Robert B. Zoellick, World Bank Group President
October 26, 2011
MR. ZOELLICK: These programs are called conditional cash transfer programs. They actually started in Mexico and Brazil, but we’ve worked with countries to customize them now for their local circumstance and we have them working in about 40 countries. And as you can see, they're very important because they help give some modest amounts of cash or support to the poorest families in the neighborhood. But they also are connected to improving those families for the future, so people need to send the children to schools; they need to get health checkups. So the idea is to try to connect it to the possibilities of future opportunity.
So, the program in the Philippines, as you know, began I think around 2008. It's grown quite quickly, so one of the issues when a program grows is you have to make sure that it works right. I was talking about that with the Secretary and I think now it's about four to six million children that are covered under this program. And she told me it really runs all throughout the Philippines.
There's a second aspect that the Philippines has put in that I wanted to learn more about, which is that we worked with the Government to have a careful targeting- so we need to make sure it goes to those most in need. Once the Government has that register, then they can build other social programs based on that. So the idea is that it's more efficient if you have a foundation that you can build on, whether it be other education or schooling programs or health.
As you probably know, it's also connected to the idea of trying to help people get their own earning through jobs, so there are some jobs that are connected with construction work, some with agriculture. That obviously needs to continue to grow so that families can have their own basis of support.
But one of the things we've tried to do is encourage countries to have basic safety net programs like this, because given what's going on in the international economy, you never know whether there could be more difficult times ahead. And many of these programs came out of the experience of the East Asian crisis in the late '90s, where when there was a big downturn, the people at the bottom had no protection.
So we've tried to urge governments that they have basic safety net programs, but also you have to do it efficiently, because if you put lots of money into it, you can support it and keep it going.
So the key is to try to get the support to the right people in the right way at the right time. So all of that is trying to combine some modern methods of targeting and computer-based systems with knowledge of the community.
And so I wanted to come and see this program - I've seen them in Mexico and other different places - and try to get a sense of - again ask some of the people in it - what they would like more. And I asked the women here and also the women in the other location what they would like that we could do to most improve it. And what they all said was they hope it can be continued, so that they can get their children through school. But that's a very good sign because they have a sense that they want their children to get better education and get better jobs for them.
So my visit here to the Philippines is to try to look at a number of issues. The President's focus on good governance and improving the governance and fighting corruption, who steals from the poor, programs to try to help overcome poverty, like this one. Also very important is the growth for the future - so some of the infrastructure and other issues to create better jobs, but also we're doing a lot with the Philippines and others on natural disasters.
So just this morning I got an e-mail about the type of loan we've given to the Philippines is being used in Central America, because they've had some terrible storms, and it allows quick disbursement of the funds. We've approved such a program for the Philippines as well.
So tomorrow I'll have a chance to get to talk to the President and the economic team, business groups, civil society groups and also this afternoon I am going to go over to Bataan because it's such a meaningful part of the Philippine-US heritage. On an earlier trip I visited Corregidor.
REPORT: I see. So you mentioned about the world economy. Later today there will be a meeting again by key European policymakers. There's doubt whether there will be measures being put in place that will advert, at least contain, the debt crisis. What are your thoughts on that?
MR. ZOELLICK: Well, I was with the European ministers at our annual meeting about a month ago, when I met President Aquino, came to speak at the Bank. Then I was in Germany and then France in the past couple of weeks. And my sense is that the leaders in Europe are now very focused and seized on the issue. So it doesn’t surprise me that things may slip a couple of days to try to deal with the issues.
I think that so far the markets have responded with a belief that they will take action. And so I know the Finance Minister's meeting was delayed, but these are complicated issues to work out.
So next week I will be in France for the G20 summit and certainly by then the European leaders will need to try to have their positions on the issues. But, you know, that’s just dealing with the immediate problems for the banks and the government debt and the problems of Greece.
And so over time we also need to have growth strategies. And that actually comes right back to one of the reasons that I wanted to come to the Philippines, is since August, many developing countries have been hurt by some of the wave effects of what came out of Europe; so their stock markets have gone down, their bond spreads have gone up; there's been issues with some of their exports. So even though the Philippines has been growing well, some of the exports have slowed.
And so we're in a global economy, that's one of the reasons why you need safety net programs.
And so, in a way it's an interesting connection with your question and being here, because the point is, when people think about all the things going on in European financial markets, they may not think as much about this 4P program, but actually this is how you protect people whatever the source of difficulty that occurs. So it actually shows the connectivity that we at the World Bank are trying to help with people at the poor end, as we're trying to help with the financial issues.
REPORT: Sir, can you comment on what do you think will be the effect of massive floods in Indonesia, in Thailand and other parts? Would this lead to a food crisis, [unclear] crisis?
MR. ZOELLICK: Yes, well first off, for the people who are suffering through these, it's obviously very terrible. I heard that even in downtown Manila you had the water rise and destroy things. And so first, one of the things the World Bank has been working on with countries is how to try to get early warning on natural calamities: how to lessen the damage. For example, how you build the structures, quick response, because we've seen in the tsunamis and other ways quick response saves lives and helps: and then reconstruction.
And about 90 per cent of the natural calamities in the world occur in the East Asian ring of fire. And so this is an area we're focusing on, particularly with Japan, where we're going to have our next annual meeting.
Now, as for the Thai situation, obviously people will be watching rice prices and the news appears to be for the Philippines that even though you had some losses with your own typhoons, I saw that the Secretary of Agriculture thought that the crop would be pretty good. The Philippines has some added stocks; some of the countries in the region have now bought from India because India has removed its export ban.
So it looks like prices have been edging up somewhat. But it's a situation we have to watch closely because when I met the women again I asked about food prices. They mentioned that food prices have been going up, but at least in Manila they've got the good fortune that they can switch from food to food. So if one day pork goes up, they get more fish. Or if fish goes up, then they get the vegetables, so you've got more variety here. But it's an area to watch.
REPORTER: How worrisome is it in terms of the impact on prices at this point?
MR. ZOELLICK: On rice?
REPORTER: Yes, Thailand being the biggest seller of rice.
MR. ZOELLICK: I think it's something to watch closely, but I think that rice as a market internationally is a tricky market, because only about seven per cent of the rice producers trade it. So as you recall, in 2008 it was a difficult failed rice tender in the Philippines. But I think in the case of the Philippines, the Government's been focusing on making sure that there are ample supplies. I will ask tomorrow, but I have no information to the contrary.
So I think in general we at the World Bank have been focusing on the G20 putting food first, making food a high priority in addition to the financial issues. I think that's a good thing to do because it's the most basic sustenance of life.
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