The following is an excerpt from a wide-ranging interview with Emerging Markets
Does the Bank’s future lie in an even more laser-like focus on poverty in the least developed part of the world, or do you think the Bank’s role should evolve? If so, what are the few niches for the Bank to occupy?
I think there is a need for the Bank to redefine its focus. When China has $1.3 trillion of reserves, it is not the poor country that it was 13 years ago. When India has repaid a significant number of its debts, it is still a country in need, but it is a different country. And I think what the Bank needs to do is to keep focusing the world on the fact that there is a group of one to two or three billion people that are poor. And it may not be as exotic or as front line, but someone has to deal with the issue of poverty. Someone. You have to deal with the issue of Aids; you have to deal with corruption; you have to deal with the issue of women and environment. Now if you take those issues, the Bank has a front-line role in all of them, and given the limitation of its staff and capital, it seems to me that’s a pretty good set of issues for the Bank to address.
But this is precisely the issue: can it do all that without spreading its resources too thinly?
No it can’t do all that. But you asked me if the focus of the Bank should be on a series of issues. The criticism of the Bank that you were levelling at me – or saying that some people say – was that we’re not doing enough on middle-income countries, or that, by taking a holistic view and talking about corruption, you’re going beyond your mandate. I mean, the first big speech I made was about corruption. When I started, everyone was saying, well, that’s a new thing – and then, when you leave, they say you didn’t do enough about corruption. You can’t win in this business: you either do too much or too little. I think all you can do is to develop a thick skin, and then set yourself objectives that you think contribute, where others are not contributing and where you make a real difference. I went to 140 countries during my period at the Bank. I actually saw it on the ground. Most of the critics went to 10 or haven’t travelled at all. I think there’s absolute right for criticism, and there’s absolute right for variance of views. The Bank cannot do everything, but it needs to have leadership which may differ in its focus, but which continues through on issues that are selected by the leadership team.
And I have no doubt that what we did was to be very demanding on ourselves about setting objectives and then measuring performance. It may not have been the objectives that everybody wanted; it may not have been the performance that everybody wanted; but in our judgment, we selected good issues, and our performance was rigorously assessed. I don’t think you can do more than that. But you will not please everybody.
But what I think the Bank is now doing – and I don’t know currently what the president is doing – but certainly in the period that I was there, I think we professionalized the approach to project management and tried to apply the same yardsticks that you would use in the private sector. I think we made progress, but you should understand, nobody can come into a multinational institution that’s been going for 60 odd years and change it overnight. What you can do is shift the direction – it’s like turning a tanker. But I think that we brought in greater emphasis on people, on humanity on environment, on Aids, on women, and I’m very proud of that.
Critics – including former and current Bank staff – maintain that, under your watch, the Bank’s agenda broadened out excessively, became too ambitious and lost its focus. What’s your sense now, looking back? Do you accept that?
Well, I think we broadened the agenda undoubtedly, but by design, because I felt that just doing a dam or a school or a project wasn’t enough, unless you integrated that project into the more holistic support of a country, when the governance was changing in these countries, when they were emerging and expressing themselves in terms of their own culture. My own judgment was you’d be much more effective in working with countries if you recognized that each country or each group of countries had its own history, philosophy and values and you tailored your interventions to be more comfortable with those values. What I tried to do was to make the institution more sensitive to local culture.
This is something I will defend permanently, not because of arrogance but because I saw it work. There’s a big difference between going into a country and telling them what you’re going to give them, and going into a country and discussing with them what they need within the context of their local culture. And somehow I found that, by being a little more humble, by listening first to the culture and to the history and the values of the people, you were more likely to come out with an enduring intervention. And that was my view. The other view is – but if you build a dam it’s a dam, a school it’s a school, a hospital it’s a hospital – stop fiddling around and asking people about their local environment. Now that’s a rational approach; it’s just not one that I believe in.
Another concern that’s often raised is that, under your leadership, the Bank neglected the concerns of the middle-income countries by focusing too heavily on poverty reduction. Do you accept that now?
Well, there’s plenty of work to do in middle-income countries, and we did work in middle-income countries. But the truth of the matter is that, on the planet, you have 3 billion people out of 6 living under $2 a day, and you had maybe $20 billion-worth of projects a year done by IDA [International Development Association] and the Bank. And with 3 billion living under $2 a day, and with the Bank having been established in my judgment with a view to dealing with the problems of poverty and development after World War II, I thought there was plenty to do with 3 billion people, and I have no apologies for addressing that question, which I remind you, nobody else did.
In the last 20 years, global support for Africa has remained at a level of $12 billion, despite an increasing population. And so you know, if it’s wrong to try and focus on Africa, then I’m wrong, but we didn’t just focus on Africa. The projects in middle-income countries did not diminish, but I felt that there needed to be advocacy for the poor.
How can the Bank now go about motivating and incentivizing staff and restoring morale?
I think when I left 21⁄2 years ago, the morale was pretty high. If you’d been to the farewell events, I don’t think you could have said I was leaving an institution without spirit.
But there still has to be an answer to the question of staff turnover, which at the end of the day has been depleting the Bank of experience, technical expertise and managerial strength.
Sadly, in the last two years or so, a number of very good people left the institution. Some of them were working for me. And I’m greatly saddened by that. But I’m sure there will be a regeneration.There are very good people at the Bank, and under the current leadership, I have no doubt that Bob will pull it together.
—Interview by Taimur Ahmad