PROCEEDINGS

MS. ANSTEY: Welcome to the Development Committee press conference. You will have the communique. This press conference is not embargoed. Chairman Minister Tarrin will make some opening remarks.

MR. TARRIN: Ladies and gentlemen of the press, the first point to stress is that the Development Committee meetings took place on schedule, both last night and today. We started a little early this morning, so we have had a very full program, much of which is reflected in the communique to be distributed to you.

Let me highlight just a few points and then we can respond to your questions.

Please note at the end of the first paragraph which makes clear the importance that Ministers attached to the multilateral institutions as a powerful force for global progress, equity and stability.

Paragraph 2 through 4 focused on HIV AIDS. Please also note that the Development Committee is made up of finance and development ministers, and that we have all recognized that HIV AIDS is not only a very serious health problem, but a severe danger to the development progress itself.

I think this support indicates that this devastating disease will increasingly be given focus at the highest levels in governments around the world.

Paragraphs 4, 5 and 6 reflect our discussions on the development impact of trade, and the uneven way in which the benefits of expanding trade are shared. There was considerable commonality of views among Ministers on many issues. While the list of problems faced by Mr. Mike Moore is very long, he received considerable support from our group earlier today.

On HIPC, members note the progress achieved so far, but also equally realize that there is a great deal of additional work required, including issues of funding. The development of related poverty reduction strategies is moving along well, as set out in paragraph 9.

We had, in addition, a very interesting dinner discussion last night on how we could better address poverty issues. This is part of an informal, ongoing exploration on such subjects by the Ministers with the heads of the two institutions.

Ladies and gentlemen, I think the Development Committee did the job. Now let's take the questions.

MS. ANSTEY: Please wait for the microphones to come around.

QUESTION: Please, if you could tell us the challenge of having countries with pockets of poverty that are divided in two, like is the case in Mexico, where the north is very, very tied to the U.S. and the south is very, very tied to poor Central America, the challenge to increase the potential of sustained growth.

Thank you.

MR. TARRIN: Thank you. Jim, could you help me on that, please?

MR. WOLFENSOHN: This is a subject that we're finding not just in Mexico, your country, but in many, many countries, as we see a greater division between rich and poor. We are directing a very large part of our effort in countries with this division to the poor side of the agenda rather than the rich side of the agenda.

We had a very useful meeting just the day before yesterday with four groups of people who have come from community development activities in different parts of the world that were operated in. One of the keys, I believe, to our efforts in the poorer sectors in indigenous sectors of countries is to have a much more use of community development, where you actually work within the framework of the community and give them the responsibility and seek to build on their local knowledge and their experience.

So the problem is not unique to Mexico. It's a problem that we're dealing with extensively. If you take another country in your hemisphere--Brazil, for example, the majority of our work is now going into the northeast, where you have 43 million people and the greatest center of poverty in that country.

The wealthier areas can typically finance from the private sector or from other sources, so we have a very strong focus on poverty areas.

QUESTION: Darien Robinson from Dow Jones.

The Treasury Secretary of the United States this morning, in his address to the Development Committee, seemed to take an unusually glum turn of the record of development assistance during the past 50 years, and then he also pointed to a specific project at the Bank, the West China project, that he said had done no good for the image of aid.

How do you respond to the character and tone of the Treasury Secretary's comments to the Board?

MR. WOLFENSOHN: Well, I think last night the Treasury Secretary at dinner was talking I think rather positively about the developments that have resulted from interventions, not just by the Bank, but bilateral and bi-global institutions. I would not misquote him if I were to say that we have to look at the glass as half full, not half empty.

But I think all of us recognize--and I'm speaking for myself now--that the issue of poverty and development is not something that will uniquely solved by the Bank or by the Fund. It has to be done on a basis of a more comprehensive approach, bringing together all the players. That, in fact, is what we have been trying to do and what we, of course, talked about a lot at this meeting. With the noise outside the building, it was impossible not to consider very carefully the issues relating to the involvement of civil society, for example.

All of us recognize that to meet the challenges that are facing us, it's not just going to be the Bank. It's going to be the Bank plus other multilaterals and bilaterals and civil society and the private sector. So our attention was given really more to that than to doing a scorecard, so I took no exception to it. I thought the discussions were quite constructive.

QUESTION: Harry Dunfee from AP.

Could we talk more about the noise outside? I noticed in the Ministers' statements this morning that there was virtually no references to the protests. What impact did that have on your work.

MR. WOLFENSOHN: First of all, it was impossible not to be affected by it. Certainly it was unusual that we should have so many people in the building by 5:30 a.m. We decided to run it on European time as a prelude to Prague, so they could get used to it.

[Laughter.]

And in Prague it was already 11:30. So it was a good time to start.

But we did it because I think the thing we wanted more than anything else was to avoid a confrontation, particularly as it would send the wrong image of what we're doing with civil society. Broadly, we have built, I think, rather constructive relationships with nongovernmental organizations, and we're going to continue to do that. We're going to try and work with them.

We had some 60 organizations with us two days ago to talk about issues of poverty, issues of development in general. We had very good meetings on AIDS. I think you know we met today in the Development Committee on AIDS and on poverty and on trade, so these are all issues in which you need to have an input from civil society. So we're going to continue to do it.

But what we were listening to, or trying to listen to, was what is it they're saying. Well, one thing is very clear, that to some segments of the public we're not getting through. We thought they were "preaching to the choir" on some of the complaints they were making. We know that with other sectors of the public we're having a very constructive dialogue. So we were affected, and I personally was affected, by the fact that there were these demonstrations.

But without trying to rationalize it, I think some of the demonstrators at least were certainly not keen to talk to us this time but may never be keen to talk to us. Secondly, I think there is a general fear of institutions and globalization in the future which was being reflected, to which I suppose we have to play some part.

But I would like to feel it's not totally related to the work of the World Bank. In fact, my own judgment, of course, is that we're doing a pretty good job, and I'm sure that is the view of Jack Boorman in relation to the Fund, with whom we work so closely.

QUESTION: There is some disappointment of some of the NGOs about the progress on the HIPC Initiative. Could you give us your view on that?

MR. WOLFENSOHN: I would be glad to, and then I will also ask Jack to do it from the point of view of the Fund, because we do that jointly together.

I believe that the progress of the eligible countries is actually not bad at all. We have five countries that are through their decision point. We have another 15 or so countries that one could, on optimistic projections, deal with this year, but there is no certainty that we will.

What is more important is the response we're getting from the field and the support we got from our governors, from both the north and the south, that HIPC debt forgiveness should be associated with poverty reduction strategies, and that there's no point in have debt forgiveness until there is a strategy to employ the money in an effective and proper way for the use in poverty reduction efforts.

Those initiatives that we're taking we're getting good reports on. We did agree with the governors that we would have a joint committee with the Fund, which Stan Fischer and I announced earlier, that will report on a regular basis, country by country, on what is going on with the HIPCs. But I felt that at the end of the meeting there was a lot less concern than I think was being expressed outside.

But let me ask Jack Boorman from the Fund if he has any additional comment.

MR. BOORMAN: I think I have exactly the same sense. The tension that exists in this initiative should not be a surprise to anyone. Tension is the point that Jim Wolfensohn makes, that on the one hand everyone is anxious to get the relief to the countries, and make sure that relief is well used for poverty reduction programs, and there's a problem in making sure that the time frame of these two things don't get snarled up with each other.

You want the policies in place; you want the programs to carry assurances that the poverty reduction is really going to be the result of this kind of effort.

There has been a change, at least that I detect, in talking to NGOs and other organizations. There used to be a sense that we should provide the debt relief, do it as fast as possible, and yield, if you want, on the policy side.

I see a change. I see everyone really buying into the idea now that you want to make sure the resources really do get directed, and it takes policies to be able to do that.

QUESTION: As you might know, there will be a summit talk between the two Koreas in June, and by taking reconcile steps toward the outside. North Korea is seeking international support to help its devastated economy. It means the North Korean party will come to you, Mr. Wolfensohn, and ask for some help.

So what would be the condition for North Korea, one of the most isolated and purist country in the world, to be the beneficiary of the World Bank program in the future?

MR. WOLFENSOHN: Obviously we have been very much aware of the devastation in North Korea and have, in the past, tried to explore it, and also have had discussions with the authorities in South Korea about what might happen.

I can't predict what conditions we would put on it. I can say that if South Korea and North Korea come together and suggest that we take good look at that subject, and then take action subject to the rules of the Bank and the Fund, it would be our very strong disposition to jump in. But we have to see what the politics are and what the framework is in which we're being invited.

QUESTION: I want to know more about the international financial architecture underway, that the Committee decided to push up the prevention of a financial crisis, because I think it's the most worrisome thing in the developing countries because of the lumping of the markets.

MR. WOLFENSOHN: Let me ask Jack Boorman to start that, since we work in partnership with him on crises. They're in the lead on the crisis management. Then I would be glad to add something.

Jack?

MR. BOORMAN: Right after the Asian crisis, as early as the spring of '98 and the summer of '98, lessons began to be drawn from the crisis, about both elements of the international financial system and, at least as importantly, the ways in which countries have been running their economies, and questioning vulnerabilities that can come from either side in the global system or individual country systems.

We have been doing, as Jim says, with the Bank and with other organizations, a vast amount of work. The first phase of that was a lot of these initiatives you heard about, transparency and standards and strengthening financial systems. Over the course of the last year or so, they have been translated into operations in the two institutions.

We have a joint program going to do assessments of financial sectors in countries, because part of the problem that was all too evident in the Mexican crisis, but particularly in the Asian crisis and the Russian crisis, was the weakness of financial systems. So we are going in and helping countries to strengthen those systems to make sure that there are regulatory provisions, supervisory agencies, institutions, basically strong enough to permit those countries and their financial systems to interface with the global markets.

Under the context of IMF surveillance, which you know we do with all countries on an ongoing basis, we are giving a lot more attention to the vulnerabilities that countries face, whether it's in the management of their reserves, the management of their debt, and the medium-term debt exposure that they take on, all these institutional questions such as in the financial system. So we have moved I think relatively rapidly, and now I think productively, from this atmosphere of initiatives to operations, and we're integrating those operations into the work of the two institutions.

QUESTION: Joe Kahn with the New York Times.

One question for Mr. Tarrin and one for Mr. Wolfensohn, if I may.

Mr. Tarrin, in the trade and development section there is some mention of the importance of trade to developing countries as a development initiative. During this meeting, were there any specific proposals raised by developing countries to have more trade access to rich country markets, and if so, what became of those proposals? Is there any sense of frustration on the part of developing countries that there isn't more progress on that issue?

And, Mr. Wolfensohn, would you talk a little bit about the division of responsibilities between the World Bank and the IMF in terms of structural adjustment and crisis lending?

MR. TARRIN: Yes. From the point of view of developing countries, Mr. Kahn, there was--even though there was no real specific proposal from developing countries, but the concept was there that the international trade system should favor reduction of poverty and assist in development, and, therefore, the second part pertains to the developing countries, yes, we managed to put in language of duty-free, quota-free imports of major markets. And this morning in my Chairman's statement I did mention agricultural commodities.

MR. WOLFENSOHN: On the issue of the division of labor, it's very clear that the Fund's primary area of responsibility is in the macroeconomic sphere and in surveillance and also in the area of crisis management. We work very closely together on the issues of the macroeconomic framework which impact growth, and we particularly work on those areas that deal with poverty and that deal with the issues of development in the longer-term physical and structural sense, so that in the context of infrastructure and the context of structural reform, be it of the judicial system or legal system or governance, we tend to take much more of that responsibility.

What we try and do in terms of setting forth objectives with countries now is, as you know, to work with the countries themselves to establish an agreed framework of economic and social development. And so as we go more closely with the countries, our structural adjustment programs tend to be built around an agreed program with the country that is closely integrated with the activities of the Fund. And what we find is that in quite a number of areas we overlap and we work together, but the general distinction is the one that I described--macroeconomic, surveillance, crisis management, the Fund; development, some structural reform, poverty, with us--although both of us now are linked with the new Poverty Reduction Strategy Paper, which affects the poorest countries, in which we are jointly establishing under the leadership of the country the program where the central element is poverty and development.

So it's a coming together in the case of 30-odd countries where we are working together in a very public way.

MS. ANSTEY: Can we go to the third row?

QUESTION: A question for Mr. Tarrin. You talked about the language that you got into the communique about duty-free access for developing countries. Can you talk--to follow up on that, what significance do you think that has for your case pushing tariff- and duty-free access? And do you think pressure is building on the U.S. to come into more of your point of view? And I guess if Mr. Wolfensohn can comment on that, too, that would be great.

MR. TARRIN: Okay. I think the initiative of the new round will probably center upon this concept which was called by the Ministers today. That I believe to be really the push behind the Ministers's agreement.

MR. WOLFENSOHN: Speaking as the World Bank and not as a voter--and an American citizen--the strong belief of the Bank is now and has been that it is a crucial aspect of development to give access to markets, and that it makes absolutely no sense to seek to bring about the development of developing countries to allow them to build their capacities and their production of goods and services, and then deny them a market in which they could sell it, it just makes no sense.

And so we have always said this, Michel Camdessus and I have both said it, I think last time, and I surely have not changed my opinion. As to the politics, you better ask some others.

MS. ANSTEY: The gentleman at the back there.

QUESTION: Paulo Soltero (ph) from O Estado de Sao Paulo, Brazil. A question for both Mr. Tarrin and Mr. Wolfensohn. Was there any discussion about an idea of differentiating interest rates for World Bank loans for middle-income countries, along the lines that the Secretary of the Treasury proposed recently in a speech in New York? If there was no discussion about that, I wanted still to know what is your opinion, both Mr. Tarrin and Mr. Wolfensohn, about this idea.

MR. TARRIN: Let me give you the factual account. No, we did not discuss this subject at all. But as far as the Bank's policy and maybe shareholders' recommendation, if I may ask Jim to respond to your question.

MR. WOLFENSOHN: Well, I'd say there are two points of view. There's the lenders and the borrowers. And I think this is something which I would not prejudge the resolution of the discussion. The Secretary of the Treasury has made the discussion--this suggestion, and my guess is that it will be on the table for discussion. And as an employee of the organization, I would not care to comment on what my owners are going to decide.

MR. TARRIN: As you know, in the case of Thailand, we are borrowing. So you know where our support will be.

QUESTION: (?) Magazine. Mr. Wolfensohn, Mr. Tarrin, and Mr. Boorman, it seems to me that you have two protests: one here in Washington and another in Havana. The G-77, why is it that they have to go to Havana to criticize so severely the World Bank and the IMF when supposedly they are part of the internal working of the World Bank and the IMF? Is it that these institutions are merely instruments of Europe and the United States?

MR. WOLFENSOHN: I'd be glad to start on that because I got a call from President Obasanjo to tell me how much he loved me--

[Laughter.]

MR. WOLFENSOHN: --and that he was going to send me a love note and that how grateful he was for everything that we're doing in his country. And then I took a look at the resolutions.

I think that there's no reason for the G-77 to do that from Havana. I don't think there's any significance in that, nor is there any inability of the countries to speak with us here on--you know, here in Washington. Indeed, they do it all the time.

As to why they decided to have the resolutions that they did, I really cannot say. I, of course, will be taking it up directly with the G-77 to find out what's on their minds.

MR. TARRIN: Let me amplify that a little bit. I think many Ministers during the course of our discussion were extremely sensitive to the opinions or the expressions of what has been going on for the last two days here in Washington.

The crux of the issue, if I may be able to estimate, would be the fact that there has been globalization. The deep question is whether globalization has brought about even prosperity. And there's a lot, of course, spillover effects, a lot of issues of concern. So we talked a lot throughout the course of our two days about development strategies, either aid, trade, free economy, development of human resources, or moving into the new knowledge economy.

So a lot of these issues were discussed, and I just want to leave you with the impression that we were very sensitive to all these questions, and a lot of issues were explored.

Thank you.

MR. BOORMAN: I would add to that perhaps that in terms of a voice in the institutions, the G-24 Ministers met on Saturday representing the developing countries. You have a communique from them. You will see differences of view expressed in there on some of the issues that are in discussion in the IMF and in the Bank.

The Chairman of the G-24, in fact, reported those conclusions both to the Development Committee and to the IMFC. So the voice is there, it was heard, and the issues that they raised, in fact, were part of the discussion.

MS. ANSTEY: Yes, the gentleman standing at the back there.

QUESTION: Barry Wood, Voice of America. Mr. Wolfensohn, on debt relief, these new papers and the insistence that the savings be used for poverty reduction take you so deep into the finances of each individual country. I want to ask you about Uganda because they're due to get another $1 billion of relief under HIPC, and yet money being fungible, should the President of Uganda have an executive jet airplane? And how does one deal with these kinds of issues, specifically with Uganda but more generally?

MR. WOLFENSOHN: I think on the general question, first of all, money is fungible, but one of the things that you can assure yourself of, at the time of these Poverty Reduction Strategy Papers, is that you get a comprehensive view in the country of what it is they're going to do. And although you don't identify dollar for dollar the money that comes from HIPC savings, you can at least have the discussions that allow you to look at whether there can be increases in education or in health or in poverty-driven activities that affect the countries.

What we've discovered already in the course of these Poverty Reduction Strategy Paper programs is that the element of consultation with the community and with civil society, which is an element in these papers, is a novelty for some of the governments but very important in terms of getting not us monitoring what's going on in the country, but the citizens of the country through both their elected officials and through their public dialogue.

So I would have to say to you that I think these PRSPs are a very, very effective democratic instrument, and in the end it's the people that can decide, but it's giving us a chance to put our two cents in about the social and other aspects of budgetary policy.

Now, with the issue of the President's jet in Uganda, I don't know that it was a good time for that to happen to be announced, but, in fact, it had gone through all the parliamentary processes, and it had been transparent. This was a subject that had been debated in Uganda, and both for security and because every other President in Africa needs a plane to get around, they made the decision in the Ugandan parliament that the President should have an aircraft, which is not unusual. And it came through, I think, at a pretty inappropriate time, gave a chance to say all the money, look where it's going, to an executive jet. But, in fact, in the scheme of things, he had a jet before which wasn't working, and so they traded it in and they got another secondhand jet.

So I think this is now being reviewed. We're taking a separate look at it to make sure that it does not breach anything. But it was done publicly, and it was done through the parliament, and it was done through the public system. And I don't think we should make a big thing about it.

MS. ANSTEY: Yes, the woman there in the fourth row on the left. Right there, in the red blouse, yes.

QUESTION: Thank you. Mr. Wolfensohn and Mr. Boorman, in view of the emphasis which is given on the division of labor between the World Bank and the IMF, is there a decision that future involvement of the World Bank in emergency loans, like, for instance, Korea, will not take place again? Or do we go on as usual?

MR. WOLFENSOHN: Let me ask Mr. Boorman, because then I'll know.

[Laughter.]

MR. BOORMAN: I'm not going to use the opportunity to tell Mr. Wolfensohn how to deal with the business of the World Bank. You know that there is a large debate going on outside on the basis of, I guess it's any number of reports now that have been put out about the role of the Fund in crisis operations. There are some of these reports that would limit the Fund to that kind of lending. I don't think myself that that is going to be the outcome of the discussion. Certainly that is not the sentiment within the institutions in the Board of the Fund at this stage.

There is an aspect of that question which is under intense debate, and that is the question of private sector involvement, because the question of what our role should be either moving towards a lender of last resort or simply the question of whether we should provide large packages of official financing to countries in crisis is tied up with that question.

You will have seen in the last months there have been cases now where we have successfully involved the private sector in difficult situations. We are formulating a framework to do that a little bit more confidently and to more confidently provide to the private markets indications of what they can expect to see along those lines in crisis situations.

So I see the argument more framed in that context as far as the IMF is concerned.

MR. WOLFENSOHN: As the Bank and the Fund, obviously we would prefer to carry on our normal business without having huge disruptions in the lending program. But I think the first thing that you need to recognize is that in the middle of a crisis, you probably have to look at just how big the crisis is and find out where the resources are likely to be in order to save your client countries.

Our predisposition is not to have crisis lending unless it's done within the context of a World Bank program that we can get together. We don't think that's our function. And it would be our hope that more of that should rest with the Fund and less of it with us. But I can't make promises for future crises until we see them. Certainly our predisposition is to keep our lending for longer term and not have such dramatic shifts in the volume of lending.

We will have a very low level of lending this year, which is because we got indigestion and our clients got indigestion last year and the year before when we had a huge increase in the lending, and that disrupts the way in which we operate and obviously puts stresses on the organization, and obviously stresses on our clients because they absorb some of this very large volume of lending, and then there's a period of adjustment.

So we'd prefer a more even pattern, but I don't think we could be doctrinaire about it until we see what sort of crisis comes up.

MS. ANSTEY: The gentleman in the front row.

QUESTION: Fred Donovan with Telecom Reports. I have a question for Mr. Wolfensohn. In your note to the Development Committee, you identified the closing of the global digital divide as a priority for the Bank. Could you give more specifics on what programs you're planning to accomplish that? And, also, do you see a conflict between your view of access to information as a public good and your support of privatization of the infrastructure?

MR. WOLFENSOHN: Well, I think to finish on the last thing, when we talk about privatization of infrastructure, we're trying to get competition in infrastructure which will, in fact, broaden public access, not diminish public access. When you have a single provider which is a government, you tend to have single public access and higher costs than you do when you have private and multiple public access. So there is no conflict between the second part and what I'm going to tell you now, which basically is that we see the digital divide as being one of the most central aspects of what we're doing in the years to come.

We have passed through the industrial to the digital revolution, and in country after country in which we're dealing, the question of information flow and use of technology is becoming central. It's a bit like globalization. The fact that you have got a digital revolution is not something you can turn back. The only question is when and how quickly can you adapt to it and use it.

And so what we are trying to do is to introduce programs of knowledge transfer, of connectivity, of distance learning, and what we are setting up is a global gateway for knowledge that conceivably in years hence will allow for transmission of knowledge, information, and gathering of knowledge and information right at the local level. And we already have many examples of it.

So this is a subject for a long speech, not an answer at a press conference, but suffice it to say that for us it is here and it is with us, and our objective is to ensure that the so-called digital divide does not make larger the difference between rich and poor but that it, in fact, creates an opportunity to give poor people a better chance to access of knowledge and jobs.

MS. ANSTEY: Yes, the front row right here.

QUESTION: Ed Crooks (ph) from the Financial Times. You said, Mr. Wolfensohn, that you were affected by the protesters outside. To what extent do you think it's actually going to be possible to deal with some of their concerns?

MR. WOLFENSOHN: Well, the reason that I was affected--which is a strange word to use but it's good English, doesn't fully describe how an Australian might describe it--I was affected by it was because I think we're doing already the things that they were complaining about. And what I couldn't understand is why you would have a group of people, most--many of whom, not all, many of whom had very limited knowledge about what we were doing, complaining to us about our activities in poverty alleviation, in effectiveness--we had today AIDS activists in town--and try and stop a meeting the central component of which was to deal with AIDS, poverty, aid, and development.

And in terms of reaching out, we are the organization that has reached out enormously in the last five years, both ourselves and through our suggestions to our client countries, to embrace civil society in the decisionmaking process. So when I say I was affected, it was because I work with 10,000 colleagues who get up every day thinking that we were doing exactly what we were being criticized for. And so it affected me, it affected everybody in the building, and we were a bit nonplussed, to be honest with you.

But I would go with the description that Chairman Tarrin gave, which is I think it's a reflection of uncertainty about globalization, about a lack of belief in institutions generally, about a feeling of exclusion, and you have to listen to that and see how we can do better. It's certainly not going to make us close the door. We're going to try and see how we can reach and build on the relationships we already have.

I'm not saying that we're right. We're listening and we're trying to--but I was nonplussed by the criticisms.

MS. ANSTEY: Yes, right at the back there.

QUESTION: You had a long discussion about HIV and AIDS, but did you agree on anything concrete and new to do about it? In particular, is there any new money for programs?

MR. WOLFENSOHN: I have said to the Ministers today, and I believe got their endorsement, that for efforts to finance AIDS, there will be no limit on the funding that we get from the Bank. I have said to our African clients, if you have programs, we'll fund them, and in most cases they can be done on IDA terms.

We regard it, with 23 million cases in Africa, and at least 10 million orphans, and the problems of treatment and the problems of prevention, there is a need for a large amount of money. We are prepared to fund a very good part of it and to make sure that no sensible program is stopped through lack of money. We will either provide it ourselves or help them raise it. So we have gone on the line, absolutely clearly, to our client countries that we will fund the AIDS issue.

But the AIDS issue goes beyond just the provision of either retroviral drugs for treatment or for preventive measures that are used, and for the education. They go to issues of culture, they go to issues of the existence of a medical system and a health system that can deliver treatment, so that the whole health dynamic becomes part of it.

What I hope it's doing is allowing us to discuss more with governments the whole issue of health care, of which AIDS is a part. But I just made very clear that money is not going to be the problem.

QUESTION: This is a question for Mr. Tarrin.

There are some protesters out there who are here from Southeast Asia who are concerned that the policies of the IMF, restructuring policies and so forth, have hurt Southeast Asia, particularly after the financial crisis.

Could you comment on that and what role you see the institutions having to thwart another crisis?

MR. TARRIN: Sure, I would be glad to do that.

I think when the crisis hit Asian countries, starting with my country, we really had to manage the crisis situation on basically how to reconstitute our financial system and replenish the international reserve. There came the need for IMF presence.

Obviously, when the IMF came in, after a while analysts, or even people, began to talk about conditionalities. There was a lot of debate about conditionalities of the IMF program for Thailand. Eventually there was a report actually submitted to the IMF Board itself, prepared by the Board, it's own commissioning, that there was some policy difference that should have been pursued, which might have been better off. That fact is well recognized.

But notwithstanding this fact, I think it was necessary that we had to have IMF presence in these countries. Also to mention the additional help from the Bank, and also the regional bank, ADB.

[Inaudible question.]

MR. TARRIN: It is very much on our own now. I was in Korea last week and we had an APEC seminar on how to prevent the crisis from recurring. Eventually, I think we got down to a very simple conclusion: better macroeconomic policies and strong financial system, essentially that. Those would be the two areas on how to best prevent future crises.

MS. ANSTEY: I think we have time for two more questions.

QUESTION: The 33 million people who are infected with HIV or who have AIDS in Africa, some of whom are badly in need of medicine, which the countries obviously cannot afford--South Africa was lucky because a U.S. based pharmaceutical company decided to give them the drugs, after heavy lobbying by AIDS activists. How much of that one billion dollars that the Bank has committed to HIV is committed to getting drugs, and how far is the Bank willing to go to engage the pharmaceutical companies into making these drugs available to some of these countries who clearly cannot afford to buy them?

MR. WOLFENSOHN: I have had many discussions with both the vaccine manufacturers on the prevention side and with the drug manufacturers on retrovirals, to try and see what can be done to bridge the obvious gap in terms of treatment.

The cost of the so-called "cocktail" in this country runs about $10,000 a year, where the average cost in some countries we're speaking about is $10 a year in terms of health costs. So I believe that, first of all, the drug manufacturers are quite likely to come up with some proposals that would permit a much lower cost funding, or maybe no cost, as in the case of the company that has already indicated what it will do in South Africa. So that the financial constraint is likely to be much less. Certainly we are prepared to have some money used for that.

But I think the real question which I have become aware of is that, even if the drugs are free, the issue of administration of the drugs and distribution of the drugs is an enormous problem in Africa. You have 23 million cases and you don't have a health care system which is able to give the delivery, and in the case of many of the drugs, they are administered three times a day--they no longer need refrigeration, which they did at one point--but three times a day with meals, which doesn't fit very easily some of the conditions in Africa. So I think the whole question of delivery is going to be the biggest problem in the end.

I think at the moment cost is surely a big inhibitor, and we are trying to get over that. But I think we will probably be able to bridge a lot of that in the coming months. Then the question will be delivery. I think that will be a serious question.

QUESTION: I have a question for Mr. Wolfensohn.

As you know, Turkey is implementing very important structural reforms. Also, you talked to the Turkish officials yesterday, or the day before. I just need your opinion on what is happening in the Turkish economy. What's your opinion exactly?

MR. WOLFENSOHN: I will be able to answer that question better in two weeks time, because I'm coming to Turkey. Most of my discussions were about where I was going and what I was going to do, so if you would come to Istanbul in two weeks time, I will be glad to answer that question.

MS. ANSTEY: Thank you, ladies and gentlemen. Thank you very much.

[The press conference concluded at 3:23 p.m.]

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