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James D. Wolfensohn, President, The World Bank Group
The World Bank Group consists of the following
closely associated institutions:
The International Bank for Reconstruction and Development
The International Development Association
The International Finance Corporation
The Multilateral Investment Guarantee Agency
The International Center for Settlement of Investment Disputes


Protecting the Planet
Mr. Chairman, Governors, distinguished guests.
Let me warmly welcome you to these Annual Meetings in the
60th year after the founding of the Bretton Woods institutions.
I salute my new colleague Rodrigo de Rato as Managing Director
of the International Monetary Fund. We have already begun to
work closely together, and I have come quickly to appreciate his
experience and judgment. My colleagues and I would also like to
congratulate my friend Horst K6hler on his election as President
of Germany and thank him for his significant contribution to the
work of our two institutions.
The World Bank Group has a long and proud history. We
contributed to global reconstruction after World War II before
taking on our new role seeking to reduce poverty throughout the
world. We have been an agent for growth with equity.
With only US$11 billion contributed from shareholders to
the International Bank for Reconstruction and Development,
we have made almost US$400 billion in loans. The
International Finance Corporation, founded in 1956, has
brought US$67 billion into the emerging markets. The
Multilateral Investment Guarantee Agency has issued
US$13.5 billion in guarantees. The International Center
for Settlement of Investment Disputes, meanwhile, has
registered 159 cases for which it has helped settle disputes.
On the strength of donor contributions and reflows from
borrowers, the International Development Association (IDA) has
committed US$151 billion. The countries eligible for IDA are
home to 80 percent of the world's poorest people, who live on
US$1 a day or less. IDA is a truly remarkable instrument,
designed to be effective and accountable. I hope our shareholders
will increase their contributions to the next replenishment.
We must keep IDA strong.
5


Securing the 21st Century
I am proud of our achievements over the past 10 years. We may
be 60 but we are young. We are a united institution, determined
in our goal of "fighting poverty with passion."
We seek to support our clients as partners, respecting their
cultures and aspirations. We ourselves are diverse, with staff
from more than 140 countries.
More than two-thirds of our country directors are now in the
field, with our offices linked by satellite, making
videoconferencing and distance learning a part of all our lives.
We are one of the most modern global businesses.
During these years, we have sought to put our client countries
clearly in the driver's seat. We listen more and lecture less. And
we are not afraid to be self-critical.
We provide financing for projects, and knowledge-offering our
global experience to clients. Our greatly expanded World Bank
Institute plays a key role in this respect. So does our affiliate, the
Development Gateway, which makes available on the Internet
information on development projects as well as synthesis of
experience.
We have broadened our approach to development to make it
comprehensive. We have confronted the issue of debt with the
creation of the Heavily Indebted Poor Countries Initiative and
attacked corruption, working with governments in more than
100 countries.
Our strategy is based on two pillars: investing in people and
creating a stable business climate so that investment is facilitated
and jobs are created.
Working with the private sector is a central part of our Group's
activities. We continue to benefit from both the support and the
criticism of a vibrant civil society throughout the world.
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Protecting the Planet
Development is about people. We focus on the important roles of
women and youth in development and on the special needs of
indigenous communities, the Roma, and other excluded
minorities. We are supportive of the special needs of people
with disabilities.
The environment is also central to our work, for we know that
true and lasting development without preserving our planet is
simply not possible.
We know that we can be effective only in partnership with
others. We have reached out to the United Nations and all other
multilateral and bilateral agencies. To further improve our
effectiveness, we are strengthening harmonization with others.
We have much to do. It seems that the challenges and problems
are never ending. But great progress is being made, and I would
like to thank all my colleagues for their extraordinary work and
commitment. There is no more dedicated nor more able group of
people working to improve the world than our team at the World
Bank Group.
Let me also express my profound appreciation to the Executive
Directors of the Board and to their predecessors for their many
constructive contributions. They play a vital, but sometimes
difficult, role as officers of the institution and as representatives
of their countries.
An Insecure World
At Annual Meetings in the past, I have spoken to you on many
subjects, including the challenge of inclusion, the cancer of
corruption, the importance of comprehensive development, and
the need for a new global balance between rich and poor.
Today I would like to discuss what is perhaps the most difficult
challenge for the coming years. How do we better manage the big
global issues-poverty, inequity, the environment, trade, illegal
drugs, migration, disease, and yes, terrorism?
7


Securing the 21st Century
This year we are reporting record economic growth. And yet,
somehow, we feel less secure about the future. Deep down, there is
a nagging concern about the way the world is evolving.
One need only look at the cement barriers surrounding these
buildings to understand the big difference from past years. They
are not there for protesters. They are there for terrorists. A
computer found in Pakistan showed that the Bank and Fund have
been targeted by Al Qaeda. Terror has reached our door.
In recent times, we have seen things that cause us to question our
basic humanity. Bloody wars in Afghanistan, Iraq, and large parts
of Africa. Unspeakable loss of life in Darfur. Despicable acts of
terror in Bali and Madrid. Growing violence between Israel and
Palestinians of Gaza and the West Bank. In Beslan we have seen
children taken hostage and shot in the back. In Baghdad
innocent men are brutally beheaded on television.
In reaction, we have become preoccupied with security. It is
absolutely right that, together, we fight terror. We must. The
danger, however, is that in our preoccupation with immediate
threats, we lose sight of the longer-term and equally urgent causes
of our insecure world: poverty, frustration, and lack of hope.
Over the past decade, Elaine and I have visited more than 100
countries. We have met with poor people in all of them-in
villages and shantytowns, in remote rural areas, and in the slums.
Just like all of us in this room, they want to live safely and
peacefully. Women want to build their lives free of violence
against them both inside and outside their homes. They want
education for their children. They want voice and respect. They
want to retain their cultural integrity. They want hope.
They want security-but they define it differently than we do. For
them, it is not about concrete barriers and military force. For
them, it is the chance to escape poverty.
8


Protectng the Planet
If we want stability on our planet, we must fight to end poverty.
Since the time of the Bretton Woods Conference, through the
Pearson Commission, the Brandt Commission, and the
Brundtland Commission, through to statements of our leaders at
the 2000 Millennium Assembly-and today-all confirm that the
eradication of poverty is central to stability and peace.
It is still the challenge of our time.
We Can Meet the Challenge
We know that development works. Over the past two decades
alone, the proportion of people in poverty in the world fell by
half-from 40 percent to 21 percent. In the past four decades, life
expectancy in developing countries has increased by 20 years, and
adult illiteracy has been halved to 22 percent.
The Bank's chief economist, Francois Bourguignon, and I have
published a paper for these meetings that looks back on the
lessons of development over the past decade and looks ahead to
the challenges of the future. (Find it on the World Wide Web at
http://www.worldbank.org/ambc/lookingbacklookingahead.pdf.)
We can build on these lessons. At a conference in Shanghai that
we organized with the Chinese government earlier this year,
developing countries shared their experience of what works and
what does not. Over 100 case studies showed that we can
accelerate development rapidly if poor people are treated as
agents of change, not objects of charity.
Many of you participated in the meetings in Doha, Monterrey,
and Johannesburg. The developed countries made promises on
aid, trade, and debt relief. And let me add that we are very
supportive of the proposals on aid and debt reduction that have
been put forward by the United States, United Kingdom, France,
Brazil, and others. The developing countries, for their part,
promised to do much more to build capacity and institutions,
strengthen legal and judicial frameworks, improve financial
systems and transparency, and fight corruption.
9


Securing the 21st Centur,N
Next year we will meet at the United Nations to review progress
in achieving the Millennium Development Goals-with 10 short
years to go until 2015. Thanks to China and India, we know
that the overall objective of cutting poverty in half will likely be
met. But we also already know that most of the other goals, for
most countries, will not be met. Africa, in particular, will be left
far behind.
So what are we going to do about it? What are our children going
to do about a world that in 2015, threatens to be even more out
of balance-even more insecure-than it is today?
I believe, Mr. Chairman, that we must raise our game as an
international community. We must do a better job of managing
the key global issues that will determine our future. As I see it,
there are three urgent priorities:
* Protecting the planet-through better stewardship of our
environment;
* Scaling up on effective poverty reduction; and
* Educating our youth differently for the 21st century-and
giving them hope.
Let me touch on each of these briefly.
Protecting the Planet: Environmental Sustainability
First, protecting our planet.
We must promote growth with a full awareness of the natural
systems on which all life depends. Economic growth does not
have to come at the expense of the natural environment. They
work together.
We all must do a better job of protecting our planet's fragile
environment and addressing global warming. It has been three
decades since I attended the Stockholm environment conference,
and despite progress made in some areas, the way we have abused
the earth since that time is alarming.
10


Protecting the Planet
People in the rich world have overused and wasted tremendous
amounts of energy. The average U.S. citizen or Canadian uses
nearly 9 times more energy than the average person in China-12
times more than the average African. And as the climate
changes, it is the poor in small island states, Latin America,
South Asia, and sub-Saharan Africa who will be the most
vulnerable to the ravages of droughts and floods.
Forests are cut down relentlessly. Of the world's species, a quarter
of the mammals and a third of the fish are either vulnerable or in
danger of immediate extinction. Ninety percent of the big fish in
the oceans have already been killed off.
Mr. Chairman, we have proven ourselves better at menacing the
planet than preserving it.
This was brought home to me two weeks ago, when we had a visit
from a poor but proud farmer who lives near Machu Picchu in the
Peruvian highlands. He was in Washington for the opening of the
National Museum of the American Indian, along with thousands
of other representatives of indigenous peoples. As part of the
opening celebrations of the museum, we at the Bank had a forum
on culture and development.
He was wearing a traditional woolen knit hat and dress, and his
face was weathered by years of living at windy, high altitudes.
Speaking in his native Quechua language, he told me that his
mountains were "sad." The glaciers formed on them for thousands
of years had been the "smile" on the face of the mountains, and
those glaciers are now getting smaller every year. As they recede,
there is no water to refill the lakes and rivers. The animals
suffer-the alpaca yield is half the normal size. The income of
the valley has dropped 50 percent. Farmers are abandoning
their homelands.
So this man from Machu Picchu had a simple question: "Can you
help me get my glaciers back?"


Securing the 21st Century
For those who doubt the impact of global warming, this was an
urgent cry for help. For him, this was not some abstract, long-term
issue. It is an issue of immediate concern. For him, it is a matter
of security.
Perhaps his cry for help is being heard. I welcome the recent
decision of the Russian government to ratify the Kyoto Protocol.
Let us build on this effort, and other signals of support, to get
political commitment by our leaders to fulfill our common
responsibilities that were agreed at the Johannesburg Summit.
Environmental challenges affect all of us, but poor people are
particularly vulnerable. We must give higher priority to renewable
energy. New and clean technologies can allow the poor to achieve
the benefits of development without having to face the same
environmental costs the developed world has experienced.
We must keep the promise to preserve our planet.
Scaling Up the Fight against Poverty
The second urgent area where we must keep our promise is in
scaling up poverty reduction.
We all know the basic facts. Half the people in the world live on
less than US$2 a day. A fifth live on less than US$1 a day. Over
the next three decades, 2 billion more people will be added to the
global population-97 percent of them in developing countries,
most of them born into poverty.
Over the past decade, a quiet revolution has taken place in the
effectiveness of development assistance: with countries taking
ownership of their own programs, with aid being focused on good
policies, and with increasing coordination among donors. Taken
together, these changes can help us double or triple the impact of
aid in the coming decade.
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Protecting the Planet
We can also multiply the effect of projects to reach more people.
As you know, this has been a real issue for the Bank and our
partners. We complete a project for 5 schools or 100 miles of road
or 10 community programs-we call them feel-good projects.
When the need is for 5,000 schools or 10,000 miles of road or
5,000 community programs.
At the Shanghai conference, we learned how we can build on
small, successful projects-and scale them up. Common to all of
them were consistent management over a period of years, simple
replicable models, and full participation of poor people.
I have seen it happen.
In 1996 while visiting China, I met a woman from the Loess
Plateau, where we supported an agricultural project in that arid,
mountainous region. Living in a cave, she had no power or
running water and had little prospect of improving her life.
This spring I had an emotional reunion with her, and she told me
about how her life had improved, how she now has two caves,
doors, windows, water, and power. How she had bought her son a
motorcycle. How her son had found a wife. How she was now
looking to educate her daughter.
She was one of 3 million people who found hope through a
series of 32 similar projects in the plateau completed over 10
years. Projects that were carried out by thousands of individuals
with spades literally turning rocky land into arable soil. The
area is no longer dry and threatening, it is lush and full of crops
and animals.
We and our Chinese partners provided management for 10 years,
repeating the process while benefiting from lessons learned. These
lessons are now being implemented elsewhere in China for the
benefit of millions of people living on marginal lands.
The message is clear: we can scale up poverty reduction and thus
build a more secure world.
13


Securing the 21st Century
Youth and Education
Poverty, of course, is of major concern to young people-and
youth is the third global issue that I believe we must deal
with urgently.
Almost half of the world's population is under the age of 24. Half
of the 14,000 new HIV infections that occur each day are in
young people ages 15-24. More than 50 percent of young people
of working age cannot find jobs. With alarming frequency, youth
are becoming involved in conflict-either as victims or, just as
tragic, soldiers.
What then can we do for them and for ourselves to lead to peace?
One thing I have learned is that we must engage young people in
finding the solution. Last month, when I met in Sarajevo with
youth leaders from 83 countries, I was struck by their genuine
desire to build a better future, of harmony, respect, and peace.
The young Bosnians, Serbs, and Croats I met were eager to put
the country's past behind them. But they felt it was the adults
who were holding them back. As they did in Paris the year before,
they told me they are not the future, they are the now.
We must support our youth through education to create their
better world. And it begins with early childhood development-
because we know that a child's future is largely determined in the
first six years of life.
I am very proud that the Bank is a leader in this field. We have
invested over US$1 billion in early childhood education, and we
make our global experience available to all via our Web site.
We are also actively pursuing the Millennium Development Goal
of getting all children into primary school by 2015. But we have
to recognize that education is not just about getting kids into
school. Content and quality are key-and children need to stay
in school.
14


Protecting the Planet
Children in developed and developing countries also need to
learn more about each other. I fear that today there is too much
education for hate that will not be reversed in later years.
Providing children with a quality education is not only the right
thing to do, it also has a huge development impact. If the 115
million children now out of school were to enroll, some 7 million
new HIV infections could be avoided over the next decade. That
is why, two years ago, we launched the Fast Track Initiative-to
accelerate access to primary education for children not in school
today. What has been our experience?
We estimated that US$3.7 billion in aid flows is needed each year
for the next 10 years to ensure that all children complete primary
school. That comes to roughly US$1,200 per class of 40 children
to pay for the teacher, books, and classroom, or just US$30 per
year for each child. This compares with the US$150 we spend
worldwide for every man, woman, and child on military and
defense.
Sadly the international community has not yet been able to
mobilize the money. We are letting the children down on the
promises made, in 1990 in Jomrtien, in 2000 in Dakar, and again
in 2002 in Monterrey.
We are simply not keeping our promise.
Global Leadership for the 21st Century
Mr. Chairman, these issues-protecting our planet, scaling up the
war on poverty, and educating our youth-are among the most
critical for a more secure world. We know what needs to be done.
Why is it not happening?
I think it is because, as an international community, we are not
managing global issues well enough. And yet, more than ever in
the past, the most important issues facing us are global, not
domestic, and long term, not short term.
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Securing the 21st Centurs
The way our system works today is that at a sequence of global
meetings, we agree on objectives. On everything from
environmental targets and the importance of gender equity to
education. In recent years, under the remarkable leadership of
Secretary-General Kofi Annan, the United Nations has convened
a number of international conferences. In the year 2000, as we all
know, the Millennium Assembly set goals for 2015 and they were
adopted unanimously.
National governments supported by international agencies and
responsible institutions then try to achieve those objectives. Every
five years or so, another global meeting is held to review progress.
Usually that meeting concludes that we have not achieved the
objectives. New targets are set. Blame and praise are attributed
and we set out on the next five years.
During those five years, various groupings of heads of state and
ministers spend a day or two per year discussing one or other of
the global targets and commitments. The most visible annual
gathering is the G8. But there are many others: the 010, G20,
024, and G77. And there are regional groupings of leaders in
Asia, Africa, Latin America, Europe, and elsewhere.
Although these meetings have contributed to the enormous gains
in development over the past decades, we are falling behind on
the goals we have set. We need stronger leadership, and we need
more continuous engagement on the key global issues.
Actually, this was the original idea behind the G7 when it first
met a quarter-century ago. It was a recognition by the leaders of
the major countries that they needed to set aside two days a year
and consider long-term global issues. Their meetings are hugely
visible and highly important. They bring the attention of the
entire world to the key issues of the day.
But global challenges have only grown more demanding in the
past 25 years. And the balance between the developed and
developing world has changed greatly, and it is set to change
further.
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Protectng the Planet
Perhaps the 08 leaders, who have achieved so much, would
consider coming together on a more frequent basis and with a
broad representation of leaders from other parts of the world to
seek new ways of supporting urgent global issues. In this way, they
could report on global progress, publicize efforts in pursuit of the
goals, and help ensure that promises are fulfilled.
In today's world, every one of us is not only a national citizen but
a global citizen. Without greater visible engagement by global
leadership, we will not make the breakthroughs we need to ensure
real security and peace.
Conclusion: Promises to Keep
Mr. Chairman, we are one world.
Damage to the environment somewhere is damage everywhere.
Poverty somewhere is poverty everywhere. Terror somewhere is
terror everywhere. If there is a bombing in Bali or Madrid or
Moscow, we all get scared. We all feel insecure.
Making our planet equitable and safe is an issue that we all need
to come together on-and we need global leadership and political
will to do it. That is the only way we can keep our promises to
the farmer of Machu Picchu, the woman on the Loess Plateau,
and the young people in Sarajevo.
It is our duty to ourselves. It is our duty to our children. It is the
choice we must make for security and peace.
Thank you.
17



James D. Wolfensohn
President, The World Bank Group
James D. Wolfensohn has made sustainable poverty reduction the
World Bank Group's overarching mission since he became the
Bank's president on June 1, 1995. Mr. Wolfensohn was appointed
to a second five-year term on September 27, 1999, making him
the third president in Bank history to be reappointed by the
Board of Executive Directors.
Prior to joining the World Bank, Mr. Wolfensohn established his
career as an international investment banker with a parallel
involvement in development issues and the global environment.
In his nine years as president, Mr. Wolfensohn has traveled to
more than 100 countries to better understand the challenges
facing the Bank's 184 member countries. In addition to visiting
development projects, he has met with the Bank's government
clients and representatives from business, labor, media,
nongovernmental organizations, religious and women's groups,
students, and teachers.
Born in Australia on December 1, 1933, Mr. Wolfensohn is a
naturalized United States citizen. He holds a BA and an LLB
from the University of Sydney and an MBA from the Harvard
Business School.
He and his wife, Elaine, who is an education specialist and a
graduate of Wellesley College (BA) and Columbia University
(MA and MEd), have three children-Sara, Naomi, and Adam.


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