They worry less about a culture of dependency and
more about, the suffering that becomes, a vicious circle.
And
I wonder if you would, you know, how does you, how
do you in the world bank think about this tension between
those who worry about a culture of dependency, and those who
urge us to really address the immediate suffering of the most poor?
>> You know, I have great admiration for both Bill Easterly and Jeff Sachs.
Jeff is a close friend.
Whom I have worked with for years, and let me put it this way.
So I think that the work that Belize truly
has done people like Douglas Semoia have done This
is real, this is important stuff because they're taking
a very hard look at how effective aid has been.
You know I, I was part of a movement called 50 Years Is Enough.
>> Right.
>> And this movement called for the closing of the World
Bank on its 50th anniversary, which was about 20 years ago now.
I have
to say, I'm very glad we lost that argument
>> [LAUGH]
>> But in many ways, Michael, you know we won the argument because
the, what we were arguing was that the World Bank was focused so
much on growth, and they were basically at one point saying Look there's
a formula you gotta get the macro economic fundamentals right and focus on growth.
You know charge for basic health care. Education will come along.
But the most important thing is, reduce your public expenditures, and focus
on your growth model by getting the macroeconomic fundamentals right.
They were right in so many ways.
>> Mm-hm.
>> And a lot of the work that was done, Jeff was part of that group.
>> Yep.
>> Of helping countries get macroeconomic fundamentals right, I
think, is one of the big reasons that during the
last five years, when everyone else's growth, especially in
the developed world, was hit, the developing countries did well.
>> Yeah.
>> And part of it was they
had separated central banks from ministries of finance.
They weren't printing money to solve their problems.
There's so many things that they did right.
You know, debt to GDP ratios had gone down, they were managing
their debt more effectively, so a lot of these fundamentals were important.
But I think what was less appreciated, was that you've gotta get
your growth strategy right, but you also have to invest in your people.
>> Yeah.
>> That was your argument we were making.
We were, we were saying, you know, you
cannot undervalue the importance of investment in people.
And now, here at the
World Bank Group, the thing that's most
exciting to me, is that there's a tremendous
amount of research, on the programs that have
worked and the programs that have not worked.
And you know, what we know for sure, is that
you cannot approach this from an ideological point of view.
>> Yeah.
>> Right? Market based reforms.
Privatization.
You know export oriented strategies is good for everybody.
There's really nothing that's good for everybody.
>> Yeah.
>> So the way we've been trying to, to, to move the
discussion and you know, I, I, I, I would hope that both
Bill Easterly and, and Jeff I know Jeff emb, embraces this idea.
Is we've been talking about creating what we call a science of delivery.
>> Yes.
>> In other words, let's be really
specific about what worked, why, and where.
>> Yep.
>> And then talk about how that can
be taken to other places and scaled up, right?
>> Mm-hm.
>> So let me just give you an example.
Has aid ever worked?
Well, look at my, the country of my birth, South
Korea. I was just there a month ago, right?
And the World Bank made huge investments in,
in our fund for the poor, it's called IDA.
We made huge investments in Korea.
And I was just there, and they were saying that the
World Bank's investments were critical from, in us getting off the ground.
But here's what else they said.
But one of the things that was important for us, is
we actually didn't listen to the World Bank advice all the way.
We invested in health. We invested in education before
anyone thought we could afford to.
And then right after Korea I went to Japan.
The Japanese said we invested in universal health care before anyone
thought that we had any right to even think about it.
And so you look around at the kinds of investments that have been made in people.
And the links to growth.
I mean, you know Turkey, just in the, you know in the early 2000s, made
huge investments in health and dramatically dropped
their maternal mortally rate, their infant mortally rate.
Changes that usually people think take a long time.
>> Yeah.
Yeah.
>> They did really quickly, and they're convinced that it had a
huge impact on their current growth trajectory, which is really quite good.
Now, what Turkey learnt is it, that you know, you're
as good as what you did in the last week.
>> Yeah.
>> Becasue there were protests In Turkey.
So you gotta keep, you gotta keep at it.
But here's, here's what I.
You know, you cannot argue about moral responsibility to end poverty versus a
culture of dependence.
You've gotta step back and, and ask yourself,
what kind of investments can be made that
will enable people To build the foundations for
the future growth that we know is critical.
There are so many countries in the world that
are just not going to be able to fund the
kind of health and education investments that are needed
right now to build that foundation for future growth.
>> Yeah.
>> And so what we, what we would
say is, let, let's move from the ideological and
move to the specific.
There is $125 billion of official develop assistance out there.
I think that we have to just be extremely
humble and grateful for the generosity of the donor
countries but I think it implies we have to
be much more rigorous about knowing what works and why.
>> Yeah.
>> And then, take the responsibility to take those things that
work and take them to scale.