World Bank chief: Citizens need voice in Arab world

By Lesley Wroughton

WASHINGTON (Reuters) – Middle East governments moving away from dictatorship must deliver quick wins through job creation to meet immediate hopes of street protesters but longer-term reforms need to ensure a more inclusive society, the head of the World Bank said on Wednesday.

In a speech on the ongoing turbulence in the Middle East and North Africa, World Bank President Robert Zoellick warned that a break from a past where societies were driven by autocrats to one that includes citizens in decision-making will be vital for the region’s transition.

“Our message to our clients, whatever their political system, is that you cannot have successful development without good governance and without the participation of your citizens,” Zoellick told a gathering at the Peterson Institute.

The unrest in the Arab world will loom large as finance officials from around the globe gather next week for the spring meetings of the World Bank and International Monetary Fund.

Zoellick, a former U.S. deputy secretary of state and chief trade negotiator, also set out a new role for the development lender, saying it must become flexible enough to adjust to a rapidly shifting political landscape in client countries.

He suggested that might mean having the World Bank become more directly involved in supporting citizen groups and private foundations, rather than working solely through governments.

Such sweeping proposals would take the bank into unchartered territory and could stir controversy among World Bank member countries and require authorization from contributors like the United States, Europe and China.

REINVENTION

Unprecedented street protests against Arab autocrats is transforming an oil-rich region that has largely ignored the wishes of the masses. Ordinary people taking to the streets swept away president of Egypt and Tunisia, while leaders of Libya and Yemen are fighting for survival.

The region faces enormous unemployment among youths. The World Bank estimates that 40 million new jobs will need to be created over the next decade.

Zoellick said there was an immediate need to create jobs, but it was important any job program not lead because to greater economic distortions and a more bloated civil service.

Governments should also entice investors by signaling early on that the private sector is welcome through measures such as cutting governmental red tape, reforming bankruptcy laws and easing regulations that restrict business.

Zoellick cautioned that a successful transition must give ordinary citizens a voice in running their own affairs.

“Inaction poses risks. So will the wrong actions,” he said. “Over the short term, the priority may be quick wins to build confidence and political buy in.”

“Reforms must be transparent and must be fast,” he added.

Zoellick said the World Bank would work with governments to make them more effective and accountable. Among other things, that would mean the World Bank would not directly finance budgets unless governments published them.

He said just as the institution moved over the last six decades to support the private sector from originally financing just governments, it should now consider helping citizen groups as a way of making governments more accountable to people.

“We could back this work with seed capital, and with knowledge exchange and research aimed at improving the enabling environment for social accountability,” Zoellick said.

He said the bank would encourage governments to publish information, enact Freedom of Information Acts, open up their budget and procurement processes, build independent audit functions, and sponsor reforms of justice systems.

But the World Bank chief acknowledged that his proposals may be too political for an institution that is meant to be seen as a neutral broker in the fight against global poverty.

“Some of that may be what we think of as politics, but most of it is also what we know is good economics; most of it is what we know is good for fighting corruption; most of it is what we know is good for inclusive and sustainable development,” Zoellick said.

(Editing by Neil Stempleman)

World Bank chief: Citizens need voice in Arab world