And it is a particular pleasure today to welcome back an Oregonian, Jenna Dorn, who started life in Corvallis, went to Oregon State University where she studied journalism before embarking on her really illustrious career. So we'd like to have everyone note that, that preparation for world fame can be done right here in Corvallis. But let me tell you a little bit about her. As U.S. Alternate Executive Director of the World Bank, Jenna Dorn represents the U.S. Government as the largest shareholder on the Board of Directors of the World Bank Group. Many of you here are familiar with the structure of the World Bank but for those of you who are not quite on top of it, I assume Ms. Dorn will go over what that means. This is Ms. Dorn's fourth Presidential Appointment. Previously she served as the Administrator of the Federal Transit Administration, which is one of this six operating administrations in the U.S. Department of Transportation. As Federal Transit Administrator, Ms. Dorn led a 500 person agency that provided over 7 billion dollars in financial assistance each year to develop new transit systems. She also served as Assistant Secretary for Policy at the Department of Labor under President George H. W. Bush and was the Associate Deputy Secretary of Transportation under President Reagan. From 1991 to 1998, Ms. Dorn was senior vice president of the American National Red Cross, overseeing the organization's international operations, fund raising, communications, and marketing. It is indeed a great pleasure to have Jenna Dorn with us. Please join me in welcoming her. Thank you very much, Maria, and thank you everyone for being here today. You know, it's really wonderful to be back in Oregon, and actually I've told a number of you whom I met earlier today that I'm grateful to have survived my last trip here. Because a few weeks ago I brought my very active teenage sons, John and Ben, to Oregon on an adventure vacation. And I wanted to show them the whole range of incredible outdoor experiences that Oregon has to offer, so they would love it as much as I do. So. We sand-boarded down the phenomenal dunes in Reedsport, and I revved up my ATV as fast as my courage would allow, we golfed our way up the majestic coastline, and we stayed in a cabin in the beautiful Columbia Gorge, where the boys rope swung from twenty feet above this wonderful, crystal-clear lake. We finished the trip in Portland's pearl district, where some very dear old high school friends of mine taught my boys the traditional Oregon card game Texas Hold em and we had a great time, and my mission was accomplished. Because they believe, like I do, that Oregon is indeed God's country. You're so lucky to live here. It is such a pleasure to be with fellow Oregonians today, and to exchange views with the World Affairs Council of Oregon, and I'm humbled already at my table talked to a number of former World Bank staffers and leaders and all of you I know are very actively engaged and involved in foreign affairs and many things that relate to economic development, so I look forward to having an opportunity of having a question and answer period shortly. This council's work in broadening the community's understanding and involvement of international affairs and connecting Oregonians to current world issues is both remarkable and inspiring. From providing learning opportunities to leaders in business and government from the former Soviet Union, which I understand you have done, to helping public schools give their students a broader world view, the council has demonstrated its commitment to the values of Democracy and peace through greater understanding. Nothing could be more relevant than this complex and even scary world that we live in, so thank you for your leadership. You know, when I first came to the World Bank just a few months ago, it put perspective into a whole new perspective, if that makes sense. Not only was it more global than my previous work and involvement, but also it illustrated for me how your roots and your traditions and your background have a real effect on how you see things and how you hear things. One of my colleagues at the bank, whose name is Munira Sala Murdoch, told me a story that simply illustrated this. She told me about an occasion years ago when she lived in the Sudan, on assignment for the World Bank. She was entertaining several colleagues, including some Americans, at her home there. And after the Americans left, one of her Arabic friends, who was at the gathering, asked Munira to tell her again the names of the visitors. Jack, Joan, and Jim. Her friend was amazed. "How can you ever remember those names? Doesn't any American have a simple named like Akhmed or Mohammad or Mahmud?" It's all in one's perspective. You know, in an impressive setting like Portland, Oregon, and in the thriving economy that is America's it is easy to lose sight of the fact that around the world more than one billion people are struggling to survive on less than one dollar a day. The compelling mission of the World Bank is to eradicate this extreme poverty, and at the heart of the banks mission is one of the most important millennium development goals, reducing by half between years 1990 and 2015 the proportion of people living in extreme poverty, which is defined as living on less than a dollar a day. At the World Bank, 184 nations come together to provide more than 20 billion dollars each year to build roads, to improve health care and schools, create capable government institutions and foster private sector investments to fuel economic growth. The economic growth that is really imperative and fundamental to bringing opportunity to the world's poor. As President Bush has said, "The reduction of extreme poverty in our world must be a key objective of America's foreign policy." Not only is it the right thing to do for our fellow man, it is a vital thing to do for our nation. But as all of you know, economic development is a very complex undertaking. Scores of public and private donors provide vast sums of money to address a multitude of deep-seated country problems in the context of a unique cultural and political environment. Determining what to do first and how to do it effectively is like putting together a rubix cube. And it's clear that the developing country must be in the driver's seat. On a recent trip to Sub-Saharan Africa I was reminded how easy it is to let one's personal experience and perspective influence your view of a situation. As we were slowly making our way down a rutted bumpy road from the country of Gambia to Senegal in West Africa, a journey of about 200 miles that took almost ten hours because of the incredible pot holes and unlimited number of unofficial checkpoints, we passed village after village of small grass huts. Occasionally, next to a hut, I'd see a single cinderblock wall, or sometimes two. In some cases, I'd see four walls without a roof. Later I saw a dozen of these empty, partially-built structures clustered in a single area and I really couldn't figure it out. Why would anyone build such structure, what is the purpose of these? The World Bank Country Director with whom we were traveling finally explained that these were dream homes, as people have the money they build a wall. With no mortgage, financing industry in the country, it typically takes twelve or fifteen or twenty years or more for a house to be finished, one wall at a time. In fact, if these bare-boned houses were constructed too quickly, neighbors assumed that the owners were on the take. A fact that complicated a World Bank effort to support a small home financing project not too many years ago. Houses could be constructed within weeks, rather than years, but families did not want to participate in the project because their newly completed homes would mark them, in their community, as corrupt. It turned out that changing perception was not as easy a problem as financing a home, and even that was not easy of course. In my remarks today, I'd like to touch on one aspect of this story, relating to the bank's work that you may have read about in terms of an increasing focus on anti-corruption, and I'd also like to give a couple of first-hand impressions about Africa, which is the bank's number one priority in terms of assistance and achieving the Millennium Development Goals. For most of its history, the World Bank viewed governance as something outside the realm of its non-political charter, and it viewed corruption as a problem to be quietly condemned, not openly tackled. About ten years ago, those views began to change when then President Wolfenson, with the endorsement of the board, launched a World Bank initiative to fight the cancer of corruption. Since then we have learned much about the relationship among good governance, corruption, and economic development. They are, indeed, interrelated. Research has shown that on average, the economies of countries with better governance the public institutions that support the public work grow faster than those with poor governance. Small improvements in governance can almost triple the income per capita of a population over the long-term and can reduce infant mortality and illiteracy by two thirds. That's what some call the triple dividend of good governance. Effective government service delivery systems, a legal system that supports and enforces the basic rules of commerce and a public financial management system that makes government accountable to its citizens are all fundamental to economic growth and development, as you all know. When governments take explicit steps to counteract corruption, the turnaround can be dramatic. In Uganda, for example in the early 90s, schools were on average receiving only 13% of the public funds that were supposed to be spent on children's education. To address this problem, the government of Uganda started disseminating the education budget down to the district level so parents could see exactly how much their schools were supposed to be receiving. By 2001, nearly 80%, according to the documentation, of the funds were reaching the intended schools. Demonstrating that a government that is transparent and accountable to its people can and will deliver services more effectively and fight the disease of corruption. For corruption, if left unchecked, can stifle private sector growth, undermine the legitimacy of government's imperatives to eradicating poverty. Good governance, on the other hand, builds the confidence of the investors that is needed to invest in developing countries. It ensures that contracts will be enforced, that property rights will be respected, and that their legitimate profits will not disappear into the pockets of corrupt officials. As President Wolfowitz has often noted, corruption is not just a disease of developing countries. In every corrupt transaction, he says, there are at least two parties involved: a bribe giver and a bribe taker, and in many cases the bribe givers are representatives of major corporations in developed countries. And it is incumbent on every developed country to prosecute those corrupt corporations as the U.S. has sought to do for many years under the foreign corrupt practices act. Planning and instituting governance reforms obviously is not easy. In addition to transparent and accountable public institutions, good governance requires independent judiciary, and a government that enforces contracts as well. The evidence shows, too, that a free press and a vibrant civil society can play an increasingly important role in creating a supporting citizen demands for good governance. Under the leadership of President Wolfowitz the bank is now moving forward with even stronger efforts to address governance and corruption, and the strategy discussed by the World Bank governors in Singapore last week reflects this new vigor. It also demonstrated that this is a sensitive and potentially controversial topic. At that meeting, a number of countries raised concerns about transparency, consistency, and fairness, and they are worried that the bank management, rather than the countries, will make key decisions. Some a particularly wary in which findings of corruption lead to findings about whether any money should go at all to that country. Some borrowing countries are concerned that the bank will begin to work directly with MGOs and other players in their country rather than with World Bank member governments. There is also genuine concern that the potential suspension of bank funding will unfairly hurt the poor. But the bank strategy is clear. Quote, "In the most difficult cases the bank will engage in areas and sectors where adequate government arrangements are possible with a likely focus on building capacity, meeting the basic needs of the poor, and working within its legal mandate, non-politically, with institutions outside central government." We in the U.S. Government believe the strategy as put forward by the board, by the President and worked on by the board, is important and good. The U.S. Government and the foreign U.S. Senate foreign relations committee have both been very clear in a long-standing position about in order to have our taxpayers have confidence that the generous offerings that we give both through U.S. Government general assistance and also private contributions that you and I and others make, we need to ensure that those are delivered as effectively as possible. Resources are scarce and we need to know the money goes to the places where it's going to do the most good. We have an obligation to poor people of the world in that regard, and it is not secret that the demand for development resources, as I mentioned, far exceeds what is available. If we waste our assistance, it will be at the expense of others who might otherwise have benefited. Nowhere are governance reforms more important than in Africa, and that's the other piece I would like to focus on today. Poverty, HIV/AIDS, Malaria, are all plentiful, you've all read about it, and some have been there to work the issues. Education health care, infrastructure, are in scarce supply. While progress and growth in many African countries is occurring, it is the continent overall has lost ground in its fight against poverty, and as I mentioned, Africa is the #1 priority for World Bank assistance. Last March I had the opportunity to visit several African countries and saw firsthand how the issues of governance and corruption can be. In the Gambia, for example, my colleagues and I met with President Yama, an interesting character who took control of the government in a coup in 2003. He scheduled elections, I think they occurred late last week, I've not heard the outcome, I have a feeling I know how it came out. The President impressed upon us his view that the most important step to take is to eliminate tribal wars. One major issue, for example, is the lack of capacity in the government itself. Particularly noteworthy was the fact that the government was unable to find and hire accountants and financial analysts who could deal with financial management issues, and that issue perpetuated the entire country situation in terms of the labor supply. Basically a huge brain drain of people moving to London and to America to try to gain opportunities for education and work, and all of whom I am told, and many of whom when I spoke to them, said their strong commitment is to go and have an opportunity and of course remit funds on a regular basis to their family back home. In addition, in the Gambia, the government has created a tax structure that undermines private sector investments. So not only is the labor supply scarce, but the private sector investment opportunities are also limited because the government taxes companies at a rate of 35% of profits or 3% of gross revenue, whichever is higher. So this creates a real dis-incentive, obviously, to invest in high-volume, low-profit goods. But that's nothing that the World Bank, in terms of policy, should be involved in, so it makes for a difficult environment in which we work. In Gabon, where there are few private sector job opportunities, the government is reluctant to crack down on illegal activity, and one can understand why. It's often the only source of income, at this point, to people in the country. Thus, the illegal checkpoints that I mentioned are nearly as common as potholes in the few roads that do exist, and petty corruption is commonplace among civil servants. The situation was even more dire in Central African Republic, a country that is just emerging from civil war, and the UN has recently referred to it as the African's "silent drama." It doesn't get as much attention and yet the prospects and the challenges both are incredible. A decade ago, CAR as they called it boasted more than 300 private companies. Today there are just 30 in the country, and on the UN DP human development scale, CAR ranks 169th out of 177 countries. CAR made the Gambia and Gabon look prosperous. And it was a bit nerve-wracking on our trip to be accompanied by a caravan of bazooka-toting military officers on every stop on our trip. CAR's President Bozizi came to power in a coup in 2003. He was elected a year later in a UN-organized election that was generally viewed to be unfair, but he and others in his cabinet were in the middle of an imminent political uprising when we were there, and we visited with all of the cabinet ministers. The economy, they explained, was in need of an immediate jump-start, in order to forestall the rebels from the North and other disenfranchised groups from taking over the government. At the time of our visit, the country had well-defined plans for economic and judicial reform, as well as improved capacity-building so the government could jump-start the economy. But they had been unable to execute those plans because they lacked access to even minimal financial resources that had been consumed and over-consumed by the previous regime. Most public servants, in this government, had not been paid in 40 months, four oh months. Not surprisingly, corruption was high, the lack of paychecks made paid servants highly susceptible to petty bribes or even bigger bribes. In all the countries, the situation seemed bleak. But there is indeed reason for hope. Africa seems to be turning a corner. Greater peace and stability are taking hold, while there are still six active conflicts ravaging that continent, unfortunately, just four years ago, there were sixteen. And fifteen African countries have been able to maintain growth rates of four percent or higher for the last ten years. Some, like Rwanda and Mozambique, have achieved growth rates as high as eight or ten percent. Unfortunately, this story of suffering and poverty is told more often than the story of progress, and that progress motivates Africans everywhere, and when I was there it was a palpable sense of optimism and by ordinary Africans, if that's an appropriate way to say it, people with whom I spoke, and it is reflected in a Gallup poll that found that Africans are the most optimistic people anywhere in the world. Asked if they thought 2006 would be better than 2005, 57% of Africans thought this year would be better than last. Higher than East Asia, at 54%, and much higher than Europe, which was at 30%. In exploring these findings, a New York Times reporter spoke to a woman from Sudan, who had escaped the brutal violence in Darfur and was scraping by with her three-month-old son in a refugee camp in Chad. She stated with little hesitancy, according to this reporter, that her son would go to school and would have access to doctors as well as plenty of meat to eat. As President Wolfowitz said recently, "That spirit of optimism, even in a circumstance of unimaginable deprivation, provides Africa's greatest hope. It is the people that do that." Over the last 20 years, the world has made much progress. The number of people living in extreme poverty has been reduced by nearly half a billion. Most of the progress in tackling poverty has been in East Asia, half in China alone. Africa is the frontier. It is a country on the move, with such potential and so many challenges. I hope, though, that we will be able to look back in ten years, or maybe even sooner, and say, "We lived up to the optimistic convictions of Africans everywhere." And I am convinced that it is only in resolute partnership with countries and with generous donors public sector, private sector, non-profits and involved and informed people such as yourselves that that is the only way we will succeed. Thank you very much and I look forward to the opportunity of having some questions, and hopefully some answers. Thank you.
member. 
