Address by the Vice President of the United States1

International Monetary Fund. Secretary's Department
Published Date:
November 1996
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Al Gore

I am honored to be here. I wish to thank Chairman Aninat, Chairman of the Board of Governors; Managing Director Camdessus; and President James Wolfensohn, a longtime friend, for doing an outstanding job with the World Bank.

I note that some Members of Congress from my own country may be here. I know that Senator Paul Sarbanes is here, and I want to acknowledge him. But if, in doing so, I have overlooked others, I want to assure you that it is not intentional.

If I might, I would like to begin with a brief word of hope for the cause of peace in the Middle East. I know we were all saddened to see violence return to the ancient streets of Israel, Gaza, and the West Bank. It was a great blow not only for the Israeli and Palestinian peoples, but for all who support the peace process.

I have just come from a series of meetings at the White House, convened by President Clinton, wherein the regions’ leaders have gathered to rejoin the path to peace upon which so much progress has been made in recent years. President Clinton and I are committed to do all we can to work with them to help end the cycle of violence, to restore calm, and to resume in earnest the task of building peace through negotiations.

I know I speak on behalf of all of us here when I say that our prayers and our hopes are with these leaders. May they take inspiration from their own recent successes in the name of peace, and may they be guided by other men and women who have, over past decades, also traveled the path to peace in the face of great adversity.

A little over a half century ago, in a small town called Bretton Woods, amid the granite hills of New Hampshire, one such group of leaders gathered to give form to an idea as simple as it was powerful. That even the rubble of world war can be used to build a firm foundation for peace and prosperity, when nations summon the will to join in a common cause to solve common challenges.

This idea and the institutions born of it endure as monuments of our century, as signposts on our journey toward a world where peace and freedom and the promise of prosperity are the birthright of all people. We join today as friends and partners with renewed conviction and sharper focus to advance the task of strengthening and broadening prosperity, maintaining the stability of the international financial system, and investing in the dignity and promise of people throughout our world.

It has perhaps become commonplace to speak of pivotal times and great challenges. Yet I firmly believe that today, on the heels of the fiftieth anniversary of the World Bank and the IMF, and as we prepare to cross the bridge to the twenty-first century, that today is such a time.

A quick canvass of the revolutionary changes under way more than proves the point. Today, an increasingly integrated global economy, extraordinary technological advances, and, most important, the deepening global commitment to democracy and personal liberty offer us unparalleled opportunities. For many of our nations, these changes have brought impressive growth, high-quality new jobs, and a different—but no less important—role in the world.

We appreciate now, more than ever before, that we today are not only living with the challenges, but also reaping the rewards of our ever more open and dynamic international system. Yes, there are those who see only problems. These are the heirs to the same doubting Thomases who questioned President Roosevelt’s vision to create an open international financial system some 50 years ago. They were wrong then, and they are wrong now.

The Clinton administration stands with those who see promise. We see both promise and achievement in the fact that strong, steady economic growth here in the United States has helped to create 10.5 million new jobs over the last three and a half years. This growth has reduced poverty, slashed our deficit, and produced a combined unemployment and inflation rate that is at a nearly 30-year low.

It is a plain fact: growth and openness here at home, coupled with growth and openness abroad, have been good for America and good for the world.

Two of the keys to our recent economic success are ones that the Bret-ton Woods institutions have emphasized throughout the world. The first is a commitment to low inflation—and inflation has come down in the United States, as growth has continued on a sustainable basis. The second is open markets—and we have fought very hard to open markets around the world, including our own.

A shared determination to grasp the opportunities of this new era is ultimately why we are here today. It is why we have placed such great trust in the Bretton Woods institutions and why we have such high expectations of them. It is fundamentally why these institutions continue to deserve our strong support and why we in the United States will do all in our power to meet our financial commitments to them, including to the International Development Association (IDA), which is so important to developing countries all around the world.

The World Bank Group and the International Monetary Fund have been major features of the international landscape for many years. So too, tragically, have been deep poverty and human suffering, political and financial crisis, and environmental degradation. This in turn has led some to underestimate what the international financial institutions can do to ameliorate these terrible problems. For too many, there is a sense of resignation about the human condition and skepticism about the possibility of working cooperatively for real progress.

I am here today, as President Clinton was a year ago, to say simply that I reject the complacency and I abhor the indifference. If we have learned anything from the second half of the twentieth century, we have learned this: that we cannot achieve peace and prosperity in isolation or in the absence of a healthy international economic system; that free markets consistently outperform shackled ones; that poverty can be reduced dramatically; and that good government is the key to equitable and sustainable growth.

Neither President Clinton nor I underestimate what the Bank and the Fund can do. They can make a difference, and they must. These are the basic truths that will guide America into the next century. They are the basic truths whose influence has spread so dramatically around the globe in recent years. And they are the basic truths that must unite us as we, the shareholders and Governors of the World Bank and IMF, chart their course for the years immediately ahead. In particular, it is essential for the institutions to focus selectively on areas where they can make a real difference and to ensure that as they evolve they are as modern as the evolving markets they must serve.

Let me be crystal clear: if our international financial institutions are to succeed in the new millennium, they must adapt the practices of the past to the demands and realities of the future. This means focusing more attention on giving all people the chance to make the most of their lives. It means investing in education and health care and in programs that attack the precursors of poverty. It means helping to build the private sector and investing in the promise of free markets and free minds, in democracy and in the rule of law.

But it also means giving greater attention to two broad issues that I firmly believe must shape and inform everything we do in our quest for equitable and sustainable global prosperity. The first of these is a commitment to sustainable development and our environment. We now know with perfect clarity that economic development and growth cannot ignore ecological realities. We know that investments that genuinely reduce poverty in an equitable and enduring way are investments that take their environmental implications fully into account. Not only is such an approach consistent with our development objectives, but it will also be much more cost effective. Win-win situations are not always available, but this is one of them, and it is available.

Given their unique capacity to both influence and help finance the development choices being made by the poorer countries, the multilateral development banks have particularly serious responsibilities in this area. I have spoken forcefully about these responsibilities in the past and, speaking frankly, I have been critical of the institutions in the past. So, it is with great personal satisfaction that I view the progress that has been made by the banks in recent years and laud the tremendous hard work that has gone into producing that progress. The banks have committed to taking the environmental and social implications of their project work fully into account, examining all of the alternatives, ensuring that the whole range of costs and benefits is considered, and listening carefully to the views of affected people. This is an ambitious commitment, surely; it is a necessary commitment, absolutely.

I therefore welcome—and we all should welcome—the great distance that has been traveled on this front. Jim Wolfensohn and, before him, his late predecessor, Lew Preston, deserve our gratitude for their vision and their commitment. I wish particularly to thank Jim Wolfensohn for his persistence.

But the really hard work remains: the challenge now for both the institutions and the borrowers is to translate commitments into action. Today, therefore, I call on the banks and borrowers to meet this challenge head on. I call on you to make sustainable economic development and growth top priorities in planning Bank assistance in coming years.

We all share a huge stake in the success of this effort. The banks cannot do it without the borrowers. The borrowers cannot do it without the banks. And neither can do it without the continued strong support and encouragement of the developed countries. Let me assure you that the Clinton administration will be there, and the United States of America will be there.

The second key issue I would like to discuss is also an outgrowth of my own personal experience, as well as the lessons all of us have witnessed over the past 50 years. Surely, one of the most pressing development imperatives of all, and the one offering the greatest promise for human dignity, is the challenge of good government.

The bottom line is that good government—that is, government that is fully representative, transparent, accountable, and restrained—provides the indispensable foundation for virtually everything that we hope to achieve in meeting the challenge of equitable and sustainable economic development.

From my perspective, it has been a great personal honor and privilege to have worked over the last four years with some success toward President Clinton’s goal of what we call “reinventing government” here in the United States of America. We have studied carefully the management techniques of the best-run corporations in the world and sought to apply those insights to the public sector.

This set of new insights and initiatives is based simply on a new understanding of human potential and on a new determination to take full advantage of the great intellect and creativity that exist in the minds and hearts of all individuals who work within these institutions in our government. I am convinced the same principle applies universally.

Here in the United States over the past three and a half years, we have eliminated both excessive management layers and misguided regulatory obstacles to private initiative and efficiency. We have cut over 16,000 pages of regulations. We are in the midst of that task now. We have pared down the federal workforce by a quarter of a million employees. The United States federal government is now smaller than it has been since John Kennedy was President of the United States almost 35 years ago. We have made government here more accessible and more accountable to the people whose lives it most directly affects. The result is stronger growth; more dynamic, innovative, and efficient markets; and a civil society that takes the fullest possible advantage of the opportunities provided by democracy.

I believe there are important lessons here: for us, as we continue to reinvent our government in the years ahead; for the poorer countries aspiring to greater prosperity; and for the institutions we gather today to support.

In far too many cases, the real obstacles to development and prosperity are pervasive legal and regulatory barriers that distort the decisions of small enterprises; poor choices by governments that are not sufficiently accountable for those choices; and a lack of mechanisms to ensure that decisions are fully informed by the views of the people whose lives they affect. Nothing—no specific investment or trade agreement or financing package—would make a greater or more enduring contribution to development than clearing away these obstacles.

Ultimate responsibility for taking these bold and difficult steps resides, of course, with you, the senior officials in whose hands the hard choices lie. But this assembly is, quite simply, our expression of commitment to help.

The international financial institutions are vitally important partners in this effort. We are fully supportive of the concrete steps they have taken to fulfill the challenge of reform posed by the Group of Seven at Halifax. We are very pleased by the important steps Jim Wolfensohn is taking to cut overhead, to streamline management, and to promote efficiency. We also are pleased that Michel Camdessus and the IMF, through their new data disclosure standards, are helping governments around the world to become more transparent and accountable to their citizens and world markets.

I believe that these priorities—taking a comprehensive approach to the challenge of sustainable development and good governance—deserve the closest possible attention by the institutions in the years immediately ahead.

Though we have much work before us, I am deeply confident that our cause is just, our path is clear, and our resolve is unwavering. Just as Lord Keynes reminded us at the conclusion of the Bretton Woods conference more than two generations ago: “If we continue in a larger task, as we have begun on this limited task, there is hope for the world.”

I believe in this hope. I believe that the next century will bring a new era of achievement and growth and human fulfillment. I pledge to you here today, on behalf of President Clinton, that the United States of America will do its part, as you do yours, until our job is done.

Delivered at the Second Joint Session, October 1, 1996.

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