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Juan José Daboub: The UN and International Organizations Are Not Free

Former Managing Director of the World Bank: We Are Already in the Modern Version of WWIII

Dr. Juan Jose Daboub

by Nadia Turki

In an interview with Majalla, the former Managing Director of World Bank Group confirmed that job creation is the best way to fight poverty around the world. Juan Jose Daboub, a politician and economist who has held several prominent posts including El Salvador’s Ministor of Finance, explained that change is inevitable in all regions of the world and that the key to success is to not wait for things to happen, but to be one step ahead. Countries whose leaders decide to lead, have a better chance of success, Daboub elaborated.

On the side-lines of a the Victoria Forum, which was held last week in Victoria, Canada, the prominent businessman also stressed that the World Bank needs to go back to the basics of open economies, fiscal responsibility, rule of law, and the creation of opportunities for all.

Is the World Bank fulfilling its purpose?

The World Bank was created to support the reconstruction efforts after WWII. Once such task was accomplished, a new mission has evolved: to eradicate poverty in developing countries. To achieve such mission, it is imperative to focus on market based solutions that can create private sector led jobs. Job creation is the best tool to eliminate poverty. Today’s World Bank has diluted its core mission to include ‘the flavor or the month’ and that is not a very good idea, in my view.
 
Does the World Bank need to change its strategy, and why?

The World Bank needs to go back to basics. Open economies, fiscal responsibility, rule of law, and the creation of opportunities for all are the main strategies the Bank should focus on. Why? Because this is the only way to empower people to take destiny into their own hands – the alternative is a large, corrupt and bureaucratic public sector, which very seldom delivers results to its people.

Drawing from your experience of working with the United Nations and other international organizations, do they have the freedom to take decisions related to member states within legal frameworks, or does politics run the world as many have said before?

None of these organizations are free. They all depend on the donor’s politics and policies. This is the reality.

What are the major challenges facing the world today?

Today’s world is moving faster than ever. Its constant evolution forces people to adapt. Technology and the access to knowledge are key in order to capitalize on the opportunities that exist, but also to manage the challenges. The main challenges I see are: unemployment, access to clean water, re-apparition of socialism, increased corruption, and lack of true leaders around the world. The effects of these are: insecurity, migration, populism, and lack of trust among people.
 
The Middle East is undergoing major changes, economically and socially and culturally. Does the region need these changes at this time? Are these changes safe? 

The Middle East is the cradle of knowledge and faith. Hard working and resilient people live there. In the same way that the world is changing, so would all regions of the world. Some regions are moving faster than others, but change is inevitable. So, the key is not to wait for things to happen, but to be one step ahead: to lead. I believe that those countries whose leaders decide to lead, will have a better chance of success.
 
Many observers claim that we are seeing the signs of World War III because the state of the world is showing some similarities to the pre-WWI and II global pictures. How true is this vision?

I have heard that and I tend to believe that we are already in the modern version of a WWIII. That is, with so many conflicts going on around the world one can argue that the numbers of lives lost are comparable to those lost in the previous world wars. The only difference is that there are no 2 parties or axis involved, but rather a multi polar set of parties, with different interests and objectives.

Many observers view the education systems in the developing world as very weak. Do you agree with this view? What should international institutions do to save future generations?

Education is crucial to adapt to a fast-changing world. Education is about meeting the market demands, not about educating for the sake of educating – it has to have a purpose. Given the unemployment levels of the youth, especially in the Middle East, it is fundamental to focus education as a function of what the markets demand. Technical education, for example, is important.

By the same token, the education system has to change in order to be more effective. Instead of a bureaucratic ministry of education, you need the parents in the communities to lead the efforts. That is what we did in El Salvador with the EDUCO Education plan.

Policies and laws around immigration are changing sharply around the world. While millions of people suffer the scourge of war and have no choice but to flee, the world is closing its doors to them without considering international laws and human rights. What is happening, and why now?

Immigration exists since the beginning of humanity. People always look for better lands, amicable weather, and security. So, I am not surprised by what is happening today. we need to work towards creating the right conditions in each country for people not wanting to leave. So, I go back to the reforms I described earlier. Each country can have the conditions for people wanting to stay there; we need politicians to understand that.

You had a distinctive career as a finance minister, politician and businessman in El Salvador. Could you talk to us about this experience and why you had to leave? 

El Salvador suffered an armed invasion from communists. Such invasion destroyed about 90 % of its infrastructure and about 5 % of its population was killed. By the same token, 22 % of the population migrated to other countries, primarily the USA.
 
Citizens and not politicians lead a reform process in El Salvador. such reform process took El Salvador from Hardship to Investment Grade. These reforms focused on opening the economy, strengthening the rule of law, investing in education, and creating the conditions for local and international investors to invest. El Salvador beat Germany, Spain, South Korea, France and Chile in the years 2001 and 2002 on several economic indicators. Poverty was cut by half and access to public services became almost 100%
However, once the communist got into power a few years ago, they took the country back to the starting point. Today, corruption, crime and lack of jobs are what define El Salvador. This is very sad, but it is the reality. I am hopeful, however, that we will be able to retake the path to prosperity and become an example again.

Was it difficult taking on the role of finance minister in El Salvador? What challenges did you face? 

Reducing the size of the public sector to half, increasing tax collections without increasing taxes, and combating corruption were the most difficult tasks, but, it was achieved. By the same token, we dollarized our economy to eliminate from politicians the desire to fool around with the exchange rate. This was not easy, but it bullet proof our economy.

What do you aspire to achieve through your investment company The Daboub Partnership?

The Daboub Partnership works with the private and public sectors, as well as, with civil society organizations to identify sources of sustainable growth in countries and regions of the world. This is done based on the experiences of success that I have observed in the more than 110 countries around the world where I have worked. The Daboub Partnerships assembles ‘hands on’ experience agent of changes to advance reform process in countries and/or to advice companies on country and sector

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