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Mentoring Paul Wolfowitz.

Paul Wolfowitz, earlier this week, assumed his role as head of the World Bank, pledging to fight poverty in Africa, among other things.



Somewhat surprisingly, he's getting mostly positive reviews thus far:

Although some activists remain hostile, development experts and non-governmental organisations who have met him over past weeks say they have been reassured by their early encounters with the urbane Mr Wolfowitz.

Mohammad Akhter, chief executive of InterAction, an alliance of 160 US-based development organisations, has admitted to being "pleasantly surprised" and said the bank was "in good hands".

Seven years of growth at 5 percent in India reduced national poverty by 6 percent. During the same time period, 6 percent economic growth in Vietnam reduced national poverty by 7 percent; 8 percent growth in China reduced national poverty by 8 percent.

If Africa could achieve growth rates of 4 to 5 percent over a decade—half the rate in China—the resulting poverty reduction would be far greater than what would result from a doubling of the foreign aid budget to the troubled continent.

Put the Bank to the Test:

As an international organization charged with fighting poverty, the World Bank should devote meaningful resources to fund randomized evaluations, ideally in conjunction with other private, public, and international donors, and create an “innovation fund” devoted to such evaluations.

A little vague, but decent advice.

Put Your Faith in Microfinance:

Typically, poor people have no property and, hence, no collateral. Without collateral, they have no means to secure a loan. So the entrepreneurial ability and ambition of poor people is blocked by their lack of access to credit. Microfinancing unleashes that entrepreneurial ambition by offering small loans—normally in the hundreds of dollars—as start-up capital at normal interest rates. The global repayment rate for microfinance loans is about 98 percent. These loans allow families to get out of poverty, send children to school, and finance healthcare costs. They also help poor people garner the resources necessary to defend their freedom and democratic rights.

Put Borrowers On Notice:

The developing world would be better served if the bank linked its overall volume of lending—subject to broad, prespecified criteria—to spending on critical institutions, such as basic education, basic health, and nondiscriminatory legal frameworks. In this way, the bank would fund the very things that drive growth, be it infrastructure or higher education.

Put the Brand First:

To develop an integrated, unique, viable, and sustainable mission—and to correspondingly align the brand and internal culture—is Wolfowitz’s biggest challenge at a time when the mission is in dispute, the brand is in doubt, and the culture is amorphous.

Some decent advice, all around.

UPDATE:

More advice for Wolfowitz:

With all of its good intentions, the World Bank has failed to achieve its goal of ending poverty and, in some cases, has left recipient countries poorer than when lending started decades ago. Paul Wol­fowitz, the new president of the World Bank, has an opportunity to change this disappointing record and turn the World Bank into a more transparent, more accountable, and more effective organization.

This effort should start with setting a more appropriate mission for the World Bank: encourag­ing poor nations to bolster the rule of law and to increase economic freedom. It is these policies that will remove obstacles for economic growth and pave the way to reducing poverty.

Key elements in the strategy include focusing assistance on low-income countries that have good policies but lack access to capital markets and pro­viding that assistance through performance-based grants that have quantifiable benchmarks. These changes will help the poor to cope with the desper­ate life they live while giving countries incentives to implement sound policies, to reform, and to pro­mote a strong rule of law, which is the only path to eliminating poverty.

Posted by Will Franklin · 3 June 2005 10:54 PM

Comments

Posted by: Zsa Zsa at June 4, 2005 08:16 PM

Posted by: Tara at June 4, 2005 09:28 PM