August 1st, 2006 03:48 EST
World Bank President Cites Economic Progress in Africa By Elizabeth Kelleher
Washington -- Paul Wolfowitz, president of the World Bank, said African countries are turning a corner in their efforts to fight poverty and disease.
Having returned from an eight-country trip through sub-Saharan Africa one week earlier, Wolfowitz spoke July 31 to an audience at the Heritage Foundation, a conservative research organization in Washington.
Citing progress made in East Asia, Wolfowitz predicted that Africa too would succeed at improving people’s health and economic well-being. He rejected a view that a country’s culture could stop economic progress, saying that, as recently as the 1960s, written accounts depicted South Korea as a hopeless mess and argued that cultural views – “oriental fatalism” and a belief that manual work is unsavory – would keep it that way.
“But government policy can trump culture,” Wolfowitz said. He said the two main messages that other countries should take from progress in South Korea are that educational attainment and a good business environment will turn a difficult situation around.
He said a turnaround is beginning in Africa, although big problems remain: the number of people in extreme poverty, or living on less than $1 a day, has reached 300 million in sub-Saharan Africa, more than double the level 20 years ago. Nearly two-thirds of people who have AIDS live in sub-Saharan Africa, and 90 percent of the world's annual 3,000 malaria deaths occur there. One-third of boys and one-half of girls do not complete grammar school on the subcontinent, he said.
But Wolfowitz said he did not see Africa as a hopeless case and said he found “energy and ambition among ordinary Africans.” He cited annual economic expansion of 4 percent or better for 15 African countries. (The leaders, Rwanda and Mozambique, grew 8 percent and 10 percent, respectively.)
A new attitude at the World Bank and other organizations aiding African countries expects business-friendly reforms in exchange for grants, Wolfowitz said, quoting British Prime Minister Tony Blair's quip that he expects “a deal for a deal.”
Wolfowitz said African leaders need to improve the convenience and cost of starting a business. Wolfowitz said it typically takes 64 days to launch a company in Africa and only 2 days in Australia. He said it costs twice as much to pay for a business license in most African countries as it costs in Australia.
If business innovation is prohibitively costly, people tend to work outside of a country’s formal economy, which makes it hard for them to export goods or for their governments to gain tax revenue, Wolfowitz said.
The World Bank publishes Doing Business reports on 155 economies, including 37 from Africa, in which rankings are given to countries for their business-friendly laws. Wolfowitz said much can be accomplished just by putting the facts in front of government leaders and bureaucrats. For instance, he said that, since Burkina Faso’s president read the Doing Business chapter on his country, he has made it easier to register a business there. Wolfowitz met a Burkina entrepreneur who started a cell phone company that signed a million customers in less than five years.
In Rwanda, where conflict resulted in nearly a million people slaughtered in 1994, Wolfowitz said, there is now a government investing in its people and changing rules to encourage start-up businesses. He met a U.S. businesswoman there who started a flower farm that exports to Europe. She told him she grows “beautiful flowers on the ashes of genocide,” Wolfowitz said.
Wolfowitz also pointed to the election in Liberia of Ellen Johnson Sirleaf, a woman running on a platform to end corruption. “Monrovia [Liberia’s capital] last week got water and electricity for the first time in 15 years,” Wolfowitz said.
When a country improves the quality of its governance, Wolfowitz said, the per capita income of the people triples over time. “Africans are taking politics seriously,” he said.
The World Bank’s Doing Business reports are available on its Web site.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)