Former World Bank President: Big Shift Coming

Former World Bank President: Big Shift Coming


>>[Applause]>>Well, thank you very much for that introduction, and I’m sorry I didn’t bring a cello to calm you all down. I don’t have a very clear understanding of what it is that you would like to hear me talk about, other than that I was told that you have an interest in development. But that interest in development might lead you to ask questions. And so, my thought was to give you a short introduction. And then, leave it over to you guys to ask such questions as you think might be interesting and would allow me to contribute to your understanding — at least in my experience and what I think is important. One was the career that I wanted to establish, which was a career that I’d hoped would be in the investment banking business and which allowed me to, in fact, develop my activities in that field in countries other than my native Australia. And to finish out doing work in the middle of the American investment banking community, and then, starting my own firm before I went off to the World Bank. And so, I was able — because of the opportunities here — to have first the professional strand. And then, on the other side, to establish for myself a goal, which was first to spend 20 percent of my time and my income. And then, thirty percent, and ultimately more, balancing the life that I was doing between business and non-business activities. And I have to tell you, just because — as I look at this room and think of my own background — that if there’s one thing that I would as a generality say to you, it is that, if it is possible for you, in whatever you’re doing, to engage yourself in the things other than the straight business course, you will find that, not only does it enrich your life, but the truth of the matter is that it’ll enrich your business. Because you engage yourself in people and with people in the community that have broader issues with which they’re engaged. And they tend to be the best people in the community — the people that have decided that it’s not just a singular interest in business, which is the thing that drives them. But that, since business does survive within a communal environment, that that aspect of duality in the life is something that I found in my life — or was the thing that made it meaningful. But it also gave me the opportunity, as a result of activities in the field particularly, not just of the arts, but of development in which I became interested that it took me into that area, for which I suppose I’m best known, which was my period at the World Bank, and subsequently in the Middle East. But today, I would like to focus on the period in the World Bank, because it has some messages that I think may be interesting to you and certainly relevant. And if I were your age, I would be thinking very seriously about what it was that drove me to the Bank and what it was I learned there. The first thing I’d like to say is that, harking back to my own experience, I grew up in a world in which, for decades, there was one sixth of the world, by the year 2000 — a billion people who had 80 percent of the world’s income. And then, there were 5 billion people who were in the so- called ‘Developing World’, that had 20 percent of the global income. And I took an interest in that 20 percent, through activities and foundations and other things, largely because I couldn’t understand how the world would continue in an inequitable distribution of 5 billion having 20 percent and one billion having 80 percent of the world’s GDP. It stood there in the post-war years — with varying numbers, of course, in terms of the global population — but, proportionately, that was the sort of relationship — this 80/20 — which existed for decades. But came the last decade of the last century and moving into this new century, we’re seeing for the first time the swing, which now has that 80/20 somewhere closer to 70/30 or 72/28 or some such number. And that is an important and rapid change which has occurred. And it’s brought about a change which has been very evident in the way in which international institutions function and in which, indeed, the global economy functions. So much so that as we look out, the so-called 80/20 that I and my contemporaries grew up with is now looking at a very, very different future. It is the future that you will face. It is a future of 9 billion people on the planet by the year 2015. Of the 3 billion extra that have been added to the planet — or will be added to the planet — from the year 2000, about a hundred million goes to the rich countries. And 2.9 billion goes to the developing countries. So come 2050, it’s not one billion and five billion, it’s 1. 1 billion and 8 billion or close to it. That is a huge change — dramatic change. The other consequential change is that the structure of the economy is being driven both by the population development and also by modern technology, which has allowed the conveyance of ideas and innovation to move to the developing world. And so, the projections today are that that old 80/20, with which I grew up for decades, will become 35/65. Thirty-five percent for the billion one in the rich countries and 65 percent for the people in the developing countries. That is turning the world on its head, in terms of the world that I grew up in. But it is the world that you’re going to work in. And it is not a trivial change. It is a change of monumental importance. So much so that, by 2050, China and India — the two countries that I have — of course, the leading countries in the developing world, will constitute 50 percent of the global GDP. 50 percent of the global GDP. That is the consensus estimate. But let’s say we’re off 5 percent, it’s 45 percent of the global GDP. It’s nonetheless a monumental switch in terms of economic power. It happened last in 1815 when China and India were 15 percent of the global GDP. And it happened before that in the year 1500. And in the period from 1815, at various times, it’s been approaching that, but with communism and with the change in governance in China and with the greater development in terms of Industrial Revolution in the West, you got to a point where, after World War II, China and India were, together, 2 percent of the global GDP. So the growth — in terms of China and India and of Asia generally — is such that, it is not just some modulation of former trends, it is an absolutely fundamental change in the way the world is balanced. I remember I was at a meeting of the G-7, G-8, the first time that the people from the developing world — leaders — were invited. Seven or eight leaders were invited by Jacque Chirac to a meeting that was held in France. You’d be familiar with the fact that the G-7, G-8, meet once a year in June or July, and generally — until recently — decide what they think’s going to happen with the world. And then, they might tell a few people outside. Well, it changed at that meeting. And I remember that the first person to speak was Hu Jintao from China, who made a very elegant speech about China and about the growth and about interdependence between China and the rest of the world. The prime minister, Bajbai, from India then spoke — I think, probably eloquently, but I couldn’t understand his English very well, so I can only assume that it was another brilliant speech. But then, President Lula from Brazil got up and said rather charmingly, “If only my parents could see me now. I came from a very poor family and to see myself here with you, President Chirac, and with you, the prime minister of England, and you, the head of Germany, and you — he detailed the people that were in the room. He didn’t mention the president of the World Bank, I want you to know. [laughter] But he did mention the other minor people that were there. And then, he said, “But I’d like you to consider something, and maybe next year, you should have your meeting in Brazil. And the reason you should do that is because you should start getting used to the fact that, in another ten or twelve years, five of you are not going to be here. [laughter] And you will be replaced by my friend from China and my friend from India and by myself. And we’d like you to get used to it, so that you can come see us.” Well, it was sort of prescient, because as you know, when the economic crisis hit, very quickly, it moved from a G-8 issue to a G-20 issue. And now, the G-8 is part of the past and the G-20 is the new institution that is there. And it again fits into the prospective development of which I spoke, which is that the weighting of the planet is now moving in different directions. Until recently, ’til we had this crisis, the United States had a sort of 10-trillion consumption. European union had nine. And Asia and the rest of the developing world had a little less than $5 trillion. So it was ten, nine, five. And the middle class in the world — of whom there are today or couple years ago — was a billion and a half, roughly, in the middle class. A billion was in the rich countries in that group that I spoke of. And about half a billion in the middle class characterizes incomes of between ten dollars and a hundred dollars per capita per week — that this amount of money was demonstrated to be heavily leveraged to those richer countries. By 2030, the estimate now is that there will be 3 billion people in the middle class, and of that 3 billion, two- thirds of it will be in Asia. Two-thirds of it. So this is a switch from being a fraction, being less than a third, to being two-thirds. And that is a pretty dramatic shift. You’ll have a middle class in China of a billion people. Billion people by 2050 — middle class. So these are not trivial changes in the outlook. These are tectonic shifts in terms of the way the planet works. And as I said to you — as I look at all of you — in my generation, we didn’t have to think about that. In the dean’s generation. It was 80/20, or 78/22 or something like that. It was a balance where you knew you were the rich countries — the powerful countries — and all the organs of running the world were designed to accommodate that fact. But the world that you’re going into is a very, very different one. And it’s not something that is going to be turned back. It’s something that will happen. It may not happen lineally. There may be events that will occur that will disrupt it for three years or five years that may not be exactly 65/35. It may be a variation of that, but directionally, it is very clear. And there are a couple of observations that I think are interesting beyond that. But before I get to the observations, let me make one other point about the planet. And that is that there — and I say this in the presence of the dean — because in Africa, of the 8 or 9 hundred million people that are now there, that moved over to 2 billion people by 2050. Two billion out of nine billion. And the estimates are that the average per-capita income for people in Africa at that stage will be between two and three thousand dollars per capita. The same projections would have China and India between thirty and forty thousand dollars per capita. So you have two to three thousand, thirty to forty thousand. And countries in the so-called ‘rich’ world — United States, European countries — somewhere between ninety and a hundred thousand dollars per capita. I’m not giving you these figures with any sense of mathematical accuracy. They may be off a bit, but directionally, they’re right. So if you have 2 billion people living in a continent with two to three thousand dollars per capita, have China and India with more people — three to four billion — three billion — between thirty and forty thousand dollars per capita. And you have the rest of the world somewhere either north of that or in the middle class somewhere between the two countries, the two areas of the world. You have a basis for instability. Africa is not a continent which is any longer isolated. It’s not a place where people are uninformed. It’s the fastest-growing market for cellular phones. Information, as you would well know — whether it’s in the townships or wherever it is — now passes very quickly. And that’s not just in South Africa. That’s in the 53 countries in sub-Saharan Africa. And this is not an issue which is going to go away. Nor is it an issue which is trivial to those of us that live as we do here. This is a major issue, which is not being confronted, and which you will have to confront at some stage. And that gets into a second issue which I would like to touch on, which is, What is happening with the rest of the world as it looks at this changing dynamic? Having worked in the World Bank and had some familiarity with the whole issue of aid, I know just how tough it is to get people in the rich world to really understand what the responsibilities are, not just as a matter of conscience, but as a matter of enlightened self-interest to try and help development in the developing world. There was established decades ago a 0.7 target for foreign aid. My former colleague from this activity — who is here from a different part of Stanford, as I understand — knows this. And we’re now, really, after a lot of speeches and a lot of activity — we’re starting to get some momentum before the economic crisis of 15 months ago, which we’re now maybe getting out of, to a degree. But it’s now not the 0.7. It’s about 0.2 that we’ve reached. And there are a lot of statements that are still being made, but in terms of the actual money which is flowing, if you x out the amount of money that are going to the travel spots in the world today, there is very, very little development. And in fact, the per-capita contributions to Africa have been declining steadily for the last 10 or 15 years. So, one of the tragedies is that there is great analysis of the issues. There’s great understanding of the issues. But these, like the environment, are long-term issues. And political decision-making is essentially short-term. And so, you have political decisions which are being taken – – in terms of this demonstrable development in terms of global balance — that certainly, so far as western countries are concerned, is not being met. What is interesting is to see how the dynamic between Africa and China and Africa and India is developing. Three years ago, for the first time, the summit meetings of the African leaders was held in Beijing. And they swore after that that it was unlikely that they would ever meet again in a western country. Simultaneously, 400 African businessmen met in New Delhi. And each led to an understanding, on the part of both the Chinese and the Indians, of having a dimension of their activities geared towards Africa. Of course, there’s been an Indian community in Africa — particularly, in East Africa — for a long time. And there are now 750,000 Chinese in Africa. And if you’re in the business that I’m in, I was recently in an African country where we’re involved in a real estate development, we went up-country to visit this real estate development and — which was near a university. And I was astonished to find that everybody on the team that was doing the development was Chinese — the architects, the town planners, the builders — everyone was Chinese. So if you go to Africa today, you don’t see people who come from western business schools. You see people from China and from India. And I just raise that as a point. And the second point I would make is that, in terms of China and India — in terms of their development — I was trying to get the most recent numbers, and they may be in my Blackberry, but I haven’t looked. But the numbers in 2007 were the following: There were 110, 000 Chinese studying in the United States. There are now over a hundred thousand Indians studying in the United States. So I look around the room and suppose it’s not surprising. There were 11,200 Americans studying in China, and 2,800 studying in India. This is madness. It’s just madness. And it’s a tragedy, in terms of the potential for our young people that are still being guided to look towards Europe, to look towards graduate work in British or European universities, when the world is telling them that the dimensions have changed notably. I was very interested to hear that there’s been a recent trip made by some of your students to Asia and another one to the Middle East. But, what is needed in today’s world is for us to come up with what is the last thing that I’ll touch on, which is this: Historically, the western countries were able to stay ahead, firstly, because of manufacturing. Well, that got taken out, and manufacturing moved to Asia. The second thing that happened after that was that, in service industries, it moved to the western countries. And now, that’s been taken out in terms of Asian, really, dominance in the service areas. And thirdly was, in technology, we were able to stay ahead, but as is evident to you — and I’m sure from your colleagues and people you know — the technological advance has now shifted as well. So, the challenge for our country is, What the hell is it that’s going to be left for us if Asia’s eating our lunch and dinner in terms of the things that we used to be able to do? And it’s not just the United States. It is truly that group of the so-called ‘billion plus’ that were previously the dominant factor who had 80 percent of the world GDP. And so, I leave you with that issue, because as people that are going out into the world, if it were me today, the number one thing that I would be thinking about, which is different from when I grew up, is that the 80/20 rule, which I had comfortably in my hip pocket, is going to be a 35/65 rule. And that puts a challenge of dramatic proportions to anybody who’s at a business school today or graduating. And so, I was told that I should go for about this time, and I would then be peppered with questions that would be so intelligent that I wouldn’t be able to answer them. [laughter] So, if there are questions, I’d be delighted to have a shot at them. Yes, ma’am. Q My question is, How would you respond to people like Dambisa Moyo’s arguments that aid to Africa is actually a bad thing and should be stopped? A I think that the methodology of aid is the thing that should be looked at. I think that Africa, first of all, is not a homogenous place. With 53 countries — and there are some that I think are taking to themselves responsibility for management and governance. And there are some that are just, very sadly, a long way away from it — essentially corrupt, impossible places to have management. And so, I think, what you need to do is to be selective. The first thing that I have become very impressed by is that there are now a growing number of young Africans. Although, I look around the room; I don’t see too many here. A growing number of young Africans who are going overseas for education. And these are black Africans. These are not just white, South Africans or white other Africans. And they’re coming back. And they are trying to find room for themselves, both in business and in government. And even in my decade at the Bank, I saw a significant move in the development of this core of young Africans. And then, the question is, To what extent can they be backed by the governments? And to what extent is there a framework in which there is a judicial system, in which there is governance, in which there is an attempt to counteract corruption and to create some sort of meritocracy? And that is happening in some countries in Africa. I would say you could see movement in 15 or 20 of the countries of the 52, 53. And I think it is a transAfrican move now. The thing that I failed at doing was trying to get the African leaders, who were the most enlightened, to try and – – we tried to split the continent into quartiles and have the best of leadership deal with the countries in each of these sectors led by Africans — enlightened African leaders. But unfortunately, we failed, because the presidential system in these countries and the leadership in all the countries just made it impossible for us at that time to try and encourage the development of the best practices to come to the top. But I’m not totally pessimistic, because there is a change. But it’s not nearly as quick as I would like to see it. And I think that aid going to countries — to answer specifically your question — aid going to countries that will be corrupt and that will waste it is, I hope, going to become a thing of the past. You’ll find humanitarian relief going into those countries, but it will not be run by the government. And there needs to be a system of ‘carrots’ and ‘sticks’ to try to get the countries to change their practice so that the best countries can be rewarded. That, by the way, was something that was brought in when the Bush Administration, the best countries to be rewarded. And say to the others, “It’s just not acceptable to steal the money that we’re giving.” It’s going to be a tough road, but I believe we’ve started on it. And I believe that the best advocates of the enlightened African leaders themselves — not westerners — I believe that that is now happening. Yes, sir. Q Considering the huge amount of change, especially away from the U.S, that you talked about, can you stress how you think the World Bank needs to change? And then, also concerning the U.S. president’s ability to appoint the leader of the World Bank, does that hinder the related change away from [inaudible] A I think that the old practices — I’m sure everyone knows here — was that the Europeans appointed the head of the International Monetary Fund, and characteristically, the United States appointed the president of the World Bank. I think that is now a thing of the past. I think that has changed, and that, it will be an open competition next time. Part of the reason for this is that the appointment of the person of the president of the World Bank was at a time when the U.S. economy was dominant. Today, that’s no longer the case. As I said to you, it used to be ten, nine, five. Or ten trillion, nine trillion, five trillion for the rest of the world. That is changing. And, as it changes, I have personally witnessed, in my own time at the Bank, a definitive change in the way in which groups of countries come together to challenge American dominance. First, it was the Europeans. And then, it’s the Brit countries. But it’s very, very clear. And so, my own judgment is that the next president of the World Bank is — could be American, if there’s someone dramatic. But it will not be as a right. It will be because that person is notably the best person that you could have. But I think that, in both institutions, they’re now internationalized. And it is much more likely that you’ll have the ‘best in class’ for both the Bank and the Fund. Yes. Q Can you talk about the involvement of China and India in the development of Africa. And their business connections and political connections. And the World Bank is openly criticized for not tying aid to environmental goals, to not tying aid to human rights goals. And the World Bank has been trying to move in that direction. At the same time, now you have a second layer or second source of aid or some form of capital that doesn’t really impose that conditionality as of yet. And I was just wondering what do you think of that aspect and what does that mean for the next twenty years? A Well, I think the first thing is to challenge the first assumption, which is inherent in what you’re saying, which is that aid was tied into environmental or human rights’ conditionality. And I think, personally, that that was more nominal than it was real. It was increasingly expressed in the last ten years. But the truth of the matter is that I don’t think that there was the hammer to come in to insist. There were all sorts of methodologies that we used to produce arguments as to why you were environmentally moving forward or you were being more innovative in terms of opening up the society to people. I think that it’s not something that will change instantly. In history, nothing, by the way, has changed instantly — not in terms of Europe and not in terms of anywhere. But I think that what we are on is, on a clear path, which I am sad to say has been arrested — at least in terms of the environment — by the recent, economic downturn. Copenhagen was a colossal disappointment in my judgment, certainly relative to what many of us had hoped for. And the truth of the matter is that, leaders in countries, the rich countries — in terms of the allocation of their resources — focus appropriately on what are their domestic needs. And because of a downturn in the global economy for the first time in 60 years last year, it has exacerbated the issue about, What the hell do we do in terms of getting our own economies going? When that happens, people in Africa — or people in less- developed countries — become secondary. And so, what you tend to get are luminous statements, but not a lot of action. And that’s why I said to you before, in terms of Africa, the contributions over the last 20 years, per capita, have been declining. Not trivially, but significantly — 50 percent decline. And so, I think that we need two things: We need a turnaround in the economy. And then, hopefully, we need some global leadership that is thinking beyond a four-year term of political office. I haven’t seen that in my lifetime yet. One of the great advocates, by the way, in my years at the Bank was Gordon Brown as chancellor and even as prime minister. But Gordon, now, has a problem with the U.K. And so, if he comes out and starts talking about how much money he’s going to give to the developing world, it’s not going to help him in the next election — if anything would help him in the next election. I hope something will, but — so I’m afraid that we’re caught up in this terrible path in the ‘short-termism’ against something which is an inevitable long-term problem. And nowhere is that long-term problem more evident or likely to hit us than in the environmental issue. Environment is something that, you know, we’re not going to be able to decide in four years we’re going to fix. It’ll be more difficult to fix if we leave it 12 years — you can’t fix it. This is not — this is a problem all you guys are going to have to deal with. [laughter] I’ll be six feet under or something by that stage. Yes, ma’ am. Q I’m just curious what you see is the most promising practices in terms of poverty reduction in Africa. And if you had a magic wand that you could focus attention and investment on a couple key levers, what would they be? A I would be very supportive of nongovernmental intervention. I think that the role of civil society is crucial. And I think that the role, in terms of funding — particularly for small business, microcredit — is an initiative that has found its time. I would go back, however, to a crucial need of education, which I think I heard my wife whispering on the right [laughter] And if I didn’t hear her, she would have given me a hell of a time going back to New York this afternoon. [laughter] But education is clearly critical. Clearly critical. And that’s boy’s education, but more crucially, girl’s education. And those two things, I think, are fundamental to what could happen in Africa. So you have a lot of changes occurring in Africa. You have the China/India thing of which I spoke. You have a gradual move towards better, more-responsible government. And you have civil society moving in broader ways than it has previously. Part of the problem, however, is that there are just too many institutions in civil society that keep falling all over each other. And the overheads are just killing. I would estimate that for every hundred dollars that gets put aside for development, you’d be lucky if 30 to 35 cents gets to the project in every dollar. And the rest is taken up by overhead, stealing, and mismanagement. And that is a hugely important issue, which I’ve been trying to deal a little bit since I left the Bank, to try and see how you could get a greater rationalization of the aid business. And just have a free pickup — a free pickup — of 20 percent of whatever it is that you’re spending. But again, that’s a problem for all of you to face. It’s a nice, easy one I leave you. Yes, sir. Q The Chinese are investing heavily in the natural resources in Africa. Do you see that as a opportunity for stability in the region or will that just allow the corrupt governments more opportunity to maintain power? A Well, I think both is the answer. It is an opportunity for improvement, but in some of the countries, it’s pretty evident that the benefits are going, sadly, to a small group. And that’s just a fact. I wish it were otherwise. And it’s not very clear that the Chinese are, at this stage, insisting on social benefits as a result of their involvement in the countries. They’re more interested in getting the minerals out than in participating in high-level debates about What is the purpose of economic development. Up to now, that has been the position of the Chinese. I know a number of people in Chinese leadership who would wish it to be otherwise and would like to bring about some change, but the way the Chinese system works — even though I’ve been there many, many times — is still opaque to me. And I think it needs a decision at the top, beyond just making some speeches about it. It needs to be pushed down there. I see a big representation of Chinese in the room. Maybe they can help you after this gathering and tell you the realities. But the big reality in China is to get control of natural resources. And even with its aid programs in Africa, important as they are, they tend to be more attention-getters, in my judgment, than they are substantive. It’s not wholly true, but everywhere — the president’s house, the town hall, the sports stadium — is done by the Chinese. It’s a very good thing to do, but what is really needed underneath that, is, to try and change the societal structure. And I don’t think, up to now, the Chinese have attempted to do that. And from my little experience that I told you, in terms of this real estate development I was doing in Ghana. It doesn’t help to have 25 Chinese doing the development and no Ghanaians if you’re talking about bringing along the economy. Yes. Q Piggybacking on that, what can the U.S. and Europe do to change the relationship with Red China now? Can you describe the problem with what do you see as a potential solution [inaudible] A I would say nothing. The only thing that they could do would be to get in there and compete. But they’re not going to influence China to change its ways. And they’re not going to influence African governments to change their ways. Because, the interest is economic development. Maybe the dean would have a different view, but I don’t think that’s the case. I think reality is that, at the moment, the money is in the hands of the economic growth powers that are looking at natural resources, particularly in Africa. The interest is fundamentally, natural resources. And in the case of some Indian companies, also retailing, where there is a big history of manufacturing and selling in Africa. But it is a — if we’re going to compete — first of all, we have to create a group of leaders who give a damn about Africa. And then, create a group of managers that are prepared to live and work in Africa and who care about Africa and who see it as an economic possibility — which it clearly is — but it’s a little less transparent than some other economic activities. And in the case of China and India, they’re there already, and they’re throwing people at it. The growth in the China resident population has just been enormous in the last ten years. Q [inaudible] A Sure. Yes, ma’am. Q You mention that there’s going to be a tremendous shift in power and wealth in the future. And I was wondering if you had any thoughts on, Are there some tenets or guideposts from the past that you think will help us move forward in the future and kind of chart our way through these unknown waters? A Well, this is what I was saying before. In my generation, for a good 40 years of my business activity, there was no challenge to the 80/20. It was, in fact, a little higher at the end of World War II, but basically 80/20 was the profound understanding that people had. I can only put the problem in front of you which is that, If 80/20 becomes 35/65, and you added another 3 billion people to the planet, that’s a very different world. And frankly, what worries me is that people are not learning about the history and culture of Asia. They’re not learning the languages of Asia. And at least, to the limited extent that I know it — certainly, by the statistics — our younger graduates are not prepared to put themselves in Asia. And so, I just hope that our educational system will do something about training our kids — younger or primary school — in both language and in culture and in history. And then, have them go through, so that at universities, they’re already interested in it. I have an image — three years ago, I gave a speech, or two years ago, I gave a speech at BeiDa University, Beijing University, 700 kids in the audience. Spoke in English, no translation — no translation. And the most fantastic questions that you could possibly have. There is no place in the West where you could have 700 people in an audience speaking Mandarin or Cantonese and have a Chinese speaker make such a speech. I’m not suggesting that we all — that the only yardstick is going out and learning the language. But I am suggesting that, in terms of culture and in terms of direction, we are miles behind where we should be if we’ re going to be competitive. Maybe different on the West Coast, but certainly on the East Coast. [laughter] One there and one there. Q With the proposed change in the economics of the global 10, 20, 30 years, how do you see that shifting the military balance, and what sort of consequences when it comes to that? A Well, I think you’re ready to get — as you are now — in our country, a lot of pressure for less intervention — both financially and in human terms. But I must say that, in the last year, I can’t point to any great advances. So I don’t know the answer to that question. I would just think intellectually that it has to be true that, if the economic weight is shifting, shifting with that will be responsibility. And part of that responsibility will be military and intervention and the issue of peace. And that’s a whole lot of subject about the balance between the United States, Russia, and China, which would require another hour to get into. And, even then, I’m not sure I could give you an answer. But I can say that, historically, economic power has nearly always led to military might. And so, if there is a huge shift in economic, chances are, you’ll see a significant shift in military power as well. There was one other question. Yes, sir. Q For those of us interested in effecting change or getting involved in economic development, what would be your advice with regards to how we balance the decision to get involved in government side, multilateral side, nonprofit side, or private sector? How should we think about those trade ops? A I think you can have a good career and a good contribution in any one of those four. I don’t think that it’s essential that, if you’re interested in economic development, that you need to be at a business. I think that you can be in business and still have an influence. I think you can have an influence in the U.N. I think you can have an influence in the World Bank. I think can have an influence in other international agencies. I think the important thing — if I were to give advice to my own kids, if they were of an age — is that, I would try very hard to have them go take a look and spend a year and at least learn something about Asia. If my kids had come to me, and said they wanted to go study at Oxford or the Sorbonne, I would be vigorous in suggesting to them that they go to China or India — vigorous. And so, I think that your generation — although this is a slightly older group than an undergraduate group — but there’s still an opportunity to understand the world that you’re going to live in. It’s a very different world than I grew up in. And I don’t think there have been an adequate series of changes made in our educational system or in the aspirations of young people to recognize that it’s a very different world when you’re talking about 65 percent of global GDP being outside the OECD countries. And it’s a very different world when China and India together have 50 percent of the global GDP. And when two-thirds of the middle class are in those countries, and alone a billion in China; that’s a different world. And I fear that our educational system — although I know nothing about the Stanford system, so I’m not making any comment — but I do know something about some other places. I fear that our educational system has not caught up to the realities. And what is fascinating to me is how the realities of the composition of students and graduate students in our universities is reflecting the change that I’ve described, which is that there are many more Chinese, Indians, Asians studying to the benefit of the entire community. The same is not true in reverse, and I think it’s a damn shame. And hopefully, there will be a growing tide of people that can understand that learning about Chinese culture and Indian culture and Asian culture is not going backwards. It is discovering something which is enormously rich, profound, and important, and has to be part of the balance of people’s lives. Thanks very much.>>[Applause]

Leave a Reply