Visiting World Bank Group President James D. Wolfensohn delivered a
keynote speech entitled "Implementing a Global Partnership for
Poverty Reduction" to students and faculty members at
Peking University
Wednesday afternoon. Following is the full text of his speech:
IMPLEMENTING A GLOBAL PARTNERSHIP FOR POVERTY
REDUCTION
Professor Min,
Distinguished faculty and students:
I
am delighted to be back in China and feel especially honored to
deliver a speech at this great University. It was here at Peking
University, I am told, that the famous May 4th Movement originated
in 1919 -- an event in which the students of Beijing, your
predecessors, took to the streets to protest against the then
warlord-led government, rallying the fight against feudalism, and
promoting democracy and science throughout China.
I
find those themes of challenging outdated ways of thinking, while
embracing more pluralistic views, and with it, science, knowledge,
and learning, especially fitting today.
These were indeed the kind of sentiments exhibited during the March
2002 Financing for Development Conference in Monterrey, Mexico,
which marked an important turning point in meeting our aspirations
on development as embodied in the Millennium Development Goals. The
conference brought together heads of state; foreign, development,
and finance ministers; civil society; and international
institutions for perhaps the first time in an international
meeting. And, more encouraging, its outcome has laid out for the
global development community a greater consensus than ever about
what needs to be done. The challenge before us now is to translate
that consensus on the global development compact into action, by
scaling up efforts on the part of developing countries and the
broader international community.
Now is the time to focus on moving from words to action.
The challenge ahead is implementation -- and implementation in a
way that maximizes the impact on poverty, and minimizes the
administrative burden we put on poor people. This means actions
taken not just on further boosting aid but on improving how aid is
used, on building capacity in countries to manage development
programs, on improving trade conditions to take benefit of the
globalizing world, and also, equally importantly, better aid
co-ordination to ensure that resources are not wasted, and that aid
is used to the benefit of poor people.
We
must recognize that while there is social injustice on a global
scale -- both between states and within them; while the fight
against poverty is barely begun in too many parts of the world;
while the link between progress in development and progress toward
peace is not recognized -- enduring peace may never be
realized.
On
September 11, the imaginary wall that divided the rich world from
the poor world came crashing down.
Belief in that wall, and in those separate and separated worlds,
has for too long allowed us to view as normal a world where less
than 20 percent of the population -- the rich countries --
dominates the world's wealth and resources and takes 80 percent of
its dollar income.
There is today, an important realization by rich and poor nations
that no wall divides us. There are not two worlds. There is only
one. In this unified, fast globalizing world, interdependence and
mutual living must replace self-seeking and uncaring stances.
The process of globalization and growing interdependence has been
at work for millennia.
As
my friend and Nobel Prize winning economist Amartya Sen has pointed
out, a millennium ago it was ideas -- not from the West -- but from
China, from India and the Moslem world which gave intellectual
basis for much of science, for printing, and the arts. It was the
great Mogul Emperor Akbar, a Moslem, who in the sixteenth century,
called for religious tolerance and openness.
Today we are linked not only by trade, investment, and finance by
travel and communications but also by disease, by crime, by
migration, by environmental degradation, by drugs, by financial
crises and by terror. And there is now a broad consensus that these
problems cannot be solved without addressing its root causes.
Poverty is our greatest long-term challenge and enemy. Grueling,
mind-numbing poverty -- which snatches hope and opportunity away
from young hearts and dreams just when they should take flight and
soar.
Poverty -- which takes the promise of a whole life ahead and stunts
it into a struggle for day-to-day survival.
Poverty -- which together with its handmaiden, hopelessness, can
lead to exclusion, anger, and even conflict.
Poverty -- which does not itself necessarily lead to violence, but
which can provide a breeding ground for the ideas and actions of
those who promote conflict and violence.
Here, China can pride itself on a world-beating record of poverty
reduction -- over the last two decades, the number of absolute poor
people fell from 250 million to 34 million -- the biggest single
contribution to global poverty reduction of any country in that
period. These are impressive accomplishments and deserve to be
celebrated. But we cannot stop here. China can and must achieve
more.
In
this unified world poverty is our collective enemy. Poverty is the
war we must fight. We must fight it because it is morally and
ethically repugnant. We must fight it because its existence is like
a cancer -- weakening the whole of the body not just the parts that
are directly affected.
And we need not fight blindly. For we already have a vision of what
the road to victory could look like.
Last year, at the summit meeting held at the United Nations, more
than 140 world leaders agreed to launch a campaign to attack
poverty on a number of fronts. Together, we agreed to support the
Millennium Development goals. By 2015, we said, we will:
- Halve the proportion of people living on less than one dollar a
day. Ensure that boys and girls alike complete primary schooling.
Eliminate gender disparity at all levels of education. Reduce child
mortality by two-thirds. Reduce maternal mortality by
three-quarters. Rollback HIV/AIDS, malaria and other diseases.
Halve the proportion of people without access to safe water, and
Develop a global partnership for development.
China is well on its way to meeting these targets. Over the last
ten years, China has succeeded in halving the number of people
living in extreme poverty, maternal mortality rates have been
reduced from 95 per 100,000 live births to 50 per 100,000, and
primary enrollment rates have climbed to 99 percent, with the
girl-boy ratio almost at par.
Access to clean water supply has increased from 60 percent to 75
percent. Social and political consensus on the need to protect the
environment and safeguard the future for the next generations has
grown, resulting in the signing of several international
conventions on climate change, desertification, ozone protection;
passing of an environmental protection law and nearly 400
environmental safeguards and regulations.
China is clearly on its way. But more needs to be done.
In
nearly all of these areas, regional and ethnic disparities are
stark -- Western provinces and rural areas are lagging behind on
most of the indicators, progress has been uneven between urban and
rural, and among coastal and remote/minority areas. This disparity
needs to be narrowed -- indeed, must be narrowed, if China is to
achieve its goals of broad-based economic growth, reduction of
poverty, and an equitable and stable China of the 21st century.
The Western Development Initiative is a significant step in this
direction, and the new National Poverty Reduction Plan addresses
the need to ensure that the poorer, more remote areas have access
to growth, economic and social development -- and better lives. The
Plan is adopting a more comprehensive approach including social
development and a new targeting method using a village as a unit
for poverty reduction planning and funding -- and we are encouraged
by the Government's resolve to encourage the participation of
communities, non-governmental organizations and the private sector
in carrying out this plan.
We
know from experience that development happens fastest when poor
people have the ability to influence the decisions that most affect
their lives.
These are good, solid steps towards addressing poverty and
inequality. Yet, in China, and around the world, clearly, more must
be done to both fight poverty and to achieve the millennium goals,
which, as a group -- education, health, gender, environment --
address some of the core issues that keeps poverty entrenched.
How can anyone take issue with the millennium goals? How could
anyone refuse to stand up and say that for my children and my
children's children, I want a better world?
And yet, there are those who legitimately ask: can we win a war
against poverty? And if we can't be sure, should we wager our
resources?
To
these people I would ask: can we afford to lose? How much are we
prepared to commit to preserve our children's future? What is the
price we are willing to pay to make progress in our lifetime toward
a better world?
As
we have noted, much of the growth and poverty reduction worldwide
over the past twenty years has come in the two giants of the
developing world, China and India; with progress too in other parts
of East Asia and Latin America. Yet, too many countries are being
left behind -- especially in Sub Saharan Africa.
Too much inequity between countries and within countries, too much
exclusion, too many wars, too much internal strife, and now
HIV/AIDS, are threatening to reverse many of the gains made over
the last 40 years.
And these challenges will only grow over the next 30 years, as the
global population increases by two billion to eight billion people,
with almost the entire increase going to developing countries.
As
we in the international development community -- international
institutions and bilateral agencies, governments and NGOs -- look
to the challenge before us, we must also look objectively back at
the past, and do so with humility.
For too many poor people, the Cold War years were years when
development stalled or even reversed; when leaders became enriched
at the expense of their people; when monies were lent for the sake
of politics, not development.
We
have seen failure, yes, and we have seen the effects of the
politicization of aid; and we must never forget its corrosive
impact.
We
have learned that policies imposed from outside will not work.
Countries must be in charge of their own development. Policies must
be locally owned and locally grown.
We
have learned that any effort to fight poverty must be
comprehensive. There is no magic bullet that alone will slay
poverty; but we know too that that there are conditions that foster
successful development: education and health programs to build the
human capacity of the country; good and clean government; an
effective legal and justice system; and a well-organized and
supervised financial system.
We
have learned that corruption, bad policies and weak governance will
make aid ineffective, and that country-led programs to fight
corruption can succeed.
We
have learned that debt-reduction for the most highly indebted poor
countries is a crucial element in putting countries back on their
feet, and that the funds released can be used effectively for
poverty programs.
We
have learned that we must focus on the conditions for investment
and entrepreneurship, particularly for smaller enterprises and
farms. But that is not enough for pro-poor growth: we must also
promote investment in people, empowering them to make their own
choices.
We
have learned that development is about the long haul, reaching
beyond political cycles or quick fixes -- for the surest foundation
for long-term change is social consensus for long-term action.
These lessons and principles should give us heart, for more than
ever today, bilateral and multilateral donors, governments and
civil society are coming together in support of a set of shared
principles.
More than ever today, a new wind is blowing though the world of
development transforming our potential to make development
happen.
And I believe we can make this happen. Through this global
partnership, there is increased understanding that leaders of the
developed and developing world are united by a global
responsibility based on ethics, experience and self-interest.
It
is recognition that opportunity and empowerment -- not charity --
can benefit us all. It is an acknowledgement that we will not
create long-term peace and stability until we acknowledge that we
are a common humanity with a common destiny.
In this partnership, what must developed countries do?
Leadership in the developed world needs to grasp the opportunity
presented in Monterrey to take the next important step to create
that more stable and peaceful world.
First, they must assist developing countries to build their own
capacity in government, in business, and in their communities at
large. And in doing so, they must listen to the expressed needs of
developing countries so that they help to build individual programs
that are relevant and can make a real difference.
Second, they must move forward on the issue of trade openness,
recognizing that without market access poor countries cannot
fulfill their potential no matter how well their policies.
Third, rich nations must also take action to cut agricultural
subsidies -- subsidies that rob poor countries of markets for their
products. Farm support goes mainly to a relatively small number of
agribusinesses, many of them large corporations, and yet those
subsidies of $350 billion a year are six times what the rich
countries provide in foreign aid to a developing world of close to
5 billion people.
Fourth, rich countries must recognize that even with action on
trade, or agricultural subsidies, there is still a fundamental need
to boost resources for developing countries [estimate an additional
$40 to $60 billion a year to reach MDGs -- roughly double aid
flows]. This is something which I, along with UN Secretary General
of the United Nations, Kofi Annan; as well as the United Kingdom's
Chancellor of the Exchequer, Gordon Brown have been urging in
recent months; and we very much welcome the recent decisions by
President Bush and the European Union to boost aid spending.
There is no debate that our efforts need to be focused and
effective -- on this we all agreed. Too much money has been
squandered in the past by decisions borne of politics not
development.
The understanding is growing. Three months ago a poll of 23,000
people in 25 wealthy countries showed overwhelming support for the
view that fighting poverty and addressing the gap between rich and
poor should top the international agenda.
For centuries, we have focused on issues of war and peace. We have
built armies and honed strategies. Today we fight a different kind
of war in a different kind of world.
A
world where violence does not stop at borders; a world where
communications sheds welcome light on global inequities:
Where what happens in one part of the world affects another.
Inclusion, a sense of equity, empowerment, anti-corruption -- these
must be our weapons of the future.
And what about the other half of the compact, the developing
countries -- what must they do?
In
this new world, development is not about aid dependence; it is
about a chance for developing countries to put in place policies
that will enable their economies to grow, that will attract private
investment, and allow governments to invest in their people --
promoting aid independence.
It
is about treating the poor not as objects of charity, but as assets
on which we can build a better and safer world. It is about scaling
up -- moving from individual projects to programs; building on --
and then replicating -- for example, the successes of
community-driven development and microcredit -- where the poor are
at the center of the solution, not at the end of a handout.
China's own reform experience in the late 1970s with the Household
Responsibility System demonstrates this: by giving the rural poor
control over key decisions regarding the production of agricultural
goods the policy marked a return to incentive-based mechanisms that
were familiar from the past and resulted in huge gains in
agricultural productivity and poverty reduction, representing
possibly the largest successful social and economic change in such
a short time. This shows us that when poor people are given the
tools and opportunity to construct their own solutions to
development problems, they will do so, often in ways unanticipated
by economic policymakers or planners.
China, like some other countries, is not sitting back waiting for
development to be handed to it by others. It has taken full
ownership of the development process and has determined how best
donor programs can support its priorities -- while emphasizing the
need for appropriate institutions and systems and ensuring that the
pace and nature of reforms is commensurate with local
realities.
The last twenty years has witnessed remarkable economic growth in
China. When government recognized that some new "territory" of
reform was uncharted -- it adopted a pragmatic "learn as you go"
approach to reforms -- piloting projects, introducing reforms,
testing for success, and replicating, if possible, across the
country -- helping to contribute to the economic success we know
today as China.
Now the challenge for China, as the reform path leads into
uncharted territory of opening to the global economy and growth
increasingly driven by the private sector, is to continue with
unfinished old reforms (financial sectors, SOEs); to address
adverse side effects of reforms (increasing national and regional
inequality, budgetary problems, environmental deterioration,
problems with health and education) and confront new reform
challenges emerging from its ascension to WTO.
Openness to trade has been a wise choice for the people of China.
More reforms are needed to enhance governance, alleviate social
pressures, mitigate environmental degradation and strengthen
infrastructure -- while promoting innovation and change.
The factors which led to China's past success -- agricultural
reforms, opening to world markets, expanding investment and trade
-- will not be able to be replicated to drive future growth. Its
future success and competitiveness is going to rely on increasing
the productivity of labor and capital and acquiring new knowledge
in this new century of rapid technological change, open and
competitive economies, and knowledge-based industries. In this
environment, stable countries with well-educated and healthy people
will realize the most rapid progress.
China must continue to invest in education and the knowledge
economy. The future of China's growth lies in these.
While China today compares favorably in education accomplishments
with most of the countries of similar income level, substantial
challenges remain due to remaining pockets of poverty, persistent
structural weakness and widening disparity of income and inequality
in sharing the benefits of growth.
And, though China has made significant progress on improving access
and quality of basic and primary education, it is falling behind
its neighbors in ensuring the same level of secondary and higher
education, essential to building the kind of versatile,
well-skilled workforce needed to compete in the 21st century.
I
am encouraged by Government's recognition of the need to both: (1)
ensure there are adequate resources for the weakest parts of the
system -- especially poor rural areas -- to provide increased
access to high-quality basic education to all, and (2) encourage
the strongest parts of the system -- especially in the urban and
coastal areas -- to increase their quality to grow and prosper as
fast as possible. And I pledge the support of the World Bank is
assisting China achieving both of these objectives.
By
investing in education, China can build the human capacity it needs
to take full advantage of the unprecedented opportunities offered
by a new globalized world economy, while ensuring that each
individual has the opportunity to thrive personally, contribute
productively to the country's goals, and break free of the burden
of poverty.
Knowledge and information are becoming the key drivers of
international competitiveness and the global economy. China must
not be left behind.
To
compete and prosper in this new environment China has to move away
from factor intensive growth toward knowledge based growth, become
more open and harness the forces shaping the global economy,
leapfrogging to take advantage of rapidly evolving technologies --
technologies which some of its neighbors have already been
developing and using.
In
order to do this, China needs to make major changes in its
development strategy to upgrade and create new institutions and
infrastructure critical to harnessing the knowledge revolution --
this involves updating its legal and financial networks,
intellectual property rights, education upgrading, information
infrastructure, etc.
And, a huge challenge will be to provide supportive environment for
diffusion of technology into enterprises with backward technology
in the less developed parts of the country. If foreign investments
and technology-driven growth remain concentrated in cities of East
China, the rest of the country will increasingly fall behind, and
existing regional inequalities across China will further
deepen.
We
are working with China on a range of initiatives, including using
the Global Distance Learning Network (GDLN) to link not only
Beijing with other Asian capitals but also to help it link with
smaller, regional centers -- such as the new center in Ningxia.
Efforts are underway to use the GDLN network via the China Country
Gateway, to extend throughout China by linking up Mayors to share
experiences and develop common strategies for well-planned,
well-serviced and environmentally friendly city development.
We
at the Bank fully support this move towards embracing the potential
of the "Knowledge Economy" and see our role as a catalyst, a
facilitator, a broker and a connector, positioned at a major
intersection in the network economy, connecting global learning
opportunities together with investment assistance for local
development.
I
have spoken now of both sides of the partnership -- of the
developed countries, and leadership in the developing world -- as
exemplified by China. I believe we have a greater chance today,
than perhaps at any other time in the last 50 years, for both sides
of the partnership to work together, to fulfill their part of the
bargain, and work together to win that war and forge that new
partnership for peace.
We
need to go further. We can do more. China can and must accomplish
more.
Across the world, we must educate our children -- students such as
you who are standing before me today -- to be global citizens with
global responsibilities.
We
must celebrate diversity, not fear it. We must build curricula
around understanding, not suspicion; around inclusion not hate.
We
must tell our children to dare to be different -- international,
intercultural, interactive, global. We must do better with the next
generation than we have done with our own.
Thank you.
(china.org.cn May 29, 2002)