Interview with World Bank President Robert Zoellick: Prospects for Economic Development, Part 1

Ideas in Action with Jim Glassman is a new half-hour weekly series on ideas and their consequences.

Is investing in women 'smart economics?' World Bank President Robert Zoellick thinks so. The Bank has programs in Afghanistan, the Middle East and elsewhere that help women become educated, gain better access to health care, and start small businesses. In this one on one interview, Jim asks Zoellick why the empowerment of women is crucial to the overall wellbeing of these regions. Will the turmoil in the Arab World help or hinder women? And how can the World Bank - and the U.S. - ensure women's rights are protected?

Transcript

IDEAS IN ACTION with Jim Glassman

Robert Zoellick Part One

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman.

Here on the campus of Southern Methodist University the George W. Bush Institute and the U.S. Afghan Women's Council recently held their second annual conference promoting freedom and economic advancement for the women of Afghanistan. World Bank president, Robert Zoellick, was a featured speaker. [Zoellick on Camera, 'So one opportunity is to show in very practical terms how economic empowerment, how education, how women's voices and minds and work can improve the lives of families and communities.']

He and I spoke afterward about efforts by the World Bank to help women in Afghanistan and other Muslim countries. The topic this week: economic empowerment for the women of Afghanistan and the countries of the Middle East. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com.

JIM GLASSMAN:
The World Bank has programs in Afghanistan and 20 other countries across the Middle East and North Africa. The organization considers women's rights essential to the overall economic stability of these countries and it has invested in many projects to help women including education, health, and entrepreneurial training. How effective have these programs been and what effect can the bank have if male dominated cultures don't change?

Robert Zoellick, president of the World Bank, welcome.

ROBERT ZOELLICK:
Glad to be with you.

JIM GLASSMAN:
We're at a conference on empowering Afghan women economically, what does the World Bank do in this area?

ROBERT ZOELLICK:
Well, I think the most important thing we try to do is connect it to the basic operations we have of economic empowerment and make sure that it expands to the empowerment of women. So one of our most successful programs has been something called the National Solidarity Program, which works in all the provinces of Afghanistan, works in about 27,000 different communities. And it's built on the idea that councils of men and women, in some cases separate councils, make the decisions about some local small investment whether it be micro hydro or schools or roads and in that sense it builds local ownership, involvement, and that's also a way of connecting women with the decision making process. And that connects and builds with other things whether it be microfinance or whether it be rural development programs and so I think the success in any society of development depends on local ownership and here we're trying to work with the Afghan government and the Afghan people to design programs that include women in that ownership.

JIM GLASSMAN:
And you said that empowerment of women is quote 'smart economics' end quote. Why particularly women?

ROBERT ZOELLICK:
Well I think, you know, it starts out with the fact that many people properly feel that it's the right and fair thing to do to give women an opportunity and to treat them in an equal fashion with men. But what I was trying to emphasize is that our research shows that gender equality is smart economics and in fact in some cases we've learned-- a study in Brazil comes to mind that the effect of having women head of household get the form of income whether it be of support or whether it be that they earned, has about 20 times the effect on children's survival. And similarly-- let me give you another example from Ethiopia which is that if in land tiling if you simply produce another line so that the women can have their ownership as well as the man an opportunity for the picture that you'll get women also getting land ownership and that opens the way to credit and opens up to other possibilities. So if you think about it in the most common sense terms how can a society succeed if it excludes 50% of its people? And that's what women's empowerment is about.

JIM GLASSMAN:
And what sort of results are you seeing in Afghanistan from your engagement there?

ROBERT ZOELLICK:
Well, we work a lot in some of the rural areas and as I mentioned at the conference this is an area where it's been toughest for women and frankly there's actually been some setbacks in recent times. But where we've been able to develop these programs in small villages as well as obviously in the major cities like Kabul, you see tremendous involvement. I mean, if people have a chance to meet any of these women as you saw at the conference you untap a whole set of energy and opportunity and creativity and what people often miss is its intersection with other things. Women may develop carpets, the men may start to do the marketing, the uncle may start to do the bookkeeping. And, I think this is the key to its success; if gender equality is seen as something foreign as it's seen as something unislamic, something that breaks down the family, it's not going to find roots. But, if you integrate it and instead show that this can increase incomes and opportunities-- and by the way you start to see all sorts of things around the world, you know, if women start to have higher degrees of education and income and opportunity it improves family nutrition, it improves the education of both boys and girls and a whole series of positive things flow from it.

JIM GLASSMAN:
And this point about cultural sensitivity is a very important one. I would imagine that the World Bank operating in what 120 countries you have to be very cognizant of the culture you can't kind of impose yourself on a culture that might be resistant.

ROBERT ZOELLICK:
That's true but I'll take it even a step beyond and that is that what we've learned in Afghanistan-- and this is critically important-- is even though the capacity of the government is weak you have to try work with the government to build the capacity. So only about a third of the assistance to Afghanistan actually flows through the Afghan budget. Well that has a number of effects; one is it means the Afghans aren't going to own these problems so someone may build a school but if it's not connected to teachers, if it's not connected to security, how long is it going to operate? But it also means the Afghan government doesn't build the capacity and sometime if Afghanistan's to stand on its own two feet it's going to have to develop the capacity. So one example I've used is we worked with the Afghan government on a basic preventive healthcare program. It goes all across the country, rural areas, men and women. It's had a huge effect on infant mortality, maternal health, some of the basic preventive diseases. And the way we designed that because capacity was weak in the central government is to have the central government basically contract with NGOs, international and domestic, to provide the basic preventive healthcare services. So that was a design that recognized weak capacity but you would build it over time. So the core lesson of development in any country is if the locals don't own it-- people from the outside may have good intentions, they may have money, they may have knowledge, it's not going to work. Do people in Texas want everything run from Washington or do they want to have their own say in things? And it's true anywhere in the world. On the other hand you can also benefit from ideas from elsewhere and this is also something we're seeing more broadly at the World Bank. There's a lot of interesting things coming from the developing world that could also be good for the United States. One that I've mentioned is private sector investment and infrastructure. I don't go to any of our developing country clients without having a discussion about how to draw in private capital but yet some of this in the United States is seen as you know how can we dare have private sector money in toll roads?

JIM GLASSMAN:
But the other side of this coin is that there is corruption in a lot of these countries and certainly lots of reports of corruption in Afghanistan so how does the World Bank make sure that, for example, money that is supposed to be flowing to projects involving women really does?

ROBERT ZOELLICK:
With corruption you have to operate at different levels. We're a very big financial institution and our first responsibility is the integrity of our own funds in flowing and that is everything from the design of the programs to the inspections that we have and the types of sanctions we'll take on different companies and other different things. But-- and it's critically important because we try to emphasize you know every dollar that's taken from our work is like stealing a dollar from the poor. I mean it's got to be as immoral as can be. But I don't think we can stop there. So part of what one also has to do is work with the countries themselves so the more that you can build in transparency, open information-- we work with countries so that they have asset declarations of their public officials, so they have financial declarations, so they have in effect freedom of information acts and then you can combine these in the design of the program. And you know one that's always stuck in my mind is an education program in Uganda where when it came time for sort of some basic community development that the-- published on the door of the school the purchases that were supposed to be made, and the teachers that were supposed to be hired, so it engaged the local community. So to come back to Afghanistan, we have to work with the government on these things, and there is-- I mean when you look at the corruption indices you have huge problems of corruption in Afghanistan. It's one of the lowest on the scale. So in a sense how can we bring in social accountability? How can we bring in citizen participation? And go back to those solidarity programs that I mentioned. These are based on the concept of community development. If you have the local community deciding how the money is supposed to be spent for the community they're going to know if somebody's stealing it or ciphering it off.

JIM GLASSMAN:
In 2009 you wrote that Afghanistan was quote, 'one of the most difficult environments where the World Bank works,' end quote. How has that environment changed if at all today?

ROBERT ZOELLICK:
Well, we're struggling with some of the things that people are reading about in the newspapers. So for example when the Afghan government was talking about having security contractors have to leave this was a big problem for us. I mean we not only have our own programs but we manage a multi-donor trust fund which eases the burden on the Afghan government but I think we made some headway on this but frankly a couple weeks ago we had to send a special mission to London to keep our contract enforced. So this security issue is fundamental to what we do. And frankly where you see security decline you're going to see women's gains decline and you're going to see some of the loss in some of these rural areas. Where you do see this security created though you can create some opportunities and build support for the government and the society. Another issue I think you touched on is the ongoing corruption. We've been working with the IMF and the U.S. and others on this Kabul bank problem, which is a very serious issue. And there we try to bring our expertise as the IMF does about what steps need to be taken to make sure that the shareholders of the bank bear their responsibility, that the lenders that you collect on the assets. So this is again where we can try to bring some of the expertise and standards from around the world and apply it to Afghanistan. And nobody should underestimate how difficult this is. But as also if you saw some of the young women and girls at this conference you also see what a difference it makes.

SHAHLA AKBARI:
Now, I am a successful businesswoman in Afghanistan and I want to be an example for all those girls and women that they are sitting in their home and they don't come out. They think that they can't work. I don't know why but when they come out they can work because I can, so they can.

JIM GLASSMAN:
So how optimistic are you about Afghanistan's future?

ROBERT ZOELLICK:
I'm positive about what I've seen can be done. And as I mentioned following the formula basically where we have an honest minister, where we work with the government and try to build something around their capacity so we do it through the government. We've done this in education, we've done this in healthcare, we've done this in microfinance, we've done this in the National Solidarity Program. Frankly about a year ago, I went to president Karzai and said if you give me the right person in agriculture I think we can make big gains there too and he did. There's some possibilities in mining as well. But there's places where there's still difficulty and I guess what I come down to is you have to tell me ultimately what you see on the security posture. That's an area that is a condition that I don't deal with through the World Bank. I mean, we don't have the army. But on the other hand if we can keep the right security environment, I've certainly seen the people of Afghanistan respond. And you've had very very good growth rates. I mean still it's a very poor country. Per capita is probably between five and six hundred dollars a year. My worry right now is more the world of Kabul and Herat the urban areas versus the rural. You have to keep the progress going in the rural areas.

JIM GLASSMAN:
I want to switch gears for a second. What do you think is driving the historic changes that we're seeing in the Middle East today?

ROBERT ZOELLICK:
Number one, you did have a huge youth bulge so we estimate that the countries of the Middle East and North Africa would have to create about 40 million jobs over the next ten years just to hold even. In some countries they were making some progress on growth and on some of the basic human development statistics but I think what was fundamentally missing was a notion of social accountability, citizen participation, which ultimately went to respect and dignity. And so it's always hard to tell what's the spark you know in Tunisia it was the spark of too many licenses and hassling of a poor vegetable dealer who was so frustrated, partly I'm sure with defense to his dignity and a sense of hope and opportunity, so he set himself on fire. So one of the things-- the points we'll make to the new government is in addition to doing some of the things that they do on the government side, let's ease up on some of the red tape, let's ease up on the licensing, let's create some of these entrepreneurial possibilities because how can you miss the fact that that was the spark that set it off. I think more generally we're now in a stage where we have to recognize this is going to have ups and downs, this is going to go for years, it's going to vary by country. But, the stakes are so high we need to try to lean forward to see where we can support it and this is one of the topics I'm sure that the bank and oth-- the World Bank and others will be deeply engaged with.

JIM GLASSMAN:
Is there going to be a change in the way that you engage with middle eastern countries?

ROBERT ZOELLICK:
Well-- we always have to change with the circumstances and as these governments change I think that-- I see a couple of things. One, we need to lean forward because some of these countries are going to be in a very difficult transition. But, at the same time leaning forward doesn't just mean more money, it also is going to mean the right policy changes. Second, I'm concerned about high food prices in the world and for countries like Egypt that are big weed importers could put a lot of stress, Tunisia, Jordan, some others, and so we need to try to get countries through this period but frankly most of their support programs are not targeted, they're too expensive, and their first steps that they've taken are going to deepen their budget problem. So what lessons can we draw from other developing countries about more targeted safety net programs that can be done with efficient budgets? So while we get through today we also have to be moving towards the tomorrow. Jobs; this youth bulge, the people in the streets, economists tend to be weary of make work government job programs, so am I. We've learned in other developing countries there's ways you can do things however that give people employment, get them out of the streets, give them some hope, that don't interfere with private sector development. It may be a food for work program. You may give people some of the basic necessities if they help build some local infrastructure on a project. You have to be careful about the wage rates if you pay wages for these programs. The third one I mentioned is some of the licensing, the red tape, this would send a very important signal. I think you could connect this with some of the trade side, this would be for both Europe and the United States. I think for investors to come if they feel that some of the trade access, some of the rules of origin, bringing some of the agricultural products. But I wrap it all together with this point about social accountability and civilian involvement-- citizen involvement. In here if you ask what we're going to do to try to support this is take Egypt; we had developed with some Egyptian reformers a freedom of information act but it got stuck. So I partly feel what has happened in these countries is they've had a partial modernization. The bureaucracies have been sclerotic. Now this isn't going to be easy because a lot of the people that are going to take over are going to be risk averse and they're going to be worried and some of them frankly may not be as reformers as the past group. But, I think we have to try to encourage them and here where we now have a benefit is we don't just want to show the comparison with the United States or Europe or Japan but we have developing country examples of what works.

JIM GLASSMAN:
And so do you think that what is happening now in so many Arab countries is going to happen elsewhere in the world with other authoritarian regimes? I mean is this another 1848?

ROBERT ZOELLICK:
I don't think it's just a question of authoritarian. I really think it's a question of social accountability. I mean in other words-- let's take China, which is not a democracy. China has actually been pretty shrewd about trying to figure out ways to involve its citizens, to do polls of the citizens, to take some of the types of attitudes. So, the line that I would draw is an authoritarian or an elite system loses touch with its public. And that you can address with a whole host of ways we've seen across different countries but they basically go to openness and involving citizens. These community development programs we talked about in Afghanistan or can apply it elsewhere that's a wonderful way of getting people to focus on what they think is most important. I think that some of these issues about citizen involvement are now going to be in this stage.

JIM GLASSMAN:
How will women be affected by the transformations that we're seeing and the potential increase in government accountability?

ROBERT ZOELLICK:
Well, I hope it offers more opportunity but that's going to be sort of each society. And as you mentioned I like the 1848 example too although it may be obscure for a lot of people but-- because it really shows that you have a flow of events that's going to hit different shores in different ways and it's going to have some aspects that you may have repression that follows. But I'll go back to the fundamentals. I've seen, whether it be in China, whether sub-Saharan Africa, Latin America, there's this tremendous energy that can be tapped and creativity and intelligence from women and even societies that seem to be, you know, discouraging women's role, once you start to show well this can add a little income, this can improve the life, this can create additional opportunity-- I've seen this in very poor villages in India and yet then as the women get organized then they start to focus on other different things together. So again, one reason that I emphasize gender equality is smart economics is to say people may have different views from society and culture about women's role in the world but it just makes common dollars and cents if you will to create additional opportunity and to use all the members of your society and allow them to reach their potential. So this is again-- sometimes facts speak louder than words. So we now-- we have the evidence, we have studies that shows the benefits.

JIM GLASSMAN:
And what are some of the countries that have been particularly successful in empowering women and thereby increasing their own prosperity?

ROBERT ZOELLICK:
It varies but let me give you an example. Mexico, nearby country here, they have this opportunatis program, which is called a conditional cash transfer. It gives money to the very poorest families but on conditions; number one you send your children to school, number two you get health check ups. It's probably done more for women's health than anything else in the history of Mexico. That money goes to the woman head of household and it gives additional role and frankly what the statistics show about what women do with family income versus the men is quite striking in terms of nutrition, and education, and frankly spending in the community. So Brazil has done something similar, Colombia's done something similar, so it really varies. And one of things is in Afghanistan there's an effort to try to bring women into the governance process through the parliamentary process. If you look across many of the Asian countries they have women in significant types of roles and again have been very active in the business side. Most Sino-based countries, China's actually been pretty good in terms of engaging women throughout the system although there's still discrimination as there are in other places. So, it takes different forms in different countries but again and you know United States and Europe and all have their own built in limitations in this, and you know we at the bank had limitations. One of the things that I've tried to do is increase the number of women in senior positions and you know I'll give you the practical experience; what tends to happen is DNA replicates itself so whatever the decision systems tend to look back at the same systems. So you really have to at a senior level put major attention on this and half the officers I've appointed at the World Bank have been women but frankly I still need to get some of those officers and the ones below them to bring more women into the system.

JIM GLASSMAN:
You know the opportunatis program that you mentioned was that something that the World Bank came up with or was this a indigenous Mexican program?

ROBERT ZOELLICK:
It's a program that was partly developed by a person who's now the chief economist at the Interamerican Development Bank and so he worked with the Mexican government, worked with us, it had different forms, it evolved over time, but this is a good example of how the World Bank worked. We got engaged in the process relatively early with some refinements and testing and we've now brought that in some form or another to some 45 countries around the world.

JIM GLASSMAN:
You've had to argue for the U.S. to keep its commitments to the World Bank. And this is a tough time economically for the United States as well as other countries. What do you say to encourage Americans to support the World Bank?

ROBERT ZOELLICK:
Well, a number of different things. The first is it's a pretty economical investment. I mean, we have capital and we borrow in international markets. And so the United States owns about 15% of the shares so there you've got for every dollar the U.S. puts in you've got about six dollars from others. Then, we borrow on top of it another four or five dollars so you get about a 30-dollar to 1 sort of investment. And one of the things that goes along with the changing nature of these institutions is as we have other developing countries grow we're adding to their contributions so it's quite interesting-- is taking some of the rising middle income powers. Part of the point that I engaged with with president Bush but now at the World Bank is how do we also get them to assume greater responsibilities? So, that's one on the financial side. On the second side is you get different types of interest. We talked about Afghanistan. If this is an America security interest look at the different role the World Bank is playing there or in Pakistan or in Egypt or other countries of interest. A lot of church communities are very interested in the type of work that we do in malaria or with countries like Liberia or Southern Sudan. The business community is interested-- what used to be considered charity is now a half of global growth, a half of global growth is coming from the developing world so we have the support of the U.S. Chamber of Commerce, a lot of the business groups, because they're looking at exports as a source of jobs and investment and opportunities more broadly. So whether it be the business community, church community, security interest, or frankly Americans feeling a role and responsibility in the world, we connect all that. And it makes one more point which is you know the World Bank was created right after World War II to learn some of the lessons of the failures of the 20s and 30s after the end of the first World War. And sometimes there's a debate about multilateralism or unilateralism and frankly I find a lot of it strained. The question is how can the United States make multilateral institutions work for its interest while other people's interests get developed? How can they help develop free markets, private sector? How can they help deal with some of the disease or security issues? So the real challenge is how do you modernize multilateralism? How do you make multilateralism work? It can't just be an excuse for inaction and that's part of what my job at the World Bank's all about.

JIM GLASSMAN:
You make a good case. Thank you Bob Zoellick.

ROBERT ZOELLICK:
My pleasure.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. We'll see you next time.

Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

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For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.


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Robert B. Zoellick

President, World Bank

Robert B. Zoellick became the 11th President of the World Bank Group, which works with 187 member countries on July 1, 2007.

Prior to joining the Bank, Mr. Zoellick served as Vice Chairman, International of the Goldman Sachs Group, Managing Director, and Chairman of Goldman Sachs' Board of International Advisors from 2006-07. In 2005-06, Mr. Zoellick served as the Deputy Secretary of the U.S. State Department. He was the Department's Chief Operating Officer and policy alternate for the Secretary of State, in addition to having lead policy responsibility in a number of areas.

From 2001 to January 2005, Mr. Zoellick served in the U.S. cabinet as the 13th U.S. Trade Representative. He forged an activist approach to free trade at the global, regional, and bilateral levels, while securing support for open markets with the U.S. Congress and a broad coalition of domestic constituencies. He worked with Ministers from nearly 150 economies to launch the Doha Development Agenda in the World Trade Organization (WTO) in 2001 and then to complete the framework accord for opening markets in 2004. Zoellick was instrumental in completing the accession of China and Chinese Taipei to the WTO. He also completed or substantially advanced the accessions to the WTO of Cambodia, Saudi Arabia, Viet Nam, Russia, and others.

Zoellick enacted or completed FTAs with Jordan, Chile, Singapore, Morocco, Bahrain, five countries of Central America and the Dominican Republic, and Australia, quintupling the number of countries with which the U.S. has FTAs. He also launched FTAs later completed with Peru, Colombia, and Panama, and enacted a Basic Trade Agreement with Viet Nam. Zoellick worked closely with the U.S. Congress to pass Trade Promotion Authority, as well as preferential trade arrangements with Africa, the Andean countries, Caribbean states, and all developing economies.

From 1993 to 1997, Mr. Zoellick served as an Executive Vice President of Fannie Mae, the large housing finance corporation, where he supervised the affordable housing business, as well as offices dealing with legal, regulatory, government and industry relations, and international services.

From 1985 to 1993, Mr. Zoellick served with Secretary James A. Baker, III at the Treasury Department (from Deputy Assistant Secretary for Financial Institutions Policy to Counselor to the Secretary); State Department (Undersecretary of State for Economic and Agricultural Affairs as well as Counselor of the Department with Undersecretary rank); and briefly Deputy Chief of Staff at the White House and Assistant to the President. Zoellick was the lead U.S. official in the "Two-plus-Four" process of German unification in 1989-90. He was the "Sherpa" to the President for the preparation of the Economic Summits in 1991-92. Mr. Zoellick graduated Phi Beta Kappa from Swarthmore College in 1975. He earned a J.D. magna cum laude from the Harvard Law School and a MPP from the Kennedy School of Government in 1981. He lived in Hong Kong on a fellowship in 1980.

Zoellick received a number of awards, including: the Knight Commanders Cross from Germany for his work on unification; the Alexander Hamilton and Distinguished Service Awards, the highest honors of the Departments of Treasury and State, respectively; the Department of Defense Medal for Distinguished Public Service; and a Doctorate of Humane Letters from St. Joseph’s College in Rensselaer, Indiana. Mr. Zoellick has also served on many non-profit boards, among them the Council on Foreign Relations, the European Institute, the American Council on Germany, the American Institute of Contemporary German Studies, the German Marshall Fund of the U.S., the National Bureau of Asian Research, the Overseas Development Council, and the Advisory Councils of the World Wildlife Fund and the Institute of International Economics.

Mr. Zoellick grew up in Naperville, Illinois.

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