Outgoing World Bank president James Wolfensohn discusses U.S. contributions to world needs and his new position as negotiator in the Middle East on Newshour with Jim Lehrer PBS. 31th May 05

JIM LEHRER: Mr. Wolfensohn, welcome. You said the other day that one of your major disappointments as you leave the World Bank was you were unable to get the world interested in Africa. Why not? What's the problem?

JAMES WOLFENSOHN: It wasn't that they're not interested. They're interested, but in terms of actions in relation to Africa, it's very hard to move the world with the force that is required. We have in that continent 47 countries, 750 million people. We have wars. We have AIDS. We have tremendous poverty; lack of education, and it is just that the resources are not flowing the way they should, and by that the Millennial Summit, which is coming up, it will be brought to the attention of the world, and even before that at the G-8 meetings to be held in Geneva. Tony Blair is going to give a special push for Africa; that's my hope, is that this will happen.

Obstacles to helping Africa

JIM LEHRER: Well, what's your analysis of why it's so difficult?

JAMES WOLFENSOHN: I think it's difficult because most of the rich countries tend to be Eurocentric. If you look at our reaction to wars in Africa, it's pretty thin. If something happens in the Balkans or if something happens in a country nearer the Middle East we are concerned, of course, over whatever political or resource reason, we spend fortunes. You see what's happening in Darfur, you see what's happening in Congo, it's very hard to get attention.

JIM LEHRER: Well, Darfur is the thing that -- is the place that immediately jumps to mind. Here we have thousands of people dying, millions displaced, and it's still going on and it's being reported on a -- we've certainly reported it regularly on this program but nobody seems to be able to stop it.

JAMES WOLFENSOHN: Well, that's what troubles me because on a program as influential as yours when you come to putting forward the issues of Darfur -- before it I remember Rwanda -- you could not get the sort of interest. It is just one of the sad things about the reaction of the world that they've never fully warmed up to the fact that African lives and African development is important as developments in other parts of the word. I hope it's changing, and I think President Bush, himself, is showing a greater interest in Africa. And it's my belief that if he and Tony Blair and others come together and if you have good African leadership, which is important, then we've got a chance of moving forward.

JIM LEHRER: Does the World Bank have a role to play in situations like Darfur?

JAMES WOLFENSOHN: Not unfortunately or fortunately, the way you look at it, not in actually solving the conflict; we have a huge role in post conflict, in trying to make sure that when a conflict is over, you get the military demobilized and you build economic and social programs that will stop the next work, and so our work is mainly in the reconstruction. After all, the bank was called the International Bank for Reconstruction & Development. We're not a peacekeeping agency, our origin for that.

JIM LEHRER: So there has to be peace first before you all can do anything.

JAMES WOLFENSOHN: Yes.

Perceptions of the World Bank

JIM LEHRER: You know, I was looking at some material and surveys and stories about the attitudes of the American people about the World Bank and it's hard to escape the conclusion that most Americans have no idea what the World Bank actually is. Do you agree with that?

JAMES WOLFENSOHN: Unfortunately I do; and it's sad because the United States has been a huge factor in the World Bank, really helped its creation as one of the Breton Woods institutions after World War II and more than $300 billion worth of lending has come out of the World Bank, and significantly in support of things with which the United States is very much in sympathy. So the relationship between the U.S. and the World Bank is considerable.

JIM LEHRER: What is it? What's the single most important thing that the average American -- I'm not talking about think tankers and people that already know about the World Bank -- but the average person -- what's the most important thing they should know about the World Bank?

JAMES WOLFENSOHN: They should know that the World Bank is dealing with 5 billion people in the world out of 6 billion, 5 billion in developing countries, and that that 5 billion will grow to 7 billion in another 25 years, and that the same billion roughly will be in our rich countries.

And what they should hope is that the World Bank can reach out and help the development of those countries so that all of us on this planet can benefit, benefit in terms of trade, benefit in terms of peace, benefit in terms of a better environment, because there are no longer two worlds; there is one world. And we, if you like, are both the window on that development world and the active force to bring the developing world and the rich world together.

JIM LEHRER: The United States government contributes how much to the World Bank on average, of its total budget, or any terms you want to put it in?

JAMES WOLFENSOHN: Well, to the bank itself it doesn't contribute anything because the bank had an initial capital of $10 billion and we borrow in the market and we lend. But there is a very important affiliate of ours called IDAA, which is the International Development Assistance Agency, which makes loans to the poorest countries and to that the United States puts in several hundred million dollars a year and gives roughly 18 percent I think it is of the moneys which flow to that.

JIM LEHRER: What would you say to the American taxpayer? Are we getting our money's worth for that money?

JAMES WOLFENSOHN: Well, I think -- I can say this more easily now I'm leaving --

JIM LEHRER: Sure.

JAMES WOLFENSOHN: -- and I don't need it to pay my salary, but I can say with total assurance that the American taxpayer is extraordinarily well served, because we deal with the question of governance, the question of corruption, questions of environment, questions of health, questions of education. And ultimately those things are at the core of peace, so I think it's a trivial amount relative to what we and the rest of the world spend on defense, for example; the total amount of money spent on development annually by the world is 50 to 60 billion dollars a year. The total amount of money spent on military expenditure is a thousand billion dollars a year, 20 times that amount. And so the American public should hope that we can build peace because that makes less war.

Link between poverty and terrorism

JIM LEHRER: Based on your 10 years at the World Bank, do you have any opinion about whether or not there is a connection between poverty and the problems of poverty and terrorism and the other problems that we're having to deal with throughout the world?

JAMES WOLFENSOHN: I do have a view. It's not by any means clear and indeed it's not true that every poor person is a terrorist; that is clearly not the case. But what is true is that if you have people without hope who really have nothing to look forward to, then the level of forces can come into those groups and both find a haven there and find recruits there. If you remember September the 11th, Afghanistan was seen as the epicenter of the terror. There were no Afghans who came to the United States in terms of the terrorist acts, and there were quite a number of people who are quite wealthy who came --

JIM LEHRER: Most of them were Saudi Arabians, yes.

JAMES WOLFENSOHN: They found their haven in that country. And the haven was made possible because these people have nothing to hope for. If you look now at Gaza and the West Bank, part of the problems in Gaza are that you have a group of people who feel that they have no economic hope, that they have no social hope, and so if you have forces that come in, extremist forces, to play on these young people who have no hope, they become very vulnerable. I was just in Pakistan; President Musharraf told me the same thing in Pakistan.

JIM LEHRER: Isn't that a hard case to make, I mean, to the average person who says, hey, wait a minute, we've got problems right here in the United States of America, why don't we deal with them first before we start worrying about folks in, whether it's Africa or Pakistan or Afghanistan or what else --

JAMES WOLFENSOHN: It might have been a tough case before Sept. 11, but Sept. 11 showed that there is no wall around the United States. And in fact our reaction has been that we're waging a war against terror not only in the United States but outside the United States. So at least the American public understands that there is no wall around the United States and that as a leader -- as the leader of the free world -- the United States must be interested in the questions not just of terror and not just of military expenditure, and that the issues of equity and social justice and of hope our country understands that.

JIM LEHRER: Do you believe we've got the equation right in the United States of America? Are we giving enough on the development side, on the assistance side?

JAMES WOLFENSOHN: I think President Bush has done much more than perhaps all of his predecessors in increasing the level of aid, in increasing the support, for example, for AIDS, so I give him full credit for that, but as president of the bank I think the world's got it wrong. I think if the world is only putting 50 to 60 billion dollars into development and a thousand billion into defense, that we've just got to balance out -- and in that context I would say the same is true of the United States -- as admirative as I am of what this administration has done.

JIM LEHRER: Do you -- what's your state of mind as you leave the World Bank now? Do you leave with a feeling of satisfaction, of frustration of things undone that you wish you had done?

JAMES WOLFENSOHN: Well, I think it has been the most remarkable 10 years of my life, being able to make a difference in the planet, if you like, so I leave with a sense of gratitude for that opportunity and a sense of confidence that I have 10,000 colleagues there who have worked with me and who are deeply committed to the same things that I work for, which is to try and deal with the question of poverty, to try and deal with the question of the environment, and I feel very proud to have been with them. If I were 20 years younger, I'd like to go on for another 20 years but I have another challenge now. So I'm leaving, of course, with some sadness, a lot of pride, and with hope that I can still do some useful things.

Next role as Mideast mediator

JIM LEHRER: Well, the next thing you're doing is -- you mentioned Gaza a moment ago. Tell us what that assignment is, who you answer to, and what you're going to be doing?

JAMES WOLFENSOHN: Well, I have been appointed by the United States, by Russia, by the European Union, and by the United Nations, the so-called Quartet, to intermediate between the Israelis and the Palestinians on the economic, social and to a degree political matters -- in the first instance on the withdrawal from Gaza and the West Bank. I report to the Quartet and essentially what I will be doing is working in the region with the two parties to try and help them reach an agreement which is peaceful and will lead to a furtherance of I think everybody's desire to see security for Israel and hope for the Palestinians. It's not the easiest job in the world, as I'm sure you might imagine, but it is a remarkable opportunity to be trusted by this administration and the others to do this.

JIM LEHRER: How long do you think this is going to take? Do you anticipate a timeline here for you?

JAMES WOLFENSOHN: Well, I've been working in the field there for 10 years, and we've put --

JIM LEHRER: Because the World Bank has been continuing --

JAMES WOLFENSOHN: The World Bank has been tremendously active, which is why I think the president and others thought it might be useful if I did it. But we've put a six-month timeline on this till the end of the year because the actual withdrawal from Gaza is now slated to start on Aug. 15. But I guess we'll take a look at the end of the year and see whether I've made a contribution or not, and if I haven't, it'll probably be six months.

JIM LEHRER: But is it physically negotiating with these folks, having them sit down in rooms and say, OK, let's work this out, let's work this out, or is it a different kind of job?

JAMES WOLFENSOHN: Frankly, there will only be peace if the Israelis and the Palestinians agree between themselves. It's not what I say or even what the United States says. And so what you have to do is to try and be supportive of each side and bring them together in whatever way I can, without intruding either my ego or my personal assessment of it, because I think that's counterproductive. I think one should try to be as invisible as possible because there are remarkable people on both sides, but I think it would be fair to say that there are quite a lot of misunderstandings and there's not a lot of trust.

So maybe what I can do is to help bring about better understanding and help produce greater trust. If I can do that, then I think you'll find that the people of the Palestinian territories and of Israel all want peace and though one has to find a way to make this happen in an environment which, as you know, is fraught with danger and with some people who on either side don't want to see this happen. So I wish I could look at this with certainty. But I think it is a moment in time when there's a real possibility for peace.

JIM LEHRER: All right. Well, good luck to you and congratulations on the end of your 10 years and the beginning of your new venture.

JAMES WOLFENSOHN: Well, thank you so much, Mr. Lehrer