Today's date:
  Global Viewpoint


Americans can do more; if aid is effective, donors will be generous

Paul Wolfowitz, the former US Deputy Secretary of Defense, is the new president of the World Bank. He spoke with Global Viewpoint editor Nathan Gardels on Friday, July 1 in advance of the G-8 Summit Meeting in Scotland July 6-8 that will focus on Africa.

By Paul Wolfowitz

Nathan Gardels: What is the significance of this upcoming G8 Summit, that, unusually, is focused on Africa?

Paul Wolfowitz: This summit comes at a historically opportune time. Africa is at a turning point. As Nigerian president Olusegun Obasanjo said to me recently, it is a continent on the move. That is not true everywhere, of course, but it is true in a lot of important places there. If the leaders of the big developed countries step up to their responsibilities as well at the summit in Scotland, it can also be a turning point for a new partnership.

Gardels: Having just visited Africa, what has been the cause of poverty and what is changing that makes this a turning point?

Wolfowitz: There are multiple causes of poverty. There are legacies from the past that unquestionably burden African countries. But these legacies, which can often be blamed on developed countries or colonial powers, burden places like China and Indonesia as well. That is in the past, however. You are not going to move forward by dwelling on the past.

What is so encouraging in Africa today is seeing talented, energetic people throughout the continent standing up to their responsibility. They are intelligent and willing to work hard. What they have lacked in the past is a political and policy framework that will allow that hard work to give their children a better future. We are seeing a significant improvement in this regard. Some 15 African countries have registered real growth over the last 10 years. That doesn't happen without an improving policy environment. We've seen that just recently in both South Africa and Nigeria, where criminal proceedings have been initiated against three very senior officials on corruption charges.

Even more importantly, there is a recognition that there must be a systemic approach to development that includes transparency — making clear where the money is coming from and where it is going. African leaders today understand that in order to reduce poverty and really help their people advance, this is something they have to do. It is not something they are doing as a condition for aid; it is something they do for themselves. Only when they really believe this, and I believe they do, can aid be applied effectively. This is a huge step forward compared to 10 years ago.

Gardels: On MTV, British Prime Minster Tony Blair and rock-activist Bob Geldoff said the remedy for African poverty was "aid, trade and debt relief from the rich countries in exchange for good governance in Africa." That is, more aid, removal of trade obstacles, such as farm subsidies that shut out African exports to the West, and forgiving past debts.

Is that the right formula?

Wolfowitz: Yes, basically it is right. We are not just talking about aid in isolation, as Tony Blair has made clear. This is a deal for a deal. It is assistance for performance. But there is another dimension: Governance is a shared responsibility. Battling corruption is not just the responsibility of African leaders, a task which they are increasingly taking on. It is also a matter of enforcing good practices on multinational corporations and helping African nations recover some of the stolen assets that have been placed in banks in developed countries.

Gardels: Blair has proposed doubling Western aid to Africa from $25 billion a year to $50 billion by 2010.

Do you support that goal?

Wolfowitz: Yes I'd love to see the money double. Extra money is an essential piece of the solution, but that is not all. The development community, including the World Bank, has a responsibility to make sure these increases in aid are applied effectively — for well-thought-out programs and connected to performance.

Aid now comes from so many sources that, to be effective, it also has to be more coordinated, or "harmonized." That is a key challenge for the World Bank.

Gardels: European countries have signed on to Tony Blair's goal of doubling aid, but the U.S. has not. Critics argue that less than 3 cents per 100 dollars of U.S. GNP goes to Africa aid. Should the U.S. do more?

Wolfowitz: I think so. All donors should do more. I appreciate the fact that President Bush has significantly increased development assistance generally, particularly to Africa. But I'd like to see everybody do more, including the United States.

Those of us in the development community must recognize that if we want the developed countries to do more, we must overcome the skepticism that there is no connection between aid and performance. We've got to make sure the aid delivers performance.

My sense of U.S. taxpayers and those in other countries is that they are prepared to be generous, but they need to be convinced that their generosity produces results.

Gardels: In other words, where there is transparency, accountability and performance, there will be generosity on the part of the donors?

Wolfowitz: I believe there will be. It our responsibility at the World Bank and the development community to help persuade them to be generous by doing our job well. But it is not just generosity: Helping to ensure a better life for the children of Africa is also helping ensure a better life for the children of Europe, America and every other developed country. It is not a healthy situation when 700 million people are being left behind.

Gardels: Beyond the issues of more money, transparency and performance, what are the other key elements in reducing African poverty?

Wolfowitz: The priority being placed on health issues is critical. I learned on my recent trip to Africa that malaria is a bigger killer in some countries than HIV/AIDS. Education is also vital, particularly the education of girls. You can't expect to develop fully when half your population is denied equal opportunity. That is almost an arithmetical equation.

It is also very important that, as people go after individual problems, they help develop a whole system that doesn't just provide the medicines, but provides the clinics; that doesn't just provide the clinics, but provides the electricity for the clinics, and the roads to get to them.

Identifying priorities is important, but they have to be put in context and placed within a system that works.

Finally, good governance, which is sometimes taken only to mean combating corruption, also has to include policies that support the growth of the private sector. We've seen throughout the world that real, sustained growth comes from the private sector. There are many different ways to have a private sector. One size doesn't fit all. But it has to be there. In many African countries, the private sector is still in its infancy.