Heads of state or government leaders from more than 40 African countries have confirmed their attendance at the upcoming Beijing Summit of the Forum on China-Africa Cooperation (FOCAC). 1,700 delegates will attend the summit, scheduled for November 3-5. "Beijing Summit is a terrific idea!", said World Bank President Paul Wolfowitz in Washington on October 26 in a joint interview with correspondents from People's Daily, Xinhua News Agency and China Radio International.

World Bank President Paul Wolfowitz receives a joint interview with correspondents from People's Daily, Xinhua News Agency and China Radio International in Washington on October 26, 2006.

World Bank President Paul Wolfowitz (R) and People's Daily correspondent Yong Tang.

Correspondents: What do you think about China-African relations given the upcoming China-Africa summit in Beijing?

Paul Wolfowitz: I think the summit is a terrific idea; and I have been saying over and over again in speeches that Africa needs to be following the example that has been pioneered, especially in East Asia; where 400 million people have escaped poverty in the last quarter century. That makes it the best quarter century in the history in the fight against poverty, and 70-75% of that number is in China itself and that example is truly inspirational for poor countries in Africa.

So, if China did nothing else just by showing that it is possible to succeed in that way, just by showing that no matter how awful your colonial history may have been �C and certainly China's was pretty awful �C you can take charge of your own destiny. And also by showing, what I believe the economic reforms that started late 70s and early 80s show, is that getting the right policy environment is crucial to success. I have in many audiences enjoyed quoting the famous saying from Deng Xiao Ping, "That doesn't matter whether the cat is black or white as long as it catches mice." The essence of success here is to see what works and not be doctrinaire.

Now that China has achieved what I call middle income status-- and it is long way from being a rich country but it is no longer a poor country, there is a lot that China can actually do in Africa in terms of bringing resources that are badly needed, and in terms of bringing expertise that's badly needed. So, I think if the last quarter century was the chance for East Asia to turn the corner in the fight against poverty, I very much hope that this quarter century will be the chance for Africa, Sub-Saharan Africa to do the same thing. It is the only part of the world that's really been left out of this progress in recent years and it is very important that it be brought into it.

Correspondents: China is trying its best to bring Africa out of poverty. The World Bank is also doing the same thing. How could China and the World Bank work together to help Africa?

Paul Wolfowitz: Good question! I think there are several ways. First, we can coordinate our mutual activities and maybe develop some joint activities. The World Bank does that with a number of major donors. It takes a little more work to develop joint programs, but the benefit is that when you have done that work, everybody is aiming in the same direction.

Second, the more dialogue we have with China, the better we can coordinate. The third area is through the mechanism of what we call IDA (International Development Association). China is not a donor of IDA, but now it is a member of IDA, it has its basic contribution to IDA. China has gone from being a major recipient of IDA assistance. China is no longer a recipient. I would hope at some point China could become an IDA donor. The reason why I mention IDA is that it is a mechanism for pooling resources and then working things out on a multilateral basis. If China has a stronger voice in IDA, it would be helpful for African countries too.

Correspondents: The World Bank is helping developing countries develop their own economies. Do you think there will be any policy adjustment in the future in that regard?

Paul Wolfowitz: If you go back 30 or 40 years, the main thing the World Bank does is giving money to build big investment projects. Our experience taught two things: sometimes those big investment projects are the wrong things, we need to be more thoughtful about what is useful and about what is sustainable development versus what things damage the environment or sacrifice long-term gains. It still remains the case that we spend money to finance projects that are needed for development and it is still one of the central things we do. I think we've changed though �C some of the most important investments are not in physical capital but in human capital, health and education in particular. If you compared how the World Bank was 30 years ago and how we are today, you can see we have more financing of soft investment like health and education.

The third thing we come to appreciate much more is that sometimes the most valuable things that come from interaction with the World Bank is not money for investment but the things that developing countries are able to learn either from the experts of the World Bank or because the World Bank provides a bridge to other experts. When I asked Chinese officials when I was in China last October: "what is the most useful thing you have got from the World Bank?" �� one striking answer is: "it is not money. We learn through the World Bank how important it is to have a very good accounting system". The World Bank helped set up training programs in China for that.

It is the exchange of knowledge and I think one of the reasons why China has been so successful in the last 25 years is that China has been extremely good at getting the best knowledge available from the outside world and not being uncomfortable with learning from other people. The World Bank is one of the mechanisms China has found useful for learning from the outside world. It works well when you have people who want to learn. So it works better in some African countries better than others and some Asian countries better than others. I was in Pakistan last August and I met with a woman in a small village. I asked her a question if Pakistan could do something. She said, "Japan has done it, China has done it, why can't Pakistan do it?"

Correspondents: China is lending to many African countries. What is your opinion about that?

Paul Wolfowitz: The issue isn't China's lending, India's lending, the US's lending, France's lending. We have just been through a particular big debt cancellation exercise for many of the world's poorest countries. And what everybody is concerned about is that now that those countries don't have any debt anymore, they may go out and borrow too much all over again, and they'll become heavily indebted countries all over again. It is not the responsibility of any one lender to prevent that, it is the responsibility of lenders as a group. I don't single out China specifically �C it could just as easily be the US or any number of other countries that lend too much.

We have something now called the Debt Sustainability Framework which was worked out by the Work Bank and the IMF. The framework gives guidance on how much is a reasonable amount for a poor country to be borrowing. We now need to work with the different lenders so that when countries hit the yellow zone and before they hit the red zone, the lenders start to figure it out. The key to that is sharing information.

Correspondents: You said China is no longer a poor country by the World Bank standard. Does China still borrow money from the World Bank?

Paul Wolfowitz: China does still borrow money from the World Bank, but it no longer borrows money from IDA, it borrows money from IBRD, which is the International Bank of Reconstruction Development which lends at favorable terms which are slightly better than other commercial banks.

Correspondents: You have been to China several times since you became President of the World Bank. How do your trips in China change your perceptions about China?

Paul Wolfowitz: My first trip to China was in 1983. I was with Secretary of State George Shultz. My first big impression is how things changed and developed in China. My second big impression is that it is not just a big country, it is like several big countries, and some provinces are bigger than any countries in Europe so it is not surprising that there is a huge variation. I once went to Gansu Province and saw people who still live in serious poverty. I think one of the important reasons why the World Bank is still useful in China is there're still 140 million people, which is a very large number, who would be counted as living in poverty; and that's a big challenge for China and it's something where we think we can help. Another area the World Bank and China could work together is on developing the financial systems in China.

Correspondents: What has the World Bank done to fight against corruption in the world?

Paul Wolfowitz: The issue of governance is a very broad one. It is very difficult to make a general statement about this, the only general statement you can make is the more effective government institutions are, the better the results will be for fighting poverty. It's even a challenge in the most successful economies in the world �C look at the US with the Enron case. The difference between the US and a poor African country is that the American economy is so strong that Enron doesn't damage its economy while some African countries are so weak that even a small corruption problem can weaken the whole economy. The goal of the World Bank is to fight poverty. Fighting corruption is a means to an end.

Correspondents: What is the biggest challenge for the World Bank today?

Paul Wolfowitz: One of the big challenges is to coordinate our efforts with all the other donors. That is a very difficult thing to do. Another big challenge is encouraging the countries we work with to determine and pursue good policies. We can't force them to pursue those policies. That is why it is so important to set an example that good policies make a difference. China is one perfect example.

By Yong Tang, People's Daily correspondent based in Washington, DC