James Wolfensohn

Excerpts from a Monitor breakfast on poverty and globalization.

President of the World Bank James D. Wolfensohn rose to be executive partner at Salomon Brothers and later founded his own investment firm, James D. Wolfensohn, Inc., which employed, among other notables, former Federal Reserve Board Chairman Paul Volcker.

An Australian by birth, Mr. Wolfensohn is now a naturalized US citizen. He has a bachelors and a law degree from the University of Sydney and an MBA from Harvard. He was a member of the Australian Olympic Fencing team, and he has been knighted by Queen Elizabeth.

On President Bush's performance on poverty:

"President Bush, to the surprise of many, has in fact made decisions already which advanced at least the funding for poverty reduction way beyond anything we have had before.

"The US contribution up to now in development assistance had been 10 billion dollars. As you know, [Bush] has come up with a program that [would add] an extra 5 billion - which is a 50 percent increase over the next four years. And the Europeans came up with 8 billion.

"So we are in fact seeing at this particular moment a significant increase in the development funding, but it is from a fairly low base. ...the big issue for us is what is the quantum, what is the level of development assistance you need to get. At the moment, overseas development assistance is a bit over $50 billion, agricultural subsidies are $350 billion, and defense expenditures [are] somewhere between $900 billion and a trillion. So if you deal with the question of what I call the other war, $50 billion is probably not near enough.

"So we have made a nice start but it is probably going to prove to be inadequate."

On international interest in rebuilding Iraq:

"There are a lot of people, expatriate Iraqis and others, who can see the potential of this country - which is enormous."

"The Brazilians tell us they are the best friends of Iraq, the Indians tell us they are the best friends of Iraq, the Afghans tells us they are best friends of Iraq. There isn't anybody who is not the best friend of Iraq. And they are all ready to come in and rebuild the country. And the interest is all commercial. And highly significant....that did not happen in East Timor, I can assure you."

On efforts to reduce Iraq's debts:

"There will be significant pressure to deal with the question of debt and there will have to be some form of debt reduction. What we are trying to find out at the moment is how much debt there is out there. ...so the question in the end is who is going to pay?

"If Iraq takes its oil funds to pay back debt, then someone has got to come up with money for the development of the country. If you can get people to forgive the debt, then that money can be used for development. So this is a concealed debate about who is going to pick up the bill."

On why Russia would want to forgive Iraq's debts:

"I don't know. What I have learned in this business is that there are a huge number of trades that are done that you don't see. They may want to do it for reasons totally unrelated to Iraq. This is the wheeling and dealing that goes on at the meetings I don't attend. "

On global poverty:

"I personally deeply believe that unless we take a global view on the question of poverty and equity, that those [American] steel workers and those cotton producers are not going to have peace. I really believe that. ...the question of the coming together on the issue of poverty is the question of whether our kids are going to live in a stable world."

On agricultural subsidies versus aid for the poor:

"I think that the pressure is on rich countries to look at the question of subsidies."

"European cows get a subsidy of $2.50 a day. We have 3 billion people in the world who live under $2 a day. Japanese cows get $7.50 a day subsidy."

On globalization:

"I think the facts are that globalization is happening whether there are demonstrations or not. We are becoming more interdependent. I think what is happening is that the institutions which may control globalization or may be there to help modulate what happens between countries are being challenged. And I think the reason you see people in the streets complaining about globalization is that they are concerned about how the ... thing is going to work, how it is going to affect them."

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