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 | Erin: Welcome to T2A chat with James Wolfensohn, former President of the World Bank. Mr. Wolfensohn founded a private investment firm that provides strategic consulting advice to governments and large corporations doing business in emerging market economies. He has served as U.S. special envoy for Gaza disengagement for the Quartet on the Middle East. Mr. Wolfensohn founded the Wolfensohn Center for Development at the Brookings Institution policy analysis center in Washington, D.C. Mr. Wolfensohn joins us from his office in New York City…let’s get started with an international email question from Imma:
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| Imma(email): What is the status of the African continent in the emerging markets sector? Do emerging markets include all of the following: producers, consumers, exporters and importers? How are emerging markets innovating technologically – do you see them duplicating existing or new inventions coming from the West?
Mr. Wolfensohn: Africa is lagging. first of all it is a billion people out of 6 billion on the planet and it's sad to say that even though it's one sixth of the planet it has 2.5 percent of the global income and the income of the individuals in those countries is very very much lower than in any other part of the world so Africa has fallen behind and another problem is there are 53 countries in Africa and they are divided into small groupings, so the future of africa is one where there will be in 2050 a doubling of the population to 2 billion people -- it's not very optimistic at the moment unless governments come together and have a more coordinated future. on the second question, emerging markets include all those four categories, but the fact is that they have not developed them sufficiently, that the income per person puts them into the category of more developed countries. But there is a huge change occurring, because the developed world today has 75 percent of the global income each year and they have only one billion people out of the six billion on the planet. But by 2050, that 75 percent will be reduced to approximately 35 percent of the global income each year, which means that the developing countries will share much more and will show greater growth for the people and for their industry and technology and today one could add that China and India are the two largest developing countries with more than a third of the world's population. They are developing very strong scientific and technological resources and the capacity to innovate.
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| Cynthia Baldwin: What do you think is the most pressing issue in the Middle East?
Mr. Wolfensohn: The broadest issue is the resolution of the Suni-Shia problem and related to that, the challenge of nuclear power in Iran and elsewhere. The persistent problem of Israel and the Palestinians needs to be resolved but it is only 11 million people out of 350 million people in the Middle East. And finally the biggest natural problem is the problem of getting work and opportunity for 130 million kids under the age of 21, and with that number growing.
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| Emily: What are three things that you believe International Institutions should do to help those who are suffering the most due to rising food prices? Do you believe this will be a persistent problem? Do you believe that rising food prices will affect poor countries long term?
Mr. Wolfensohn: The first thing one should focus on is on governance in the developing countries. The second thing I would say is the enfranchisement of women and third, is the introduction of better agricultural technology and water management. Yes, I believe food will continue to be a challenge and that with the development of a bigger middle class around the world, there will be increasing pressure on food prices.
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| Allison Jones: Do you think the Middle East peace process will likely move forward at the end of the Bush term? Will any future candidate bring new ideas to the table? What should be done to resolve the Middle East crisis?
Mr. Wolfensohn: I think it is likely that the resolution will come with a new President. We have already seen that Mr. Obama has stated in the Middle East that this will be one of his primary international goals, and I believe that the framework of the ultimate resolution has been discussed for decades and simply needs to be agreed to. If Mr. McCain is President, I would imagine that he will have the same priority.
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| Sheridan Marfil: Do you think world leaders should boycott Chinese Olympics given the country’s human rights stance?
Mr. Wolfensohn: I personally do not. I am actually an ex-Olympian in fencing so I believe that the Olympic movement is very important and should not be politicized, but I do think that countries should continue to express whatever views they have to the Chinese, but outside the Olympics.
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| Marcien FOSSUO (Cameroon): Glad to have you here Mr Wolfensohn. In 2007 Venezuelan President, Hugo Chavez, manifested his intention to withdraw his country from the World Bank and IMF before they are being plundered. Why and what do you think about that? Thank you.
Mr. Wolfensohn: I think that President Chavez can and should do what he wants, but I think the notion that the World Bank and IMF are being plundered is preposterous.
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| Eileen: Do you think China’s involvement in Africa, Middle East and Latin America – its quest for resources – is detrimental to development?
Mr. Wolfensohn: I think it is not detrimental to development but I think we run a risk that the countries in the developing world that are being supported may well only be those that have natural resources, and that we must look beyond the dollar amounts to the distribution of investment and of aid so that all parts of these areas are helped forward, whether they have natural resources or not.
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| K.Gopi, India (email): What does the typical “emerging market” look like? How do World Bank policies impact the average resident of a developing country? What is the most important factor of global development?
Mr. Wolfensohn: I think the countries that are subject to categorization as developing countries are those that have per capita income that is under that of the rich world and from memory that number is around 13-thousand dollars per capita per year. On the 2nd question, these World Bank and all development institution policies impact individuals to the extent that government programs in those countries pass on the benefits to the individuals -- that often it cannot be seen in monetary terms because it may come through in the development of public utilities, of roads, of infrastructure that benefit the individual. The objective of development institutions however is to build the income level of individuals but to do so by working with the State and with non-governmental organizations.
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| Thomas Bradfrod : What do you think can be done to resolve the unemployment issue for young people in the Middle East?
Mr. Wolfensohn: I see two needs; one is training and a more focused education system, secondly, a greater commitment on behalf of governments to the development of industry and of the labor market. It is very important that concentrations of wealth be spread to the broadest community in order to ensure peace.
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| Subhash: The Financial Times reported today that Saudi Arabia plans to establish a sovereign wealth fund that may exceed $900 billion, which would likely be the largest in the world. Should the financial institutions which incurred losses stemming from a mortgage meltdown in the United States expect some investment?
Mr. Wolfensohn: I think the Middle Eastern funds have already taken investments in American and non-American banking institutions. And over recent weeks the press has given accounts of these interests, all of which are judged to be passive interests and I would expect that that trend will continue.
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| Subhash: The Sovereign Wealth funds, which has an enormous amount of money earned by oil exporting countries because of rising oil prices, give loans to needy countries. Are they contributing to IMF or World Bank functions or controlling them?
Mr. Wolfensohn: They are not contributing directly. They are operating in parallel. They are however shareholders in the Bank and the Fund but have very limited percentage ownership.
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| Subhash: We have shortage of grain in many parts of the world. At the same time some countries have surplus. In spite of this they are holding export of rice, wheat etc. What could be consequences of this approach?
Mr. Wolfensohn: I think that the reason for limitations on exports is that the countries producing do not want to inflate local prices because of foreign demand and that is understandable -- but by reducing the supply to the international markets, it means that prices will likely increase rather than decrease, and the reaction of course will be to bring farmers everywhere more into production. What we have at the moment is a classic outstripping of demand from supply and over time that should be re-balanced.
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| Subhash: Follow up question: Is climate change affecting food production in developing countries causing food shortage?
Mr. Wolfensohn: The answer is that climate change is having serious impacts around the world. If you take for example the enormous rice growing programs in Australia, because of lack of rain, they have been substantially closed down. On the other hand, by creating new agricultural lands and getting rid of forest, we are also impacting the climate and so we are both victims of climate and causes of climate problems at the same time.
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| Rocky Fan: What is your assessment of Tony Blair's time as quartet special envoy?
Mr. Wolfensohn: I think he is doing a fine job but his mandate is limited to economic development and one should understand that in terms of the process of peace, this is very largely in the hands of Secretary of State Rice and some of her colleagues in the Quartet. I think however Mr. Blair is a great talent to have in the region.------------------------------- |
| Michael from Germany: What do you think about the new Union of the Mediterranean proposed by French President Sarkozy? Do you think that the countries around the Mediterranean will be able to overcome their political differences to engage in regional cooperation on important political and economic issues?
Mr. Wolfensohn: I very much wish him some success and I think President Sarkozy is bringing creativity and innovation in launching this initiative and that by using his personal leverage and the leverage of France, he may make another step towards bringing opposing factions together, as recently he did with the Prime Minister of Israel, being present with the President of Syria at the same meeting.
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| Subhash: Enormous and continuous rise in oil prices has caused tremendous problems all over the world. Do you think that the climax has already been reached and relief might be on the way?
Mr. Wolfensohn: Short term relief appears to be on the way with the very substantial drop in prices in recent days, but in the medium and longterm, I think there is likely to be an upward pressure on prices because production will be outstripped by demand and there will be special attempts by certain countries to pin down supply that will have an impact on the general market. The most notable example currently is China which is broadly seeking to assure supply from more than 20 countries.
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| Erin: That wraps T2A chat with James Wolfensohn, former World Bank President. Our thanks to Mr. Wolfensohn and to you for joining us. You can learn more about his work on emerging markets and global development at www.brookings.edu/wolfensohn.aspx or www.wolfensohn.com We hope you can come back next Wednesday, July 30th at 1800 utc when we meet author James Conaway to learn about the year he spent walking in America to learn more about its history, culture and environment from the people he met along the way. That’s Wednesday, July 30th at 1800 utc right here on voanews.com See you then!
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