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Implementing a Global Partnership for Poverty Reduction: Keynote
Address delivered at Peking University by James D. Wolfensohn,
President The World Bank Group, Beijing, China - May 29, 2002
Executive Vice President Min,
Distinguished faculty and students,
I am delighted to be back in China and feel especially honored to
deliver a speech at this great University. It was here
at Peking University, I am told, that the famous May 4th Movement
originated in 1919 ¨C an event in which the students of Beijing,
your predecessors, took to the streets to protest against the then
warlord-led government, rallying the fight against feudalism, and
promoting democracy and science throughout China.
I find those themes of challenging outdated ways of thinking, while
embracing more pluralistic views, and with it, science, knowledge,
and learning, especially fitting today.
These were indeed the kind of sentiments exhibited during the March
2002 Financing for Development conference in Monterrey, Mexico,
which marked an important turning point in meeting our aspirations
on development as embodied in the Millennium Development
Goals. The conference brought together heads of state;
foreign, development, and finance ministers; civil society; and
international institutions for perhaps the first time in an
international meeting. And, more encouraging, its
outcome has laid out for the global development community a greater
consensus than ever about what needs to be done. The
challenge before us now is to translate that consensus on the
global development compact into action, by scaling up efforts on
the part of developing countries and the broader international
Now is the time to focus on moving from words to action.
The challenge ahead is implementation ¨C and implementation in a
way that maximizes the impact on poverty, and minimizes the
administrative burden we put on poor people. This means
actions taken not just on further boosting aid but on improving how
aid is used, on building capacity in countries to manage
development programs, on improving trade conditions to take benefit
of the globalizing world, and also, equally importantly, better aid
co-ordination to ensure that resources are not wasted, and that aid
is used to the benefit of poor people.
We must recognize that while there is social injustice on a global
scale ¨C both between states and within them; while the fight
against poverty is barely begun in too many parts of the world;
while the link between progress in development and progress toward
peace is not recognized ¨C enduring peace may never be
On September 11, the imaginary wall that divided the rich world
from the poor world came crashing down.
Belief in that wall, and in those separate and separated worlds,
has for too long allowed us to view as normal a world where less
than 20 percent of the population ¨C the rich countries ¨C
dominates the world¡¯s wealth and resources and takes 80 percent
of its dollar income.
There is today, an important realization by rich and poor nations
that no wall divides us. There are not two
worlds. There is only one. In this unified,
fast globalizing world, interdependence and mutual living must
replace self¨Cseeking and uncaring stances.
The process of globalization and growing interdependence has been
at work for millennia.
As my friend and Nobel Prize winning economist Amartya Sen has
pointed out, a millennium ago it was ideas ¨C not from the West
¨C but from China, from India and the Moslem world which gave
intellectual basis for much of science, for printing, and the arts.
It was the great Mogul Emperor Akbar, a Moslem, who in the
sixteenth century, called for religious tolerance and
Today we are linked not only by trade, investment, and finance by
travel and communications but also by disease, by crime, by
migration, by environmental degradation, by drugs, by financial
crises and by terror. And there is now a broad consensus
that these problems cannot be solved without addressing its root
Poverty is our greatest long-term challenge and
enemy. Grueling, mind-numbing poverty -- which snatches
hope and opportunity away from young hearts and dreams just when
they should take flight and soar.
Poverty -- which takes the promise of a whole life ahead and stunts
it into a struggle for day-to-day survival.
Poverty -- which together with its handmaiden, hopelessness, can
lead to exclusion, anger, and even conflict.
Poverty -- which does not itself necessarily lead to violence, but
which can provide a breeding ground for the ideas and actions of
those who promote conflict and violence.
Here, China can pride itself on a world-beating record of poverty
reduction ¨C over the last two decades, the number of absolute
poor people fell from 250 million to 34 million --the biggest
single contribution to global poverty reduction of any country in
that period. These are impressive accomplishments and deserve to be
celebrated. But we cannot stop here. China
can and must achieve more.
In this unified world poverty is our collective enemy. Poverty is
the war we must fight. We must fight it because it is morally and
ethically repugnant. We must fight it because its existence is like
a cancer ¨C weakening the whole of the body not just the parts
that are directly affected.
And we need not fight blindly. For we already have a vision of what
the road to victory could look like.
Last year, at the summit meeting held at the United Nations, more
than 140 world leaders agreed to launch a campaign to attack
poverty on a number of fronts. Together, we agreed to support the
Millennium Development goals. By 2015, we said, we will:
* Halve the proportion of people living on less than one dollar a
day. Ensure that boys and girls alike complete primary
schooling Eliminate gender disparity at all levels of
education. Reduce child mortality by
two-thirds. Reduce maternal mortality by
three-quarters. Rollback HIV/AIDS, malaria and other
diseases. Halve the proportion of people without access
to safe water, and Develop a global partnership for
China is well on its way to meeting these targets. Over
the last ten years, China has succeeded in halving the number of
people living in extreme poverty, maternal mortality rates have
been reduced from 95 per 100,000 live births to 50 per 100,000, and
primary enrollment rates have climbed to 99%, with the girl-boy
ratio almost at par.
Access to clean water supply has increased from 60% to
75%. Social and political consensus on the need to
protect the environment and safeguard the future for the next
generations has grown, resulting in the signing of several
international conventions on climate change, desertification, ozone
protection; passing of an environmental protection law and nearly
400 environmental safeguards and regulations.
China is clearly on its way. But more needs to be
In nearly all of these areas, regional and ethnic disparities are
stark ¨C Western provinces and rural areas are lagging behind on
most of the indicators, progress has been uneven between urban and
rural, and among coastal and remote/minority areas. This
disparity needs to be narrowed ¨C indeed, must be narrowed, if
China is to achieve its goals of broad-based economic growth,
reduction of poverty, and an equitable and stable China of the 21st
The Western Development Initiative is a significant step in this
direction, and the new National Poverty Reduction Plan addresses
the need to ensure that the poorer, more remote areas have access
to growth, economic and social development ¨C and better
lives. The Plan is adopting a more comprehensive
approach including social development and a new targeting method
using a village as a unit for poverty reduction planning and
funding ¨C and we are encouraged by the Government¡¯s resolve to
encourage the participation of communities, non-governmental
organizations and the private sector in carrying out this
We know from experience that development happens fastest when poor
people have the ability to influence the decisions that most affect
These are good, solid steps towards addressing poverty and
inequality. Yet, in China, and around the world,
clearly, more must be done to both fight poverty and to achieve the
millennium goals, which, as a group ¨C education, health, gender,
environment ¨C address some of the core issues
that keeps poverty entrenched.
How can anyone take issue with the millennium goals? How
could anyone refuse to stand up and say that for my children and my
children¡¯s children, I want a better world?
And yet, there are those who legitimately ask: can we win a war
against poverty? And if we can¡¯t be sure, should we
wager our resources?
To these people I would ask: can we afford to lose? How much are we
prepared to commit to preserve our children¡¯s future? What is
the price we are willing to pay to make progress in our lifetime
toward a better world?
As we have noted, much of the growth and poverty reduction
worldwide over the past twenty years has come in the two giants of
the developing world, China and India; with progress too in other
parts of East Asia and Latin America. Yet, too many
countries are being left behind ¨C especially in Sub Saharan
Too much inequity between countries and within countries, too much
exclusion, too many wars, too much internal strife, and now
HIV/AIDS, are threatening to reverse many of the gains made over
the last 40 years.
And these challenges will only grow over the next 30 years, as the
global population increases by two billion to eight billion people,
with almost the entire increase going to developing
As we in the international development community ¨C international
institutions and bilateral agencies, governments and NGOs ¨C look
to the challenge before us, we must also look objectively back at
the past, and do so with humility.
For too many poor people, the Cold War years were years when
development stalled or even reversed; when leaders became enriched
at the expense of their people; when monies were lent for the sake
of politics, not development.
We have seen failure, yes, and we have seen the effects of the
politicization of aid; and we must never forget its corrosive
We have learned that policies imposed from outside will not work.
Countries must be in charge of their own development. Policies must
be locally owned and locally grown.
We have learned that any effort to fight poverty must be
comprehensive. There is no magic bullet that alone will
slay poverty; but we know too that that there are conditions that
foster successful development: education and health
programs to build the human capacity of the country; good and clean
government; an effective legal and justice system; and a
well-organized and supervised financial system.
We have learned that corruption, bad policies and weak governance
will make aid ineffective, and that country-led programs to fight
corruption can succeed.
We have learned that debt-reduction for the most highly indebted
poor countries is a crucial element in putting countries back on
their feet, and that the funds released can be used effectively for
We have learned that we must focus on the conditions for investment
and entrepreneurship, particularly for smaller enterprises and
farms. But that is not enough for pro-poor
growth: we must also promote investment in people,
empowering them to make their own choices.
We have learned that development is about the long haul, reaching
beyond political cycles or quick fixes ¨C for the surest
foundation for long-term change is social consensus for long-term
These lessons and principles should give us heart, for more than
ever today, bilateral and multilateral donors, governments and
civil society are coming together in support of a set of shared
More than ever today, a new wind is blowing though the world of
development transforming our potential to make development
And I believe we can make this happen. Through this
global partnership, there is increased understanding that leaders
of the developed and developing world are united by a global
responsibility based on ethics, experience and self-interest.
It is recognition that opportunity and empowerment ¨C not charity
¨C can benefit us all. It is an acknowledgement that we will not
create long-term peace and stability until we acknowledge that we
are a common humanity with a common destiny.
In this partnership, what must developed countries do?
Leadership in the developed world needs to grasp the opportunity
presented in Monterrey to take the next important step to create
that more stable and peaceful world.
First, they must assist developing countries to build their own
capacity in government, in business, and in their communities at
large. And in doing so, they must listen to the expressed needs of
developing countries so that they help to build individual programs
that are relevant and can make a real difference.
Second, they must move forward on the issue of trade openness,
recognizing that without market access poor countries cannot
fulfill their potential no matter how well their policies.
Third, rich nations must also take action to cut agricultural
subsidies - subsidies that rob poor countries of markets for their
products. Farm support goes mainly to a relatively small number of
agribusinesses, many of them large corporations, and yet those
subsidies of $350 billion a year are six times what the rich
countries provide in foreign aid to a developing world of close to
5 billion people.
Fourth, rich countries must recognize that even with action on
trade, or agricultural subsidies, there is still a fundamental need
to boost resources for developing countries estimate an
additional $40 to $60 billion a year to reach MDGs ¨C roughly
double aid flows. This is something which I, along
with UN Secretary General of the United Nations, Kofi Annan; as
well as the United Kingdom¡¯s Chancellor of the Exchequer, Gordon
Brown have been urging in recent months; and we very much welcome
the recent decisions by President Bush and the European Union to
boost aid spending.
There is no debate that our efforts need to be focused and
effective ¨C on this we all agreed. Too much money has
been squandered in the past by decisions borne of politics not
The understanding is growing. Three months ago a poll of 23,000
people in 25 wealthy countries showed overwhelming support for the
view that fighting poverty and addressing the gap between rich and
poor should top the international agenda.
For centuries, we have focused on issues of war and
peace. We have built armies and honed
strategies. Today we fight a different kind of war in a
different kind of world.
A world where violence does not stop at borders; a world where
communications sheds welcome light on global inequities:
Where what happens in one part of the world affects another.
Inclusion, a sense of equity, empowerment, anti-corruption ¨C
these must be our weapons of the future.
And what about the other half of the compact, the developing
countries ¨C what must they do?
In this new world, development is not about aid dependence; it is
about a chance for developing countries to put in place policies
that will enable their economies to grow, that will attract private
investment, and allow governments to invest in their people ¨C
promoting aid independence.
It is about treating the poor not as objects of charity, but as
assets on which we can build a better and safer world. It is about
scaling up ¨C moving from individual projects to programs;
building on ¨C and then replicating ¨C for example, the successes
of community-driven development and microcredit ¨C where the poor
are at the center of the solution, not at the end of a
China¡¯s own reform experience in the late 1970s with the
Household Responsibility System demonstrates this: by giving the
rural poor control over key decisions regarding the production of
agricultural goods the policy marked a return to incentive-based
mechanisms that were familiar from the past and resulted in huge
gains in agricultural productivity and poverty reduction,
representing possibly the largest successful social and economic
change in such a short time. This shows us that when
poor people are given the tools and opportunity to construct their
own solutions to development problems, they will do so, often in
ways unanticipated by economic policymakers or planners.
China, like some other countries, is not sitting back waiting for
development to be handed to it by others. It
has taken full ownership of the development process and has
determined how best donor programs can support its priorities ¨C
while emphasizing the need for appropriate institutions and systems
and ensuring that the pace and nature of reforms is commensurate
with local realities.
The last twenty years has witnessed remarkable economic growth in
China. When government recognized that some new
¡°territory¡± of reform was uncharted ¨C it adopted a
pragmatic ¡°learn as you go¡± approach to reforms ¨C piloting
projects, introducing reforms, testing for success, and
replicating, if possible, across the country ¨C helping to
contribute to the economic success we know today as China.
Now the challenge for China, as the reform path leads into
uncharted territory of opening to the global economy and growth
increasingly driven by the private sector, is to continue with
unfinished old reforms (financial sectors, SOEs); to address
adverse side effects of reforms (increasing national and regional
inequality, budgetary problems, environmental deterioration,
problems with health and education) and confront new reform
challenges emerging from its ascension to WTO.
Openness to trade has been a wise choice for the people
of China. More reforms are needed to
enhance governance, alleviate social pressures, mitigate
environmental degradation and strengthen infrastructure ¨C while
promoting innovation and change.
The factors which led to China¡¯s past success ¨C
agricultural reforms, opening to world markets, expanding
investment and trade ¨C will not be able to be replicated to drive
future growth. Its future success and competitiveness is
going to rely on increasing the productivity of labor and capital
and acquiring new knowledge in this new century of rapid
technological change, open and competitive economies, and
knowledge-based industries. In this environment, stable
countries with well-educated and healthy people will realize the
most rapid progress.
China must continue to invest in education and the knowledge
economy. The future of China¡¯s growth lies in
While China today compares favorably in education accomplishments
with most of the countries of similar income level, substantial
challenges remain due to remaining pockets of poverty, persistent
structural weakness and widening disparity of income and inequality
in sharing the benefits of growth.
And, though China has made significant progress on improving access
and quality of basic and primary education, it is falling behind
its neighbors in ensuring the same level of secondary and higher
education, essential to building the kind of versatile,
well-skilled workforce needed to compete in the 21st century.
I am encouraged by Government¡¯s recognition of the need to both:
(1) ensure there are adequate resources for the weakest parts of
the system ¨C especially poor rural areas ¨C to provide increased
access to high-quality basic education to all, and (2) encourage
the strongest parts of the system ¨C especially in the urban and
coastal areas ¨C to increase their quality to grow and prosper as
fast as possible. And I pledge the support of the World
Bank is assisting China achieving both of these objectives.
By investing in education, China can build the human capacity it
needs to take full advantage of the unprecedented opportunities
offered by a new globalized world economy, while ensuring that each
individual has the opportunity to thrive personally, contribute
productively to the country¡¯s goals, and break free of the
burden of poverty.
Knowledge and information are becoming the key drivers of
international competitiveness and the global economy. China must
not be left behind.
To compete and prosper in this new environment China has to move
away from factor intensive growth toward knowledge based growth,
become more open and harness the forces shaping the global economy,
leapfrogging to take advantage of rapidly evolving technologies ¨C
technologies which some of its neighbors have already been
developing and using.
In order to do this, China needs to make major changes in its
development strategy to upgrade and create new institutions and
infrastructure critical to harnessing the knowledge revolution ¨C
this involves updating its legal and financial networks,
intellectual property rights, education upgrading, information
And, a huge challenge will be to provide supportive environment for
diffusion of technology into enterprises with backward technology
in the less developed parts of the country. If foreign
investments and technology-driven growth remain concentrated in
cities of East China, the rest of the country will increasingly
fall behind, and existing regional inequalities across
China will further deepen.
We are working with China on a range of initiatives, including
using the Global Distance Learning Network (GDLN) to link not only
Beijing with other Asian capitals but also to help it link with
smaller, regional centers ¨C such as the new center in
Ningxia. Efforts are underway to use the GDLN network
via the China Country Gateway, to extend throughout China by
linking up Mayors to share experiences and develop common
strategies for well-planned, well-serviced and environmentally
friendly city development.
We at the Bank fully support this move towards embracing the
potential of the ¡°Knowledge Economy¡± and see our role as a
catalyst, a facilitator, a broker and a connector, positioned at a
major intersection in the network economy, connecting global
learning opportunities together with investment assistance for
I have spoken now of both sides of the partnership ¨C of the
developed countries, and leadership in the developing world ¨C as
exemplified by China. I believe we have a greater chance
today, than perhaps at any other time in the last 50 years, for
both sides of the partnership to work together, to fulfill their
part of the bargain, and work together to win that war and forge
that new partnership for peace.
We need to go further. We can do more. China
can and must accomplish more.
Across the world, we must educate our children ¨C students such as
you who are standing before me today ¨C to be global citizens with
We must celebrate diversity, not fear it. We must build curricula
around understanding, not suspicion; around inclusion not
We must tell our children to dare to be different - international,
intercultural, interactive, global. We must do better with the next
generation than we have done with our own.