Thomson Reuters


Full transcript of Robert Zoellick Newsmaker

By Peter Rudegeair
April 6, 2011

Hope you all got to watch Chrystia Freeland and Lesley Wroughton’s Newsmaker interview with Robert Zoellick earlier this afternoon.  Here is the transcript of the whole thing in if you are interested in reading it.

CHRYSTIA FREELAND: Hello, Chrystia Freeland with Reuters.  And I’m here with my colleague Lesley Wroughton.  We are interviewing Bob Zoellick, President of the World Bank.  Thanks for joining us, Mr. Zoellick.

BOB ZOELLICK: Glad to be with you.

CHRYSTIA FREELAND: So, you gave a really important and– Lesley was saying before this– bold and courageous speech– just now about the significance of the uprisings in North Africa and the Middle East.  One of the things that struck me about that speech was really the profound historical significance you think that this moment has.  You– you said it could be– “Now, this could be 1848.”  That’s a pretty big claim.  So, why?  W– why is this such a big deal?

BOB ZOELLICK: Well, I– I think, you know– it’s hard not to be stunned by the momentous set of changes starting with, you know, a vegetable or fruit vendor– and unleashing what are amazing social and political forces.  I think– the– the reason why people struggle with historical analogies is because this is a revolution.  And people are uncertain about the forms that revolutions take.  And the rough analogies, obviously, ’89 is in mind because people are– think about the events of Central and Eastern Europe and the freedom and democracy. ’79 is because the people think about– what happened– in– in Iran.  1848– is gonna be pretty obscure analogy for most people.  But what 1848 would have suggested to me was that this was something that– washed over countries very differently.  There– there were aspects that affected depending on the locality and– and the nature of the process.

Some of them– were able to break free.  Some of them had– sort of counter-revolutions. And the effects ran for a long period of time.  I mean, so one might say some of the things that happened in Austria-Hungary and Northern Italy ended up leading to unification of Italy 20 years later.  So, I think this is one of these events.  And I think it’s very difficult to predict the– the– the course that we’ll take.  But because of that– what I’ve been– sort of picking up over the past weeks is increasing calls from foreign ministers that are obviously moved by the importance of these events. Finance minister is a little bit more hidin’ under the table — because they’re uncertain about– the costs or the full economic effects.  And as we approach our spring meeting, it seemed appropriate for the bank to try to start to frame these issues in a combination of political economy and also connect them with something that I’ve been tryin’ to do since I started the bank, which is how you modernize the multi-lateralism of– of an institution like the World Bank.

CHRYSTIA FREELAND: You pointed out also in your speech that we are bad at predicting this kind of thing.  I interviewed Mohamed El-Erian on last week.  As you know, he’s Egyptian.  And he– rather charmingly and self-deprecatingly– r– said that he’d been in Egypt over Christmas with his family.  And his wife said, you know, “Is there gonna be an uprising here?”  And he said, “Oh, no, definitely not.  Everything’s gonna be fine.”  So, why are we so bad at predicting it?  And are we collectively in big institutions like yours, those foreign ministers, those finance ministers you were talking about, are we gonna be any better at responding to what you’re describing as, you know, a shift of world historical proportions?

BOB ZOELLICK: I mean, seismic events are always very difficult– to predict.  You know, in– in later– and this is what historians do, they can go back and try to assess, “What were the causes?  What were the contributions?”  You know, and in this case, it’s often you– you can point to underlying currents.  And I talked about some of these in the speech.  But ultimately, there’s a crystallizing event.  And in this case, it was the– the humiliation and– the treatment and lack of dignity– so severe in a poor individual, a poor fruit and vegetable seller in Tunisia that he set himself on fire.

Now, that then connects with a whole bunch of other things.  And so I think– I hope we can be better in terms of the response.  On the front end, what it does suggest for policy-makers is a need to keep a certain– fingertip feel for events and also some ability to have the response– to respond in a more flexible fashion.  But we are where we are. And I think in this context– part of my message for the World Bank but also for finance and foreign ministers is– we need to lean forward.  These are important events.  And I believe that we can make a difference.  Sometimes in the past governments and big institutions like the World Bank are– accused of saying, “Well, they’re waiting for everything to get in order.  And the– too many procedures,” so they don’t lean forward.

Second was that I think while this will require financial support, the policy will be just as important if not as important as money.  Third, I try to give some sense of some of the ways in which we’ve tried to learn some lessons about including from a report that we’ll be issuing next week about post-conflict in fragile states about how– sometimes in a situation like this the most urgent political and security step is to create jobs.  But economists say, “Well, we don’t like make-work jobs.”  And so I was tryin’ to share some of the experience that we’ve developed from countries about how to approach short-term jobs as we have in Liberia, Afghanistan, and others, but ways that actually support the medium and long-term development.  So another message is you’ve gotta be focused on the short term to get to the medium and long-term.  But you can’t ignore the medium and long-term as well.

Same with safety nets.  We’re in an era where food prices are going up.  We’ve got energy prices that are increasing.  Many of these countries are food importers.  Egypt is one of the biggest wheat importers.  But their subsidy programs, historically, have been very expensive, not targeted.  So, at the same time we lean forward to help, we don’t wanna have big budget-busting expansions.  And so are there lessons, again, to learn from other developing countries?  Which is what the World Bank might be able to bring to the table about how to do this more effectively.

Similar with the private sector.  You know, keepin’ in mind that– it all started with– in a sense the red tape and the harassment of a small business person.  And so what can one do in that area?  So I think those are all important on the economic side.  Now, there’s one other key element that I was tryin’ to underscore.  And that is I believe if we take– these different revolutionary period, I was tryin’ to suggest 2011 may merit its own year, its own recognition.

And this is because– there’s a lesson about the critical role of citizen involvement and social accountability in the development process.  And this is something we’ve been learning across the bank more generally.  We’ve had a lotta success with what are called Community Development Programs where you often will have the community decide, “What are their priorities?”  And they’re deeply involved with the process.

Two, things like Freedom of Information Act and transparency and anti– corruption programs.  And so given that this was started by people in the street, given that this– was something that– you know, in a sense many countries had reasonable economic reform programs, but they were top-down programs, the question is, “How can we take lessons from other countries and connect social accountability, citizen participation, transparency, the political movement with economic development?”

CHRYSTIA FREELAND: So– I think that’s an excellent point.  And as– we all have discussed, the I.M.F. was among the institutions that were wrong-footed by the uprising in Egypt.  And they had pointed out last year that, you know, the economy is going great.  But how far do you go with this.  I– I was struck in your speech by your Chinese example of community involvement and community decision-making.  But China, after all, is an authoritarian Communist regime that imprisons its Nobel Prize-winning dissidents.  So, you know, how– how– how– how far can you go pushing this?  And what kinda push-back are you gonna get?

BOB ZOELLICK: Well– well, I think what we’ve seen, and this is what I talked about in the speech, is I think this observation– applies regardless of one’s political system.  And I gave examples from Mexico and Uganda and Senegal and China, all different political systems, to recognize how each in their own way have tried to figure out how to have better development by involving citizens.

And ultimately, these are decisions that governments make, we don’t make.  But what we can do, and I think this is one of the changes in the world from– from– 20 years ago, we now have a lot of examples not from northern developed countries, not from the G-7 industrialized democracies, but we have examples from other developing countries about how this makes a better development process.

But let’s take it to the ground in the Middle East and North Africa.  If you’re a transition leader or somebody that is gonna be tryin’ to run for election in Tunisia or Egypt, doesn’t it make sense to try to figure out, “How can I engage these people that were in the street?  How can I connect ‘em to the development process?”  Now, the first instinct for some might be, “I don’t wanna cause any turmoil.  So, in a sense, let’s go back to government-controlled systems,” okay?

But, that is– the lesson of that is it’s been very expensive and it hasn’t really worked.  It certainly didn’t work in the socialism of Central and Eastern Europe.  So, if that is a dead end– if the idea that top-down sort of development, you know, getting the macro economic statistics right, that by itself doesn’t work, how do you move beyond what I referred to as partial modernization?

There– there– we should not ignore, there were progress made in a number of these countries in terms of human development statistics and some of the growth statistics.  But the lesson is it isn’t enough.  And in some ways, countries that start a modernization process are most vulnerable if they don’t draw their public in.

LESLEY WROUGHTON: So– as Chrystia– pointed out, your speech did– push the envelope in many ways and– working directly with– civil society– has been one of your– your– things that– that the World Bank has been involved with.  But more d– you’ve been dealing directly with governments.  So in some new ways, you’re dealing with uncharted waters, here.  How do you think– a lot of your shareholders– you’re going to sell this to your shareholders and to convince them that, you know, “You need to be backing citizen groups more,”?  A lot of governments might also see this as trying to– perhaps that the World Bank’s trying to become a democracy-building institution than a development lender.  How do you go between those?

BOB ZOELLICK: Very good question.  But let’s start out with the– with the– the core point.  You know, since I came here in 2007, one of my beliefs is multi-lateral institutions have to change with the times.  So this institution was set up in 1944 to lend from governments to lend to governments, okay?  That’s– was World War II.  A lot has changed since then.  There’s a lot of understanding about how the international system has changed.

In the ’50s they set up a private-sector lending institution, I.F.C.  In the ’60s we had a specialist focused on some of the– the very poorest countries, now– ’79.  In the ’80s there was something about political risk insurance.  So, the institutions have to continue to change.  And there’s a lot that my tenure I’ve been tryin’ to do more generally to make us faster, flexible, more attentive to clients.

What I’m suggesting is that what we’ve seen in countries with different political systems is the critical role of engaging– the citizens groups in a different way.  And let me give you another analogy.  I point out in the speech that 20 years ago corruption was the C-word at the bank.  It was considered too political.  So people couldn’t use the word.  We used to censor it out of documents.

I– similar process in gender, in transparency.  Those are now all acceptable parts of the development process.  To come to how– countries and board members will– will view this over time, keep in mind that about 50 percent of our projects– today now involve interaction with the beneficiaries or civil society groups.  So we’re doing this today.  But in some ways I’m tryin’ to draw to people’s attention maybe we need to be more systematic.  And maybe we need to think about how we support some of the civil society groups.

And here I’m not talking about broad generalized global– N.G.O.s.  I’m talkin’ about the types of groups that are active in these countries with service delivery, monitoring, and helping develop these projects.  In Afghanistan, these groups are part of our delivery of the help monitoring because the government doesn’t have the capacity.  So we have a record with countries across different political systems with our board of integrating this into the development process.

Now, still a fair question, “Where does it go from here with the bank?”  Well, I think those are the questions for our board and shareholders and others to debate.  And– it may be that– they do it through government bilateral programs.  It may be that they do it through foundations.  It may be that we– interconnect with other multi-lateral parties, sometimes the U.N. agencies, to do this.

And maybe there’s a role that we can do this in some additional fashion to support the civil society groups as part as a– of– of– citizen accountability.  But one last one, this is always up to countries to decide.  So if you ask, “Well, if a country doesn’t wanna do it, I can’t force them to do it,” so it’s up to them to decide.  But– but again what we can now do is I can show them what has worked in other developing countries.

And I used an example from China in the process because, you know, I– I was talking with Chinese party officials years ago about how they’re using polling to assess performance.  So, successful countries figure out one way or another to how to engage their citizenry in development.

LESLEY WROUGHTON: So how does one– one more thing– how do you– help these civil societies sort of– increase citizen participation without seeming to governments that you’re trying to arm them against governments in many ways by showing more checks and balances?  How– how does one deal with

BOB ZOELLICK: Well again, the– this will depend on the government.  And it will depend on (NOISE) what they’re comfortable with.  And– and again, I mean, one of the core lessons of development is local ownership is critical.  If– if a government in a country doesn’t hold it, outsiders no matter how well intentioned can’t do it for them.  So, let’s take a couple of different examples.  You– you said– the fact of how civil society groups might– be against the government.  Well– there– there’re a lot of governments around the world that realize that civil society groups might find something that is wrong.  Is that against the government?

I used an example of the speech about a case in Mexico where some civil society groups used Freedom of Information laws to dinner– to identify the misapplication of some money that was supposed to go for an HIV/AIDS program.  They brought it to attention to others in the government.  And others decided h– actually they had to build better auditing systems.

So is that against the government or helping the government?  I use an example of Uganda– a very simple one, but it shows the baseline where on a school door the information was posted about the textbooks and the teachers that the program was supposed to be financing.  So if the textbooks didn’t show up, people were realizin’ that someone’s on the take.  So, does that make for more efficient use of your development money, of your growth money?

And, you know, across the whole spectrum, w– we put in in the World Bank the first Freedom of Information policy.  We’re the only multi-lateral institution that has one.  Traditionally institutions don’t like this.  I happen to think that it’s a good thing to, in a sense, create open information.  I think it’ll make a stronger institution.  So– it’s the nature of– of how far– a country might be willing at different levels to open itself up.

And over time, this is one of our challenges as a development institution, to share the experience of what others have done.  And some of these are democracies.  Some of these are not democracies.  But, I keep going back to the Middle East and North Africa, which is the– the point.  What certainly oughta draw people’s attention when you have tens of thousands and hundreds of thousands of people in squares is that the public wants to be engaged.

They can be engaged that way.  Or you can also figure out how to try to engage them more generally.  What also– there’s– there’s exciting opportunities here now with different types of– of use of technology.  And you can build these into programs.  So, for example, you can have a local community engaged in checking the weight of– of babies and so they’re engaged in the process.  They’re responsible for the process as well as filling in the information using mobile and hand-held devices.

So– what I find exciting about this is the sense that, you know, it’s– part of a different part of modernizing multi-laterals in the World Bank is to get development economics out of kind of the theoretical and the textbook and connect it to the reality on the ground.

CHRYSTIA FREELAND: Isn’t there, though, something– you know, if you’re a person– like me, I– lay my political cards on the table, you know, who actually thinks democracy is a better way to run a country– isn’t there something a little bit dangerous about that line of argument?  You know, you’ve just said, you know, what we’ve seen in the Middle East and North Africa is if you don’t engage your citizens they go out on the street and have a democracy revolution.  So, do you really wanna be in the business of helping authoritarian regimes to stay in power by engaging their citizenry in non-political sort of nice, local activism?

BOB ZOELLICK: Well, we have 187 member countries.  They represent all different political systems.  We’re in the business of trying to overcome poverty and create opportunity and growth on the economic side.  My own view, and which I’ve stated, is– is that some issues that people might consider political, corruption, transparency, gender, citizen involvement, we’ve learned and are learning are important point of the economic development process.

So, the question will be, “What will other countries think?  Will they decide that they want to keep this at arm’s length?” and so on, so forth.  Well, general they can then see what’s worked in other countries.  We can share with them, whether it be Freedom of Information Act, transparency, central auditing systems, to community development programs, what’s worked in the process.

And then it’s up to them to decide what they wanna put together.  Now, we do also make our own decisions.  I’ll give you one.  And it’s– this is more of a fiduciary responsibility.  We sometimes put money directly into the budgets of countries.  Well, frankly, I don’t think it’s defensible for us to put money that comes from our shareholders and the bond markets and others directly into a budget if somebody doesn’t at least publish the budget.

I mean, that’s a reasonable aspect.  Now, there’s always in-between cases.  You have countries such as Liberia that went through– terrible– situations that, you know, you may wanna give them some time until they publish the budget.  But, this also does talk about setting higher standards.  But, the alternative will be if somebody else wants to stand for money that can be stolen, I’ll let them take that case.  You know, I mean, my responsibility is to make sure that the money isn’t– is– goes to the purposes that it’s supposed to be going to.

LESLEY WROUGHTON: Mr. Zoellick, you look at the– the situation in the Middle East and it’s filled with uncertainty and was wondering whether you– you– you were talking about leaning forward and creating jobs here.  How does one move forward to create jobs, bring in the investors, but at the same time when there’s a political vacuum that you haven’t filled and it isn’t established yet?  How do you actually, you know, go ahead and create those jobs?

BOB ZOELLICK: This, I think, is gonna be one of the critical questions of this period because you’ve got– you’ve got, you know, 40 million over the next ten years jobs you’re gonna have to create for some of the young people coming up.  And what we saw in Tunisia and Egypt in particular but other countries as well is what happens when you have young people, many of them educated but some also not, that lose a sense of a future and opportunity.

And here I think then– the traditional economics approach might be to be sort of cautious about what we’re seein’ as make-work jobs.  But, what I mentioned in the speech as we now have experienced in well over 20 countries around the world about trying to develop programs.  They may be a sort of a food-for-work program.  So, people can get basic sustenance, but they’re helping build local infrastructure.

And as– if you design it so that you don’t have wage rates that would interfere with the creation of private sector, you can tell– create emergency jobs but also not interfere as you’re making other policies to create long-term jobs.  Secondly, sometimes you can connect these to various types of training.  So, one of the things I talked about is you have some service– promotion jobs already in some of the Middle Eastern countries.  And I suggested some of these might– take some of the lessons, for example, in the United States where sometimes it’s– it’s modestly-paid but hires people, university graduates, to go teach in some of the schools that need good teachers.

So that’s another type of prospect.  You can connect it with training positions.  But then also, what’s important to keep in mind, all of it doesn’t have to be done by the government.  And here’s the sharpest reminder, you know, the– the– the fruit and vegetable seller– Bouazizi in– in Tunisia that head all this off, what was his complaint?

His complaint was he just wanted to be able to sell fruit and vegetables but he was bein’ harassed because of licensing and red tape.  This is important because particularly in many developing countries where you have what’s called a large informal market, so it’s not the– the formal business employment system, if you stymie entrepreneurialism, if you stymie small businesses, you’re really hurting that type of entrepreneur, many of whom are women I might add.

So, in a sense, what you should be doing is creating a legal structure, creating credit structures that help those people get started.  So, in many parts of the developing world, you know, women don’t have contract rights, they don’t have property rights, they can’t get access to credit.

So, in another example in Ethiopia we get a land titling project where we did the simple step, working with the government, of creating two lines for names and two possibilities for pictures.  All of a sudden women got land titling as well.  And it started to change a whole series of credit and collateral possibilities.  So there’s a lot we’ve learned from around the world about how to engage people in job creation.

My point would be I think it would be a serious historical mistake to kinda wait until everybody gets all the economics right ’cause I’m not sure that’s gonna happen in the time span that one needs socially.  On the other hand it would be a mistake just to throw money at the problem.  So, across the full agenda, safety net programs, job creation, potential investment, business sector, we need to try to think short, medium, and long-term about how we can help countries get through the transition but also build for the future.

One last one, and this goes back to your– historic history of revolutions, these are not straight-line paths.  And one of the things we’ve seen in East Asia is that– the– the power of models, the power of watching what happened in some East Asian economies tried in other East Asian economies.  So I drew an analogy in the speech.  I talked about Algeria and– and– and– and Vietnam.  Both were French colonies.  Both suffered long conflicts and wars.

Vietnam followed the model of other Asian countries, opened up, took advantage of different types of foreign investment, took advantage of the international trade system.  Algeria did what many countries in the region did.  They relied on their oil and gas resources.  And so they lost some of the interconnection with the international economy.

I hope that over the next couple years at a minimum what we can try to do is start to create some models of success.  And from our early contacts, I have to say, you know, the– the– the Tunisian process is one where at least the transition government is very much in line with the types of things I was talkin’ about today.

CHRYSTIA FREELAND: So, Mr. Zoellick, you talked a lot in your speech about how the new media environment means governments have to behave differently.  And multi-lateral institutions like yours do, too.  And you’re walking the walk and have invited us to invite our readers to send in questions.  And they have done that.  We’ve had dozens of questions.  I’m gonna ask you a couple now.  One that we got on our website,, from a user called Daybase– who is interested in the impact of higher food prices and what the World Bank is thinking about this, what impact that’s gonna have on poverty.

BOB ZOELLICK: Okay.  First, I’m also worried about higher food prices, and particularly the connection of energy prices with these events in the Middle East and North Africa, ’cause I mentioned people understand the economic base, a lot of these countries, they’re food importers. And so– Egypt is actually one of the biggest wheat importers globally. I’m sorry to bother you, but if you’d give me a water, it would help. More generally I think what we can try to do with a number of countries– across the developing world is make this into an opportunity.  We can do things to try to help increase productivity and production of agriculture in many developing countries.  And this deals with everything from property rights to seed to fertilizers to– irrigation systems and– marketing.

And that’s another effort that we have more broadly underway.  There’s a third part, though, that we’re also tryin’ to focus on.  And this is where the French who are head of the G-20 this year have tried to highlight this. And that is I think we’re in a period where for a number of basic commodities, the stocks are relatively low.  And if you have weather-related events, so supply-side shocks whether it– and we’ve had some weather-related events in Russia– North America, Australia– South America, that these create– particular– upsurges in prices.

And if you’re a country where– if there are poor people that depend, say, 50 percent of your income on food, that’s particularly disastrous.  So, we’re trying to– work internationally to try to deal with the volatility issue– in addition to the long-term production.  What are things you could do?

Well, one, you don’t wanna make the problem worse.  So when countries sometimes put on export bans, that makes it harder.  So at a minimum, we’re suggesting that for– humanitarian purchasers such as the World Food Program that they ha– or, to be a code of conduct, to allow them to buy humanitarian supplies.  Second, volatility is often predicated on our uncertainty– and shocks of– of information.  So if we can get better in– stocks information ‘s going on in the world.

A third one would be– while in general building large stocks because expensive and they tend to– to degrade over time and so people don’t like them as a policy matter, we think maybe in places like the Horn of Africa where there’s a relatively high probability of problems, relatively weak infrastructure, it takes a long time to bring food in, you might wanna help the World Food Program get the support they’d be able to develop such stocks.

Then you can use risk management tools.  So, for example– we’ve done a project with Malawi that is very much dependent on rain-fed agriculture that in a country such as Malawi if the rains are good, everybody lives well, if they’re not, it’s very bad.  So, you can buy rain index futures.  So if the rain doesn’t come above a certain level, you get a certain sort of payment in the system.  So this is how you can use the much decried derivatives markets (NOISE)– for– for positive purposes.  So I think there are a number of practical steps—

CHRYSTIA FREELAND: Goldman will be glad to hear you say– saying that.

BOB ZOELLICK: Well, actually, the– one of the first things with this was a French company, Axe — that did this in Ethiopia.  So it’s– it’s across the board of people bein’ able to use this.  But I think the– the key point is, “How do we try to make these markets work better in information?”  And it’s a little bit like I was also mentioning for Egypt, focus on the most vulnerable.

So the other thing is we have social safety net programs.  But we know that particularly children in the negative nine months to two years are the absolute critical period for nutrition.  So rather than have bread subsidies that support 85 percent of the people, we can design programs that focus on those that are most vulnerable.  So, what I’m suggesting is over the long term, let’s make this an opportunity to increase production and productivity in the developing world, increase incomes, increase opportunity, value-added production.  But, in the near term, when we have the uncertainties and risks of the market, let’s try to help those that are most vulnerable.  And that’s a way that, frankly, you can target your efforts at lower cost.

CHRYSTIA FREELAND: Another reader question, given your sort of view of the real historical significance of what’s happening, is the intervention in Libya the right thing?

BOB ZOELLICK: That’s a– I– I mean, it’s a legitimate question to ask.  Unfortunately my role as head of a multi-lateral institution is I don’t get into the political security discussions about these.  I think that– there’ll be a big debate about how one intervenes.  And obviously the U.N. has authorized certain types of action.  For us as a development institution what I focus on is how we can use our capabilities to try to help those in need.

So what distinguished the situation of Libya from some others is a lot of the workers there were foreign workers.  So often in a– in a civil strife such as– you’re seein’ in Libya, the people we’d be freeing would be locals.  In this case a lot of them were South Asians.  So, I’m actually very pleased.  We work with the Bangladeshi government.  And we offered help to some others to try to be able to get the people out of the camps in Tunisia, get them back home, and actually give them some economic support as they set up– sort of– a livelihoods program.

So, that’s one way we can try to support.  I think more broadly this is a question of support for some of the U.N. humanitarian agencies that are gonna have difficulty getting some of the supplies in.  And I– I just hope that there’s a– a process whereby the people of Libya also get a say in their future.  So–

CHRYSTIA FREELAND: You are now the world’s big– biggest development guy.  I think that’s fair to say.  But, you have also a history of being America’s biggest trade guy.  And looked at from the American perspective right now there are a lot of pressures on– on both sides of the political spectrum around trade and around a perception that, you know, rather than– needing to worry about economic growth in the developing world and jobs as we’ve been talking about that Americans need to worry about jobs at home and that maybe develop– developing countries are taking those jobs away.  Are you concerned about protectionist pressures in the United States and– and– and what that might lead to?

BOB ZOELLICK: I’ve always been concerned about protectionist pressures in the United States and isolationist pressures as well.  And– you had waves in the United States that go along those lines.  It’s a big continental economy.  So, sometimes people are used to thinking that it can operate on its own.  But keep in mind– about half of the global growth is now coming from the developing world.  United States has about four percent of the public, okay?  Depending on how you measure it maybe 20 to 25 percent of the world’s– economy, but the other parts of the world’s economy are– are growing quickly.

So the opportunities for exports, the opportunities– if– if you’re a farmer in America– I’m from Illinois in the Midwest, and you’re lookin’ at those soybean prices or you’re lookin’ at the wheat prices or the corn prices, a lotta that’s driven by demand and changes globally.  So people– farmers have long understood the prospects– of selling– overseas.

If you think of the high-tech industry, if you think of a series of others, over time, if you can compete internationally, you’ll have higher productivity.  You’ll be able to pay higher wages.  And the one thing we’ve learned– you know, classic case was the 1930s.  United States had a trade surplus in the 1930s, doesn’t look so good in terms of the overall economy.  So, I think having said that, at times of great change, people get anxious.  And they get nervous.  And then the question is how do you–

CHRYSTIA FREELAND: But it’s high unemployment, right?  It’s not just anxiety in America is it?  I mean, people don’t have jobs.

BOB ZOELLICK: Yes, and– and that goes with the overall process of, I think, separate– even before– what I’m suggestin’ even before you had a high unemployment you had a rapid change.  And rapid change could be disconcerting to people.  So I think part of it is what– what is the role of tryin’ to help people adapt to change?  And that’s something that, frankly, we try to also do– with developing countries.

And one of the things that’s changing is there’s now lessons that might be learned from developing countries for developed countries.  So one of the topics that brings– brings back with the Middle East and North Africa is, “How do you connect people from education to training to jobs?”  That’s something that I picked up when I was in– Malawi and Zambia in December.

It’s something I pick up in some countries.  And it’s something in the United States as well.  So– we will be launching next week a– part of our private-sector– our I.F.C., a– a– education for employment, how to invest in companies that actually help make this process of change.  So, I think, again, the good thing and, you know, and when the United States I think has capitalized on its– its greatest assets, it’s capitalized on its openness to trade, to investment, to ideas, and to people, that doesn’t necessarily mean, you know, all people all the time, but that is what has kept the United States– historically a dynamic country.  Because it’s natural for any country and government to make mistakes.  But if you’re open, you tend to catch it more quickly.

CHRYSTIA FREELAND: So, Mr. Zoellick– your colleagues are– saying in my ear that your schedule is very busy, which we all know, and that you have to go.  But I wonder if since Lesley’s spent her life following you and what you do she could ask one quick final, final question.

BOB ZOELLICK: It’s fine with me.

LESLEY WROUGHTON: Well, the question I get asked all the time and was speaking to today– is, now, with– with Middle East, the focus of the Middle East always on oil, and the world’s attention, looking on them and worrying about oil supply and so on.  And with– with crude hitting over 120– barrels– dollars per barrel a day, what– what do you think the world should be, you know, worried about or looking forward to in this region?  What is this region going to offer?

BOB ZOELLICK: For energy prices?

LESLEY WROUGHTON: For energy, for– for opportunity.  Where is this– where is this headed?

BOB ZOELLICK:  Well, on the energy issue– I think that– while Saudi Arabia had some excess capacity that I think the events in Libya– added in a risk factor.  And so I think that core prices reflect perhaps some adjustment of the market, but really it’s a question of Libya plus what, in their minds.  And so people are building in some– risk factor because of the high degrees of uncertainty.

That may– persist for a while.  Over time, if you ask in the energy area, I suppose more diverse sources of energy, whether it be additional types of fossil fuels, whether it be hydro power, whether it be some of the clean energy sources, would create additional opportunities for– to expand the supply and have diversity of– of resources.  One of the issues that people– some people look to nuclear.  Obviously it’s gonna get reassessed after the events in Japan.

But so I think it’s important to look across the broader sense.  More generally, what does the region have to offer?  You know, in some ways, other than oil and gas, the Middle East and North Africa is a region that lost ground on globalization.  If you look at its share of global manufacturing and different types of engagement, it’s one of the few areas, not East Asia, not South Asia, even Africa has been able to expand.  It’s lost ground.

So, this goes– also goes back to Chrystia’s question a little bit about the– the gains.  The nice thing about economics is you can get win-win benefits.  One can grow and the other can grow with it.  So, frankly, if you have one rich country and everything is poor around it, not only does it create social instability and disease and other types of problems, but it’s not gonna be a very good market for innovation or– or exports or– or investment.

So, if one can take this historic moment and help these countries tap their own energies or their own people, and I might add if they don’t tap the half that are women, they’re gonna be 50 percent behind, then, you know, this could be an opportunity for others.  So, I think the– in a sense going back to this whole exercise, how do we get countries to increase the probability of success of getting through this transition, recognizing that there’s gonna be ups and downs and twists and turns and they’re gonna follow different paths?

What can we do as the World Bank?  What con– experience can we share from others?  What can we do from the private sector?  What can we learn from public-sector programs?  (NOISE) And that will, I hope, help create a greater environment more generally to tap the– (NOISE) the intellect and energies of the people across the Middle East and– North African regions.

CHRYSTIA FREELAND: Thank you very much.

BOB ZOELLICK: My pleasure.

CHRYSTIA FREELAND: Thank you very much, Mr. Zoellick.  We are going to try next time to get you to come do a news-maker event with us and then you will have people sending in questions afterwards.

BOB ZOELLICK: As long as I have my water.

CHRYSTIA FREELAND: So, even more social media.

BOB ZOELLICK: Very good.

CHRYSTIA FREELAND: And we’ll have water on the table.

BOB ZOELLICK: Very good.  I look forward to it.

CHRYSTIA FREELAND: Thank you very much.

BOB ZOELLICK: Thank you.  My pleasure.



This is definitely worth reading. It is a joy (and a relief, if you know what I’m talking about) to have Bob Zoellick at the helm at the World Bank.


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