Global Policy Forum

By Lisa Gonderinger

James Wolfensohn faces a frustrating paradox. He and his critics want the same thing. The street demonstrators who deplore the callousness of the global economy and the millionaire World Bank chief with modest Australian roots both seek an end to world poverty.

It's how they go about it that separates them -- and the often emotional divide runs deep. "I was giving a speech the other day in Aspen," the 66-year-old banker told The Prague Post from his Washington office, taking a break from 11th-hour preparations for the Bank's annual meetings, which open Sept. 26 in Prague.

"I had demonstrators outside complaining about poverty and complaining about equity and complaining about justice." At the same time, inside the conference hall, he was making a speech, he says, "about poverty and equity and justice." He sighs ruefully. "If they'd only listen to what I was saying. A lot of protesters don't have a clue what we're doing or what we're trying to do."

Wolfensohn sits at ground zero in an intensifying -- and for him, personal -- debate about the future of the planet's have-nots. At first glance, he is an unlikely champion. His net worth was once pegged at $100 million, (4 billion Kc) more than the entire amount the World Bank has loaned to such troubled West African nations as Chad and Cameroon. Not long ago, he flourished in the tough world of international investment banking, quietly building a small firm into a Wall Street powerhouse.

He travels in a private jet, celebrated a recent birthday with President Bill Clinton, golfs with U.S. Federal Reserve chief Alan Greenspan, and has played the cello with the acclaimed Yo-Yo Ma. Wolfensohn has also been hailed as a prime mover in the rebuilding of New York's Carnegie Hall.

But the naturalized U.S. citizen quickly insists he is not as removed from the abject world as his affluence might suggest. "Poverty is an issue I take very personally, one that moves me tremendously," he says. "Otherwise, I'm of an age where I ought to be doing something else."

The World Bank, which grew out of New Deal thinking and postwar depression, annually awards about $15 billion to developing economies. It is a key player in the largely Western debate over international lending policies.

Critics say reckless loans can expose poor countries to constant debt, as cash is often funneled to unscrupulous regimes or good-faith projects manipulated by multinational interests. They call the Bank an out-of-touch bureaucracy that can cripple the very economies, and the poor, it sets out to help.

This complex debate will seize the spotlight in Prague. Tens of thousands of anti-globalization demonstrators plan to use the Bank's annual meetings with the International Monetary Fund (IMF) to protest the global economy's moral and practical shortcomings. Czech officials are bracing for potentially serious disorder.

Humble beginnings

But Wolfensohn wants to talk with his foes. He has repeatedly said he's ready to address criticisms and wishes to "create an agenda of cooperation and discussion."

"It's my prayer that we don't have a breakdown in those discussions," he says. You can't make any progress if people are behind barricades doing nothing more than hurling abuse at you." President Vaclav Havel's efforts and pleas to exchange angry protest for dialogue, Wolfensohn says, could "make the difference in the tone of the entire conference. His openness to ideas, and his global vision, if it can be conveyed, will have a tremendous influence."

Wolfensohn remains in his $200,000-a-year job -- where he is bruised by the criticism lobbed from both inside and outside the organization -- because "the World Bank is one of the few instruments that can make [poverty] public and bring it to people's attention." And then, he says, the Bank can do something about it.

"In the next 25 years, we're going to add 2 billion more people to the globe, and practically all of them go to the developing world," he says. "Unless you solve the issue of poverty, you're not going to have a peaceful world. You're going to have a very unstable world."

Wolfensohn's ideals were spawned in a tiny apartment in Sydney. His father, a business adviser who emigrated from England, struggled to make ends meet in the late 1940s. "I'm not trying to make this a story of parents who didn't have shoes and came out of the gutter," he says, his Australian lilt still audible. "But we often didn't have enough money for bills. It was in no sense difficult compared with the role of poor people in developing countries, but it was tough. It made you conscious of the fact that not having a lot was problematic."

His parents, mindful of those in need, enlisted him to work with the growing population of refugees who fled to Australia to escape the Nazis during World War II. "It was my first exposure to people who had nothing," he says. Wolfensohn then worked his way through school, at the University of Sydney and later at Harvard.

British economist and author Barbara Ward, who wrote extensively on developing nations, influenced his thinking. It was Ward who once wrote that the Western Colonial system "shook all the societies in the world loose from their old moorings. But it seems indifferent to whether or not they reach safe harbor in the end."

Wolfensohn, who schooled himself in development issues, said: "I knew nothing about Africa, I knew nothing about Latin America. I didn't know anything about the poor parts of Asia, and China was closed. You suddenly became aware the planet was not a few hundred million people, it was 6 billion people."

Tough on staff

But it is Wolfensohn's unusual mix of big-money know-how, liberal ideals and willingness to learn that makes him one of the strongest leaders in the history of the 56-year-old World Bank, observers say. Though he can be hard on his staff, he is a passionate front man for his organization, and often charms detractors with his evangelical style and frequent calls to "tell us what we're doing wrong."

In his 1995 inaugural speech, he said he wished to measure the Bank's success "by the smile on a child's face -- thanks to one of the Bank's projects." Unlike many of his predecessors, he travels -- he's visited more than 100 nations at last count.

"Wolfensohn has done a masterful job of reinventing the image of the Bank," a former Bank official told the National Journal this summer. Still, Wolfensohn acknowledges that running the Bank, let alone reforming it, is an immense and inexact process, and he admits he and his staff of 11,000 can make mistakes.

The Bank was blasted recently during negotiations with China over planned World Bank funding to help move 60,000 Western Chinese farmers onto more fertile land in Tibet. Critics said the funds would ease China's "colonization" of Tibet, and the Bank backed out of the offer. Wolfensohn publicly acknowledged the Bank might have been naive in failing to anticipate the controversy.

"There will always be issues where we are just wrong," he says. "But the 95 percent of the things we get right should be given some credence, too."

He says the emotional debate over the Romany, or Gypsy, population in the Czech Republic illustrates the nature of resistance. "Changing the cultural values of the elites around the world" is a laborious task for the Bank, and a gradual one. "I am not happy with some of the results, but I don't think we can be blamed for not trying," he says. "The attempt is there."

The institution is also assailed for what it is: a bank. Although it is on track to forgive more than $100 billion in Third World debt under a program Wolfensohn created, spiritual leaders like Pope John Paul II, say it is not enough. "The answer is really very simple. We can't write off everything, because if we do, we don't have any capital left," he says. "We've gone to the limit."

Critics like Chelsea Mozen, international press agent for the Initiative Against Economic Globalization (INPEG), are dubious. "They talk a lot about the poor, they loan a lot of money, but at the end of the day, world poverty is going up," says Mozen. "If you're not making those numbers go down, what exactly are you doing?"

Reaching out

The Bank is a bureaucratic culture, says Bruce Rich, a senior attorney with the Environmental Defense Fund. "There's a single-minded focus on pushing money out the door, without fully considering or understanding the reality of its impact," says Rich, author of Mortgaging the Earth, a scathing critique of the Bank.

But Wolfensohn perseveres. "I am by no means self-satisfied. But we've changed 30 percent of the staff, we've changed 90 percent of the vice presidents. We've got 2,500 people in the field instead of 500. These are massive changes. But that you never hear from the critics."

Wolfensohn acknowledges that the Bank must communicate its message more effectively. He chuckles as he recalls joining World Trade Organization (WTO) chief Mike Moore in Seattle last year, feeling somewhat superior as violent protesters trained their wrath on Moore's group. "I told him, 'if only you'd done what we'd done, started a dialogue, you wouldn't have these problems,'" he says.

Only three months later, he was chastened. Dissenters, albeit more subdued, hounded the World Bank's meetings in Washington, D.C. One year later, the Bank's Prague meetings are a source of potential unrest. "We thought we'd reached out, but we haven't been as effective as I'd thought," he says.

On a personal level, Wolfensohn seeks balance in his life. On his way to Prague, he'll squeeze in the opening ceremonies of the Sydney Olympics. An Olympic fencer on the 1956 Australian team, he seeks a reunion with old teammates. "We can all sit around and exaggerate our past achievements," he says

And when his World Bank work is done? "Maybe I'll start a concert career as a cellist," he laughs, noting that he picked up the instrument at age 41 and recently played a Haydn quartet after a five-year hiatus. How did he play? "Not well," concludes James Wolfensohn, "but I finished on time."

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