Well, under the impulse of the economic crisis
we have seen a new dialogue to strengthen global governance
and find solutions for problems we share.
Among those, of course, there’s the World Bank,
which is a financial instrument of the international community
which has traditional task like fighting poverty,
but it will have new endeavors
like helping to fight climate change in the 21st century.
But it can hardly do it with its present governance
and that is why Bob Zoellick, its president,
decided to appoint an international commission with people like these
and they asked me to be their chair
because they believe that I am underemployed
which is not true, right, Mr. President?
And we work during the summer and deliver a report in October.
And we made a diagnosis of the present governance of the World Bank
and, of course, by not giving complex definitions but by good governance
we need an institution that has adaptability, accountability, legitimacy,
and focus on resource in a very synthetic way.
Well, we made a diagnosis and we found that although it has strengths,
governance at the World Bank has very serious problems,
like conflict of interest.
Why conflict of interest?
Because the executive board represents the membership
on the one hand. It has the oversight responsibility which is fine
but they also have co-managerial responsibility.
The executive board is supposed to approve every single operation of the World Bank
and that clearly poses a very serious conflict of interest.
So this is just one problem but a very serious one
that we found in the World Bank governance.
We also... and the consequence of that is that we have very weak accountability.
Disappears, huh? And, of course, strategy formulation it’s also very weak.
It should drop now. Drop. So we need to address that.
Well, we also have a problem of what is called voice and representation.
You know, 25 seats, well, starting this year,
some guys are too powerful in the board.
Like the Europeans, they have a lot of chairs,
too many chairs relative to their relative importance,
and emerging and developing countries are seated in a corner.
What we propose, eliminate conflict of interest. No managerial responsibility.
They must have only the... representation and the oversight.
And we also tell... elevate the level of the board.
They don’t have the right seniority.
We want to see ministers or deputy ministers seated at the World Bank board.
But you don’t want to have an imperial president,
you need strengthening oversight,
and also you want separation
between the chairman and the president of the World Bank.
That’s very important if you don’t want to have.
Okay, for the executive board, it’s too big.
We need to reduce it to 20 and we need to give...
enhance voice and representation to developing and emerging countries.
And, of course, the first to put some chairs should be the Europeans.
They have eight or nine at a time. They should get rid of four of them.
And eventually, we should have a board for only 20
where at least we achieve a division of voting
between developed and developing and emerging countries.
And within that board like that...
of course, there will still be some bigger guys
because they put more money and that has to be recognized.
The U.S. has veto to change the articles of agreement.
We veto the veto. It shouldn’t exist.
To choose the president of World Bank, we need rules, inclusion, competition,
and that should deliver a good accountable, effective president of the World. Bank.
We say, well, they have better governance because they will have big challenges.
The World Bank should have more money
but condition upon doing the necessary reforms.
Now, these reforms are not going to be carried out by the present executive board,
not even by the ministers.
We really need the political muscle behind this kind of reforms.
And we need something like the G20 to start delivering
on the promises that they had made.