Remarks by President Wolfowitz : Parliaments valuable to fight corruption, the parliamentary network at the World Bank, Helsinki, Finland

 101321 Parliaments Valuable to Fight Corruption, the Parliamentary Network at the World Bank, Helsinki, Finland Remarks by President Wolfowitz October 22, 2005 Thank you very much. First of all, let me thank Foreign Minister Tuomioja, for his insightful comments and thank the whole Finnish Government through you for hosting this Conference and for the marvelous support you provide to the Parliamentary Network on the World Bank (PNoWB). I think there is an important symbolism in being here in Helsinki, and particularly being here in the house of Parliament. I am a recent student of this part of Finnish history, but this Parliament is 100 years old this year, if I am correct. Finland did not actually achieve independence until 1917. You can do the arithmetic. The Parliament is older than the country, and my guess is, the Parliament had a lot to do with Finland becoming independent. It is not a unique experience. It was true in the United States, where the whole independence movement grew out of the colonial legislatures. The same has been true I am sure in many other countries. It is also thirty years, another anniversary, since the Conference on Security and Cooperation in Europe met in Helsinki and produced a document which some people feared was simply going to ratify the division of Europe in the Cold War. It had a little annex called Basket 3, which was the Human Rights Basket, and the cynics said, "What is Basket 3 against the power of the Soviet Union?" Thirty years later, I think we know the answer. The power of the ideas in Basket 3 was much more powerful than any dictatorship, and I think the ideas that were represented at that conference are ideas that parliamentarians and people assembled in this conference can help to take forward. I also want to express our thanks to our Chairman, Bert Koenders, for his leadership of the PNoWB and for giving me the invitation to address this gathering. Thank you for mentioning my old friend, Jim Leach, who is a very distinguished senior member of the U.S. Congress. I have to tell you that he is also an alumnus of the Johns Hopkins School of Advanced International Studies, where I served as Dean, and he is an old friend from many years ago when he was on the East Asia Subcommittee. He is a terrific member of Congress, and he is actually a symbol of the fact that there is support for the work of the World Bank from both political parties in the United States. He is a Republican. Thank you, also, Mr. Chairman, for your reference to 24-hour speeches. I wish to thank you for not delivering one, but that is not the main point. I was sitting once as Ambassador to Indonesia in the then-Indonesian Assembly, listening to the then-leader, whose name you all know, droning on and on; and I formulated then probably one of the few reliable laws of political science: there is an inverse relationship between the length of leaders' speeches and the amount of democracy in a country. The longer the speeches, the more you know you have a captive audience. So it is a pleasure to be here. I will have to keep my speech within limits now that I have set myself up, or else -- but at least you are free to leave if you want to.I know that your Network has come a long way in just five years. The membership has grown to nearly 1,000 members of Parliament from 110 countries. The Parliamentary Network on the World Bank is a respected player in the development community, and there has been some amazing progress around the world. I wanted to make a special point -- and I'm sorry for the brief delay -- of welcoming my Indonesian friends, some of whom I know, some of whom I only recognize by name; but it is only seven years since Indonesia had a democratically elected Parliament. It is great to have you here in that capacity. And I do have to say that even before it was democratically elected -- and I will come back to this point, perhaps -- I think, even though there was a lot to question about the National Assembly in Indonesia under the former regime, it was a vehicle by which some voice was given to genuine opposition leaders, including Megawati Sukarnoputri, who later became President. Parliamentarians sometimes have a way of working through the cracks, and that is something to keep in mind. I am told that there are 75 members of Parliament here from Africa - a special welcome to all of you. As I have said often -- and I am prepared to say it many times -- I think the situation of sub-Saharan Africa is not acceptable. It has to be the first priority of the World Bank; but it is not something the World Bank or the development community can do unless there is leadership in Africa ready to take on the challenge of reducing poverty in Africa. And increasingly, I find leaders and governments, including the Parliaments in governments, stepping up to that challenge, and that makes me hopeful about the future of sub-Saharan Africa. And as I look around the room, I cannot do the count; but I see a fair number of women. I think that is terrific. I think it is important. I could tell you a number of stories in this regard, but one that has stuck in my mind was visiting a small Muslim village in a very arid part of Burkina Faso. I was introduced to the person that was going to guide me around the village, who has been elected Secretary of the village. It was a woman, a young woman. She had taught herself to read. I asked her whether it was difficult for a woman to be elected Secretary in a Muslim village, and without hesitation, she said, "There's no way we can develop if women don't have equal opportunities." So I think it is important that they are represented in good numbers here in this group, as well. Thank you. The past 15 years have seen tremendous growth in participation in civil society around the world. In 1987, there were 66 countries with electoral political systems; today, that number has nearly doubled to 121. At the same time, the number of nongovernmental organizations has more than doubled from 20,000 to more than 44,000. This participation boom, combined with the development paradigm that emphasizes partnership and country ownership, brings tremendous opportunities. But these changes also imply new responsibilities. They imply that your mission, the mission of the Parliamentary Network on the World Bank, your mission of strengthening parliamentary voice on development and global issues is becoming more relevant and more important. Development policies are not made in a vacuum. They reflect the political environment in which they are formulated. This means that effective leadership and strong public institutions are needed if we are to fight poverty successfully and create opportunities for the poorest people of the world to have a better future for themselves and for their children, and that means effective leadership by elected representatives such as yourselves. Well- functioning parliaments can help ensure that the voices of the poor are heard and that their needs are addressed in the policymaking process. Against this background, the World Bank and Parliamentarians are increasingly working on issues of common interest. On my first official visit as President of the World Bank, I made a point of going to Africa. My first stop was in Nigeria, and I was really delighted in one of our sessions there to meet with a group of Nigerian Parliamentarians who were joined by representatives of the British Development Agency DFID, the U.S. Agency for International Development and a nongovernmental organization from the United States called the National Democratic Institute. We had spent a lot of time in the previous 48 hours talking with both government officials and civil society about the problem of corruption. As we talked with these parliamentarians, I realized that parliaments are one of the key institutions to help hold governments accountable; and that one of the keys to doing that is having parliaments that are not only elected and independent, but parliaments that are competent, and not only competent in their individual members, but with staffs that can provide these members with the information they need. I think information is the key to transparency and to the fight against corruption. Corruption is a weed that does not survive well in the light of day. I think parliaments can be part of bringing the light of day to clear out the weeds. The World Bank is working on forging stronger partnerships with parliaments around the world, because their oversight role has an important bearing on the mission to fight poverty. Across the world, parliamentarians monitor public resources and provide a crucial link between the World Bank and the local communities in both developing and developed countries. In developing countries, parliamentarians can act as change agents, championing social and economic reforms and combating corruption. We have a lot to learn from the on-the-ground experience that members of parliament bring and that can help shape projects and policies of the World Bank Group. And of course, as many of you know, our projects are subject to parliamentary approval, either through direct ratification or through the budget process. Parliaments play an equally vital role in countries that provide development assistance. Parliaments debate and approve foreign-aid budgets and shape and review development policies. They are also an important partner in the call for action, making the case for more aid, better use of aid and more trade opportunities. We have found that involving parliament through all key project stages contributes to building trust, ownership and understanding, all key ingredients for the success of our activities around the developing world. When the Parliamentary Network on the World Bank set up its East Africa chapter in Kenya over two years ago, Bank staff in Nairobi began to meet regularly with Kenyan Parliamentarians to exchange views on policy issues, including the sensitive and important issue of corruption. Professor Ayiecho Olweny, a member of the Kenyan Parliament, later said, "As MPs, we are glad to be involved in this dialogue process and are not as suspicious of the World Bank as we were previously, now that we have more information." Our objective with the Parliamentary Network on the World Bank is not only to engage parliamentarians in the dialogue on development and global issues; we also provide support for strengthening parliaments so that parliamentarians can fully exercise their roles. It is a fact that there are still many countries where parliaments are weak. Even where they are democratically elected, many parliamentarians are constrained by limited training or experience in drafting laws and budgets. Very few have the staff or the technical support needed to perform their roles most effectively. Under such conditions, parliaments in many parts of the world cannot fulfill their potential or effectively represent the interests of their people. That should be a worry to anyone concerned about development, and certainly it is a worry to us at the World Bank Group. As World Bank President, I intend to build on the partnerships that the Bank has already established with parliaments around the world. Our engagement at the global level is focused above all on sharing knowledge. The Parliamentary Network offers the World Bank an opportunity to exchange views today with some 200 Parliamentarians representing nearly 100 countries. This, I gather, is your Sixth Annual Meeting, and I am very pleased to see a large representation from our colleagues in the donor community, including from the IMF, the U.N., the African Development Bank and the OECD. I know they share my views about the importance of cultivating strong relationships with leaders from civil society, from parliamentary organizations, from businesses and from academia in a forum like this. At the country and regional levels, Bank relations with parliaments focus on our operations and on the development challenges that our partners face on the ground. The local and regional chapters of the Parliamentary Network on the World Bank help to structure Bank interactions with parliaments to encourage lively debate around local and country- specific development challenges. In Nairobi in Kenya, parliamentarians meet several times a year with the country director for the World Bank to exchange views on our projects and policies. In India, in New Delhi, some 50 parliamentarians meet several times a year with our country director and his staff. In Lebanon, in Timor-Leste, and in many other countries, our staff consult parliamentarians on country assistance strategies. And in Mexico and Bolivia, the same was done for our public-expenditure reviews. Over the past ten years, the World Bank Group has also responded to requests for capacity building. Our training activities are co-financed by many donors, including and especially the Government of Finland. I would like to take this opportunity to thank all of you for your valuable assistance. These programs have helped strengthen capacity to curb corruption, to enhance oversight for poverty reduction and to improve administration. More recently with Finland's support, we conducted a study group to examine the parliament's role in representing the poor in conflict-effected countries, the most vulnerable group in the developing world. The report of this study group has been distributed to some 50 Parliaments around the world. So, as you can see, the two focus areas of the Parliamentary Network -- that is to say, engaging Parliamentarians in dialogue and strengthening the capacity of Parliaments -- are becoming more and more integral to the mission of the World Bank Group. During this year of development, the call for action in the fight against poverty resonates loud and clear from around the world. We have seen demonstrations of political will and commitments of means to fight poverty, and we need to ensure that our work addresses the day-to-day hardship faced by the poor and that this work translates into results. Proactive parliaments that act in the interests of the poor are vital players in that process. That means asking tough questions and ensuring that pressing development issues are placed on the national agenda. We have achieved much progress in the past year with strong international commitments to increase aid and strong international commitments to debt relief; but much more needs to be done by both developed and developing countries, and parliamentarians can help. Developed countries must live up to their promises to increase aid and to provide debt relief and to do a better job of coordinating their efforts on the ground; but, more importantly, they now need to help bring the trade talks under the Doha round to a successful conclusion. These negotiations hold the key to a better future for the 1.2 billion people around the world who live on less than a dollar a day, who live in extreme poverty. Let me be very clear: Unless serious concessions are made by all sides, developing countries, as well as developed countries, by Europe, the United States, Japan, by everyone, the Doha round of trade talks will fail, and the people who will suffer the most are the poor people of the world. I have just come from visiting some very poor areas of Western China, and before that I have seen extreme poverty in Pakistan, in India, in Bangladesh, in Nigeria, Rwanda, Burkina Faso and South Africa. It is the people I saw in those places: people living on less than a dollar a day, people who are not present in this room or at this gathering, but people who we are charged with representing. There are 1.2 billion of them. They have been waiting a long time. These trade issues, I know, are difficult issues. And it may be uncomfortable -- it probably is uncomfortable -- for almost every government to step forward and give up subsidies and other barriers to free trade; but that temporary discomfort is nothing compared to the daily discomfort and depravation of the poorest people of the world. They are counting on us; we must deliver results for them. We face great challenges ahead; but I am confident that results can be achieved with resolve and commitments that come with strong leadership. There is much that we can learn from each other and from the failures and the successes of the past, and the World Bank Group is ready to work with you to share this knowledge and to build capacities. Throughout recent histories, parliaments have steered their countries through times of great change and contributed to progress and development. Today, parliaments must rise to a new challenge: helping their countries to stand accountable in the fight against poverty and to deliver results for the poor. Thank you very much. Q&A session with World Bank President Paul Wolfowitz THE CHAIRMAN (Bert Koenders): With the region of Africa: I know there is a question from Beatrice Kiraso, who is one of our members from Uganda. Mrs. Kiraso, you have the floor. Can you identify yourself? MS. BEATRICE KIRASO: Thank you very much, Chairman. Mr. President, you have indicated time and again, and indeed you have repeated this morning in your speech, that Africa is your priority. Within that priority, you have also specifically stressed the importance of infrastructural development. One of two questions that I would like to put to you: what specific type of infrastructure are you focusing on, and how much emphasis will be placed on regional integration projects which have already been identified? The other question is about the timeframe: what kind of timeframe are we talking about for the delivery of these projects from the time of starting them to completion? Since there have been challenges in the past that the Bank has faced with the delivery mechanisms, especially in sub-Saharan Africa. So the question is, how do you intend to deal with these challenges? And on the side of members of parliament or parliaments in sub-Saharan Africa at institutional level in the spirit of a better approach to its efforts of economic development, how do you intend to engage or involve parliamentarians more? I know that there is an office in charge of relations with parliamentarians. But I mean the practical approach of engaging with parliaments across the region. How are parliaments going to get prepared to understand and appreciate more the policies of the Bretton Woods Institutions? I thank you. PRESIDENT WOLFOWITZ: Thank you. That's a very thoughtful question. Actually, it's a series of questions. First of all, let me say that when I've stressed the importance of infrastructure in development, it's not to the exclusion of other sectors. It is rather because I've been impressed ever since I was nominated for this job by the number of people from developing countries, and particularly from Africa, who have complained to me about what they perceived as a withdrawal by the World Bank from infrastructure projects. So I don't want to have anything I say here sound like I think we should withdraw from education or health. It's a matter of trying to get the balance right. I've often used the analogy that since development is a team sport. We need to cover all the positions on the playing field. For those of you like me who've had small children play soccer, in Europe you call it football, the ball goes to one part of the field, and 22 players including both goalies go chasing the ball. I don't want infrastructure to be this year’s ball that everyone goes chasing. We've got to cover education. We've got to cover health. We must have an integrated strategy in each country. But it's also important for people who are very much moved - and I share that feeling - by the plight of people who are suffering from HIV/AIDS or the plight of children who don't get to go to school. I say, “Why should we be wasting our time building dams or railroads? We should be helping those people directly. “ The fact is, you need electricity. You need jobs. You need roads. You need the whole integrated structure of development just to deliver health care or just to deliver education. You can't do it in isolation. But we'll be making a big mistake if we swing over the other way and unbalance ourselves. And this was, I think, a direction that had already begun a couple of years ago of increasing support to infrastructure; and the projection at the present rate is that we will increase by about a billion dollars of lending per year over the next two or three years, at which point infrastructure will probably represent about 40% of the new lending of the Bank. I think among the priorities in that investment will be, well, I should first start with the general principle: our role is not to supplant investment by the private sector. We're going to particularly focus on those areas where public-sector investment is critical. In India, for example, we're looking at investment in rural infrastructure, because the private sector is not going to build small rural roads or drill wells. And I think one of the reasons that there was a decline in infrastructure investment over the last 10 years is, there was a slightly excessive expectation of what the private sector could do. But there are many things that the private sector can do, and we're not trying to replace that. So we are trying to focus on those things that most directly affect the poor. And at least inAfrica, I think there needs to be a particular emphasis on regional development. I think you referred to it in your question, with the subcontinent divided up into so many countries and some of the biggest challenges are faced by landlocked countries like two of the ones I visited, Rwanda and Burkina Faso, you can't deal with their infrastructure problems just on a country basis. Among other things, we have something called the East Africa Trade and Transport Project inKenya, Uganda, Rwanda and Tanzania aiming to facilitate concessioning of railroads and improving regional customs services. We have something called the South Africa Power Market Project to facilitate transmission of power from the Democratic Republic of the Congo toZambia and also connect Malawi to the power pool. We have something called the West Africa Gas Pipeline from Nigeria to Ghana, Togo and Benin. Something to point out, by the way, I saw this in Pakistan when we discussed the Lower Karachi Corridor, where the problems of transport are so severe that products that are highly competitive – or would be highly competitive in world markets when they are produced in Lahore become non-competitive by the time they get to the port in Karachi; and roughly one-third of that additional cost is attributable to bad roads, and two-thirds of it is attributable to excessive administrative and informal barriers of various kinds to move that distance. So we can pour all the concrete in the world but if you don't deal with some of the other problems, in West Africa, for example Mr. de Rato mentioned in his speech to the Annual Meeting of the World Bank and IMF Governors that in one stretch of 1,000 kilometers running through Burkina Faso, there are, I believe he said, 69 different checkpoints. Do the arithmetic. That's one checkpoint every 15 kilometers. And you know what a checkpoint means. It probably means not only paying a fee, but some other things, as well. It certainly means delays. These obstacles must be eliminated or the investment and infrastructure will be useless. And we have to learn from some of the mistakes of the past. There were reasons why the World Bank pulled out of this area, and some of them were good reasons. There were too many white elephants; if you know, money thrown at big things that don't work; money used on big roads without money spent on maintaining the roads; big projects where, just like honey attracts flies, big money attracts corruption, unfortunately. So we can't just repeat those mistakes. At least … well, we can but we mustn't. We've got to try to learn from them. And one of the things we've got to learn from is some of the environmental lessons of some of the bad projects of the past. I think one of the great things that the World Bank brings to this whole area is a lot of understanding about how to balance environmental needs with development needs, and I think that is crucial. And some people would say,