Re: [OPE-L] Wolfowitz's world: easy easy money not so easy, chicks not for free

From: Patrick Bond (pbond@MAIL.NGO.ZA)
Date: Sun Apr 15 2007 - 19:08:29 EDT


Jurriaan Bendien wrote:
> Why do they talk about "governance" at all, do you think?

To give them moral strength to do the rest of the dirty work?


PREPARED STATEMENT BY SECRETARY HENRY M. PAULSON, JR. AT THE DEVELOPMENT 
COMMITTEE MEETING

This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp352.htm

Washington, DC--Over the past five years the world economy has grown
at a pace not seen in over three decades. This robust growth has been
particularly strong in low income countries and has helped reduce
poverty. The world is well on its way to halving the share of people
living in extreme poverty. While this is a remarkable accomplishment,
progress is neither great enough nor balanced enough for us to
congratulate ourselves. The Global Monitoring Report appropriately
highlights the difficulties with progress in fragile states, many of
which are located in sub-Saharan Africa, and draws attention to the
need to ensure that the benefits of growth are equally open to all
members of society, both male and female.

While the community of donors recognizes the need for continuing
substantial aid flows, one of the most critical of the many lessons we
have learned in the 60-year history of the World Bank is that higher
aid flows by themselves do not guarantee less poverty. Assuring that
our assistance is directed to effective, efficient, well-coordinated
projects that can make lasting changes in people's lives remains a key
and daunting challenge. It requires intellectual vigor, the
willingness to constantly reassess and question the effectiveness of
our approaches, and a true hard-nosed dedication to the pursuit of
measurable results at all levels of our programs. It also means that
resources need to be applied to their most efficient use, and that
institutions focus on their core competencies.

Sub-Saharan Africa

We are heartened by the early indications of success with the Bank's
Africa Action Plan (AAP). It is too early to determine the long-term
effectiveness of the AAP, but there is sufficient evidence that
results are moving in the right direction. We are particularly pleased
with positive country policy performance, a key ingredient for
development results. One area highlighted in the AAP where more work
should be done is statistical capacity building. Without data, African
countries will always be at a disadvantage in policy creation and
adaptation, and private sector firms will be less confident in
investing.

As we think about a post-2015 Africa, many areas of activity, such as
infrastructure, the private sector, and governance deserve significant
attention. While we support the IDA-IFC micro, small and medium-size
enterprise facility, the AAP needs a greater focus on private sector
support and improving financial sector access. It is the financial
sector that provides a loan to start an enterprise, grow a business,
or buy a house. Access to capital helps people acquire assets that
give them a foothold in the economy  personal financial wherewithal
they can leverage into greater prosperity and economic security.

Trade

Reducing trade barriers is also essential for providing people
opportunities. The best way to alleviate poverty and raise living
standards is through greater openness, so more people can benefit from
the expanding global economy. The most important driver for poverty
reduction has been the rapid growth of developing countries that
opened to trade, notably in several Asian economies. For instance,
Mexico's poverty rate fell by more than 20% and its rate of extreme
poverty fell by more than 30% between 1994 and 2005  the years
following the passage of NAFTA.

We need to continue pushing forward on the trade agenda, including a
successful Doha Round of negotiations, to keep all our economies
growing. The case for trade liberalization is clear and compelling.
And if we want more people to support it, we need to ease anxieties
and help more people realize the benefits of trade. The Aid for Trade
agenda launched at the Hong Kong Ministerial can help allay these
fears.

Fragile States

Fragile states pose a special development challenge because they are
frequently unable to sustain any forward momentum on reforms and
growth. As such, fragile states do not typically respond to standard
development interventions and require a rethinking of donor engagement
to ensure positive results. Paramount among these is careful
consideration of resource investment. Due to weak governance and weak
institutional capacity, the ability of fragile states to absorb and
effectively utilize resources is limited. This is particularly
relevant given the potentially negative macroeconomic implications of
scaling up in low-capacity countries.

Given the challenges posed by fragile states and the limited
applicability of standard development tools to their situations, a new
framework needs to be developed to assist donor institutions to engage
effectively. Key elements of such a framework include: (1) developing
a cohesive definition of fragility that focuses on the sources of
fragility and not its outcomes; (2) developing and adopting an
approach of selective intervention; and (3) developing a high quality
and integrated monitoring and evaluation system.

Governance

Finally, we welcome and support the updated version of the World Bank
Group's Governance and Anticorruption (GAC) strategy. We applaud the
Bank for an extensive public consultation process, which has helped to
sharpen the GAC's approach and has opened the door to new
partnerships.

We are confident that the strategy will strengthen the Bank's role in
helping borrowing countries promote good governance and fight
corruption and in playing a leadership role with global partners. We
believe the GAC rightly focuses on the most important issues: building
effective and accountable institutions; country ownership; and
government commitment to governance and anti-corruption. Further, we
support the call to help countries address the problem of asset
seizure and repatriation and greater disclosure of assets by public
officials. The core proposal to revamp the country assistance strategy
(CAS) process to systematically address governance issues in country
strategies assumes a continuing framework for fighting corruption in a
way that applies central principles to country-specific circumstances.
Going forward, we would like to see more use of the Public
Expenditures and Financial Accountability indicators within the Bank
fiduciary diagnostics and their link to the preparation of country
assistance strategies.

Conclusion

The challenge of global poverty can be overcome only when the
appropriate resources are married to the right policies. The MDGs
intentionally set a very high bar, and achieving them will require
that we remain focused in our purpose and efficient in our methods. We
look forward to working closely with all our partners to achieve our
common goal: to create the conditions and opportunities for the
world's poor to improve their livelihoods and overcome poverty.

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