Here to help

Oppressor of third world countries or an organisation focused on doing the right thing for developing nations? Christiaan Poortman, vice president, Middle East and North Africa at the World Bank, outlines the organisation’s raison d’être.

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By  David Ingham Published  August 31, 2003

|~||~||~|Why is Dubai so excited about the World Bank and IMF meetings and why are they significant for the region?

I think there’s excitement on both sides. Every three years, we have our meeting somewhere outside Washington. It is the first time we’re doing these meetings in the Arab world. Clearly, the Arab world is very much in the news. We’re not in the business of dealing with members’ politics, but we think there are some very important development issues out there in this region that the world knows very little about. They know about the headline problems, the military and security issues, but I think there is less knowledge about the particular development challenges of this region. We think this is an opportunity for us, beyond the more global issues that we address, to have a chance to focus and showcase ourselves more towards this world, to say that there is a contribution that the World Bank is already making, but that there is more we can do, and in fact we’ve recently done a synopsis that roughly shows where we think we can be of more assistance.

What do you aim to achieve at the meetings?

It helps us focus more on what we are doing here in the region and this is very considerable. Our assistance to this region has been significant, but we’d like to extend it. The way things are coming together at this time, and our reports make that clear, is that governments of these countries will have to fundamentally rethink their development approach. The approach of the past has generated a certain amount of benefits, but now the issues of employment creation, wealth creation and poverty alleviation are ones that beg to be tackled urgently.

What is your role as the World Bank when you deal with these countries?

It’s twofold. On the one hand, we are an international institution and have worldwide experience, which we will very gladly bring to bear on the problems that exist in this region. In addition to a financial institution, we are also a knowledge bank; we store the experience that we have had and while there’s never a cookie cutter approach, there are certain things we’ve learned in Latin American and Asia, which we’d like to discuss with these governments.

There’s then the financing part for which we are better known; money goes into financing discreet projects. These could range from infrastructure to social projects, to all other technical assistance that these countries require to succeed in this process that they’ve charted for themselves for the future.

Therefore, there’s both financing and knowledge and I think in this region, it’s this knowledge part that has had far less exposure than we would like to have had.

Who are you working with and what advice are you giving?

In principle, all the countries in the region, and my region extends from Morocco in the West to Iran in the East, are members who are eligible to receive funding from the World Bank. It varies from country to country, as to what assistance we provide. This area, the Gulf, benefits primarily from our technical assistance programme. As you can see, financing is less of a constraint, so we have a very extensive technical assistance programme in this part of the world.

What work are you doing with the non-oil producers?

Again, it varies from infrastructure financing to community development projects, to water projects, to helping the Jordanian government in formulating budgetary policies. We try to provide technical assistance in certain areas. There is no limit to the range of activities that we can and do finance.

What are the basic recommendations that you are making to countries in this region?

One thing worth saying is opening up to the rest of the world. Trade and investment promotion are critical, the role of the private sector is critical. These countries have been relatively successful developing themselves in the public sector, but the limits of that are now being reached. There is this basic issue of needing to lock into the outside world, so that they can benefit in terms of exports, but also import the knowledge and knowhow they need. Associated with that is a greater emphasis on the private sector, creating an environment that is more open and welcoming to the private sector and also tapping into private sector finance.

Using finance in the public sector more efficiently is another issue. Most of these countries have been spending well in comparison to other countries, say, in providing social services, but not very efficiently. Money invested [by the public sector] has been significant, but the returns on that money have not been very great.
Related to all this is the issue of employment creation. If you do all these things, it has to go hand in hand with job creation.

Those are some of the basic messages, but there are these other issues we touch upon, issues of what we call ‘governance.’ That is, developing a more inclusive way of developing your plans and strategies, buying into the interests of those you serve.
Gender is very important. Women need to participate much more, not simply because they need to participate, but lots of investment has been made in the education of women and I think there’s very little return being achieved on that.

Water is critical. It’s a sector where we think lot more can be done in terms of allocation and resource management, as well as in terms of using it more efficiently. This is an area crying out for further reform. Those are really the headline issues, although it varies, of course, from country to country. This country [the UAE] has done a very good job of building itself up, bringing in foreign knowhow and raising the bar. There are other countries that have done some of that, not enough, and other countries have done very little of that.
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How receptive have public sector institutions been to the things you’re saying?

I think they’re receptive, but it’s not easy to do the kinds of things we advocate. However, I think that as resources begin to dry up and the need for those resources multiplies over time, I think there is an increasing realisation that tradeoffs have to be made. Then, I think the knowledge that we can bring to bear, of how other countries have dealt with their problems, is going to be much more welcome. It’s a process of experience, finding out the problems and identifying what might be potential ways to resolve the issues. People like to hear how others have dealt with their problems.

Why is there so much opposition to the World Bank?

I think there’s a lot of misunderstanding about the World Bank; few people appreciate that we are an international organisation with 184 member countries. The fact that we are based in Washington DC does not mean that we are not an international organisation. Membership is everybody, expect that the voting power within the board is somewhat weighted, but the weighting is still such that developing countries have a very significant say. There is also a great deal of consensus that has developed within the board on major decisions. I believe it is truly an international organisation.

I also think that we are sometimes the provider of difficult messages. We come in when the going gets very rough and the messages that we pass on are not always the easiest to swallow for any government. But we also feel that we have an obligation to stand by our members, not just in terms of financing, but also in terms of whatever guidance and advice we give. However, in the final analysis it’s the countries themselves that decide what they want to do.

This is also another misconception, that we come in and are strongly conditional. Yes, we have views about how we think things should be done. But, in the final analysis, it’s governments themselves that have to look at whatever advice they get and decide on the best course of action.

How do you feel about the criticism that you tend to be one size fits all in terms of your advice?

From my personal experience, I can tell you that the advice we give from country to country varies quite considerably. In the light of international experience, there are certain findings that are very difficult to dispute. For instance, this question of liberalisation, encouragement of trade and investment promotion is a lesson that has come across from many countries. In that sense, we are not one size fits all. I think there is a general direction that most countries successful in their development have marched towards. Now, the degree and the timing is something that will vary from country to country, but the basic message is the same.

How would you sum up your message for the region?

The message for the region is twofold. One is that we’re bringing out a number of reports that document the status of the discussion that we’ve had with many governments about the direction of economic policy. We would like to enter into discussions with individual governments about how best to help them implement these reforms. The other important message is that the World Bank is there to assist in this process, not just as a financing institution, but as a knowledge institution. Our message, we believe, is a critical message. The situation is such that these decisions need to be made and the recommendations implemented within the next few years.

Are you confident the region will heed your advice?

Let me put it this way, I think there has been a lot of thought, a lot of attention, a lot of discussion. I think at this point, we’re better poised to reach an understanding and also there’s a better appreciation that we’re to help. We’re a long term development institution and partnerships are being created for the long term.||**||

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