Former World Bank chief looks to future

Bangkok Post, March 7, 2008

Much of your legacy at the World Bank has been in the area of poverty alleviation and the environment.

Where does the world stand today on these issues?
The fact of the matter is that the world is not good at looking long-term. If you listen to the [election] debates in the United States, there hasn’t been a word mentioned about global poverty. You hear a bit about the environment, but much of that is local.

If we look forward, addressing the global issues of poverty and the environment depends on stability.

You might be able to put a wall [around the problem], but not for the medium-term. You can’t have a world where 50% of the people are living on less than $2 per day.

But public awareness about the issues has increased, has it not?
You can typically attract the interest of people [in a speech] for 30 minutes. During that time you can engage them in global poverty, about the environment, corruption and the rights of women.

But when they leave the room, they go back to their local issues. It’s the rare person that will give attention to the bigger picture.
But we can’t put Africa off for 10 years. We can’t put the environment off for 10 more years.

During my time at the World Bank, I had access to global leaders from 120 countries.

All would say that you are right. But it’s rare to find someone who will look beyond the short-term, domestic issues.

So where is progress being made at the current time?
I see a much larger group of young people now, who look at the issues of equality, of the environment, of education, of women’s rights.

They know that these are all issues that we will face in the future.

In the universities, you see much greater awareness and consciousness about the need for action. Throughout history, idealism has been strongest among the young.

I do think we need to concentrate [efforts to raise awareness] with young people. You can capture the interest of someone for an hour.

But that’s not the test. The real test is what are they going to do when they go home?

Can I say that we have victory? No. But I can say that now [poverty and environmental] awareness is better than during our parents’ generation.

India and China are both rising quickly in economic development.

And I think that in the last five years, particularly in Asia, awareness of the environment, poverty, the role of women, education and health issues [has risen together with growth]. People aren’t just talking about it.

One debate in Thailand has been whether community development strategies have been made more for currying political favour rather than poverty alleviation. What’s your take on populism?
I don’t have a view of the morality of Thai politics. But in a democratic system, you have to appeal to voters. In Thailand, you do have rural poor. You do have inequities. [Laughs] It is rumoured that there is corruption.

If you don’t do something about these problems, voters will react. It’s not that the politicians woke up and thought to do something .. . It’s that the public has said that these issues must be addressed.

Is environmental protection a luxury of wealthy nations?
The people affected by environmental problems are the poor. The rich can buy bottled water, they can live in air-conditioned homes. It’s the poor who suffer [more from climate change and natural disasters].

The world is changing rapidly. Four- fifths of the world controls 20% of Gross Domestic Product (GDP). But in just a few decades, the developing world will control 50%, 60% of GDP. China and India are growing quickly, and it’s now the period for Asia.

And I think that if you look at the meetings of Asian leaders, it’s evident that they know politically, they have to take the lead on the environment and poverty. I’m quite optimistic.

You also hold a position as an advisor to Citibank. What’s your thoughts on the sub-prime mortgage crisis?
I don’t think anyone can tell you when it will all end. It’s difficult to make an assessment, when huge amounts of assets can’t be valued.

On a portfolio of say $80 billion, do you write-off or set provisions for $10 or $20 billion?

Can we now expect a call for stiffer bank regulations?
I’ve yet to see regulations that can stop a [banking] crisis. They can stop the last crisis, but bankers can be quite innovative in finding ways around the rules.