World Bank president Robert Zoellick, speaking today at the conclusion of a half-day CGD conference on the future of the World Bank, touched repeatedly on the bank’s potential contributions to addressing climate change. And he framed the bank’s role in climate change and other areas as being about more than the traditional project-based lending.
"Our role is also one of trying to advance ideas about international projects and regimes and treaties whether they be in trade, whether they be in finance, health, education or climate change, so they can benefit all, and most of all those in need," he said. "So the World Bank Group should be trying to expand the frontiers of knowledge in policy and markets and trying to pioneer new possibilities, as opposed to just recycle the passively proven with a slight financial advantage."
Having attended Zoellick's speech last week at the National Press Club, I was interested to hear that he came back again to issue of climate change, providing additional details about ways that the bank could help. Speaking to some 150 development policy experts, Zoellick appeared much more at ease than he had at the Press Club, and he displayed an impressive command of the issues, especially in response to questions from the audience. He did not, however, touch on the question of bank governance, which along with global public goods was one of two challenges that CGD president Nancy Birdsall identified in her post earlier this week Will Bob Zoellick Be a Good World Bank President--Or a Great One?
Christopher Connell, a longtime reporter for the Associated Press, attended the conference and filed this news report for CGD’s Views from the Center blog:
World Bank President Robert Zoellick said today the bank has an important role to play in helping developing nations get their voices heard in the debate over what to do about climate change. As it stands, these countries are afraid that developed nations "are just going to walk over people," Zoellick told a policy conference convened by the Center for Global Development.
On the eve of the World Bank's annual meeting, Zoellick, a former U.S. Trade Representative and top Treasury and State Department official, reiterated the six strategic directions that he laid out for the bank in a 100 Days speech at the National Press Club on Oct. 10. His aim is to create a "nimbler" World Bank that can help poor countries with its knowledge as much as with low-cost loans.
Zoellick addressed 150 people at the CGD conference on The World Bank: What Should Its Future Be. Earlier, participants heard a dozen authorities -- including two finance ministers, the World Bank's outgoing chief economist and the administrator of the United Nations Development Program -- offer their own prescriptions and forecasts for what changes are in store for the World Bank, one of the global institutions created in 1944 at the Bretton Woods Conference to help rebuild Europe and the world economy.
Zoellick sidestepped questions about whether he favors governance changes to give the developing world a larger say in how the World Bank is run. But he left no doubt that he wants the bank to "pioneer new possibilities" instead of recycling its old ways of doing business.
CGD President Nancy Birdsall, a former director of policy research for the bank and former Executive Vice-President of the Inter-American Development Bank, told Zoellick that the earlier speakers had expressed both "optimism and worries" about what lay ahead for the global lending institution. But she said most at the conference shared her view that Zoellick has the makings of a "great" World Bank president. Zoellick replied that if he and his colleagues make headway on the strategic plan, "the rest will take care of itself."
A key part of that agenda is for the World Bank to play a more active role in fostering what are called "global public goods," or issues that cut across and transcend national boundaries. These include the issue of climate change, as well as dealing with threats to public health. Zoellick said his intention in personally attending the U.N. Climate Change Conference in Bali in December is "to emphasize the role the bank can play in this, while being very careful to say we are not substituting our role here for the sovereign states, because if you sit in my board meetings, you’ll understand there's a great sensitivity among developing countries on this."
Zoellick said there is "this fear … that developed nations are just going to walk all over people" in pushing solutions to the problem that favor their economies. Zoellick noted he was in sub-Saharan Africa during the recent G-8 summit in Germany that focused on the threat from greenhouse gases. "All the Africans I talked to were saying, 'Wait a minute. What about our development and growth agenda? Is this the G8 now hijacking the World Bank again to devote its resources to climate change?'" he related.
Zoellick defended the World Bank's continuing to provide loans to China, India and other middle-income countries with fast growing economies. Some critics question why the Bank still helps China, which has $1.4 trillion in foreign reserves. "To me it's a pretty clear issue," he said. Seventy percent of the poor living on less than $2 a day are in such countries, "so you really can't really ignore these countries, nor should you. But secondly, if you're interested in issues like energy and the environment, how can you possible get at them unless you're going to deal with these countries?"
Zoellick wants to see the bank "operate in a more nimble fashion as part of a network system" with other multilateral and bilateral agencies and foundations. He said multilateral institutions all face new pressures to justify what they do. This is "a very sensitive subject" inside the bank, where people are "very proud of their work," he said. "Nobody ever wants to say that things have been bad or difficult. But the reality is you have to open your eyes."
Earlier, Trevor Manuel, South Africa's Minister of Finance, told the conference that he could secure a loan in the private markets by the end of the week, but if went to the World Bank for the same amount, "it’s going to be 18 months before I can smell the money." On a separate panel, former Nigerian Finance Minister Ngozi Okonjo-Iweala suggested the bank give developing countries a greater say on the operations of its International Development Association, which makes loans to the 81 poorest countries. Okonjo-Iweala, soon to become the World Bank's new Managing Director, said the bank’s needs a lending instrument "that allows it to reach the poor" as directly as possible.
Ngaire Woods, Director of the Global Economic Governance Program at Oxford University, said the bank "badly needs globalizing." It is still operating as if the United States and its allies in Europe still controlled the world, as they did after World War II, she said.