Ask the World Bank President

March 20, 2009

Robert ZoellickRobert Zoellick, President of the World Bank, and a man who believes that 2009 will be a “dangerous year”, will be speaking on March 31st and has agreed to take questions from Reuters readers.

Zoellick has been outspoken during the current economic crisis predicting the first shrinking of the economy since the ’30s, warning that increased government spending will simply create a ‘sugar high‘ until banks’ toxic assets are dealt with properly, and urging a tougher stand against protectionism.

But the World Bank’s primary focus is on helping developing nations and alleviating  poverty. Earlier this month it published research showing that the spreading crisis will push 46 million more people into poverty in 2009 on top of 130-155 million pushed into poverty in 2008.

With the London summit of the Group of 20 nations on April 2nd fast approaching what do you want to know about the World Bank’s role in shoring up the world economy and helping poorer nations? Use the comments section below, or use the #askwb tag on Twitter, and I’ll get as many of your questions to Robert Zoeliick as possible.

UPDATE: This event has now taken place and you can view the questions we put to Robert Zoellick in the player below. We have no means to pass on any further questions to the World Bank but you are welcome to add your comments on the discussion thread below.

295 comments

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What are the top three special interest groups influencing World Bank policies? How do they apply pressure?

Posted by Dave B. | Report as abusive

Isn’t it irrational for governments to agree to WTO and the like? If not to protect the economic and other interests of a nation, why be a nation? Isn’t protectionism the only rational response for an individual nation to take to an economic crisis like the one the world is experiencing? Only in the abstract is it best to refrain from protectionism. Just as it may be best for the overall US economy for US citizens to keep on spending, it is best for the individuals to save their money, and that is just what they are doing. Since the WTO agreements leave out any agreements regarding environment or worker rights, it is a race to the bottom. In good times that race to the bottom appears to be headed upward, but in crisis it becomes obvious which direction is down. Without a world government, WTO agreements are irrational. They are based not on the best interests of citizens of a nation, but on the best interests of corporations. It was after all corporate interests which crafted the WTO.

Posted by Eric Hans | Report as abusive

Isn’t the economic model, Western Capitalism, promoted by the World Bank a giant Ponzi Scheme that only works as long as there is growth? Like all Ponzi Schemes the necessary exponential growth cannot continue forever. Global warming and the present human caused sixth major planet wide mass extinction threaten the continued existence of humans, and therefore must immediately be addressed. Global warming and mass extinction are both caused by the rapid expansion of human population and fossil fuel based economic activity.

What economic model could the World Bank promote which would allow humans to sustain a good quality of life for as long as humans remain on this planet?

Posted by Eric Hans | Report as abusive

WB’s mandate to provide low-interest loans, interest-free credits and grants to developing countries for education, health, public administration, infrastructure, and agriculture is being sidelined because of the present crisis. The funds are going to industries and banks to save them from Bankruptcies. Whereas they are facing bankruptcies because of there own mistakes. The privately owned businesses should not be saved from the funds meant for noble cause of development of poor people.
How do you justify this?

Posted by Deepak Sondhi | Report as abusive

Corruption and the misuse of funds are recurring issues for developing countries such as the Philippines. The World Bank recently even got embroiled in a domestic corruption controversy that accuses no less than the husband of President Arroyo of being involved in the rigging of bids for the World Bank-financed National Road Improvement and Management Project. Subsequently, however, the WB imposed penalties on private companies which have participated in the bid rigging but shied away from even pinpointing the obvious involvement of government functionaries in the corrupt practice.
The World Bank said the investigations on corruption it made on the project involves internal guidelines and leaves it to the particular government to pursue a possible criminal case. It was a safe course in which the World Bank can still say that something has been done to combat corruption in its turf.
Later on, the WB even raised the assistance to Philippine projects which seems to be similar to the corruption-laden road project.
Mr. Robert Zoellick has been noted for championing anti-corruption ideals when he assumed his post.
It seems, however, that the World Bank opts to take a safe middle ground whenever it approaches the hump of geopolitics.

Sir,
It seems that the cooperatives worldover are relatively safe and continued to perform better in all sphere of economic and social actvities. would you recommend the cooperative form of economy to solve the current crisis?

Posted by Veerakumaran | Report as abusive

The Gold Standard and the workingman and woman
This may sound like science fiction but under the Gold Standard there is permanent deflation equal to economic growth. If the economy is growing at 2 percent year you will have deflation rate at 2 percent a year. The value of your Gold backed money increases year after year. The earnings you make today this money will be worth more the next year. This changes the psychology of working men and women instead of spending all of your money today on credit to beat inflation and demanding wage increases to compensate for inflation. Under the Gold Standard working men and women will cause them to save their Gold backed money and hold off on any purchases except for basic necessities such as food rent clothing and major purchases will be put off to the last possible minute. The working class will save their money in a Gold reserve bank to gain an additional half percent on top of deflation. There will be those people who will demand the actual Gold Silver Palladium and Platinum bars and coins and chose to keep their precious metal assets under the mattress or a safe. But these people will keep the system honest in stopping the governments and the banks from printing more paper certificates than there are Gold reserves to back it up. Under the Gold reserve banking system savers or depositors have title to their money. This means the working class people decide which companies will get loans for their businesses and which businesses will not get loans. Obviously companies that engage in environmental disasters, fraudulent practices, habitual layoffs, hiring and firings to lower wages, hiring illegal aliens, hiring foreign workers to displace domestic workers, deindustrialization’s outsourcing work to outside of their home countries to lower wages will not get loans. A company that hires and invests long term only their home countries have stable socially responsible employment practices not creating environmental problems and are good business neighbors will get more loans than they can use.
The business cycle is created by excessive credit expansion than when inflation becomes a problem than a sudden contraction in credit to stop inflation. This is why we have regular recessions and deep recessions. A Gold Standard will have no business cycles just seasonal cycles. The ideal balance for fiat currencies is to expand the money supply not greater than the economic growth thus no inflation but nor deflation. However central banks and regular banks cannot stop stealing and they will steal as much as they can get away with. This is why we have the permanent inflation tax. Inflation is just plain stealing from the workingman and woman. The 1929 great depression was intentional so banks can buy distressed companies at pennies on the dollar. During the 1920’s or the roaring twenties stock market boom the Federal Reserve greatly expanded credit far beyond reason and to get all of the suckers in the stock market swindle. This swindle pump and dump scheme created the Rockefellers J. P. Morgan and other banking families their extreme wealth. It was the world’s greatest swindle. This swindle created an oil dependent economy which banks profited handsomely.

Posted by Phil | Report as abusive

One of the most striking truths revealed by the current financial crises is the disparity between the enforcement of tax law for the poor and for the wealthiest one percent. It is estimated that corporations have more than 100,000,000,000 in assets hidden away in the Cayman Islands alone at a time when many financial entities are in the need of recapitalization and the treasuries of so many nations are at the brink what role should the world bank play in ensuring that these banks and other irresponsible entities who have bene recapitalized by those who have not skirted tax law are not themselves avoiding international tax law in havens such as was previously established in Lichtenstein and that still exists in the Caymen Islands.

Posted by Gabrial from Indiana | Report as abusive

Asia is the only area which has a positive economic growth at this difficult time. Among the countries The Maldives is the richest as per GDP. My Question is about the future of Maldives economy and the challenges it has faced. What are the most important steps the Maldives government and private sector should take during this crisis to keep the country’s position.

Posted by niu | Report as abusive

I am curious as to how the World Bank will address the plight of highly indebted middle income countries during this crisis. The crisis provides a unique opportunity to speak to and implement concrete measures that can assist those countries which have debt to GDP ratios of higher than 90% and between 60 and 90 per cent. These countries need a combination of debt relief and debt forgiveness that looks at what is being offered to the HIPCs and takes in the developmental challenges that debt poses by crowding out public and other necessary investments in human capital development. If these countries are “freed” up, in a sense, to pursue other development imperatives, it will also be to the benefit of the developed world as the problems of the developing world usually become the problems of the developed world.

Posted by Sophia W-G | Report as abusive

dear sir,

I would like to hear your opinion about what could have been done to avoid the world crisis.
What was the most important factor that triggered the crisis?

Posted by Octavian Petrescu | Report as abusive

As an economists in a developing world, ‘am scarred that this financial meltdown could be an attempt by developed nations to envelop developing nations.Pls, as a world bank president can you tell me how it all started?

Posted by Raphael Ikyaabo Orban | Report as abusive

It is quite rational to see and understand the present financial situation, and Mr Zoellick has just done that. It is indeed disturbing to find the world in an economic chaos. What really caused this…we have to be realistic and not idealistic. Bad debts, unwarranted aid to nations with bad credit history, sagging resources caused by the Iraq and Afghan quagmire. How Mr. Zoël lick is going to bring the world currency mechanism in an acceptable broadband? The WB and the IMF are simply following the old traditional path, and this needs to be reviewed. Unless all the nations agree to a common denomination factor based on the present monetary situation and come out with a realistic solution -indeed the year 2009 will be a “Very dangerous year” as developing nations will be hard hit and the poverty alleviation programs may be in economic ‘Freezer”. Moreover, the WB and the IMF have to be free of political pressure so they can think independently and perhaps a viable solution may be in sight. Lets keep the fingers crossed. Good Luck Mr Zoellick !

Posted by Nazim Hasan | Report as abusive

i think would will help restart the wheels turning again for this economy is to give every working american a second chance by restarting are credit scores we can get a low interest loan to pay off debt start buying cars again and homes

Thanks for sharing event video… nice post…