Journal Issue
IMF Survey Vol.31, No.18 October 2002

Wolfensoh’ s opening address: It is time to move beyond words

International Monetary Fund. External Relations Dept.
Published Date:
January 2002
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These have been a tough two years. In the rich world, collapsing stock markets and corporate scandals have shaken confidence and mutual trust. The developing world has been hit by wars and conflict, falling commodity prices, slack demand, and restrictions on trade with rich countries. There has been a heavy human toll in Africa and Latin America. Yet much of the developing world has shown strong resilience. This is a tribute to the progress made in shaping and implementing policies.

We have seen a recognition that international problems require international responses. Last September 11, the world finally recognized that there are not two worlds—rich and poor—but one, linked by finance, trade, migration, communications, environment, communicable diseases, and crime. People are demanding a system based on equity, human rights, and social justice, and the world is beginning to listen. Commitments have been reached at Doha, Monterrey, and Johannesburg, laying a new basis for a global partnership.

For successful poverty reduction, developing country leaders must drive their own development and create an environment to encourage growth that is equitable for all people. This must be based on sound social and economic policies—investment in health care and education; effective legal and judicial systems; clear tax and regulatory frameworks; and strong and well-regulated financial systems. For many countries, the New Partnership for Africa’s Development shows the way.

Developed countries have agreed to help developing countries build capacity, increase assistance where it is effective and well managed, open markets to trade, and reduce agricultural subsidies. They reaffirmed their commitment to the Millennium Development Goals for poverty and hunger, education and health, gender equality, and the environment.

Together, we have set 2015 as the deadline for our results. We must now, together, move beyond words. But development is not about quick fixes. Bringing lasting change requires vision, patience, a long-term commitment, focus, and discipline. And it requires us to measure effectiveness. What must each of us do?

The rich countries must bring down their tariffs and cut back nontariff barriers. Their agricultural subsidies, at $1 billion a day, squander resources and damage opportunities for poor countries to invest in their own development. Take the opportunity at the World Trade Organization Cancun meeting in 2003 to make firm commitments on subsidies, but I urge you to act sooner. Deliver on the commitments of increased aid made at Monterrey and the excellent response to financing the shortfall for the HIPC Initiative. Untie aid and coordinate and harmonize development programs and policies better. The fragmentation of donors’ efforts has long plagued the effectiveness of aid. Many of the failures blamed on borrowing countries actually represent the failures of donors.

The Bank must implement its promises to work toward the Millennium Development Goals. Though we have changed greatly over the past decade, we must become more transparent, measure our results more rigorously, and, with others, be held accountable against broader country goals. For the first time, the development community has a tool—the Development Gateway—that enables us to collate and learn more about the development projects going on around the world. There are over 63,000 such projects, not including those undertaken by civil society or church groups. All too often, projects in the same sector and country are run by many agencies that are not talking to each other. We must use the Development Gateway to better coordinate our efforts.

We have come a long way, but we must go further. Over the next 50 years, the world’s population will likely grow from 6 billion to 9 billion, with almost 95 percent of that increase in the developing world. Food needs will double, annual output of carbon dioxide will triple, and more people will live in cities than in rural areas, placing an enormous strain on infrastructure and the environment. If we are to go on reducing poverty effectively, we will need an average annual growth rate of the world economy of around 3.5 percent. If we retain the current distribution of income, in which 15 percent of the world’s population controls 80 percent of the world’s income, we will not have sustainable development. If we continue to exclude the disenfranchised from playing their rightful role in society and ignoring their human rights, we will not have sustainable development, and we may not have long-term peace.

That is the challenge that together we must meet. We can influence whether we have a planet of peace, social justice, equity, and growth or a planet of unbridgeable differences between people, a planet of wasted physical resources, strife, terror, and war.

Last September 11, the world finally recognized that there are not two worlds–rich and poor–but one, linked by finance, trade, migration, communications, environment, communicable diseases, and crime.

–James Wolfensohn

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