101362 Parliaments and Poverty in Africa, 115th Assembly of the Inter- Parliamentary Union, Geneva, Switzerland Paul Wolfowitz World Bank President October 17, 2006 Mr. Wolfowitz: Mr. President, Distinguished Delegates, Ladies and Gentlemen, thank you for the very warm welcome it’s an honor and privilege to be here to address the Inter -Parliamentary Union I’d like to thank Secretary General, Anders Johnsson, for the opportunity to address this distinguished body a dynamic organization that has served as vital forum for global dialogue for more than a century. I am also pleased to be here in Geneva, the second home to the United Nations and where so many crucially important global issues have been debated in recent years. As we meet in this impressive [hall] in the heart of prosperous Europe, I think it is important to remember that there is still more than 1billion people worldwide struggling to survive on less than $1 a day. When we go back to our elegant hotels this evening, many of them will go to bed sick, hungry and uncertain about their future. So I’m particularly pleased to know that you will be focusing on the Millennium Development Goals with a special emphasis on the topics of debt, poverty and corruption. That is an agenda that is at the heart of the development challenges the global community faces today. It represents some of the fundamental issues that we, in the World Bank Group, confront in our day-to-day work. Fighting the scourge of poverty is at the heart of the World Bank Group’s mission. That is why we are deeply engaged in the international effort to cut global poverty by half —one of the targets set in the Millennium Development Goals. But the burden of debt and the disease of corruption threaten to undermine that global effort. Every dollar used to pay off an unsustainable debt is a dollar that is no longer being spent to help a child learn to read or write. And every dollar diverted by corruption is a dollar that can’t go toward creating jobs, good health care, or other essential services for the poor. Addressing those issues is critical if we want to meet the broader challenge of achieving the Millennium Development Goals and making poverty history. Let me share with you some troubling statistics. Some 100 million children worldwide, 55 million of them girls, still don’t go to school at all. 2.6 billion people have no access to water or sanitation services.. And preventable diseases like measles kill more than 500,000 children every year. That is today’s sad reality. But we can change that reality. As Frederic Passy said when he founded the Inter-Parliamentary Union 115 years ago, “The world, he said, is made of achieved utopias. Today’s utopia is tomorrow’s reality.� And indeed, many regions of the world have already made significant progress in improving living standards and reducing poverty. In the past quarter century, half a billion people, 500 million people around the world have escaped poverty. In the next decade, we forecast, another 400 million poor people are expected to join them. But clearly, not everyone has benefited. One region that has been moving dangerously in the opposite direction is sub-Saharan Africa. Between 1981 and 2002, the number of people living in poverty in the sub-Continent nearly doubled from roughly 160 million, 20 years ago, to more than 300 million now or roughly half the population. That is why the World Bank Group has made Africa our number one priority. The needs of Africa are truly enormous. But after traveling to 11 African countries in the past 16 months, I am convinced that there is not only a great need, but also great opportunity and real signs of progress on that vast continent. In the last ten years, as many as 17 Sub-Saharan African countries in have consistently grown at four percent or more, with some achieving growth rates as high as seven or eight percent. Countries like Rwanda and Mozambique that were once ravaged by brutal wars are now among the strongest performing economies in Sub-Saharan Africa. Most African countries still have too many obstacles in the way of people trying to start businesses or trying to grow small businesses into larger ones. But that, too, is changing for the better. Last year in fact, Africa emerged as the fastest reforming region in the world in terms of improving the climate for doing business—with Ghana and Tanzania ranked among the top ten reforming countries worldwide. Africa’s richest resource, and its best hope, is its people. The people of Africa don’t want charity. What they want, and what they deserve is opportunity. I met very poor parents in Burkina Faso who were working hard to scrape together $100 a year to send their children to a good quality school. They understood the value of education and opportunity in improving the lives of their children. In Tanzania, I met a mother who had brought a voucher to a drug store, along with 500 shillings of her own money, to buy a bed net. She needed that bed net so her young children wouldn’t get malaria. She knew the value of good health for her family. It is not lack of potential that’s holding Africa back, but crumbling infrastructure that burdens entrepreneurs with high transport costs and unreliable electricity. It is bureaucratic red tape that discourages small businesses from competing in the global economy. It is protected markets that deny poor farmers new markets to sell their products. Money alone will not solve these problems. But money is desperately needed and more and more countries are making good use of the development assistance they receive. Even at the same time that we are being more careful about how our money is spent, we are lending more than ever. For Africa and the poorest countries in the world, a critical source of development finance comes from the International Development Association or IDA, the concessional lending arm of the World Bank Group. Last fiscal year, IDA support to the poorest countries reached an historic record of $9.5 billion, roughly half of that dedicated to Africa. We also committed a record $950 million of World Bank Group income to help the poorest countries. But the financing needs are much greater than what the World Bank can provide by itself. Next year, donors are scheduled to discuss the future funding of IDA, this highly concessional lending for the world’s poorest countries. We are seeking, and we must achieve, a higher level of commitment from donors to match the ambitions and aspirations of the African people and of poor people elsewhere in the World. As part of last year’s landmark G8 agreement to cancel Africa’s debt, IDA is also providing debt relief to the poorest countries through what we call the Multilateral Debt Relief Initiative. Under this initiative, IDA is expected to provide about $36 billion in debt relief over the next 40 years. Twenty of our partner countries are already eligible to receive 100 percent cancellation of their debt. But poor countries will not benefit unless donors make good on their commitment t o preserve IDA’s financing capacity—dollar for dollar—by covering the cost of the debt relief andmaintaining their regular contributions. I say this because many of you are in a position to make decisions when it comes to IDA replenishment, it’s my hope that those of you here today who are in a position to influence the decisions of the donor countries will step forward to serve as champions for IDA’s efforts – efforts to help Africans and the world’s poorest citizens everywhere to take charge of their own futures. As legislators, some of you may be asked by your constituents why they should give money when so much aid went to this continent in the past, with so little to show for it. That is a valid concern, but it is outdated and misdirected. Yesterday I attended the Extractive Industries Transparency Initiative conference – a flagship partnership of government, industry and civil society. At that conference, Nigeria’s Minister of Education, a founder of Transparency International Nigeria, Minister Obi Ezekwesili pointed to the new steps Africans are taking to improve accountability – including the African Peer Review Mechanism. Why are they doing so? She said “Because transparency is not an end unto itself; reducing poverty is the end.� For those of you who argue that millions of development dollars have been squandered by corrupt leaders — I am here to tell you that is changing, and it is changing dramatically for the better. And for those of you on the other hand who may say that improving governance is a luxury that poor countries cannot afford, I am here to tell you that they cannot afford not to improve governance. In the long run, neither aid nor debt relief will help the poor escape poverty without a transparent and accountable government. 33 countries in sub-Saharan Africa have either signed or ratified the UN Convention against corruption. These countries are leading the way to a better-governed Africa where development dollars go to their intended purpose: which is to improve the lives of the poorest people. We are seeing an increasingly informed African citizenry demanding change. It’s just one example in Liberia after more than two decades of devastating war and conflict, the people of Liberia voted in their first elections last year. They elected Africa’s first female president—an economist who is committed to fight corruption and rebuild that … country. We are seeing leadership that is increasingly aware of its responsibility to its people; leadership that is pushing for reforms in their own countries; many of them whom are even doing so even at great personal risk. One such individual, is another Nigerian, Nuhu Ribadu. He is the Executive Chairman of The Economic and Financial Crimes Commission (EFCC) of Nigeria. Mr. Ribadu is leading the bold efforts of the Nigerian government to confront the disease of corruption. The work of his agency has already led to the recovery of as much of $5 billion in stolen assets from corrupt officials and individuals. And two of his staff have sadly been murdered, probably because of the work they were doing. Chairman Ribadu said recently and I quote him, “We know what corruption has cost us—it has denied us the value of our resources, both human and natural. It breeds injustice. It causes killings, the diseases that ravage us almost everywhere…that is not what we want, he said, and this is not what we are going to allow to continue.� There are many compelling reasons to support courageous leaders like Mr. Ribadu —because ultimately change cannot be imposed from outside. There must be local ownership; change has to be driven by the leaders and citizens of Africa who want to take control of their destiny and build a better future for their children. For that reason, the World Bank Group is committed to supporting champions of reform in both government and civil society, including legislators, courts, and a free press. Corruption is a disease that thrives on darkness. Transparency, participation and accountability – the light that emanates from an empowered citizenry – are the strongest antidotes to corruption. So promoting them is an essential part of the mission to fight poverty. But responsible governance is not just about fighting corruption, it is about creating government institutions that work. It is about building a sound legal framework that protects the rights of the poorest citizens. They are often the least knowledgeable about their rights. They also are often the least able to effectively articulate their needs. If we want our collective efforts to translate into real improvements in the lives of the poor, we must support approaches to empower them. A system that protects rights and promotes the rule of law can help the poor and disadvantaged take control of their lives by allowing them to know what their rights are and giving them recourse to claim them. That is why it is essential to invest in what I call the ‘software’ of development—namely, helping countries build institutions, institutions of accountability. And one of the most important institutions for promoting accountable government are freely elected parliaments. Already the World Bank Group is working closely with parliaments in a number of our partner countries. We would like to expand that collaboration as much as possible. Well-informed and capable parliaments are critical in the collective fight against poverty. You as Legislators play a vital role because you can amplify the voices of the most silent, invisible, and poorest citizens in the halls of government. Your work can make sure that the needs of those citizens are addressed in the policy-making process. Parliaments are also indispensable in improving governance. On my first official visit as President of the World Bank in the summer of last year, I was delighted to meet with a number of parliamentarians from Nigeria who were keen on promoting good governance. As we exchanged views on these matters, it became clear to me that parliaments are one of the primary institutions holding governments accountable for their actions. But to do that, parliaments need resources and technical capacity. Legislators and their staffs need to have access to the information required to make sound policy choices. After all, knowledge is power and information is the cornerstone of a well-functioning, transparent system of governance necessary to ensure that jobs, education and healthcare are within the reach of every citizen. For us at the World Bank Group, partnering with parliaments from donor countries is as important as working with parliaments in recipient countries. Your role in approving development assistance budgets and crafting international development policy is a vital one. And your plea for better use of aid and more opportunities for trade is one that we at the World Bank Group share and support. On that note, I cannot be in Geneva addressing this vitally important group of leaders without stressing how critical trade reform is for the fight against poverty. That’s a shared responsibility. Unless serious concessions are made by developing and developed countries alike, all sides will lose. But those who will suffer the most are the more than one billion people around the world struggling to escape from poverty. Parliaments are key allies in this global effort to reduce poverty. Together with other donors, the World Bank Group stands ready to support parliaments in the developing world with funding and training. Parliaments that can translate the will of their constituents into real action, they can meet the expectations and needs of the poor. In this effort, I believe, all of us share a common goal In fact 60 years ago in 1946, the first World Bank president, Eugene Meyer, said “We live upon a planet which is inescapably integrated. The whole world is one community. All parts affect the common destiny of the whole. Prosperity like peace, Mr. Meyer said, must therefore be viewed as indivisible and we shall prosper individually only as we prosper collectively.� For too many years, too many citizens of this planet have been left out of the progress of our global community. To achieve true prosperity for our integrated planet, we must work together to help give the poorest among us the chance to find their way out of poverty. I ask you to join us in the World Bank in pursuing that noble mission. Thank you.