James D. Wolfensohn, President of the World Bank Group, addressed
the inaugural ceremony of the Annual Forum for APEC Finance and
Development Program (AFDP) Sunday in Beijing. Following is the full
text of his address:
OPENING ADDRESS -- APEC FINANCE AND DEVELOPMENT
FORUM
James D. Wolfensohn
President
The World Bank Group
Vice-Premier Wen, Minister Xiang, it is a great honor for me to
open this inaugural session, of the inaugural event, of the APEC
Finance and Development (AFDP) Forum. I am particularly pleased to
welcome such a distinguished group of policy makers, renowned
academics, senior government officials, and private sector
executives from China and neighboring countries.
We, in the World Bank, feel privileged to be co-sponsoring this
event with the Chinese Government. I am also pleased that our Chief
Economist, Nick Stern, will be representing us in today's
discussions -- a testimonial to the importance that we attach to
this initiative.
I
personally would like to congratulate the Chinese authorities for
taking the lead in establishing the AFDP, and for having the
foresight to pursue the overarching theme of AFDP: improving
financial intermediation for economic growth, development and
stability.
Much effort has been devoted over the last several years,
particularly in this region of the world, to restructuring
financial systems to remedy the problems that became painfully
evident over past five years. Much progress has been made in
addressing the principal causes of the Asian crises --
over-leveraging, excessive foreign currency debt, weak corporate
and financial sector governance, and ineffective official
supervision of financial systems. Rebound from the Asian financial
crisis exceeded most expectations but that should not lull us into
complacency. We cannot be content with having stabilized national
financial systems. The debilitating effects of possible contagion
on regional economies following any financial fall-out by any
country, makes this meeting even more important and crucial. It is
critical that you build the regional financial systems here into
dependable network and know that each economy is dependent on the
others. It is a single world and the Asia Family will continue to
live in one world with itself and with the rest of the world. You
know, probably, more than any other group, that a sound and robust
financial system is fundamental to growth and poverty alleviation,
employment creation and economic stability. Good financial systems
promote these outcomes, weak systems threaten them.
You will cover a number of themes in today's discussion. From my
perspective let me just offer a few observations.
We
need to be ambitious.
We
must pursue financial sector development that creates in each
country a diverse and competitive financial services industry that
fosters innovation and growth of national economies as they become
increasingly integrated in the global economy This integration
itself offers substantial opportunities for expanding the range of
financial products and services available in APEC member countries
(by importing and exporting high quality financial services).
Taking full advantage of such integration is one of the challenges
that I believe China will work hard to achieve as the nation
embraces WTO obligations.
We
must go beyond seeing banks largely as mobilizers of savings --
which China and other Asian countries have done extremely well --
to financial intermediaries responsible for seeking out productive
investments wherever they might be in national economies. In
particular, this means doing a much better job of evaluating the
performance and substantial growth potential of small firms which
presently are underserved by financial systems in many countries.
Here again I congratulate the Chinese authorities for adopting this
challenge as one of the principal areas of focus under the
AFDP.
We
have come a long way in this effort. But we must not stop
there.
We
must go beyond seeing the financial sector challenge as developing
sound banks, and focus more on building capital markets which
provide new means for companies to strengthen and diversify their
financing structure, reduce financing costs and better manage
financial and other risks and from my experience, the prerequisite
for capital markets to flourish is that governments have created a
deep and liquid government bond market.
The shared experience of the APEC members in pursing these and
other objectives can provide valuable insights for such discussions
and thus can help shape the research and training activities that
comprise the AFDP.
Let me conclude by thanking you for the opportunity to open this
Forum. The issues that you will be discussing are vital to the
realization of the full economic potential of the APEC members.
Your success will contribute even further to the impressive
achievements that have already been made in reducing poverty and
raising living standards. For these reasons, the World Bank is
strongly committed to collaborating with the Chinese authorities in
promoting the success of the AFDP.
Thank you.
(www.h5a3.com May 26, 2002)