World Bank needs new approach for Mideast

By Lesley Wroughton

WASHINGTON (Reuters) – The World Bank needs to take a more grassroots approach to fighting poverty in response to revolutionary change in the Middle East and North Africa, the bank’s president said on Wednesday.

In an interview with Reuters, Robert Zoellick said autocratic societies in transition will have to open up their decision-making to citizens if they want to be stable and grow, and the World Bank had a role to play in that change.

He said the pace of political upheaval in the Arab world meant it was still unclear how exactly to respond.

“This is a revolution and people are uncertain about the forms that revolutions take,” Zoellick said.

In the interview, with Reuters Editor-at-Large Chrystia Freeland and correspondent Lesley Wroughton, and an earlier speech, Zoellick called for the World Bank to take on a new role and to provide direct support to civic groups that have on-the-ground knowledge and experience of public needs.

Asked how the global lender can work with citizens’ groups without governments taking issue with it, Zoellick noted it already does so via development projects around the globe.

“We have a record across countries with different political systems of integrating this into our development projects,” he said before adding: “It’s a fair question: ‘Where does the Bank go with this now?’ And those are questions for our board, our shareholders and others to debate.”

Zoellick plans to push the theme at meetings of the World Bank and International Monetary Fund next week as part of discussions of modernizing the multilateral institutions.

The political turbulence in Arab countries is expected to feature heavily at the meetings in Washington.

“Part of my message is we need to lean forward,” he said in the interview. “These are important events and I believe we can make a difference.”

While Zoellick acknowledged that some critics might accuse the World Bank of becoming too political by taking on issues such as transparency or corruption, the institution could not force governments to adopt unwanted policies, he said.

His proposal to work more closely with citizen-based groups could stir controversy among World Bank member countries who may see it as internal meddling by an institution that is meant to be seen as a neutral party.

“If countries don’t want to do it, I can’t force them, so it is up to them to decide,” he said.

If civic groups uncover wrongdoing in public systems, it does not mean they are against governments, Zoellick said. He said countries in the Middle East and North Africa had undertaken reasonable economic reforms over the years, but it was not enough because too few people had benefited.

World Bank experience showed that countries that start modernization processes are more vulnerable if they do not involve their citizens, he added.

Zoellick said job creation in the Middle East and North Africa was an important challenge for governments and it would be a mistake to wait until after political transitions to tackle the problem.

He recalled television images of ordinary people taking to the streets in Egypt and Tunisia in protests against unemployment, repression and corruption that toppled rules in both countries.

He cited World Bank data showing about 40 million jobs will be needed to meet demand over the next decade across the region.

Governments could create emergency jobs by providing food for work programs or developing credit structures, or so-called micro loans, to help small businesses in the informal sector.

(Reporting by Chrystia Freeland and Lesley Wroughton; writing by Glenn Somerville; Editing by Dan Grebler and Richard Chang)

World Bank needs new approach for Mideast