James D. Wolfensohn has no qualms about honing new skills later in life. In his 40s, while chairman of New York’s Carnegie Hall, he became a fanatic about the cello – that oft-forgotten instrument wedged in between the lyric violin and the resounding bass – and became a near-virtuoso.
In his 60s, too, Wolfensohn took on a new challenge as president of the World Bank Group. Much like the cello, the World Bank often sits uncomfortably, plying its mission to prop up underdeveloped countries while weathering attacks from both the right and left, from arch-capitalists and socialists.
Wolfensohn still plays the cello in his spare time, but for the last eight years, he has traveled the globe in hopes of ameliorating poverty in the developing world and trying to satisfy his detractors on both ends of the political spectrum. “I am conscious of my own inadequacy in assessing the impact of what is happening now on the multi-national scene,” said Wolfensohn, speaking at the University of Pennsylvania’s Annenberg Center for the 2003 Granoff Forum on International Development and the Global Economy. “But things do continue as they did before the conflict. Poverty is an issue whether there is a conflict or not. There are conflicts in Kashmir, wars in Africa, stresses all around the world as a normal condition,” he said. “But our issue at The World Bank is the issue of what will happen with our planet in the next 25 or 50 years.”
When Wolfensohn took over at the World Bank in 1995, he viewed himself as a spiritual successor to a former World Bank chief, Robert McNamara, who, critics said, had used the World Bank’s lending powers to assuage his guilt for his long promotion of the Vietnam War while he was Secretary of Defense. Wolfensohn saw McNamara’s stint less cynically; he believed that McNamara had turned the developed nations’ eyes toward the terrible poverty of the developing world and its cultural plight.
In the intervening years, primarily in the late 1980s and 1990s, the World Bank tended to lend money for infrastructure – projects like buildings and roads with tangible results. Wolfensohn has pushed the organization toward goals he feels are more long-term – health, educational and agricultural projects that, while less measurable than whether a highway is finished from here to there, are, he feels, more able to reduce poverty in the long run.
This has made Wolfensohn run afoul of critics from the right. The most scathing attack came in a Foreign Policy article by Stephen Fidler in late 2001. Fiedler said that pet Wolfesohn initiatives like environmental clean-up, anti-corruption campaigns and free-speech initiatives were useless in developing nations and that the World Bank should go back to building dams and roads or cease to exist. Former U.S. Treasury Secretary Paul O’Neill said that World Bank lending actually hurt developing nations by coddling them and preventing them from choosing free-market solutions. Even World Bank insider William Easterly said the Bank should consider becoming merely an advisory body, noting that all its help in sub-Saharan Africa hadn’t raised per capita income since 1980.
On the other side, seemingly contradictorily, the left accused him of forcing capitalism on unready societies and making deals with multinational companies to come into developing countries, use their resources and make profits at the expense of poor people.
Wolfensohn, though, hardly seems weary of defending the World Bank’s actions in his eight years there. He hammers at the moral and practical need for developed nations to rid the developing world of poverty. “Three billion people live on less than two dollars a day, a billion don’t have access to clean water. When you go down the line of who has access to health, education, whatever, it is an inadequate situation,” said Wolfensohn in his speech at Penn.
“The U.S. has about 10 trillion dollars of the 31 trillion in world GDP, and only 4% of the global population. Some 50% of the people in the world hold 7% of the GDP,” he said. “As I go around the world, the relative scale in which we are dealing requires a worthy examination. It needs a sanity and relevance check.”
Wolfensohn likes to tell detractors on both sides of the political divide that they don’t live separated by some big wall any more. He points to his growing up in Australia – he is a naturalized American citizen now – where he said he got interested in helping nearby poorer nations like Indonesia and those in Southeast Asia. “People would say, ‘Oh, that’s a nice thing Jim is doing, but one day he will come back and be an investment banker or lawyer or doctor,’” he said. “If you were really successful, you went to London or Paris or New York. The centers were not New Delhi or Jakarta or Johannesburg.
“But if that wall ever existed, September 11 ended that notion,” Wolfensohn said. “The people worried about globalization, well, it’s here in many forms. We are linked not just by money, but by the environment, by trade, by crime, by migration, by health, by communications. We are linked by everything, even terror. We must recalibrate our thinking.”
Wolfensohn throws out statistics by the baleful. For instance, five of the six billion people in the world are in developing nations, and the youth there means that in 20 years, seven of the projected eight billion world residents will be there. The rich nations ignore this at their peril, he said. And yet the ignorance even of the public is massive. Polls show, he said, that people in the United States think the nation spends between 10% and 15% of its budget on foreign aid. “But it is zero-point-one percent – not one-point-zero, but zero-point one. It is just inadequate,” he said. More stats flow: the total assistance for developing countries from the developed countries is $52 billion, while defense budgets are $900 billion. The average Japanese cow gets a subsidy of $7.50 a day, while half the world’s people live on less than $2 a day.
The World Bank lends about $20 billion to as many as 180 nations each year, which Wolfensohn regards as a trifle and his critics say is wasted. Most of that never gets repaid anyway, they say, so why not just make outright grants or just let the private sector handle things. Still, the World Bank presses on, asking developed nations to ante up. He said the Bush administration has told him that it will increase its subsidies from $10 billion to $15 billion next year and that the European Union will add $7 billion more by 2006.
“But if we are to achieve the minimum of objectives, the money has to be a multiple of that, at least $50 billion and more like $60 billion to $70 billion,” he said. “If we look at the needs for health, education, AIDS cures, we are finding it incredibly difficult to raise incremental funding for these.”
Yet even aside from the money, Wolfensohn wishes the developed nations would understand the practical issues surrounding the funding, even as they mouth the talk. While world leaders do recognize that there will be no planetary peace “if we don’t deal with poverty and hope,” he said, “I find that rhetoric is ahead of actions. You have to understand that you are certainly going to be influenced by what happens in this new global paradigm.”
Wolfensohn revels in his varied professional life. While an investment banker at Salomon Smith Barney, he was instrumental in designing the bankruptcy bailout of the Chrysler Corporation. He formed his own investment company later and then devoted time to arts funding, serving for 11 years as chairman of Carnegie Hall, overseeing the building’s reconstruction, and then five years as chairman of Washington’s Kennedy Center before taking the World Bank job.
Early in his adult life, Wolfensohn said, he would have never dreamed of being an establishment figure. His days of protest make him understand those anti-globalists who harangue him on many of his travels. He said in his youth he pushed institutions in Australia to be more socially conscious, and he hopes he is still doing that in his position today. It may actually take a turning out of the old guard to accomplish the goals he seeks, he added.
“We need a new generation to come and confront the imbalance with a sense that the world will be reshaped and protected environmentally,” he said. “It will be a world, soon, of nine billion people and it needs to be prepared for that now. It’s not in the headlines the way Iraq is in the headlines, but it has an inevitability that no one can avoid.”
