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[Music]
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before introducing our speaker this
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evening let me thank John and lri
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reinsberg whose generous gift
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established this lecture
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series John an alumnist of the college
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who is now Deputy chairman of Lazard
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Asset
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Management wanted Penn students to learn
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from those working in the international
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arena in positions that we might Now
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call social
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impact and he and his wife lri
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established this series and lri is also
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very involved at pen and she's on the
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board of the instit for contemporary
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artart I think that you will agree that
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this evening's speaker demonstrably
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fulfills John and L's
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purpose our speaker this evening decided
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that he did not want to stand up in
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front of you and deliver the
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conventional
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lecture this is midterm week and perhaps
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he thinks that at this point in this
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semester most students don't want to
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listen to another lecture so we're
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having a moderated
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discussion and he suggested this
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moderated discussion and we are
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fortunate this evening to have Professor
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Howard pack of Wharton's business and
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Public Policy Department to join us to
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moderate Professor pack is an expert in
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international and developmental
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economics and by the way he was uh Bob
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zelich's teacher at one point in the
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past it's my great pleasure to introduce
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this evening's speaker Mr Robert B zel
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president of the World Bank
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group who and there was a title who will
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speak about the impact of the economic
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crisis on developing countries but I do
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think the discussion May range
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broadly when we asked Mr zelich to speak
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we knew that there was a financial
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crisis this was a months ago we asked
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him to speak and we knew this but now we
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realize that this crisis is much more
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far-reaching
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in an article published in the financial
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times two weeks ago Mr zelik was quoted
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as
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asking what started as a financial
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crisis became an economic
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crisis and is now becoming an
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unemployment
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crisis and to what degree does it become
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a human and social
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crisis he then observed that this Stark
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question should occupy the minds of all
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those those struggling to find answers
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to the global
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recession Mr zelich is superbly
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qualified to discuss possible answers to
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this question let me note some of the
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highlights of his long career in public
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service he became the 11th president of
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the World Bank group on July 1st
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2007 immediately prior to joining the
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bank Mr zelich served as Vice chairman
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International of the Goldman Sachs
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group he served in President George W
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Bush's cabinet as the 13th us trade
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representative from 2001 to 2005 and as
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deputy secretary of state from 2005 to
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2006 from 1985 to
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1993 he served at the treasury and state
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departments as well as briefly in the
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White House
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during the 1990s Mr zelich served as an
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Executive Vice President of Fanny
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May Mr zelich is no stranger to
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Philadelphia he received his bachelor's
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degree from swore College where he was F
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Beta Kappa um he then went further north
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along the coast and spent some time at
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Cambridge he received his JD Magnum L
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from the Harvard Law School and his
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masters of public policy from the
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Kennedy School of government at Harvard
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please join me in welcoming Mr Robert
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celik president of the World
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Bank turn it over to you okay so when I
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going to start with is a set of
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questions which will allow us to get the
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discussion going and the first thing is
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that when uh you became president of the
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World Bank the big challenges all of 18
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months ago were
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you're going to list some of the newly
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emerging uh economies to become Partners
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in uh with the World Bank and fostering
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development throughout the world you're
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going to encourage growth in the Middle
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East you're going to try to deal with
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fragile States emerging from Civil War
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and disaster use free trade to Spur
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growth and in general build sustainable
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inclusive globalization and now that you
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face a crisis every morning and probably
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every night and uh the world has changed
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quite dramatically especially in the
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last six
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months can you in retrospect say uh that
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the topics you chose to emphasize when
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you first came in still remain important
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are they doable and is it uh feasible to
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address them given the crises that are
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occurring on a daily
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basis um well well first let let me
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thank all of you for uh for joining us
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tonight and uh particularly since as you
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mentioned it's the heart of the midterm
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but let this be a caution to you um uh
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Professor pra was my professor he's
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still asking me questions so you never
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get away from it it's best just to give
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up and accept the role of the
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faculty uh what what what Howard had
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mentioned were was that when I joined
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the World Bank I thought it was very
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important to identify some strategic
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themes and I talked about them uh as
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themes because I was trying to recognize
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that the the velopment mission of the
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bank um had to customize its services
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for different challenges and so we were
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focusing on uh the poorest countries in
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Africa the particular challenges of some
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of the middle- inome countries and the
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rising uh uh economic Powers the unique
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issues of fragile States uh which uh
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really require a combination of
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governance and security and development
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um Global public goods uh which included
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the trade issue but also uh climate
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change questions I also highlighted
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uh the Arab world in the Middle East
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because I thought there were some unique
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issues there that we could make a
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contribution but another one which cuts
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across was a knowledge and learning
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agenda and the reason I drew that out is
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because I think one of the key functions
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of the World Bank group is not just to
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do loans and business every day but to
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continue uh to draw on that experience
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um compare it with other learning and
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try to see how we can upgrade and
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provide additional insight and in that
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sense uh
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those challenges remain at the heart of
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what we need to do in a global crisis
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because part of the uh the issue for us
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is how do we customize uh our services
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uh for each of those those groups and
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categories given the nature uh of the
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problem that we're in um obviously uh
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there's there's ones that will rise in
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prominence so I was talking with some of
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the Huntsman fellows uh uh and louder
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fellows earlier today about the
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particular challenge in the area of
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trade of identifying the need for trade
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Finance given the problems that or the
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amount of of largely government
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guaranteed debt in the developed world
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this has presented a special problem for
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some of these Rising economic Powers uh
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that otherwise would have had open
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opportunities for finance so one of the
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challenges that uh runs across all this
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for us at the World Bank group is to try
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to be faster and more flexible in
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adapting to client needs and seeing how
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we can solve problems uh at the same
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time there's a ongoing uh requirement to
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try to anticipate and we can get into
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this further with your questions or
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others I think we are in a period now of
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uh extraordinary uncertainty in the
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world economy it's a very dangerous
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period a lot of risk to the downside so
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as a public institution what we have to
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try to do while serving clients is try
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to get a sense of those issues uh that
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are immediately on the horizon
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and work with other parties because um
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while the World Bank group has some
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considerable resources given the
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challenge of this problems our real uh
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need is to try to figure out how we try
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to mobilize other players uh in support
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of the things we're doing some of the
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things on your agenda presumably
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required funding and a lot of attention
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by you and the World Bank staff and your
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attention is deflected from those issues
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for example we know that the Arab
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countries are having remarkably rapid
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increases population and labor force uh
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they've had some troubles liberalizing
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but given the amount of time one has to
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spend on something like that compared to
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the fact that Eastern Europe is in a
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freefall can you really pursue that as
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well well Howard I don't have to do it
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all
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myself we have 15,000 people there right
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so uh in a sense part of the challenge
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here uh as organizational management
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leadership is that in to take your case
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of the uh the Arab world um we tried
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over the course of the past 18 months to
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work with our Arab partners and try to
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identify some of the major challenges
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that they saw compared it with our own
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sense they include issues of Education
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to Workforce uh women in the labor force
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uh Water Resources uh I was just at the
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Arab League Summit in the middle of
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January those remain very very vital
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issues now uh of course you have to
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adjust about what resources they have to
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provide and with many of the Arab
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countries the role that the bank was
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playing was not a financing one it was
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taking the experience and knowledge and
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we were providing some of this as a fee
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for service business uh so part of what
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we instituted or focused on when I came
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to the bank was trying to adjust our
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business model uh for different needs
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and so that flexibility uh is actually
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something that gives us the strength at
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this point now you mentioned Central and
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Eastern Europe in the same vein uh we
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were talking beforehand and I was asked
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which region I felt was probably uh most
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exposed to this crisis and I mentioned
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Central and Eastern Europe because it's
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a region that over the past 20 years has
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used trade investment movement of Labor
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Force which leads to remittances to
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integrate with the international economy
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uh but in that sense it exposed itself
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to Greater vulnerability than some other
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countries would that were shielded from
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the system but it doesn't have some of
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the cushions that uh one had in Western
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Europe or in North America or Japan and
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in part because a number of the
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countries were in transition to the euro
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Zone you have this added danger of
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assets such as mortgages that may be in
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a foreign exchange in this case the Euro
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or Swiss Franks that adds to some of the
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risks so part of what we need to do at
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the bank is something that we were
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working with some of our partners at the
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European bank for reconstruction
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development the European Investment Bank
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uh just last week to try to put together
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a fund where we could try to support
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some of the key uh Western European
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banks that provide a lot of the the
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banking structure uh and support uh for
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Central and Eastern Europe but this
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won't work unless the European
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governments also provide the overall uh
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support and framework and that's a
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challenge that you were probably just
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for those of you that had time to read
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the newspapers we reading about this
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week another thing which immediately
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pops up and it's probably a touchy topic
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is historically developing countries
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have been very uh Out Of Tune with the
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advice both from the international
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monetary fund and the World Bank their
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advice differs IMF is macro the World
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Bank is micro but on things like the the
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desirability of import liberalization
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are you now finding that some developing
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countries are saying we don't want to
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liberalize look at what has happened in
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the world we're not going to try
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emphasizing exports because our export
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Market of the oecd are falling apart
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well one of the things that makes this a
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fascinating period and will be for
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graduating students is uh it's a time of
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great flux with these issues and uh
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given the diversity in the world you get
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countries that are turning to different
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answers so I was just reading as I was
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coming here um Ecuador is probably um
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putting on some of the greatest import
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restrictions and so it's one of the
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countries you see first moving to
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protectionism um I don't think that will
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succeed um uh we'll see over time but
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interestingly enough I got a similar
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report uh from one of my colleagues that
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was just uh in East Asia and some of the
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East Asian countries were actually
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recognizing this may be a time to
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continue to move forward with reforms to
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try to achieve greater flexibility of
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markets so to come back to the role of
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the bank um what we're trying to do is
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to focus on some of the Lessons Learned
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From The 9798 Crisis and elsewhere and
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help clients uh try to deal most
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efficiently and effectively with what
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are probably the primary needs one is
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safety net systems uh particularly given
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what I believe will be the depth and
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length of this crisis uh in all
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developing countries one needs to be
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able to use resources effectively to
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deal with those that can least help
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themselves now um you know if in some
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countries there's about 10 or 12
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starting with Mexico and Brazil that
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develop something called conditional
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cash transfer programs which are
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programs that devote uh cash resources
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to those that have been selected as
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being most in need and the conditions
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are you need to send your children to
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school and you need to get basic health
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checkups and that's been particularly
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helpful for uh maternal Health those
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programs are welld designed to be able
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to uh increase the amount of resources
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expand the scope but in some countries
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in subser Africa you don't have the
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organizational capacity so there we're
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trying to learn what's worked with food
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for work programs or School feeding
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programs or School feeding programs that
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would bring some food home for the
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parents as well um and so part of what
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the policy advice is if you have limited
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resources but you want to help those in
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most in need you probably don't want to
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increase all Civil Service salaries or
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uh try to increase an overall wage
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structure because that's an inefficient
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way so part of what we can share is the
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expertise now a second area uh learning
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from the Chinese experience in
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9798 uh is that countries can wisely
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invest in infrastructure to both create
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jobs and create a basis for future
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productivity which is what China very
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much did now this doesn't always have to
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be in hard infrastructure there's
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various types of soft infrastructure and
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one of the points we've been making to
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the Chinese actually that have a lot of
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hard infrastructure is this might be a
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time to invest in some of the soft
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infrastructure uh and this includes some
00:16:03
areas of educational and additional
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Social Development um the third area
00:16:08
that we're trying to encourage is the
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small and medium Enterprise sector uh
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because it's easy in an environment like
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this where you get big public responses
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to lose the fact that the greatest
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engine of creativity and flexibility and
00:16:21
job creation is the small private sector
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but they're often on the short end of
00:16:25
the credit uh stream and so what can we
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do with microf finance and others to be
00:16:29
able to keep that section going now the
00:16:33
reality is you in each country we have
00:16:35
to customize based on the circumstances
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uh and their own history and their own
00:16:40
support uh I mean one of the hard
00:16:43
lessons of development over the decades
00:16:45
is Outsiders can't do it for a country a
00:16:47
country has to be able to own it they
00:16:48
have to be able to have a sense of of uh
00:16:51
of control over their project and to
00:16:53
give you a very practical example on
00:16:55
that uh this week I was talking with the
00:16:58
president Ukraine and the prime minister
00:17:00
of Ukraine shortly beforehand the first
00:17:02
challenge is to get them working closely
00:17:04
together to get some IMF program but in
00:17:07
the process of offering what people call
00:17:09
Budget support some basic financing I
00:17:12
was trying to suggest that um we had
00:17:15
some experience with some programs to
00:17:17
try to help those most in need and this
00:17:19
could be both good politics and good
00:17:21
economics so in a crisis like this part
00:17:24
of the challenge would be issues of
00:17:25
political economy how do you get people
00:17:27
to the right policy solution recognizing
00:17:29
the institution and political structure
00:17:31
and one of the challenges for us as a as
00:17:33
the World Bank group uh is that U we
00:17:36
have many fine economists and analysts
00:17:38
some of what whom you've worked with
00:17:40
over the years but we also need to try
00:17:42
to make sure that the analysts see
00:17:45
themselves as problem solvers with this
00:17:46
broader uh complexion of of political
00:17:49
and social
00:17:51
issues and one final question before we
00:17:54
turn it over
00:17:57
um the poorest countries in the world
00:17:59
the ones that have had slowest growth
00:18:01
have been the African ones and from
00:18:05
roughly 2002 2007 there were a number of
00:18:08
about 18 African countries that are
00:18:10
actually growing quite
00:18:11
well and now one senses that with
00:18:15
commodity price decline collapse in some
00:18:19
cases the African countries are
00:18:21
having enormous problems and they're
00:18:24
going to have increasingly bad problems
00:18:25
as the oecd countries slow up and as
00:18:28
China and India demand for exports from
00:18:30
them go down is there any prospect that
00:18:33
the bank could redeploy efforts towards
00:18:36
the African countries let me start uh
00:18:38
with the foundation that you referred to
00:18:40
because many people don't recognize some
00:18:43
of the success of African development in
00:18:46
recent years if you go back uh over
00:18:49
about the past
00:18:50
decade and you look at some uh 17
00:18:54
countries that represent a little bit
00:18:56
over a third of the population without
00:18:58
mineral resources uh that group of
00:19:01
countries grew on average about 5 and a
00:19:03
half uh
00:19:04
5.6% then there were about eight
00:19:07
countries uh that were the Prime energy
00:19:10
producers uh and over that and they
00:19:13
represented a little bit less than a
00:19:14
third of the population that group um
00:19:17
grew at about an average of 7.2% so you
00:19:19
have about two-thirds of the population
00:19:21
of Africa growing in a pretty
00:19:23
significant range now the problem in
00:19:25
part was the missing third and this is
00:19:28
one of the issues going back to your
00:19:30
first question of postconflict in
00:19:32
fragile States and one of the tragedies
00:19:34
of those countries is not only the harm
00:19:37
that they caused their own people but
00:19:38
often their neighbors and you know we
00:19:40
now have the statistical evidence that
00:19:42
if you one country is next to a
00:19:43
postconflict state on average or growth
00:19:45
is about 1.2%
00:19:47
less one thing that would be a great
00:19:50
tragedy of this crisis is that people
00:19:53
lose the sense of Africa's potential and
00:19:57
uh having worked with Africa over the
00:19:59
years one of the things that I found
00:20:01
very striking in recent years was a
00:20:04
changed attitude among many African
00:20:06
leaders of thinking solely of of a
00:20:10
Social Development agenda and in a sense
00:20:12
being Wards of the International System
00:20:14
and instead wanting to have uh frankly
00:20:17
what people in Western Europe wanted to
00:20:18
have 50 years ago they wanted to have
00:20:20
Regional integration linked to global
00:20:22
markets they wanted energy and
00:20:23
infrastructure and they wanted a healthy
00:20:25
private sector now in this this crisis
00:20:29
uh what that suggests to me is uh one
00:20:33
immediate aspect is you want a direct
00:20:36
attention uh to those who have been the
00:20:38
good reformers so uh in a sense you have
00:20:41
a version of the Central and Eastern
00:20:42
European problem some of those that are
00:20:43
most linked to the International System
00:20:45
could be made particularly vulnerable
00:20:47
now you mentioned commodity prices
00:20:50
separately uh one of the things that we
00:20:52
began at the World Bank and I actually
00:20:54
was at a discussion audit this morning
00:20:56
with a our extractive Industries group
00:20:58
is how for for the for the natural
00:21:01
resource producers the real challenge
00:21:03
was one of governance how do you take
00:21:05
the
00:21:06
resources and Paul CER and others have
00:21:09
written about this build transparency in
00:21:11
the system build broad-based development
00:21:14
um and in this current environment this
00:21:16
group that we were meeting with this
00:21:18
morning was seen that uh if you believe
00:21:22
as I do that at some point uh you will
00:21:25
have a recovery and for various reasons
00:21:27
I could see that commodity prices will
00:21:29
rise again you actually want to be
00:21:31
putting in place the platform now um so
00:21:34
you don't have um the great volatility
00:21:38
and everything from property rights to
00:21:40
laws to the contracts um and it's not
00:21:43
only a question of investor government
00:21:45
confidence but it's also a question of
00:21:47
developing the benefits for the larger
00:21:50
population so that uh it's socially
00:21:53
sustainable and politically sustainable
00:21:56
so part of the challenge of any policy
00:22:00
job and a development job is how do you
00:22:03
combine the near-term challenge uh with
00:22:05
looking a little bit further out and I
00:22:07
would argue that in the case of
00:22:10
Africa while you do want to provide uh
00:22:13
targeted assistance for example in
00:22:15
social safety net you don't want to lose
00:22:16
the opportunity to build the future
00:22:19
basis for growth and that actually
00:22:21
brings me back to the point about
00:22:22
infrastructure at productivity basis
00:22:25
again there's a tremendous opportunity
00:22:27
and this is one of the things things we
00:22:28
were talking about with regional
00:22:29
integration if we can bring some of the
00:22:32
smaller markets together uh relying on
00:22:35
whether it be transport structure use of
00:22:37
the waterways some of the energy systems
00:22:40
you know one could come out of this
00:22:41
crisis with Investments that would
00:22:43
actually create uh the basis for future
00:22:45
growth so you know one of the challenges
00:22:48
um whether for me as a international
00:22:51
policy maker or those at the national
00:22:54
level is to try to keep the eye on on
00:22:58
those those steps uh whether it'll be
00:23:00
how you deal with future or the current
00:23:02
liquidity and danger of future inflation
00:23:05
um how you deal with the uh a large
00:23:08
expansion of of expenditure and budget
00:23:11
deficits uh at the same time that you're
00:23:14
trying to cope with today's
00:23:16
problem um Bob I I've been been sitting
00:23:18
here listening and you Ed the word
00:23:20
crisis 17 times but recovery only once
00:23:24
so my question is as Jenice said you
00:23:27
talk about a economic crisis a financial
00:23:30
crisis an unemployment crisis even
00:23:33
perhaps a social and um and human crisis
00:23:36
what Milestones or um metrics ought
00:23:39
should we be looking at that's going to
00:23:41
Signal a recovery well and I'll add one
00:23:43
more that I've added since that piece
00:23:46
well it's political crisis um and uh you
00:23:48
know uh as you could tell a little bit
00:23:50
my background is a little bit of mixture
00:23:52
of economics and law and governance in
00:23:54
different fields and so I I tend to look
00:23:56
at these issues from a sort of
00:23:58
multi-disciplinary perspective um and uh
00:24:03
no reason people would be aware of this
00:24:04
but when I was um in the state
00:24:07
department from ' 89 to '92 I worked on
00:24:09
German unification all the events of the
00:24:11
Cold War so when I look at the issues of
00:24:13
Central and Eastern Europe now has a
00:24:15
very striking effect because I think of
00:24:17
the danger of reversal of what was I
00:24:20
think a historic Global achievement and
00:24:22
trying to unite Europe whole and free um
00:24:26
so in terms of of what I would look at
00:24:30
um I guess first uh I would I would keep
00:24:34
an eye on what's going to happen with
00:24:36
the with stimulus programs you've had a
00:24:39
number of them start as we were talking
00:24:41
about before I think actually the
00:24:43
state-of-the-art of knowing um exactly
00:24:45
what are the right tools or things that
00:24:47
people have to approach with a certain
00:24:48
humility but there are certain ones
00:24:50
still in the process like looks like
00:24:52
China's moving towards a second phase um
00:24:55
Second and I think this is critically
00:24:57
important
00:24:59
uh stimulus programs will be like a
00:25:02
sugar high unless you fix the banking
00:25:04
system I mean you'll get a surge uh but
00:25:07
and and uh I'm sure none of you uh in
00:25:09
your circumstance either drink a lot of
00:25:11
coffee or eat chocolate or anything like
00:25:12
that but you kind of get this high and
00:25:14
Bam you hit it to the ground um and what
00:25:17
Dominique Stan the IMF has talked about
00:25:19
is they've analyzed some 122 financial
00:25:22
crisis and unless you fix the Banking
00:25:24
and Financial system you can't get it
00:25:26
back going and so I think the core issue
00:25:29
not only for the United States now but
00:25:30
for others is how do you deal with this
00:25:32
conundrum of cleaning up the Bad Assets
00:25:35
and recapitalizing the banks um a third
00:25:38
question uh is to keep a watch and and
00:25:42
again I think in this area I think the
00:25:44
United States through the Federal
00:25:45
Reserve has been pretty creative is how
00:25:47
do you keep some of the credit markets
00:25:48
working right now the banking system
00:25:50
doesn't provide that the Federal Reserve
00:25:52
has actually used its balance sheet to
00:25:53
provide a secondary Market by buying
00:25:55
commercial paper and mortgages and other
00:25:57
assets I personally think that it would
00:25:59
be useful for some of the other central
00:26:01
banks globally to look at that uh more
00:26:03
closely as as a tool to use but I do see
00:26:07
potential downside risks and and so in
00:26:09
the anticipatory sign uh one that I have
00:26:12
a concern about is something that
00:26:15
happened in 97 and '98 hasn't happened
00:26:17
yet which would be the collapse of a
00:26:19
major currency you've had depreciation
00:26:21
significant depreciation but you haven't
00:26:22
had a currency really come down now as a
00:26:25
policy maker knowing that that's one of
00:26:27
the reasons why I believe that the calls
00:26:30
for the IMF to double its resources are
00:26:32
very important so it would have the
00:26:34
resources to be able to intervene and
00:26:35
support again the role of
00:26:37
anticipation um a second area is uh
00:26:41
protectionism um you know probably all
00:26:44
of you have read about smooth Holly and
00:26:45
what happened in the 30s and the
00:26:47
traditional Terror forms of
00:26:48
protectionism that would be bad enough
00:26:51
um but uh frankly there's a lot of uh
00:26:54
sort of Insidious ways that you could
00:26:56
start to take steps that start to uh
00:26:59
create counter reactions in other
00:27:01
countries and I just have to emphasize
00:27:03
this as a former US trade representative
00:27:05
people look at the US and the biggest
00:27:07
countries with under under a very close
00:27:10
uh microscope so when you saw this bi
00:27:12
America provision came in uh you know
00:27:14
fortunately it got some close attention
00:27:16
so people uh made at least uh what I it
00:27:19
appears to be some adjustments but uh as
00:27:22
you look at these big pieces of
00:27:23
legislation and stimulus passes you got
00:27:25
to look closely at these to get a sense
00:27:27
of some of the trade effects the WTO
00:27:29
which doesn't have this capability
00:27:31
actually recently asked us to try to uh
00:27:35
examine some of the stimulus packages uh
00:27:37
and even though it'll be sensitive in
00:27:38
some quarters I think it's a good idea
00:27:40
to try to uh identify these topics then
00:27:43
there's an aspect of um of of political
00:27:47
economy that I don't know how to
00:27:49
describe other than the fact that it's a
00:27:52
global crisis you need a global solution
00:27:54
that means countries have to cooperate
00:27:56
and uh one of the D me as we get further
00:27:59
into increas in unemployment rates is do
00:28:01
you start to see actions that show
00:28:03
countries pointing fingers at one
00:28:05
another as opposed to uh trying to work
00:28:07
together and I think that's something
00:28:09
that I would watch very closely during
00:28:11
the course of 2009 you know as as a
00:28:13
leader of one of the international
00:28:14
institutions you know I can try to play
00:28:16
a modest role in identifying these but
00:28:19
uh part of the challenge in this whole
00:28:21
system is you know we still have an
00:28:23
Economy based on nation states that's
00:28:25
the political basis those are where the
00:28:27
decisions are made people have to be
00:28:28
responsible their local citizenry but
00:28:30
the issues that we're dealing with are
00:28:32
certainly crossborder and transnational
00:28:34
so how do you uh interconnect those two
00:28:36
looking a little further ahead uh we
00:28:39
talked about this this afternoon in this
00:28:41
anticipatory Spirit uh one would
00:28:43
certainly want to be alert to the fact
00:28:46
that there's a lot of liquidity out
00:28:47
there and at some point when um the
00:28:50
velocity of money picks up you could
00:28:52
have an inflationary uh boom and bust
00:28:54
again and so I think the good news is
00:28:57
the fed and the European Central Bank
00:28:59
have identified that they've suggested
00:29:01
how they would withdraw the liquidity
00:29:03
but is in a lot of things in life timing
00:29:05
is everything so knowing when and how to
00:29:06
do it is still going to be a big issue
00:29:08
and if you had to design it what would
00:29:10
the post crisis world look
00:29:12
like or if you could
00:29:15
do well I
00:29:20
um it it's hard because I'm trying to
00:29:23
think of uh sort of the Practical
00:29:25
reality versus what I would wish um I
00:29:27
guess I would say this uh at at this
00:29:29
General level um I believe that
00:29:33
globalization has brought a lot of
00:29:35
benefits uh to people and that you know
00:29:38
I've been in a lot of developing
00:29:39
countries where I've seen the incredible
00:29:41
opportunity it's provided not only
00:29:43
economically but in terms of openness
00:29:45
and freedom I think it would be a huge
00:29:49
tragedy if that were lost and reversed
00:29:52
but from the start of my period at the
00:29:54
bank I felt that to sustain
00:29:57
globalization
00:29:58
uh one has to uh make it both inclusive
00:30:03
and I use the term sustainable inclusive
00:30:06
within countries so that you get a
00:30:07
broader sense of benefits of it but also
00:30:10
across countries and then sustainable
00:30:13
has both the environmental meaning but
00:30:16
also it has a systemic meaning how do
00:30:18
you try to learn some of the lessons uh
00:30:21
from what happened in financial markets
00:30:23
try to see how you can head them off um
00:30:26
how do you try to strengthen some of the
00:30:28
disciplines in in in the trading system
00:30:31
and sort of move the the bias towards uh
00:30:34
Freer trade uh and so what I hope will
00:30:38
come out of this is a recognition that
00:30:43
um many of the forces that have created
00:30:46
incredible Economic Opportunity over the
00:30:48
50 past 50 years uh remain very valuable
00:30:52
you don't want to throw out the baby
00:30:53
with the bath water but you have to
00:30:55
create some changes in the institutional
00:30:57
structure and here again this affects
00:30:59
the institution that I had the World
00:31:01
Bank I don't know how it is now in
00:31:03
courses I remember when I was taking
00:31:05
courses you we read about the creation
00:31:07
of the multilateral institutions you
00:31:09
know so these are the grand old
00:31:11
institutions that were created in 1944
00:31:13
and 45 not surprisingly public
00:31:16
institutions uh often change more slowly
00:31:18
than private institutions do so frankly
00:31:21
coming back to the mission of the World
00:31:23
Bank group part of our challenge is how
00:31:24
do we overhaul and update these
00:31:26
institutions to play play a role some of
00:31:28
that can happen in crisis sometimes
00:31:30
crises can be an opportunity to move I
00:31:33
mean it's useful to remember that the
00:31:35
World Bank and the IMF were created
00:31:37
while World War II was still going on so
00:31:39
those people were kind of busy doing
00:31:41
something but they took time to deal
00:31:42
with these institutions so you can walk
00:31:44
and chew gum at the same time but I do
00:31:47
think sometimes uh whenever you have an
00:31:50
event like we've just or are going
00:31:52
through sometimes you also have um uh
00:31:56
political responses that uh can
00:31:58
overreact and there you have to figure
00:32:00
through um whether you might do more
00:32:02
damage you know so just one the to flag
00:32:05
is is that obviously there needs to be
00:32:07
lessons for uh regulatory reforms um
00:32:11
there were lessons of excess but one has
00:32:14
to be careful in the present environment
00:32:16
that if you want to get the private
00:32:18
sector back engaged uh that you don't uh
00:32:21
undermine further confidence in the
00:32:23
private sector so those are some of the
00:32:24
balances people have to
00:32:26
strike
00:32:30
[Music]
