After the World Bank Press Briefing - Habitat II, Istanbul
Q. Once everything is developed, what will you have in place? is there a master plan?
What is the end-result?
A. There is no end-result the human species will continue on earth. This will require to adopt sustainability to make sure we don't destroy the global eco-system or the regional eco- system on which we depend and this requires changing the patterns of consumption and production in many parts of the world.
Q. how do you change it in the US?
A. It is happening in many parts of the world...what we need to do is to build consensus about where the changes are needed. Primary success is the Montreal Protocol which deals with the ozone layer....that is an example, alerting to the seriousness of certain activities leads to a change in production pattern. The phase out of lead in the US are expressions of these changes. Some would like the changes to go faster than they are going on and the only way to do that is to express to the public the real costs associated...
Q. How do you determine cost?
A. There is mechanism that is put in place which is the Montreal Mechanism...commitments made by a number of countries and it is being executed...we have the Global Environmental Facility...so we have mechanisms in place. But it can be done. It requires a commitment by various people and these conferences because they help create a common understanding and shared vision between the people's of the world, and not just the governments who are negotiating with each other, but the private sector, the foundations, the NGO's scientists, engineers, the Academies of Engineering and Academies of Science are here helping to negotiate to committee 2. That global consensus that emerges helps facilitate the task later on of negotiating activities putting in place mechanism, projects that remove ozone depleting substances, reduce greenhouse gas emissions, that improve efficiencies in utilization of water or of energy....this is what it is all about. It ends in a much more responsible way of utilizing our resources and that is what sustainable development is all about.
Q. Do you expect the world government will be interacting directly with cities or states because in Maryland the Governor just signed an accord with the WHO. Are you expecting agreements to be signed directly with cities in the US to implement sustainable development? The US has fewer problems than other counties and how it plays out in the US
A. US is rich industrialized country and has a different set of problems than other countries--poverty, inner city homlessness, children born in great hunger--the American people need to come to consensus to solve it. You have state local government. In most countries they go directly to the country. We are looking for not individual agreements but a consensus on the principles which come together around our shared vision and collective humanity. We cannot accept I think that our concerns for topers stops when we cross an invisible line which we call political frontier. We are all citizens of planet earth and we cannot foresee a situation where the richest 20% are getting 84% of the world's income and the bottom 20% are getting 1.4%. This gap has been growing and is growing further...these gaps are growing around the world. We are not saying transfer all the income but we must adopt processes which enable the local people to pull themselves up by the bootstraps. It's been done and there are institutions...In Habitat, let us recognize these success stories and make these Best Practices around the world and we and others should facilitate that request. The mayors met in a separate forum and are saying "we are the ones on the front lines and we would like to have a greater say in the crafting of these policies." That is something for them to work out in each country between national and local governments...in some countries like US, there is state government in between.
Q. NGO's and funding for UN many people expressed concern that this is the last big meeting of the century and progress for the NGO's what about funding to promote Habitat . You commented that you give grants out to NGOs.
A. The bank is fundamentally an inter-governmental organization--the members are national governments, members of the world bank and the bank is there to provide loans to them. By statute we cannot lend from the World Bank except with a Central Government Guarantee. Our governor is usually the Minister of Finance in every country. They have to sign off. They can pass it on to a municipality or rural district, that exists. It has to be signed off by the Governor.
With regard to the NGO's we have tried to take some of our income and give it as a grant. It is a small amount. We have only done this with micro-finance...Grameen Bank, Accion, ......did not transcribe.
Now trying to--Bangladesh for $100M which we hope the government will pass on through an agency which has been set up to 30 or 40 NGOs in Bangladesh and they pass it on.
Q. How does World Bank affect the regional development banks lending to NGOs? What is the connection?
A. Regional banks are independent institutions and coordinate with them, co-finance with them. Each has to be responsible for its statutes and governing board That is the way it works. There are certain things they are allowed to do which we cannot do. The European Bank is the only bank which has a formal statement about free market and multi-party government systems. It is now doing more of the investment banking role than the development banking role, that is fine. We have IFC which deals with private sector financing without government guarantees and we co-finance with the European Bank as well.
Q. Do you see a leveling action where the economies are beginning to be restricted at the same time the economies of the developing world are being restricted as far as growth is concerned so that a leveling action takes place. The economies of developing worlds are being restricted, industry is being transferred from beyond the country, the people on the corner in the minority areas are men who can't get jobs because no industries to build skills because they have been transferred out and at the same time the 3rd world called for sustained economic growth and receiving a cold shoulder.....
A. The economy of the world, the global economy is becoming much more integrated than it was before. Trade is freer and larger and capital flows are unrestricted, foreign direct investment going to various countries. Seven years ago, the ODA was 3 times as large as foreign private sector flows to developing countries, now private sector flows are 3-4 times as high, only concentrated in 20 countries or so. Nobody is restricting anybody...there are restrictions that occur and the dynamism in the private sector is moving fast. What is needed is for governments and nations to recognize these realities and to think in terms of "reinventing the future" . The traditional roles of almost everything we know is changing before our eyes. We are witnessing a dramatic and wrenching revolution. The state, the traditional view of the nation, the central government, has become both too big to deal with its individual citizens has human beings, people feel alienated, distant, ineffective and unresponsive. It is too little, to impact on world markets and prices, etc. Even the major industrial powers like Japan and the US have difficulty impacting world prices and commodities much less a smaller country . Whereas 30 years ago, it was going to be the willful exercise force a pace of modernization and create a vision of the future . It must now rethink that role. The state has to be enabler, as regulator, as guarantor of a social safety net that comes as a compliment to what is happening in the markets. The ruthless inefficiency of the market has to be tempered by a nurturing state...both on the environmental and social side. The responsibility is "how does one create an enabling environment?"
We are witnessing within government--a totally new phenonomen--the UN is providing a forum where at different points in time people come together to share, debate, disagree/agree and at the end generate a series of steps that have cast a common agenda for the next millennium. That is what has happened in all these conferences from Rio.
Q. Do you think it is representative? People in Belgium have no idea as to what is going on at the UN. They are surprised when I go back. It is not democratic debate. Decision and rules are being redefined.
A. None of these decisions are binding on any nation. they remain sovereign. these are not agreements that have been signed by member states...take official development assistant target....
A. The World Bank is a cooperative of the governments of the world. The world Bank does not impose anything. One of the things people look to the world Bank for is "What has worked well elsewhere?" I tell them--Japan has done this, US has does this. One of our jobs is to cross-fertilize the world. Non-lending is to answer these questions. Ultimately they are sovereign countries, they have to make their own decisions.
Q. Many questions say they are held in deep debt by the former loans and they are no longer sovereign....
A. That is not true. They sit on the IMF/World Bank. Not one of them wish to walk away. The present of the World Bank/IMF has simplified their problems...what has happened there is a notion that somehow that if you had not had SAP things would have been great.....did not finish...
Most of the developing countries are looking towards the World Bank for financing. When they came for help that one of the things is that you have reached is to reduce expenditures
If you look at it by nations as corporation and the conglomerate is the Earth. Most nations in fact look only at flow statistics . the only country I know that looks at stocks statistics is Norway. Everything we look at is flows. GDP/GNP, exchange rate valuations--all flow statistics--from year to year. What we are saying is that no corporation would look to manage its affairs only by cash flows and income statement. It would be interested to know its balance sheet, its capital account, renewal of such assets and look at the wealth of the corporation.
Nations needs a balance sheet in my judgement and Maurice Strong's judgement. the world Bank published a report on sustainability on wealth of nations which is a "back of the envelope" type of first draft in terms of estimating wealth in terms of produced assets which is the man-made type of wealth that everyone focuses on such as roads, equipment, buildings, furniture and so on. The natural capital which we conclude as land water, minerals, trees and so on. We looked at human capital in terms of education, health, nutrition and social capital which is the glue that holds the society together. In our first cut we did not separate social capital but lumped them tougher. We said this is our first cut to get the idea rolling. Everyone said it is too complicated it , it can't be done and we published it, 192 countries and for that 90 of those countries we did a 25 year horizon...the press focused on the ranking of countries---that was not the issue. Four issues:
Defining of sustainability as opportunity.. If you want an operational concept of sustainability. We want our future generations to have as many opportunities as we have had and more. The traditional definition of needs is "to meet the needs of the present but not the future." Needs is meaningful for poor countries who do not have access to water. What does needs mean to a family that already has two cars and three tvs? That family is consuming over 80% of the world's income. So the meeting of needs--doesn't do it. If you change to opportunity it gives you a handle on needs. Opportunity is defined in conventional economics as capital. What kind of capital? The four kinds I was talking about. It does make sense to draw down a barrel of oil from the ground and educate little girls and transform one kind of capital to another....
Also compliments. You cannot imagine any capital to zero....
2. When do all these calculations, the pattern is stunning. Produced assets account for less than 20% of wealth of the world. Everyone is focusing on better and better calculations. The BULK OF REAL WEALTH IS IN HUMAN SOCIAL CAPITAL WHICH THEREFORE IMPLIES THAT INVESTING IN EDUCATION, ETC. IS A VERY SOUND WAY TO PROCEED.
3. The conventional measures of just measuring flow account--s income accounts, without looking at the capital account , can mask some real differences so we need to have the second set of accounts as a compliment to it. Not just the greenling of the national income accounts, but also the introduction of the capital account, the stock. It is important to know how much forest you have, water how much you have, not just how much you use--which are known and measured.
We need the stock and capital as well as flow. Then we have Genuine Saving.
4. Genuine Savings is the difference between gross investment which taken as a ...(could not understand when you deplete from it the replacement cost of what is being used and the actual realization of natural resources, sometimes you can have a figure that looks positive but is negative. It sends to strong signals to policy makers. So people ask "why doesn't the World Bank force everyone to adopt right now?"
First because methodologies are not agreed globally, it is the electronic equivalent of back of the envelope but it has opened up the channel. We have received hundreds of communications from scholars from around the world and it has helped tremendously and we will have better accounts.
Q. What is difference between social capital and human capital, will you define that?
Human capital is that capital which is associated with a person, health education, nutrition--me--I walk around and it is tied to me... Social capital is the relationship between people that enables institutions to function--shared values, institutions that function--everything in society to function.
Q. How do you function?
A. That is very complex--it will take another 5-6 years before consensus emerges on social capital and the best researches in the world are involved. For Example: compare Somalia and Bosnia-- Bosnia far superior than life expectancy, education, health better than Somalia but both unraveled. The social capital holding society together unraveled. Lebanon and Liberia, they both unraveled, now Lebanon is coming together again. Social capital is not equal to human capital. Something different. Interaction between people--solidarity, shared values exists between them.
Density of social structure at local level--how many associations exist between people in a specific location--pts's Chamber of Commerce, choir societies, etc. This tends to be a very strong proxy to measure something with social capital.
He talked about lots of ideas on how to measure social capital and mentioned Prof. Dale Jerjuson- Richard Droes? USSR and degree to which adoption of elector systems, national level, creating an index....not consensual yet.
Q. Family Dependency Ratio - assets of elderly members and costs of younger members, the productive persons versus non-productive persons, would this be considered social capital?
A. The situation between the transfer payments between wager earners in the money economy and non-wage earners which is the definition of family dependency ratio. What looking at is how do deal with shifting democratic shift in many industrialized countries with aging population. The acceptability of solutions and the ease with which one can implement them is the degree to which social capital exists and we can function together. We don't know enough about that yet and there are a number of pilot studies going on. I take an agnostic view as to the best measure. Looking at the macro and micro scale, conflicts and solutions.
Q. Maurice Strong - when I asked for definition of family dependency ratio---said what he said.....
When look at greening, human capital, is this correct, what kind of value do you put on people who cannot produce-0-babies or elderly. To me it sounds as control...a good environmental or bad enviormental citizen.
A. I don't think you understood Maurice Strong or he did not understand you. We are not trying to say that people with large families are bad environmental citizens.
Q. It appears to be a measure of production and consumption...
A. Let me give you my definition. If you want to say sustainability is to give future generations as many opportunities as we have had or more, how do you measure it? If you take all forms of capital together, natural capital together, human capital as well as the produced assets like buildings, cash in the bank, equipment, furniture, cars, etc. what we are leaving our next generation is what we are leaving our future generation--more or less? It appears that we are leaving them by husbanding natural resources, by not depleting them by renewing them, if we are doing that as well as investing in non-resource intensive and non-polluting technologies, the higher will be the legacy for future generations. Beyond THAT you have within nations, capitals and cities, you have inequalities which have to be addressed and therefore, the issue of social capital becomes very important because the presence of the high level of social capital as opposed to human capital facilitates people addressing inequalities and we need to understand more. We sill don't understand how it works. We are still in an early stage. People remind me that you can't even define social capital right now--we are where we were in the 50's when we could not human capital. Before Gary Becker wrote about human capital, researchers were working on "what is the idea of human capital?" Now we have 35 years of investment in human capital and understand it much better. Social capital is just starting.
J: That is my whole point--where does this all lead when someone said, "don't get philosophical." I am trying to figure out the thought process--where does it lead?
A. It leads to a better understanding on how we interact with each other and the planet and a better way of measuring our actions on the planet, it leads to a much better way of assessing real costs, human-social and environmental of various technologies and processes than what we have now. It facilities a greater transparency which enables people to debate topics much more successfully.
Q. (Berit) When you look at two nations that really experiments with the idea of social capital who decided what is social capital and then set out to do social engineering in order to create a nation that demonstrates that prescribed social capital and that was the communist nations and Nazi Germany. They determined that there is a certain social idealogy --social that will create the kind of nations that they wanted. and they began to change....
A. That is exactly counter to the only if you want empirical tested definition of social capital which is the Putnam definition right now it has to be voluntary. What he was looking at in his studies and others is the number of voluntary associations in which people enter at the grass roots level and create a sense of community and willingness of solidarity between them. Now, we add to that in further debates in a session where I invited all of the top scholars to Washington to for discussions on this issue, we must insure that is not voluntary associations for mayhem like the Mafia...
Q. It is clear that a sense of community is preferred to no sense of community . it is cleared that a strong sense of SOLaDARITY helps them overcome obstacles and resolve them. The QUESTION IS DO WE KNOW ENOUGH ABOUT WHETHER THAT COUNTS AND IF SO, HOW TO PROMOTE IT. We DON'T KNOW ENOUGH ABOUT THAT YET. We are where we where about social issues.
We have a whole body of literature that has proven in economic terms the value of investment in educating girls. We are telling country after country that the best thing you can do is education your little girls. Where we are is at the beginning of a process. Human capital cannot be ignored. Today people are saying this idea of social SOLaDARITY, sense of community is important. Can we measure it? We don't know it? The Habitat Document is comprised of over 750 action items and is extremely complex. There are many controversial phrases in the document. While many delegates are still trying to define the meaning of "sustainable" and "Sustainable
There is great activity here at the Second UN Conference on Human Settlements. On the United Nations side you have not only statements of position being made in the daily morning and afternoon Plenary sessions, but there are two main Committees with several working groups who are literally hashing out each word of the bracketed language of the more than 750 action items. The bracketed items represent language which was not agreed upon in the three preparatory conferences held in 1995 and 1996 in preparation for this meeting. Still
Although the main themes of this conference are idealistic. The opening paragraph of the Preamble states:
"We recognize the imperative need to improve the quality of human settlements, which profoundly affects the daily lives and well-being of our peoples. There is a sense of great opportunity and hope that a new world can be built, in which economic development, social development and environmental protection as interdependent and mutually reinforcing components of sustainable development can be realized through solidarity and cooperation within and between countries through effective partnerships at all levels. International cooperation and universal solidarity, guided by the [purposes and] principles of the Charter of the United Nations, and in a spirit of partnership, are crucial in order to improve the quality of life of the peoples of the world." (emphasis added)
This whole document promises "that everyone can eat cake in their own home." There are very direct references throughout the document with regard to "transfer of wealth."
Still, after two days of discussions, world delegates still have many questions and confusion over the key word "sustainable" on which the whole document and future economic and environmental world infrastructure is and will be based on.
There are numerous all day conferences on "Global Unemployment," "Global Energy Needs," and "Global Water Needs." In every conference and press briefing, more UN agencies and commissions are present and numerous new projects and committees are revealed or to be set up.
There is a great deal of discussion with regard to the need for both the World Bank and the United Nations to get involved on the local, grass roots level--the city level--to consult and to finance various projects. There is also much emphasis on "countries de-centralizing power" and putting it in the hands of the local citizens, whom they will help. The United Nations is concerned about all aspects of life--they are very far from the original mandate to be the "guardians of world peace" as they are now the first line of help for consultation, development, finance and construction at the national, state and local levels....their tentacles are reaching down from the global level to the local level. It is as if they are setting up "cells" for eventual control.
As with all other conferences--Cairo, Copenhagen, the UN50 in New York, and Beijing the countries come and give a statement as to implementation of the UN agenda.
With regard to the world view of the World Bank and the United Nations Development Programme, the following are quotes from actual press briefings and questions and answer periods:
Questions to Mr. Ismail Serageldin, Vice President Environmentally Sustainable Development:
Question by JV: "Once everything is developed, what will you have in place? Is there a master plan? What is the end-result?"
Answer by Serageldin: "There is no end-result, the human species will continue on earth. This will require [them to] adopt sustainability to make sure we don't destroy the global eco-system or the regional eco-system on which we depend and this requires changing the patterns of consumption and production in many parts of the world." (Note: The US in particular) Emphasis added.
"The traditional roles of almost everything we know is changing before our eyes. W are witnessing a dramatic and wrenching revolution. The state, the traditional view of the nation, the central government, has become both too big to deal with its individual citizens....We are witnessing within government a totally new phenomena. The UN is providing a forum where at different points in time people come together to share, debate, disagree/agree and at the end, generate a series of steps that have cast a common agenda for the next millennium. This is what has happened in all these conferences from Rio."
In a press release issued by the World Bank entitled, "Cities are the World's Future--Urban Problems are Solvable," the World Bank estimates that it has invested $25 billion in more than 5,000 cities and towns since 1972 and over the next five years, they plan to invest an additional $15 billion in urban programs. The Bank is urging cities to put their financial houses in order by delivering the services that people want and are willing to pay for. The following are their recommendations:
United Nations Department of Programmes
UNDP has a budget of over $2B and operates in 137 country offices worldwide.
With regard to Habitat, according to UNDP Director, Andus Wijkeman, " "We
[the UN] must assume responsibility." (He emphasized this statement)
He went on to say, "Human Development should be the END for all our
activities." [emphasis added] He stated that the purpose of the UNDP
We will give specific focus on the new technologies to help the developing countries to have...
Poverty, what can we do? Our role is to try and give advice to governments on how to implement the Copenhagen Social Summit Agenda and how to develop strategies for reduction and eradication of poverty. We are working with more than 70 countries to try and assist them.
Also, to give local governments on how to run governments, that is how to de-centralize and bring about participation. We have two specific programs on-going, our urban management Program and our Life Program. The Urban Management program is running in 30 countries and the Life Program in 14 countries and we deal with environmental, governance issues, city finance, poverty and infrastructure. Capacity building, assisting particularly local governments to deal with these issues.
Lastly, another representative from UNDP, defined "transfer of wealth" to include: "AID, INCREASING PRIVATE RESOURCE FLOW AND TRADE SUCH AS GATT."
The mandate from the UN and Governments is to coordinate activities at the local level.
We have tried to assist governments, local authorities, NGO's and so on to prepare and give their inputs. We have done that in close cooperate
We have as an organization identified a few key areas where we should concentrate. We are a grant giving organization. Human development should be the END for all our activities. The purpose of growth is to improve people's life. Need to look at Structural growth and the quality of growth. To go from quantitative perspective to qualitative perspective. This is very important. If you look at cities today, they are growing...GDP worldwide is 60% and takes place in cities.
Cities are growing Habitat deals with the urban poor Environment.
Present policies in terms of growth are not sustainable We need an efficiency revolution--we must be more efficient in how we use energy, water and waste management. We have taken it upon ourself to try and promote ecologically sound technologies particularly in the city areas. We will do it through something we call "public-private partnerships" whereby we bring together private companies which have the technologies and the public agencies to try and work as a bridge builder and catalyst. We hope in the next 5-10 years to start at least 50 concrete projects in water, energy and waste management in different parts of the world, using them as examples and then building on them. We don't have the money to invest in those technologies but our role will be the catalyst.
Thirdly, we are very much involved in Capacity Building through Capacity 21 which involves environmental understanding and awareness. Shortly before or after Rio is when UNDP launched their activities.
To integrate environmental concern into everyday life, it requires a lot of de-learning and re-thinking. It is not something you have to do like that. Still today, many of my colleagues, I am an environmentalist, still have difficulties to fully integrate but we are moving. Specifically on water, we have spent a lot of money on water projects with the World Bank, private donors and local governments but also loans in the past.