Harking back to last year’s Annual Meetings, held in an environment dominated by financial and human crisis, Wolfensohn cautioned against taking comfort in thoughts of a financial crisis passed because, “for millions, that other crisis still lives.” The world at the threshold of the new millennium, he said, is a mixed picture of great accomplishments and great challenges. Life expectancy is the highest it has been in the past 4,000 years, technology holds out the promise of universal access to knowledge, democratic culture has created opportunities for many, and 5.7 billion people live in a market economy. A closer look, however, reveals that per capita incomes in most regions will stagnate or decline this year; in the developing world, except China, more people are living in poverty today than a decade ago; too many people still lack access to safe water; the world’s forests are being destroyed at the rate of an acre a second; and more than 33 million people are suffering from AIDS. The crisis, Wolfensohn emphasized, is not over. It is a time for action.
New approach to development
What have we learned about development? Wolfensohn enumerated the lessons: development is possible but not inevitable; growth is essential, but not in itself enough, to reduce poverty; poverty must be paramount in any development strategy; and, development requires local ownership and participation. He stressed the need for donors to bear these lessons in mind in future development agendas and, in addition, to better coordinate their activities. In recognition of the need for better coordination, the World Bank launched the Comprehensive Development Framework in 1999. Its goal is to unite the social and structural aspects of development with the macroeconomic and financial aspects to establish a more balanced and effective approach. The approach, according to Wolfensohn, is widely supported as a process for pursuing “long-term, results-driven development with the country in the driver’s seat and in partnership with the broad development community.”
Wolfensohn said that it had become clear over the past 12 months that bad governance—corruption, crime, and a lack of accountability and transparency—was the primary impediment to development and poverty reduction. Weak governance threatens to marginalize countries and whole peoples from the economic mainstream by hampering their progress in education, health, water, energy, and rural and urban development.
What will it take, he asked, to move from powerless-ness to a democratic culture, from weakness to capacity for action, from violence to peace and equity? It will take, among other things, a real commitment from each country’s leaders; a willingness to reform systems of government, regulations, and institutions; strong local institutions to bring government closer to the poor; and an approach that empowers local people to design and implement their own programs.
International development architecture
It is well known that nations are dependent on each other, that they are no longer the sole masters of their destinies. Thus, Wolfensohn said, “we need global rules and global behavior. We need a new international development architecture to parallel the new global financial architecture,” with everyone assuming responsibility for global equity, which is the only assurance of peace. This new development architecture can be achieved through coalitions for change that should be built with the private sector to bring investment, create jobs, promote the transfer of technology and skills, and foster social responsibility. Coalitions with civil society and communities would mobilize grass roots support for health, education, and poverty reduction. Coalitions with government would assist them in taking charge of their own development agendas with the participation of their citizens. Wolfensohn concluded by pledging to work with all the Bank’s partners to build these coalitions for change and begin to put in place the new development architecture.