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The
World at the Millennium
We stand at the beginning of a new millennium, at the end of a decade when globalization
has accelerated dramatically. This is a time to assess where we have been and
where we are now, as well as to provide a vision for the future. This is a time
of great opportunity, but also of tremendous challenges. We must treat globalization
as an opportunity, and poverty as our challenge. But what do we mean by globalization?
In short, globalization is about risks as well as about opportunities. We must
deal with these risks at the national level by managing adjustment processes
and by strengthening social, structural, and financial systems. And at the global
level, we must establish a stronger international financial architecture, and
work to fight disease, to turn back environmental degradation, and to use communications
to give voice to the voiceless. We cannot turn back globalization. Our challenge
is to make globalization an instrument of opportunity and inclusion - not of
fear and insecurity.
We live in a world scarred by inequality. Something is wrong when the richest
20 percent of the global population receives more than 80 percent of the global
income. Something is wrong when 10 percent of a population receives half of
the national income -- as happens in far too many countries today. Something
is wrong when the average income for the richest 20 countries is 37 times the
average for the poorest 20 -- a gap that has more than doubled in the past 40
years. Something is wrong when 1.2 billion people still live under less than
a dollar a day and 2.8 billion still live on less than two dollars a day.
With all the forces making the world smaller, it is time to change our way of
thinking. Time to realize that we live together in one world, not two: this
poverty is in our community, wherever we live. It is our responsibility. It
is time for political leaders to recognize that obligation. The fight against
poverty is the fight for global peace and security.
What Have We Learned About How To Fight Poverty?
We have learned that poverty is about more than inadequate income or even low
human development; it is also about lack of voice, lack of representation. It
is about vulnerability to abuse and to corruption. It is about violence against
women and fear of crime. It is about lack of self-esteem. Poverty, as discussions
with 60,000 poor people in 60 countries have taught us, is about lack of fundamental
freedom of action, choice, and opportunity.
We have learned that market-oriented reforms, if combined with social and institutional
development, can deliver economic growth to the poor people. We have learned
that economic growth is the most powerful force for sustained poverty reduction.
Growth is central, but it is not enough. Development must be comprehensive.
It must embrace education and health, but it must also embrace good governance,
the fight against corruption, legal and judicial reform, and financial sector
reform. Development must embrace infrastructure and environmental protection
as it must also embrace sound economic policies. All these elements depend on
and reinforce each other.
We have learned -- and this is fundamental -- that development cannot be imposed
from above. There is no universal blueprint for development. It must be home-grown
and home-owned. Without a comprehensive approach that is developed and adopted
in each country, we will not achieve the development that is vital for a peaceful,
equitable world.
A Bank That Is Delivering
In 1995, I said we would become a "knowledge bank," and we have made great
strides. In 1996, I said we would fight the "cancer of corruption," and we are
one of the leaders in that fight. In 1997, I spoke of the "challenge of inclusion,"
and we are working more than ever to bring the weak and most vulnerable from
the margins of society to the center stage. In 1998, I spoke about the need
to balance essential economic growth with social and structural development
and called for a Comprehensive Development Framework. Since then we have piloted
this approach and we are introducing the poverty reduction strategies on a more
global basis. And in 1999, I spoke of the importance of governance and capacity
building and of partnering with others. We are working on these issues every
day, day in and day out, and achieving great results.
We are a different Bank, doing development differently. Are we there yet? No.
But are we more than halfway through a major reform program? Yes. And in the
next five years, we will focus still more sharply on implementation.
Moving Forward: Responsibility and Opportunity
I have spoken of opportunity, of security, of empowerment. I have spoken of
participation, transparency, and accountability. But what of responsibility?
More and more developing countries are keeping their side of the bargain. But
what about the developed world? Some countries are shouldering their responsibilities
magnificently, and we are extraordinarily grateful to them. But many are not.
I believe we need to focus on several priority areas as we move forward.
First, many developed countries have fallen far below the internationally
recognized targets for aid. They must increase their aid.
Second, developed countries must provide the resources for deeper, faster,
and broader debt relief. If we want to move rapidly on the HIPC Initiative,
we must look to the rich countries for resources. This initiative should not
be funded by reduced or more costly support for other low- or middle-income
countries.
Third, developed countries must dismantle trade barriers to poor countries.
Our estimates indicate that the annual costs of all trade barriers by industrial
countries are more than double total development assistance.
Fourth, we must explore innovative instruments, including grants, for
such pressing issues as HIV/AIDS, the environment, basic education, and health.
We at the Bank must build up our Development Grant Facility.
Fifth, multilateral and bilateral donors must work together to simplify
their procedures and reduce the cost of doing business.
And finally, we must recognize that there are more and more issues whose
resolution requires action at the global level. We must act together.
Without that commitment to development, we will not hold back the tide of deprivation,
want, and despair. We will not create that equitable world, we will not ensure
peace and stability for our children. All of us here today know that we can
and must do more.
We Have A Historic Opportunity
We must work together to harness the benefits of globalization to deliver prosperity
to the many, not just the few.
This is not just a new economic program. It is an obligation, an obligation
based on shared moral and social values. It is an obligation that is also based
on enlightened self-interest. It is an obligation to the next generation to
leave them a better world: a world of equity, a world of peace, a world of security.
James Wolfensohn
President, The World Bank Group
www.worldbank.org