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Middle East to get World Bank attention

Marketplace Staff Oct 9, 2007

Middle East to get World Bank attention

Marketplace Staff Oct 9, 2007


KAI RYSSDAL: The new-ish president of the World Bank has been flexing his PR muscles. Robert Zoellick had a sit-down with the Wall Street Journal that appeared in the paper today — he’s setting up a new strategy for the bank that he’ll be revealing in a speech tomorrow.

Topping the list is an item about fostering trade in the Middle East. Through history, countries there haven’t cooperated much on the local economic level. But with billions in international oil-trade assets, you could argue they really don’t need to.

Joel Kurtzman is a senior fellow at the Milken Institute. Mr. Kurtzman, good to have you with us.


RYSSDAL: What do you think of this speech that Mr. Zoellick is supposed to be giving tomorrow?

KURTZMAN: Well, I think it’s perplexing, because it’s taking the bank into the political arena, and away from the economic arena where it really has expertise and experience.

RYSSDAL: Let’s play out exactly what he’s trying to do here… The key, the crux of it as I read the Journal article this morning is the emphasis on free trade.

KURTZMAN: Well, the emphasis on free trade is only one part of it. The real emphasis is where that free trade is going to take place, and it’s in the Middle East, and it’s between countries in the Middle East. So it’s kind of a regional approach to free trade.

RYSSDAL: Is that the bank’s job? I mean, I thought the bank’s job was economic development, sustainability… It seems a little bit like what Mr. Zoellick is trying to do is kind of politics by other means.

KURTZMAN: Well, that’s what it seems like to me. I mean, there is a historic role, obviously, for the bank in the reconstruction of countries. That’s where it originated. But a lot of it seems like he’s trying to knit the region together through economic ties. And that’s political.

RYSSDAL: Is there any indication that regional economic cooperation in the Middle East would lead to peace?

KURTZMAN: Well, there really isn’t any evidence that’s the case. We have one great example of regional cooperation leading to peace, and that’s Europe. The EU is a success. But we don’t have any other examples — we certainly don’t have any other examples where there is active conflict involved. So there’s not much to draw on in terms of history.

RYSSDAL: You know, the World Bank has sort of a history of grand plans, Specifically, Paul Wolfowitz, Mr. Zoellick’s immediate predecessor, and his drive to stamp out corruption. Does it risk its own relevancy if it doesn’t work out?

KURTZMAN: Well, I think it does. It’s trying obviously to stem some of the conflict and volatility in that region. But it doesn’t really have the horsepower or the resources to accomplish that task, I’m afraid.

RYSSDAL: What’s the incentive, then, for them to go along with Mr. Zoellick’s plan?

KURTZMAN: Well, they really don’t have much of an incentive to change what they’re doing. It’s profitable for a countries that do some exports in that region to keep selling to their biggest markets. And it’s unlikely suddenly the market in Europe — which is huge for Jordan and Egypt, particularly in textiles — is going to be less-favored than the market in Kuwait and Saudi Arabia.

RYSSDAL: So where do we go if this doesn’t work out? What’s next for the World Bank?

KURTZMAN: Well, I think the World Bank will continue limping along and setting its own priorities for itself, and hoping to achieve them if it fails in this one. And it just adds to the list of failures.

RYSSDAL: Joel Kurtzman is a senior fellow at the Milken Institute, just down the highway in Santa Monica, California. His book is called Global Edge. Mr. Kurtzman, thanks a lot for your time.

KURTZMAN: Thank you.

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