemispheric or more broadly, about some price range, some
assurance at the same time that you focus on some of the things that you
could do in energy efficiency and clean technologies, and some of the
things to reduce the carbon production, it could be certainly of benefit for
the region, and it would interconnect it. Of course, as you and the audience
know quite well, in some countries there are very sensitive attitudes about
tapping the natural energy or mineral resources in a sense of ownership of
the public. And here again, maybe you can actually look at some models
from elsewhere.
You asked about some of the things that we are doing. I’ve been to
the Saudi ARAMCO facility, which is a fantastic company, and I have tried
to suggest some contact with PEMEX and Saudi ARAMCO. What you
actually see is the way that Saudis run Saudi ARAMCO, which is very
different from the way Mexicans run PEMEX. So, you could have a stateowned oil company, but one that operates more effectively for the State. In
a sense, part of a broader point that we are trying to do at the Bank is
encourage South-South learning experiences, because there is a lot of
knowledge and experience of different programs, whether it be social
development or energy development that you can share across the
developing world.
THE INTERVIEWER (Mr. Bernard Aronson): I’m going to ask one
more question, and I know a lot of people in the audience have questions
that they would like to ask President Zoellick. I guess my last question is:
When you take this financial crisis, how is this movie going to end? A lot
of people watching see central bankers and others scrambling to try to
catch up, and shoes are dropping. How optimistic are you to a variety of
means, to the stimulus packages, a lot of liquidity being put into the
financial markets, interventions in banks? Is this thing stabilizing, or are
there more shoes to drop? If Latin America and the Hemisphere can get
through 2009, are you hopeful or optimistic that 2010 is going to start to
see some improvement, or is this movie “hang on to your steering wheel
and hope for the best”?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
It will depend on the actions that people will take over the course of early
2009.
I think a number of central bankers have taken the right policies in
trying to create liquidity.
There’s still a huge lack of confidence in
counterparties, and so, I think some of the things that the Federal Reserve
has done in recent weeks are worth examining by other central banks.
They’re basically creating markets in some of the asset-backed securities. I
think you’re going to need a big fiscal response by countries that can do so.
I think you’ll see that from the United States. You’ve seen it from Britain;
France has wanted to do some; Germany has been more reluctant. I’m
going to be in China later and I think China will take additional steps.
There are some countries in Latin America that have a little bit more fiscal
room, but this is where it’s a challenge. Some of them do not have the
same space. Then, the question will be: As the unemployment problem
increases—and it will increase—will countries take counterproductive
policies of a protectionist nature?
I do believe that with the right
government policy responses, you could start to see a recovery later in
2009, but it’s extremely difficult to predict, because you have these
uncertainties and these events that depend partly on the right policy
response.
THE INTERVIEWER (Mr. Bernard Aronson): Bob, thanks. That
was a fascinating conversation. At least, I learned a lot. I’ll now turn it
over to Irene for questions and answers.
THE MEDIATOR (Dr. Irene Klinger): Thank you very much,
President Zoellick, and thank you very much, Mr. Aronson.
I think, Mr. Aranson, you were the longest-serving Assistant
Secretary of State for Inter-American Affairs.
I see that you have
developed some other skill. Maybe those who are buying for that position
now might think that they will develop additional skills in the future as well
and become wonderful interviewers.
Thank you very much for the
wonderful job.
I would like to open the floor for questions from the audience—our
ambassadors, as well as the audience in general. I know our ambassadors
well, but I’ll ask others to please introduce yourselves. There is also a
microphone that will be going around the room.
I have first Ambassador Manuel María Cáceres from Paraguay.
Ambassador Cáceres, you have the floor.
THE AMBASSADOR OF PARAGUAY (Ambassador Cáceres):
Thank you, Irene. This is a great conversation. We all have been interested
in listening to comments.
I have two questions for President Zoellick. The first one is in his
capacity as Head of the World Bank. We have seen with our current
financial crisis that developed countries have created huge stimulus
packages, in the hundreds of billions of dollars, trillions of dollars, and
some important developing countries are also aiding their economies.
What about for the small developing countries, Mr. President?
Is the
World Bank thinking of certain packages in order to aid them to weather
this difficult situation? That would be very interesting for us to know.
My second question is in your capacity as U.S. trade negotiator. Do
you see this current situation as an opportunity for the DOHA Round to
come to a successful ending? We could see, as you said, more
protectionism between countries, or difficult issues of subsidies, but do you
think that somehow there could be room to be optimistic about the
successful conclusion of the Round?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
On your first question, let me first briefly summarize the ways the World
Bank has been trying to help.
For the middle-income countries, which include most of the
countries in Latin America, our primary tool is the IBRD lending. We have
about $99 billion of outstanding loans, and I announced three or four weeks
ago that our capital would permit us to do about another $100 billion of
lending over the next three years. Just to give you a point of reference, last
year our IBRD lending was about $13.5 billion, in part because some of
these product changes. We probably would have been in the mid to high
teens. This year, it will probably be $35 billion or in that range. That
includes all the countries expanding.
On your second question, for the poorest countries we have the
International Development Association (IDA) funds, which are grants in
long-term loans with no interest. In this region, that would primarily be
Haiti and some countries in Central America as well. There, what we are
trying to do is every three years, we have to raise those IDA funds from
donor countries and sometimes contributions from our own income. We
have about $42 billion of those IDA funds. This is in IDA-15, and we’ll try
to frontload those as much as possible. Then, the third area is the IFC, our
private sector side. As I alluded to with Bernie, looking at the problem of
trade finance, we already had relationships with about 60 countries and 160
banks trying to help them to do trade finance. We have increased our credit
line for that activity to about $3 billion.
We were worried about smaller countries that need to recapitalize
their banks. If you are the U.S., or Britain, or France, or Germany, you can
just put the capital in, but if you are not, what do you do when your
banking system runs out of capital? So, we put together a special fund of
$1 billion, and the Japanese promptly joined us and added to it. We are
still looking for more to help use our investment knowledge from IFC in
banking systems in smaller countries where the macro environment is
stable to supply that.
We are also trying to create an infrastructure fund for viable
infrastructure projects through the IFC. The Japanese, the Germans, and
others are looking to participate in that.
In addition, we want to keep up the activity that we had for
emergency food and safety net projects. We have done a lot of those with
countries around the world and in the region. I created a rapid financing
facility of $1.2 billion to provide that. We already have about $900 million
of it committed. The Australians, the Russians, and some others were
going to contribute a little bit more.
And then, another area that we are trying to work with the Saudis and
some Europeans is an Energy for the Poor Initiative. Here, we are trying to
partner with some of their lending institutions to try to deal with those that
are the most vulnerable, but also in some of the energy infrastructure—
some of it off-grid, and others.
Then, I made allusions to the fact of climate change. We do have
other climate change funds, and these provide another source to, in a sense,
do well by doing good. So, that’s another source of opportunity.
What these all come back to, Ambassador, is that what we try to do
through our country teams—and we have offices in well over a hundred
countries—is to try to understand the special needs and circumstances, and
then, customize the support based on these various tools.
So, I used some big countries as examples, but whether a country is
big or small, we would be able to try to adjust. Some of it is policy advice;
some of it is sharing the experience. For example, we’ve talked about
safety net programs. In some countries that don’t have the public
governance infrastructure, you really need to work with things like Food
for Work Programs, or School Feeding Programs. Otherwise, if you can
work up to a conditional cash transfer program like some of the others in
the region, that’s a slightly better system to have, but we try to work with
countries based on needs and circumstances. And, indeed, we do this in
concert with others. We do this with the Inter-American Development
Bank (IDB), which is a very good partner, and others in the process.
As for the DOHA Round, I hope your hypothesis is correct. I have
long said that I believe that last year and before, there was a deal on the
table. The nature of these trade negotiations require you to get over a 150
economies in agreement, so it’s like doing a big business transaction with a
150 partners, all reaching unanimity, which is not easy.
In that
environment, it really requires some of the major players to take the
leadership role.
In this sense, I think the public actually has a mistaken view of trade
negotiations. They have this view that it is like a poker game where one
wins and one loses, and you keep all your cards close to your chest. In
reality—and many of you have seen this in your own experience—it is a
mutual problem-solving exercise.
You are trying to liberalize while
dealing with the other guy’s politics. The problem is getting the politics
aligned globally all at once. In this current environment, for example, there
are sensitivities in India. You have Indian elections now; India has been
suffering terrorism. That will be a challenge going forward. I will say—
and this is in reference to Bernie’s question—I think there would be a good
opportunity here for the current Administration to try to see if it can reach a
framework and, in a sense, carry some momentum into the next
Administration.
I’ll be very direct on this part. If you wait for the 535 members of
the U.S. Congress to give you a go ahead, you are going to wait for a long
time. Their job is basically to criticize and to represent particular interests.
It is the job of the trade representative to look across that, try to see the
bigger interest and make a deal go forward.
At this point, I’m not up on the details and particulars, but frankly, in
some ways I would love to be in the position now where in your own
country’s interest, you could discipline some of the agricultural subsidies,
open markets. One of the odd things about being a trade negotiator is that
if you give away too much, guess what you have done? You have probably
helped your economy; you have cut subsidies; you’ve opened markets.
The challenge is the politics, but in this environment, keep in mind
that the NAFTA deal was cut in late 1992 after the elections. Actually, it
was cut a little before the elections. The DOHA Agreement or the Uruguay
Round agricultural accord was done in December of 1992. So, there’s
some history here of doing a framework, and then having cross
administrations in the U.S. take responsibility. I personally think that that
would be a good idea.
THE MEDIATOR (Dr. Irene Klinger): Thank you, Mr. Zoellick.
Ambassador Ospina, you have the floor. El Embajador Ospina de
Colombia.
THE AMBASSADOR OF COLOMBIA (Ambassador Camilo
Ospina): Gracias, Presidente Zoellick.
En la reunión del Grupo de los 20, se propuso la creación de un
sistema de regulación financiera global y de un sistema de verificación
global. Había de alguna forma consenso entre la mayoría de los países.
Tal vez, Estados Unidos fue el que tuvo la posición de no aceptar esa
posibilidad. Sabemos que el Banco Mundial está desarrollando la agenda
de lo acordado en el Grupo de los 20 y que en marzo, habrá una nueva
reunión. ¿Qué tan viable ve usted esa posibilidad de crear instrumentos de
regulación global para los sistemas financieros?
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
If you look at the Work Plan that came out of the G-20 meeting, there was
an extensive discussion of work in the financial supervision and regulatory
area. I wouldn’t suggest you are going to see a global regulator. I think
what is much more likely is that you’ll see efforts of groups like the
Financial Stability Forum (FSF), which will add developing country
members, the IMF, the VASO, and others, and some of the World Bank’s
activities trying to bring countries together on common principles and solve
common problems.
It wasn’t just the U.S. that was a little cautious on this. In fact, I
would actually mention that some of your Latin partners, whom I won’t
identify, were a little concerned that some of the European ideas seemed to
be so regulatory that they could actually stymie some of the development in
Latin America. So, I think this is going to be a mixed effort. There were
good ideas from a wide range of countries. For example, in the Brazil
meeting of finance ministers, there were all also central bankers present.
The Chinese Central Banker made an excellent presentation about the
dangers of what economists call pro-cyclical policies. In other words, you
can actually have regulatory and accounting policies that deepen the effect
of the cycle. Some of this has led to the discussion about what people refer
to as “Mark-to-Market” under fair value accounting, and when it becomes
“Mark-to-Model,” and when it becomes “Mark-to-Myth”. So, there are
challenges on how to make some of these systems work.
What I personally am focused on at this point—and this applies to
developed and developing economies—is that I’m concerned that
governments haven’t yet figured out how they’re going to absorb the losses
and bring private capital back into the system. You have had a lot of losses
taken by some of the private banks. The governments have inserted money
in, in various forms:
subordinated debt, preferred stock, and others. I
think they are going to have to recognize transparently that a lot of that
money is going to have to pay for losses, that it is not a loan and that it is
actually going to pay for losses embedded in the system. Otherwise, what
private investor would ever put private money back in these institutions?
As you saw, this happened with some of the sovereign funds. They
put capital in and it was just chewed up right away. So, if you look at the
expected losses from a number of these institutions, in some ways I think
the government is going to have to be clear with what was referred to
sometimes as the “bad bank, good bank model,” setting aside the bad assets
and saying we’ll take account of these. And if you look at the rescue for
Citigroup, this tended to be a little bit more transparent in that nature. This
is another good example—and all of you know this from your public
service—sometimes things all move very fast, and governments are trying
to keep things liquid and institutions going, but they need to think towards
the second and third order issue. In this case, you are eventually going to
have to get capital back in these institutions, but people are not going to do
it if they feel that they’re just going to lose their capital. So, one of the
decisions I think you are going to see governments make over the next four
to five months is how they do recognize some of the losses on some of
those bad assets. There could be issues related to accounting too where, as
opposed to just absorbing the heat, if you have what financers call the
“match book” between the assets and liabilities of its duration match, you
don’t have to recognize the losses as long as you have the liabilities there.
These are some of the tensions on the supervisory and regulatory side. One
thing to be careful about—which I’ve seen in the U.S. system at various
times, and it’s going to be true globally—is that there is a tendency among
regulators to close the bond door after the horse has left. They actually
make it harder to deal with the problems by catching them after the effect.
I think some of the issues in the financial and regulatory supervision area
could fall on that category.
However, I’ll give you one other anticipatory topic, which is
interesting. When they look at the present crisis, many people say that
there was all this liquidity after the Internet boom in 2001, that people
didn’t watch this closely enough and that it led to this “lot-of-moneychasing yield,” and this boom, and then bust. Well, if you compare
liquidity today with liquidity in 2001, it makes 2001 look like a desert. So,
again, you have to think that at some point, the velocity of money will pick
up, and when it does, central banks are going to have to be in a position to
withdraw some of their liquidity. You also have to make sure that the
banking supervisors don’t repeat the mistakes of the past, because you
could get an even bigger boom bust, looking three or four years out if you
are not careful.
THE MEDIATOR (Dr. Irene Klinger): Thank you very much. I
have a question from the audience here in the third row. Please, if you can
introduce yourself, sir.
THE AUDIENCE: Yes, I am Roberto Jiménez Ortiz. I am from El
Salvador and a former Bank Executive Director (ED).
Two questions for the President. First, during the 1997 Asian crisis,
the Bank was unprepared and didn’t know it was coming.
The same
happened five years before with the tequila crisis. Now, how well prepared
was the Bank for this crisis, especially to the financial system in Latin
America?
My second question refers to the governance issue in the World
Bank. As you may know at the G-20, one of the issues in the Bretton
Woods Project is the reform of the Bank. As you know, the Board of the
Bank is dominated by the G-20—by the G-7, maybe by the G-5, I would
say—and Latin America needs more voices there. What would you
recommend from your point of view as one of the brokers there?
What
kind of governance proposals would be willing to go through?
And lastly, given that you have some Fannie Mae credentials even if
from 20 years ago, you mentioned something about derivatives.
In
reference to derivatives, Wall Street now is a little nervous about them.
What are derivatives? Are you trying to get a new instrument in the Bank?
Can you explain this to us? Thank you.
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
There are a lot of needs to those questions.
In the first one, I think one area that I was pleased about and on
which we were a little ahead of the curve is the food and fuel crisis. I was
watching the food crisis starting to increase and was challenging some of
my economists to run through the implications of this. Not surprisingly, at
first many people looked at it in aggregate. They said that this would help
countries that have commodities and that they’ll get more revenue. And I
said that it is very important to disaggregate, because even with a
commodity-producing country, the poor may get hurt. So, we moved quite
quickly, and I was trying to support the U.N. agencies with some of this
rapid financing facility and drawing attention to the need to support the
U.N. World Food Program, which needed to go from about $3 to $6 billion.
On the full scope of this financial crisis, I don’t think that anybody
could anticipate exactly what we have encountered. All during the course
of the year I could see that it was going to be particularly challenging.
What I tried to do at our annual meeting in October was to identify that the
events of September and October, in my view, pushed us into a new level.
In that sense, we tried to use the meeting to point out to people—and I tried
to use forums like this to do so—that I think we were going to be in a
difficult space for 2009, and perhaps beyond.
Your second question is about voice and accountability. Let me give
you some of the basics on this. We obviously have to work with our
shareholders. Management can do things like change the composition of
our staffing, so I have appointed eight officers—seven of them are from
developing countries.
My first Chief economist is from a developing
country, but in addition—and you are right—we can try to bring our
shareholders together. In fact, we took a first step this autumn as, frankly,
the region that was most poorly represented on the Board was Sub-Saharan
Africa. We have 24 chairs and we agreed to add one for Sub-Saharan
Africa, because we only had two for that region, so we will add a chair for
Sub-Saharan Africa.
In terms of the voting, we have adjusted the voting a little bit, so the
share of developing countries is now up by 44%, and for IDA up to 48% of
the total. The number of chairs now on our Board has a majority of
developing countries, but here is where the challenge comes in. You have
to figure out the balance among what. If you did it on size of the economy,
the U.S. would actually have a greater share, because it actually has 17% of
the vote, and it’s bigger as a percentage of GDP. And then you would have
to decide if you did it only on the size of the economy, then some of the
African or Caribbean countries would have no representation, and that
wouldn’t be right. So, how do you get that balance among those various
interests? What I tried to do while taking this first step was suggest that we
need to take more steps. To give us an independent view, I have asked
former President Zedillo to chair a governance group to step back—and
actually, we’ll again have more members on this commission from the
developing world than the developed world—in order to look at some of
these issues over the course of the coming year.
Now, there are other issues, and I’ll just give you some of the
tensions involved with this.
Of the 24 current chairs, eight are from
Europe. Now, Europeans often talk about improving governance, but they
don’t talk about giving up any of their chairs. To be fair to them, when it
comes to IDA—and your colleague from Paraguay asked about IDA—the
Europeans are pretty generous contributors. One of the problems with this
balance is that if you take the Nordic countries, for instance, they have been
pretty good contributors. They would really like to have a chair, and it’s
hard for them to get the money if they don’t have a chair that at least
represents the Nordic and Baltic countries. These are the balances that you
have to have. Should the chairs represent the size of the economies, the
size of the economies plus some special representation for the poorest?
Does it matter whether countries contribute to some of the special programs
we have for the poorest? How do you get that interconnectivity? I will say
this: there aren’t many decisions that actually go to our Board by voting,
and so, I do think the main thing is making sure you have the participation
in the discussions and in the day-to-day process.
Now, there’s another big question that I do think people have to ask.
It is a little strange to have a full-time board. I’m sure Luis Alberto
Moreno will talk to you about this from the Inter-American Development
Bank standpoint (IDB) as well. Our direct expenses for our Board are $70
million a year. I just did a review using 365 days a year, and we produce
17 papers a day for that board. You have a board that was created before
the era of air travel and, to be honest, one of the questions one should face
is: Does that make sense for this period? There are benefits of it. You do
have greater interaction, but you also have drawbacks. So, those are some
of the questions that Dominique Strauss-Kahn, President of the
International Monetary Fund, asked a commission that is chaired by
Finance Minister Trevor Manuel of South Africa to address, and I’ve asked
President Zedillo to do the same with another commission.
Regarding your third question on derivatives, let me just say this, and
this is the last thing on the financial crisis. When I was at the G-20 heads’
dinner, Mario Draghi, Chairman of the Financial Stability Forum, talked
about making securitization work again, and one of the heads of
government said that this was terrible. To be honest, you are not going to
make the financial system work in many countries unless you get
securitization working again. One of the problems now that people talk
about is the fact that banks in the U.S. are not lending. They are actually
lending, but they don’t have the ability to remove the product from their
books, so you have got to make securitization work.
In reference to derivatives, they are a form of securitization. Let me
give you an example of why they can do so many good things. We are
using weather derivatives. Because agriculture in Sub-Saharan Africa is
primarily based on rainfall, if the rainfall doesn’t reach certain levels in a
country like Malawi, we will give special payments to the farmers in that
country. This has already been done with the U.N. World Food Program
where they have to manage currencies, prices, and other uncertainties. We
are trying to help them improve their risk management, and we figured they
could probably get 20% added efficiency.
So, I don’t think that you want to end all derivatives. I think that
there will be lessons, as was the case with some of the credit derivatives.
You have to have clearing houses and settlement mechanisms to make it
work better, and there are issues related to the supervision of how
institutions use derivatives, but I don’t think you want to throw out the
baby with the bath water.
THE MEDIATOR (Dr. Irene Klinger): Thank you very much. I’ll
have to take the last question, because Mr. Zoellick has to go. Embajador
Efraín Cocíos del Ecuador tiene la palabra, pero le ruego ser breve.
Gracias.
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
I could have answered more questions, but your ambassadors are trained to
ask multiple questions. It must be the way the Secretary General runs it.
[Laughs.]
THE AMBASSADOR OF ECUADOR (Ambassador Efraín Cocíos):
Muchas gracias.
El señor Bernard Aronson, en el transcurso del diálogo con el señor
Zoellick, cuando se refirió a lo que él llamó el surgimiento de algunos
populismos en América Latina, dijo que estos presuntos gobiernos
populistas –presuntos, es mi afirmación– están propugnando la tesis de
“más Estado y menos modelo libre”. Obviamente, la respuesta del señor
Zoellick fue exactamente que lo correcto sería dar una respuesta con más
“modelo libre mercado” y menos “Estado”, es decir, más inhibición del
Estado en los problemas.
Entonces, aquí la pregunta que cabe es la
siguiente: ¿Cómo así tuvo que intervenir el Estado en los Estados Unidos
para salvar a los bancos y al sistema financiero en general y no se dejó al
libre mercado que solucione la crisis? Gracias.
THE PRESIDENT OF THE WORLD BANK (Mr. Robert Zoellick):
I think you are making a debating point that is a parity of what I said. I
said that the countries that have done better in Latin America have been
ones that have tried to adapt to market needs in terms of their fiscal
policies, their monetary policy, and some of their currency flexibility. That
is just a fact. We can debate policies, but it is a little harder to debate facts.
In terms of government intervention, as I said, my view on this has
always been of a pragmatic one. I know the history of my own country’s
role with government intervention throughout the 19th century; some of it
was done by the State level. As I said in my answer to Bernie, you have to
understand the pros and the cons of this. So, there’s the danger that the
government starts to control investment or control companies.
For
example, this was what was done in the Soviet Union and the Warsaw Pact
states, and it didn’t work very well in that more extreme model.
And then, we have seen in Latin America models where you had
favored oligarchies and oligopolies. It worked out very well for those who
were the favorite people, but it didn’t work out very well for those who
were left out of the system.
When I used the examples of Brazil’s
Development Bank, Mexico’s Development Bank and others, I also said
that there is obviously a very important role for some of those State
institutions to play, but each society has to figure out how far it wants to
take it and whether at some point it can interfere with some of the
possibilities for private investment.
As I talked about infrastructure, I mentioned how you create various
public-private sector models, but let’s even go much more basic. There’s a
fundamental role for the State in determining property rights, contracts,
rule of law, and enforcement. Then, beyond that, it’s up to various polities
to decide how much they want the government to intervene, whether they
want them to control natural resources. Frankly, from the perspective of
the World Bank, what we try to do is show different experiences out there.
We had a growth commission that was chaired by Michael Spence, a
former laureate of the Nobel Prize, which drew together people from all
over the world, scholars, public officials, and others. The basic message
was that there are very few countries—you really can’t find any—that grew
if they didn’t have openness to international markets. Some of them were
more open on the export side than the import side for a period, but even
that had to change if they wanted to be able to get lower-cost inputs.
Investment in their citizens was very important, and education, basic social
welfare, as well as building the foundations became very, very important.
There clearly was a key need that if the government was involved, it
did so in a transparent way to try to reduce the dangers of corruption and
favoritism.
There are different models out there, and one of the benefits, I hope,
in democratic systems is that people can help select those models, to be
able to choose from. You can see what has been done well in East Asia,
and you can see what has been done in Western Europe. Again, I’ll just
take another region, Sub-Saharan Africa. When I go to Sub-Saharan Africa
now, which has been growing pretty well—if I might add—over the past
ten years, but also faces dangers from this crisis, I am struck by the fact that
what I hear coming out of that region is probably what you would have
heard from Europe fifty years ago. People want energy; they want
infrastructure; they want regional integration linked to global markets; and
they want healthy private sectors, particularly for some of the smaller
businesses to be able to get going and create jobs.
In some ways, there are some basic principles, but that doesn’t mean
that you don’t have government interventions, particularly in a period like
this one where you’re going to need to have your central banks and also, as
I said, you need to have a good fiscal response at present if you can afford
it. But this is where the devil is in the details. The United States is very
fortunate as it can have a very big fiscal expenditure and, frankly, the U.S.
dollar still goes up. For some of the countries represented in this room, it’s
not so clear that they can do that. And so, you need to know the pros and
cons of any of the actions, and partly what we try to do as an institution is
make countries available aware of what their choices are, and what the
experience has been. However, ultimately—and this is a key point to
which the Bank was moving to before I got there, and one that I certainly
endorse—no development program works unless you have national
ownership. It must be owned by people, and they must have their own
sense that they have control over their future as best they can in a
globalized environment. So, what we try to do is help them make informed
choices, and then, it’s up to them and their representatives in government to
make them and to stand by them with the public. [Applauses.]
THE MEDIATOR (Dr. Irene Klinger): Muchísimas gracias, señor
Zoellick y también señor Bernie Aronson, por este excelente diálogo en la
tarde de hoy. Justamente, esto era lo que pensaban nuestros Embajadores,
Representantes Permanentes ante la OEA, cuando plantearon la idea de
llevar adelante la Cátedra de las Américas para fomentar y fortalecer el
debate hemisférico sobre los temas que aquejan al Hemisferio Occidental y
al mundo en general. Les agradezco por haber contribuido en este proceso.
Quisiera también agradecer a la Universidad San Martín de Porres,
representada aquí por el señor David Cunza que ha sido nuestro socio en
este esfuerzo durante todos estos años, así como a aquellos que nos han
apoyado en algún u otro momento, como la República Popular China,
Francia y España.
Asimismo, quisiera agradecer a aquellos que transmiten la Cátedra
de las Américas, que la difunden a través de satélite, como son la Voz de
las Américas (VOA), la Red Internacional Hispana de Televisión (HITN
TV) en los Estados Unidos, EDUSAT de México, Venevisión Continental
y varias cadenas de radio y televisión que llevan la señal a los Estados
Miembros de la OEA, así como a través de Webcast.
Quisiera agradecer a la audiencia aquí, a todos ustedes y a todos
aquellos que nos escuchan a lo largo y ancho de nuestro Hemisferio e
invitarlos a la Trigésimo Segunda Cátedra de las Américas, que tendrá
lugar el 12 de enero 2009, con la participación del Presidente Luis Alberto
Moreno del Banco Interamericano de Desarrollo (BID), en la cual cuando
podremos seguir discutiendo temas de importancia para nuestro
Hemisferio.
Muchísimas gracias a todos.