The Honorable Robert B. Zoellick, President of The World Bank, made his second appearance at the Economic Club. He first spoke in January 2008 when he participated in a wide-ranging discussion with Public Broadcasting news correspondent Judy Woodruff.
A focus of Mr. Zoellick’s dialogue with President David M. Rubenstein during this appearance was his tenure as President of The World Bank. Mr. Zoellick will be leaving that position on June 30. Mr. Zoellick also discussed the current global economic state of affairs, especially the crisis within the European Union. He expressed concern about the potential “ripple effect” of Greece exiting the eurozone and the impact that would have on the economies of Spain and Italy. He compared the situation with the 2008 collapse of Lehman Brothers and repercussions that had for financial markets around the world.
One potential solution Mr. Zoellick endorsed for resolving the crisis was allowing the European Union to issue “eurobonds” for a limited time to help stabilize the European economy. He also suggested using the European Stability Mechanism fund, an emergency rescue vehicle for the 17-member Eurozone to match funding with economic reform.
Excerpts from Event
“I was one of the first people that was calling for some additional capitalization for the European Investment Bank, get more money from the European Commission’s structural and cohesion funds, which are over 80 billion euro, because while the Germans are not going to have a great support of consumption, you could match some of this investment funds to help with the politics of reform in Spain and Italy as well as some investment and demand. ~ The Honorable Robert B. Zoellick, President, The World Bank Group
“. . . to give you a sense of how the world has changed, in the past 5 years, two-thirds of global growth has come from developing countries. So part of the change of the nature of the World Bank is that what used to be seen as charity or good heartedness is now fundamental mutual interest and national interest, because that’s where the growth is coming from, a lot of opportunities are coming from.” ~ The Honorable Robert B. Zoellick, President, The World Bank Group
“There are opportunities across all of these [emerging] markets. To give you an example, our returns on equity in sub-Saharan Africa at IFC (International Finance Corporation) have been, I think, 23%, 24%. Our returns overall are 18%. The point is sub-Saharan African grew 5% or 6% a year for a decade before the crisis and is now sort of back up. I use sub-Saharan Africa not saying that it would be my ultimate investment choice but saying we’re moving to a world of multiple poles of growth. ~ The Honorable Robert B. Zoellick, President, The World Bank Group
“People pay attention to China or they pay attention to India, and they should. But what they also should recognize is there are lots of other individual opportunities and markets where people are doing reforms. . . . the government of Rwanda is doing some very interesting things and there’s probably going to be some interesting business opportunities. As a market test, IFC supports about 180 private equity funds around the world. We’re trying to help build this as a market, as a vehicle for intermediation, not only for financing but to help with these businesses.” ~ The Honorable Robert B. Zoellick, President, The World Bank Group
“My basic point is that I think the bright news is there’s lots of opportunities in emerging markets but, as you know, there are risks, and there are risks you have to manage not only on the financial side but on the policy and regulatory side.” ~ The Honorable Robert B. Zoellick, President, The World Bank Group