tv Washington This Week CSPAN September 17, 2011 10:00am-2:00pm EDT
issue of faith in the 2012 election with david brody of the christian broadcasting network news. we will talk about a pending lawsuit against banks about the quality of mortgage securities. then we will finish up with a look at the new book on jacqueline kennedy, "historical conversations on life with jfk." thank you very much for watching this edition of "washington journal." we will see you again tomorrow night 7:00 a.m. eastern. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
>> coming up, the u.s. postmaster general, pat donahoe, on the future of the u.s. postal service. after that, different perspectives on the global economy. then the international monetary managing director. and an outline of the chinese economic policy. the u.s. postmaster general announced 35,000's employees might lose their jobs even though the postal service is not going out of business. he made those remarks at the postal service headquarters in washington. this is about 45 minutes.
megan is playing a big role in what we are doing now and saving the postal service going into the future. >> the i am going to walk you through some changes to our network that will change our operating model. it will change the way the postal service processes mail for decades to come. we are responding to a changing marketplace. volume has declined more than $43 billion -- 43 billion pieces. it will continue to decline. our mail processing network is
this shows our first class or advertising mail. these are projections through 2020. 2006 was the high water mark. since, first-class mail has declined 25% due to electronic diversions and the economic slowdown. first-class mail volume lost will not return. people are communicating and paying bills electronically. we project the continued decline in first class mail. we expect to see growth in advertising mail in the out years. the change in mail has serious ramifications. the days volume declined to me we have less revenue to cover the cost of the infrastructure and we have excess capacity in our network. we need fewer facilities to process less mail. i am going to mention the word capacity quite a bit. this relates to our ability to process mail. our mail processing footprint has evolved over the years in response to bosnian fluctuations and to take advantage of technology developments. if you were an operations manager back in the day, you were managing growth. mail volume and revenue grew steadily during these years. during this time, we increase the use of automation to gain efficiencies. we were building new and larger facilities to house this equipment. this was a time of significant capital investment. since 2006, our process has been reoriented. prior to 2006, our operational goal was to stay ahead of the growth curve to ensure we had capacity to support the body of increase. now our operational goal is to stay ahead of the cost curve.
we are reducing our mail processing infrastructure to get ahead of the volume decline. this is that the core of our ability to return to profitability. we have been diligent in reacting to volume declines. in the past five years, we have reduced many processing facilities. we have done this successfully and without an impact to our customers. we have delivered record service during this time. we also accomplished reduction without laying off any employees. these consolidations were accomplished through a formal process of area mail processing studies. this process worked well and we have been using it for decades. the study process uses objective criteria to determine feasibility of consolidation. it includes a public meeting to allow community members to ask questions and provide feedback. what we are proposing to do over the next two years is a dramatic acceleration of the processes we have been using. we expect to shrink our network to 200 processing facilities by 2013. this is aggressive planning. it will put us ahead of the cost curve for the remainder of the decade. what remains will be the core of our operating network going forward. here is what our mail processing but that looks like today. we have facilities throughout the country of varying sizes that employ it e-to thousand employees. here is what happens at a mail processing -- from 50-2000
employees. mail is dropped off by customers and is sorted and transported back to local deliveries or to another mail processing facility depending on the destination. most of his work takes place in the middle of denied. this is to support our overnight service commitment. our entire network was designed based on our requirements that we maintain the capability to deliver a first class mail the next business day. this limit our mail to be sequenced or the local mail carrier and have it arrive at the facility. this has implications for the way we process mail. mes our operating windows are constrained. this map shows all the mail processing facilities we are reviewing for possible consolidation or closure. we are taking a comprehensive look at our entire network. the blue stars represent studies already underway.
feasibility of consolidation. these studies will consider the overall financial impact and will include considerable stakeholder input. these studies will take approximately three months from today to complete. we are aggressive, but not that aggressive. here is what the future mail processing network might look like. you can see there are far fewer facilities and each supporting a larger geographic area. we are able to study closing so many facilities because we are proposing a change to our overnight requirement for first- class mail delivery. this is known as a service standard change. this is a stated goal for service achievement for each male class. -- mail class. we have built our network to meet the standards. our plan is to rebuild our network based on a two-three
standard for first-class mail. this will allow us to design a lower cost mill processing network with far fewer facilities. to give you a sense of what the change represents, let me show you how we represent the -- how we meet the overnight commitment. the graphic shows the overnight requirement compresses our mail processing time that begins at midnight and runs for 4-6 hours. we must wait for all male to be delivered. -- al lmail to be delivered. this is not efficient. this requires us to maintain so many facilities. all our new operating model is based on a 2-3 delivery requirement. mail will be processed 20 hours
per day, enabling us to process more mail per facility. another way to appreciate the power of this change is to see it expressed geographically. this is the central pennsylvania facility. because of the overnight standard, we have to maintain all of this capacity and infrastructure within tight geographies. this is a function of the capacity requirement and the time and distance in getting mail to and from these facilities. if you think about the clock and the way we are processing mail today, the overnight commitment means maintaining excess capacity, equipment, facilities
space, and workforce. with the two day service standard, we can meet all the needs in this region with two facilities. those facilities would process mail continually. we could maintain fewer facilities because of the expanded operating window and geographical reach. i used this example to demonstrate the business concept. no decisions have been made regarding these two facilities. when we get to a network that looks more like this, we will have fewer facilities and will realize significant savings for the's service. our future network will support a 2-3 day first-class service standard. these consolidations will result in an estimated 50% reduction in our mail processing equipment, a significant reduction of our fiscal footprint and will eliminate excess capacity in our system. it will enable us and our customers to optimize transportation.
bottom line, we expect to realize an estimated $3 billion in savings from the submission to. there are two areas of change that our customers will be interested in. when will they be able to drop mail and at what time. this change will be transparent to be residential customers and peacekeepers of mail. there will be no impact at the post office or with mail delivery. we believe we will be able to readily accommodate our new schedule. many have been telling us we need to do this. we know the proposed changes will have industry-specific changes. we have outlined these changes for most of the major industry groups on a conceptual basis.
we have been pleased with their initial response. we have a strong record of working with our customers to mitigate any potential issues. we are committed to make sure this -- to making sure this works. we plan to work closely with our customers as we have done over the past five years of aggressive consolidation. we do not make these business decisions lightly. this change will impact our employees. we have a dedicated and committed work force. our employees do a tremendous job and deserve credit for their wrecked its service levels and efficiencies in these past few years. every mail processing employee will be touched by these changes. we know that change is unsettling. we will make every effort to
accommodate employees to the extent practical. we will work with our unions to reposition impacted employees. we are an irresponsible employer. already class -- past 12 years, we have reduced its work force through attrition. we have never lay anyone off. we have a challenge ahead of us, to reduce the size of our work force and to put the employee impact in context. we have 589,000 total career employees. 159,000 total mail processing employees. we anticipate it will have 35,000 fewer male processing positions in -- mail processing positions in the future. what i have discussed today will reduce annual operating expenses -- expenses by $3 billion. this is a network realignment
initiative. we are redesigning our delivery functions to improve service, drive efficiencies, and reduce costs. we are also working on our regional network with post offices. we are expanding our network of retail partners and online offerings and we are transitioning to fewer bricks and mortar post offices. these changes will net $1.50 billion in cost savings. it will result in more than $6 billion in cost reductions by 2015. this sets the foundation for a profitable's service that will carry up for work. that me turn it back over to pat to explain how we get to $20 billion by 2014. >> thank you. as we said, our immediate goal
is to get to be $20 billion by 2015. we just described an ambitious operational plan that we think we can accomplish over the next few years. most importantly to know, this is something within our control. we have plans we need congressional help on. we have some things that are within our control to get us to be $20 billion. as you can see with the numbers, this is just a part of where we need to go to get the $20 billion. we are counting on two additional things. one, the cost reductions which can achieve working with our label unions -- labor unions going forward. and some other changes, perhaps with the health benefit payments we have. we are also seeking substantial and comprehensive long-term legislation to provide us with a
more flexible business model. we have made a number of proposals to congress over the last few months. we have to get our cost structure in line with the legislative issues and what we have going forward. if we are going to return to profitability, we have to have legislation that allows us to be flexible in the way we manage this organization. secondly, delivery flexibility. we need legislation now to move from six to five days. we need to make those changes now. the second thing we need to do is to resolve the pre-funding issues that are out there. we think we have a good proposal out there for us to tackle our own health benefits system just like any other private company. doing that allows us to hold
down costs in health benefits. we will pay $7.20 billion this year. it is an opportunity to reduce somewhere between 8% and 10%. we have shared that with congress and the administration. we are looking to push that we will work. we have the workforce issues and some proposals around retirement plans and streamlining government going forward. if we can get the legislation which through, along with the plan we have in place, we know we can be successful in achieving what we need to do from a profitability standpoint going forward in this organization. we know we can get there by 2015 and put the postal service on firm financial footing going for. we have put a lot of ideas out here in front of you this morning. we have been talking about a
number of these of the next -- the last couple of weeks. now, we would like to answer any questions you might have. >> thank you. what we would like to do is limit the questions to three of possible. if you have a question, please wait for the microphone to be brought to you. please provide your name and who you represent. i will start with this gentleman over here. >> what role has the internet played with the reduction? >> the internet has had a substantial impact on the post office. 60% of americans pay their bills online. that has moved from 5% in the year 2000. that is a dramatic affect on first-class mail. we are taking the reality going
forward. that will continue to change. we need to make these changes in our system now to be healthy financially going forward. >> what do you say to people who are concerned about their post office closing in their neighborhood? >> we want to provide the best access we can to the american public. we are looking at small offices that don't have a lot of activity. we are looking to redesign the way we provide that service. we were asked a question about a village post office. we can provide better access for customers at a lower price. congress needs to help right now with comprehensive, long-term legislation. we need to resolve this requirement for the retiree health benefits. we need to get the administration and congress and the postal service all on the same purge -- same page to get
this going. it is important for the mailing industry. >> can you tell us what the impact will be on priority mail and on your standard mail service? >> there will be no impact on priority mail. there may be some changes with the standard mail service standards. >> you set your customers are positive about these changes. can you tell us how this will impact on small businesses, particularly with the entry point changes. >> what we will be doing in the plants is reviewing plant by plant. what we will keep them open and
what is the alternative. they will have the same opportunity and an even better opportunity if they want to get to the consolidation point. that saves them on transportation costs. we want to make this as transparent and as easy and our customers as possible. >> we have extensive customer outreach efforts to ensure we hear all voices from the milling industry. we will work with them for tailored solutions. >> can you bring the microphone over here? you talked about -- >> you have gotten to the point where you could close half of these facilities and still deliver the mail. how did it get to this point? >> what we have closed our offices and airport mail facilities and some about consolidation points.
what we are going through now are much larger facilities that will require a change to the entire network. >> so why haven't you done more sooner? >> the difference became the whole decision around the service standards. what has happened is this, first-class mail has taught us to step back and do two things. look at what we do and reach out to the customers. we said to be customers, what should we be doing. its customers came back to us and said, consistency, predictability is important. designing this network where you can get the most out of your assets and provide assistance, time, and delivery is excellent and what customers are looking for. >> you say this is going to be more consistent. if you are relaxing a status from 1-2 days to 2-3 days.
you are making things slower. why is this better? >> people have moved to electronic bill payment. a lot of the consolidations we have been made have been smaller plants and larger plants. if we can keep its existing network going on forever, that is completely irresponsible. customers are saying, give us consistent timing. give us the opportunity to bring e-mail into your facility and keep your costs down. we do not want to be priced out of the system. >> it by dropping birthday card in the mail two days before my sister's birthday, you are telling me i may not have it. >> is she in washington, d.c.?
>> new york city. >> if you use express mail, we will guarantee it. >> when i mentioned revise entry time, 65% of first class mail is entered by our large commercial mail. we will work with them. depending on the time of entry, we can accommodate overnight service. >> a couple of practical questions. when it comes to the 250 closures being studied, you showed a map. what is the number we are talking about and what is the chance those offices will actually be closed? >> we have 61 studies in progress with another 252
studies that we will work through. we have data driven information. we look at the overall financial impact and will include considerable customer impact. it would be premature for me to speculate as to how many we will ultimately close. as you can see, it covers the entire landscape. >> as to the 35,000 fewer mail processing and employees, you spoke about not having to lay off anyone. what are we talking about now? 35,000 persons figure to be reached by 2013 or 2015? are we talking about layoffs? >> let me put it in context. we have 151,000 mail processing employees. they will all be directly or indirectly impacted. if you look at the broader picture, we have over 150,000's
employees that can retire today. we will continue to work with the unions. >> you have talked about creating enough breathing room. to be able to be ahead of the cost curve. is this enough to really find long-term stability? are we going to find out in 2015 that another round of this sort of thing will be necessary? >> we want to address cost in the short term. when you move up from six days to five days -- you put this process in place, $3 billion out of the system. long-term issues are addressed with, what do you do with retail? we operate over 30,000 post offices. we have to look at what is the
best way to provide access. the other thing is some of the employment cost going forward. they help to control the cost for the long term. we are looking for short-term and long-term manage the costs. >> why don't we come over with this side of the room? >> what happens to the actual facilities themselves? if the decision is made to close it down? >> we are going to study over 30 million square feet of space. either we sell the access out right, or we look to bring existing postal operations into own space. it is possible at other regional facilities will be brought into the orlando
structure? you mentioned all distribution center employees would be affected somehow, someway. will some be given a choice to move to a new facility? >> we have contractual agreements with our respective unions that dictate the repositioning of employees. some may be access to be activated site. -- access to be activated side. >> when is the change from one to two days to 2 to 3 days taking place? >> we are obligated to file with the proposal for a nationwide service an interchange. they would offer an advisory opinion on the proposed changes.
>> when does the change happened? >> probably close to november. we would transition all the things that we do with the customers. you would see changes in local service standards, you would see changes in times, the whole 9 yards. we have an excellent plant and we will be working with people, not just at this level, but eck side by side to make sure the customers are fully taken care of. >> you testified before congress last week, has encouraged are you -- you expressed your urgency to get their approval to have new legislation? from your testimony, how encouraged to argue that there will be fast action on this
considering the partisanship that is going on packs the think we will see a quick movement on this? ." >> so that we can stay out there in business and provide excellent service for a long time to come. we think the proposals under on the table are very good proposals. there are support from both republicans and democrats, the house and the senate as well as the administration. i think it'll come together.
we will see a viable bill this year by the end of the calendar year. i think congress knows that it is very important and responsible to give us long- term comprehensive legislation. >> i am interested in this because of the buffalo facility is on your list for potential closure, all rochester facility is not. i wonder what standards you use to determine which facilities to close at this moment. >> as part of the mail processing study, the components that we review our capacity, projected volume, customer and but, to name a few. -- input, to name a few.
when we are talking internally with our employees and the management team, we are clear to say, this is not an indictment of the performance of an individual or the facility. we are looking at objective criteria to make the best decision regarding the network. >> what you are looking at is reached. if you think about the geography around buffalo and rochester, you get better reach out of an area like rochester. >> take a second and talk about the history of the process. >> the studies have been around for decades. what the established process. in fact, that is by both the office of inspector general. we clearly are a very transparent about the data and the inclusion of customer input. we will have at community
meetings in each of these service areas. so that the local community will have an opportunity to provide comments and feedback. >> thank you. is that part of the 220,000 or hoping to cut by 2015? >> yes. >> would that 35,000 come back in 2013? >> we have a 625-day proposal out there. but we talk about -- 6 to 5-day proposal. we thought it was irresponsible on our part to say to congress, we knew it -- we need -- we thought it was very irresponsible on our part to say to congress, we need to address this. you can create opportunities to move people off the rolls and irresponsible way.
-- in a responsible way. >> there are always discussions that go on. the situation is that we had to unions in negotiations and won in arbitration. when you have the economic issues that we are facing, that has to be taken into consideration. >> any other questions? ok, why don't we come back over here? >> if domestic mail transitions, what will the impact be on international mail? >> we do not anticipate an impact on international mail. >> it will not have any impact? international mail will still be the same as it was before? >> we have no proposed changes to international standards. >> international comes into our house and its distributor from
there. -- hubs and gets distributed from there. >> could you give me an example of a specific industry that would be affected by these new standards? which kinda discussed since you've had with them and how they received it? -- what kind of discussion that you have had with them and how they received it? >> obviously, there are concerns. it is an important topic for us to work through. our intent is to sit down with the various segments of the mailing industry and work through this process. to determine how we can mitigate the service interchanges. with the larger commercial mailers, with the revised time, we think they will be able to accommodate that very readily.
maintained that overnight standard. >> can you give me a specific example? >> one of the things we have seen, there are too big changes that have been going on. one is the payment issues that people pay more bills online. there are still a lot of bills that get paid to the mail. as the work through this change, we have to make sure that -- we work with that industry to make sure that we are -- are: -- consolidation points are such that they are able to handle the volume and handled in an expeditious way to get that money through to the recipients. this is what has given us the idea. if you look at what has been
happening over the course of the last few years in the first- class mail business, there is a lot of consolidation and the generators. a lot of the generators have moved to consolidation point where they're bringing mail into our system and we get to 2 and 3-day service standards. we think we are making the right decision from but a service standpoint and a cost standpoint. >> any more questions on this side? how about over year? >> what do you say to folks who are saying, wait a second, i am concerned that stamp prices are going to increase. what can you tell them? >> 44 cents, putting a piece of mail and e-mail box from washington, d.c., to alaska is still a very good proposition. we also provide a tremendous
safety and security of that mail as it goes to the system. we still think we are important to the economy and society and we still provide excellent value. >> will you increase prices? >> we will see what happens next year. we are looking at that. it would be limited to 2% or less. they could possibly go up next year. >> i was wondering, what if congress does not act by the end of the calendar year? what will happen? >> we will continue their activities that we are currently under way. we have to do that. we have to reduce the network foot print and get the cost in line with the shrinking volume. we also continue to work with the unions and work out how we can get our workforce flexibility and lower the cost of labor altogether. i seriously think that congress and the administration that the
gravity of the situation and i think they will act on it. >> what if? >> i cannot control that. the mail delivered. -- the mail will gets delivered. we manage the cash we made some changes and we will make sure we make the rest of our payments. we will play employees, suppliers. the male is important to get through to people on a daily -- the mail is important to get through to people on a daily basis. >> talk to me about the switch from the one-day to the two-day. how many pieces of mail are we talking about? >> it depends. the male and the blue boxes has been decreasing of 30, 40, up 50%. that represents around 15 billion pieces of mail.
commercial mailers, the lion's share of the bottom, they still have the opportunity to bring that mellon to our centralized facility -- that male into our centralized facility. ? what is the progress on closing post offices? >> we are working through the process. the earliest we would finalize this review process would be late december-early january. as evidence that these studies are not a foregone conclusions, we are working for the post office closing process. we have discontinued 21 studies because we did not believe we had sufficient alternate access and products and services available in that community.
>> going forward, in terms of the retail side of the post office, it is access. we want to get people excellent access. it can be a number of different ways and we want to make sure the american public gets that. we have to keep our eye on the cost line. >> we have been talking a lot about what kind of cuts are being made. what is the post office doing to create new business in order to compete with things like e-mail and create more revenue? >> there are a couple of things going on. we have not touted a lot of these things that we've been working on. we have introduced products and the last four months, at a simplified advertising product. we have made about $65 million on the product. we continue to see growth and priority mail.
fedex and ups are our largest customers in that area. we are wanting to get into the digital world a lot more than we are today. we think that we play an extremely important role in digital because we do a couple of things. we're the most trusted network in the united states. we can provide excellent security. you're working with customers, we are asking customers, what do you want? how can we help? >> if i may member of congress, the first thing i do when i see this list is their eighth facility in my home district? how do i protect it? you will be getting letters and phone calls from members protecting jobs in their district. what role does congress play in this process, if any?
how do keep politics out of the process? >> the important thing is that all these things that we are doing, there are standard criteria. there is no favorites being played. we did that with the post offices, we are doing the same thing. when you actually step back from that map, you see a very viable and distribution of facilities that makes sense. congress needs to work with us going forward. we all the responsibility. we have the responsibility did the best interest of the american public as well as what happens in the entire mailing industry. i think congress will work with us on that. >> any other questions? >> do you have total clarity on this $35,000 figure? excuse me, 35,000 employees.
>> we have a set of activities. what we are looking to do is to get to about 425,000 employees by the beginning of 2015. there is a whole bunch of things in that timeframe. in a three-year timeframe, we will move to that, ok? >> are there any final questions? they are willing to stay for a few more minutes if you want to ask any additional questions. with that, we will and the conference and thank everyone for coming. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
>> a few perspectives on the global economy with world bank president robert zoellick. after that, the chinese premier outlined china's economic policies. >> sunday, representative henry waxman, a ranking democrat on the congress -- commerce committee talks about republican plans to roll back regulations and other energy issues. that is at 10:00 and 6:00 on c- span. >> the first thing, you see the flash. the next thing you hear, your
them cry out in pain. the second thing i heard, if i have lost anything special, you know, shoot me. >> sunday, the director of the 30-minute documentary about his friend who was severely wounded in afghanistan. the film follows is journey from coping with a loss of his legs to his rehabilitation. >> world bank president robert zoellick told students at george washington university that the u.s. must learn from developing countries. a look at those remarks. this is almost an hour.
in a village in the mountains of guizhou province, china -- a village like others in africa, central america, or india -- people assemble to discuss the future. they don't want handouts, they don't want policy prescriptions, they certainly don't want lectures from visiting dignitaries. they want a chance. they are ready to leave the past behind. are we? two eminent harvard professors of government and history, richard neustadt and ernest may, combined their experience in a book titled "thinking in time." so-called "lessons of history," they argued, were often misused, and led to bad decisions. history was better, they said, for helping people to think in "time streams" by considering present issues within a continuum of experience and future possibilities. history suggested questions rather than supplied answers. so what questions, what future possibilities should we be considering in the uncertain autumn of 2011? and how do today's challenges relate to what has gone before? the world bank group's upcoming
to international trade, to foster open markets, to resist downward spirals of retaliatory protectionism and economic conflict. the architects of bretton woods created a system designed for their world. let's take a moment to recall that world. in that world, even amidst the post-war devastation, developed economies' share of global gdp was about 80%, with the united states alone accounting for over 40%. in that world, developed economies accounted for over two thirds of trade. in that world, most of today's developing countries were still colonies. for almost seventy years now, the multilateral architecture of 1944 has persisted. it has creaked and groaned - with currency and oil shocks in the 1970s, developing countries' debt debacles in the 1980s, and expansions and crashes in the 1990s - but the system has remained broadly intact. for all its weaknesses, critics, and patch-ups, the bretton woods system provided the enabling framework for the greatest era of growth and the
largest, most successful, economic transformation over the shortest time in history. some nations but the bretton woods system itself is not inviolate, cast in stone for all time. the key insight the founders of bretton woods left us was the need for wisdom to recognize when something qualitatively new is going on, and for the wit and will to face and accommodate what's new -- to act boldly, decisively, yet cooperatively. today, history's warning lights are flashing again -- red, yellow, and yes, some green, too. will we face the challenges of
in the 1990's, developing countries accounted for a little more than 20% of global investment. today, they account for about 45%. some forecasters estimate that by 2025, six major emerging market economies, brazil, china, india, indonesia, the republic of korea, and the russian federation, would account for more than half of all global growth. already, we lived in a world where if china's 32 provinces
were countries, they would be among the 33 fastest-growing countries in the world over the past 30 years. today, it is consuming over half the world cement, almost half the world's iron ore and steel. as china shifts from building a foundation of growth, some of this demand for minerals and materials will ease. india will be the next to drop. this is not the 1944 world. be wary of assuming straight line trends. as china's leaders know, the country's successful growth model is unsustainable. china is recognized that it needs to do with the challenges of environmental degradation, inequality, resources, productivity growth and overreliance on foreign markets. if china reaches $16,000 of income per person, by the year
2013, the effect on the world economy would be equivalent to adding 15 south korea's. it is hard to see how that result would be sustainable. i am also skeptical of predictions of advanced economies inevitable decline. would credible and possible action, not just short-term fixes, to restore confidence, a focus on structural and tax reforms, to boost productivity, advanced economies can turn around and power ahead. predictions of inevitable stagnation and decline have proven to be wrong. nor is it a time to say that developed countries can no longer afford to face up to challenges beyond their borders. in 1947, in the united states,
an average american earned less than one-third of what each american produces today. if the generation of 1947, with less than one-third of the well person, could face the world boldly, shouldn't we be able to do the same? americans, europeans, japanese, and other developed world countries play vital roles in innovation, investments, technology, security, and development. their contribution still provide the underpinnings for the current international system. it is in the self-interest of the major developed state and in the global interest to be with others, the architects of the future. something fundamental is going on that the lesson is that we must modernize, and not abandon multilateralism. something fundamental is going on and the lesson is that we must democratize development,
not retreat behind it borders. the lesson is that we must change our own concepts and labels. listen to those labels for a moment. first world and third world, north and south, it developed and underdeveloped, rich and poor, then and ask, the language of development has been the language of old world, old order. when countries that produce almost 50% of their electricity from coal to help -- tell poorer countries that they cannot use coal, what are they really saying? do what i say, not what i'd do. with countries with large fiscal deficits preached fiscal discipline, what are they really saying? do what i say, not what i do.
when countries pay homage to free trade, but will back developing countries with barriers, what are they really saying? do what i said, not what i do. a do what i say not what i do world will fracture to the detriment of all. the old ways must change. already, we are seeing signs of change. around the world, it is no longer european, japanese, or american models that developing countries are seeking to emulate. the mexican and brazilian cash transfer systems are being looked to for their innovation in keeping children in school, improving infant mortality, and overcoming poverty without breaking the budget. singapore's combination of an open economy, anti-corruption, and relentless adaptation to changing conditions is drawing adherents worldwide. india's model for information
technology is being copied across africa. relationships among developing countries are changing the development world as we knew it. and the 1990's, developing countries imported 15% of their merchandise from other developing countries. today, it is three times that amount. and to a dozen 8, a south-south foreign direct investment accounted for one-third of total fdi going to fort -- developing countries. developing countries of along bridges the recipients of aid, they're also providers. in 2008, and new emergent donors contributed between 12 and $15 billion in development aid. that is equivalent to 10 to 15% of the amount provided by traditional developed country donors. that is like a conservative
estimate. of course, developing countries are be set of problems, too. they are understandably sensitive about assuming the responsibilities. what does this mean for the future? the new normal will be no normal. the new number will be dynamic, not fixed come up with more countries rising and shaping the multilateral system. some states may falter, too. the rising economies will be joining the new networks and reverse combinations and changing patterns. these the networks are going to be displacing old hierarchies. the new normal will be about countries are in their place. not presuming it because of past standing or official prerogatives. the new normal will be a fluid and sometimes volatile, but also more opportunities for countries to benefit from the global economy. the new normal will be about
lifting growth, not just shifting growth. creating new jobs as old ones slipped in value, capturing the potential of sustainable and green growth, stimulating the private sector to innovate, and meet changing needs. the new number will be about smart economic power, will be about a voice, of women in their communities, of citizens in their countries, of state and the international system. as we have seen in the middle east and north africa, it will be about social accountability, government transparency, civil society. it will be about citizens were changing our world even as we raced to catch up. we must support them. adapting to this new world is not about a modest shift in voting power at the imf or world bank group boards.
it is not about developing countries been instructed by developed countries. it is down about north-south, 0 some politics of complaining and blaming. -- zer-sum politics of complaining and blaming. we need china to be responsible stakeholder. we need china to be responsible trading partner, to move toward a responsible exchange-rate system, to offer intellectual property protection, to make responsible investment and to pursue responsible environmental policies. but this is not just about china. europe, japan, and the united states must be responsible stakeholders, too. they procrastinated for too long on taking a difficult decisions, narrowing what choices are now left to a painful few. the global economy has entered a
new danger zone. with little running room as european countries resist difficult truths about the common responsibilities of a common currency. japan has resisted structural economic and -- reforms that could retooled sputtering economic model. the united states is facing record peacetime deficits, with no great approach in sight for cutting the drivers of debt. it is not responsible for the euro zone to pledged fealty to monetary union without facing up to either a fiscal union that would make monetary union workable, or accepting the consequences for uncompetitive, debt-burdened members. it is not responsible for the united states to falter in facing fundamental issues such as the senate -- unsustainable growth of entitlement spending, the need for a pro-growth tax system, and the stalled trade policy. unless europe, japan, and the
united states also face up to their responsibilities, they will drag down themselves and the global economy. emerging markets will not sit on the sidelines. it will not go back to the powerless hierarchical and 1944 world of leaders and followers and spheres of influence. the insight from 1944 is the need for leadership, for reasoning are way to change multi lateral system. the time for modeling through is over. if we do not get of events, if we do not adapt to change, if we do not rise above short-term political tactics are recognize that with power comes responsibility, then we will drift in dangerous currents. that is the lesson of history for all of us, developed and emerging countries alike. but if we get it right, the potential is enormous. over the last 25 years, the
share of poor people living in developing countries has been cut in half. in just four years, and child mortality rates have fallen by 25% in 18 african countries. over the 10 years before the financial crisis, economies in sub-saharan africa over growing by five to 6% on average, and most africans have already recovered and moved beyond pre crisis levels. we have seen the power of the private sector in the $77 billion that has been invested in telecom networks in sub- saharan africa over the last decade, boosting the number of mobile subscribers from under 10 million to nearly 400 million. we have seen it and the rapid rise of equity funds and other investors looking to put private capital to work. my point is a basic one -- today, we are seeing economic, trade, and financial independence that was
incomprehensible in 1944. we are seeing innovation, scientific breakthroughs, and communications, and comprehensible in 1944. we are seeing supply chains and logistic systems that range across continents and oceans. we are seeing multiple poles of growth with new economic powers and a south-south development pattern. none of these developments were envisioned in 1944. can we now combine those changes with a modernized multilateralism to herald a new world economy? beyond dependent? beyond the simplistic division between donors and recipients? a world beyond aid? foreign aid primarily assisted with humanitarian crises, famines, floods, earthquakes, or people fleeing conflicts. with the devastation of world war ii, it seemed useful to
jump-start investment with aid that might be limited because of insufficient domestic savings. aid became a currency to gain support in may by polar cold war competition. that 1944 world has changed dramatically. it is time to think about aid and new. these changes do not mean that there is no longer a place for aid, nor that developed countries should not honor their aid commitments, nor that we should disregard what a has achieved. for millions of people all around the world, that remains a life or death matter. it remains a valuable boost in neighboring countries to climb the ladder of growth. much remains to be done to achieve the millennium development goals. much remains to be done to reach the bottom of billion. the almost 1.5 billion people
today who live in countries affected by fragility, conflict, and violence. none of these countries has yet achieved a simple millennium development goal. but aid is not for life. nor should ab what developed countries give with one hand while they exclude developing countries from agriculture or other trade markets or restrict access to sustainable energy. in a world beyond age, assistance would be integrated with and connected to global growth strategy is, fundamentally driven by private investment and entrepreneurship. the goal was not a charity, but a mutual interest in building more poles of growth. in a world beyond age, and sound economic policies would be as important as aid as a percentage of gdp. in a world beyond age, g-20
agreements would be as important as aid as a percentage of gdp. in a world beyond aid, the advanced emerging markets would assist those behind of experience, open markets, investment, and new type of assistance. in a world beyond a, new financial instruments would assure farmers against drought, would create local currency and bond markets and leverage new equity investment and develop new hedging instruments for developing countries. in a world beyond aid, support for innovation and scientific breakthroughs would develop drought resistant, more nutritious, and better yielding crops, create efficient non carbon energy sources, and finalizing vaccines. developed countries need to recognize their self interest in helping develop countries get on
a path to sustainable growth. they need to honor their commitments. but we also need to recognize that the climate for aid will grow colder as donor countries struggle with that. taxpayers have a right to know that the world bank and other developed institutions are responsible stakeholders, too. we need to do a better job at demonstrating the effectiveness of age, value for money and pointing to results. we need to leverage a more effectively and we need to expand the contributors by involving more stakeholders. what might a world beyond aid mean in practical terms? at the country level, moving beyond age means mobilizing and leveraging domestic savings and revenues transparently. it means good governance, openness, and transparency, facilitating strong citizen involvement and voice.
it means investing in one's people, including access to efficient safety nets, basic services and quality education linked to training and jobs. requiring public institutions and officials to deliver, not just represent interests. it means encouraging the entrepreneur yours, small- business is, private investment, and innovation. it means investing in infrastructure to build the basis for future productivity, including through innovative public-private partnerships. it means investing in connectivity while gathering data and sharing information. in the new world economy, good data and information will be at least as important as financial assistance. at the international level it means innovation, progress on open trade and investment, access to energy, food security, competition and services, and climate change. not always waiting for -- but
moving ahead or coalitions of progress are possible. it means using the multilateral system, including the g-20. it means continuing to transform ourselves to become an open knowledge partner, drawn from, researching, customizing, and sharing solutions from around the world. the world bank group would be an investor for investment in building markets and institutions, whether of government or businesses or civil society. it would be a catalyst for action in a democratized development model. it would be an agent that advances of multilateral solutions. it would be a champion of inclusive growth.
three years ago, i proposed one such innovation. i called it a one% solution. sovereign wealth funds would invest one% of their assets in africa's growth. today, our private sector arm has a new management company. it's fund's total over $4 billion over 3 billion of which come from outside investors. today, i want to propose another idea that could bring us closer to a world beyond a. -- aid. women make up 50% of the global population and 40% of the global work force. in africa, women are the backbone of their communities. they produce 80% of the country's food -- the economy's food. yet they only one% of the world's wealth.
women and girls in developing countries are less likely to survive infancy, early childhood, or to survive their reproductive years. women are less likely to be paid for their labor. the evidence of their potential is overwhelming. we know that gender equality is smart economics. that country's wheat gender equality tend to have lower poverty rates, that a child can a survival is much greater if the income goes to the hands of the mother, that simply by giving women more control over agricultural and but, productivity can be as -- increased by as much as 20%. this is not just about economic potential. i believe gender equality is a bright, not just a resource.
-- is a right, not just a resource. we can talk about consigning old labels like north and south and developed and underdeveloped, the history. it is still a them and us world. how does this relate to a world beyond aid? it is about changing policies and empower and every person, man or woman, not just providing aid packages. we can give aid to better support women and girls, and we should. but aid alone is not enough. we will not release the full potential of half of the world's population until globally we address the issue of equality. until countries and communities and households around the world acknowledge women's rights and
change the rules of inequality. given women the right to own land, giving women the right to own and operate a business, giving women the right to inherit, giving women greater earning power, giving women greater control over resources within their households, these could boost children's health, could increase crawls education, could leverage economic productivity and take us closer to our world beyond aid. this would truly be democratizing development. since i became president of the world bank group, i have talked about the importance of modernizing multilateralism, to better recognize and reflect the ships that are taking place in the world today. i have talked about the need to democratize and development for all. north, south, east, west, men and women, rich and poor, that
they can play a part in designing and executing and improving development solutions. we talked about the need to make openness and transparency and accountability key features, not only of the world bank group, but of government policy across the world. i have talked about the need to forge a new social contract. to recognize that investment in citizens society and social accountability are as important to development as investments and farms and factories. i have tried to outline how multilateral system better reflects the economic realities of today. more connected to private sector and civil society networks. more committed to practical problem solving and innovation, could unleash a world beyond
age, a world that highlights prosperity, palliatives. there with some argued that this approach is too radical and would lead developed countries off the hook. it need not. there are some of argued that this approach is too risky. there are some may argue that this approach is too premature, the developing countries are not ready to be responsible stakeholders. are they any less ready than developed economies appear to be? already today, a private sector financial outflows dwarfed official development assistance. already, some philanthropic contributions towards bilateral
government aid. we need to be thinking in time, drawn insights from those ists askingltilateral list questions to distinguish the circumstances of our time. it is time to catch up, time to assume our responsibilities, time to create for the future, not pined for the past. thank you. [applause] >> thank you very much for that extraordinary set of remarks. you combine strategic vision with pragmatism. your remarks on the importance of gender equality, i think, resonated here at gw.
we have launched a global gender initiative. do what we say, follow what we do. we have some time for questions. we can open things up for questions from the audience. please introduce yourself as we take questions. to keep your questions in the form of a question, rather than a speech. i think we're ready to begin. i see a question here in the front. >> thank you so much for your comments today. addressing some of the ideas that you had the beginning. you have just passed politicians to be incredibly brave and to
not think about reelection and to not think about power, but to really push forward into the future. how will you give them the incentives and bravery to actually follow through with tinted architecture in those ways? >> -- with changing architecture in those ways. >> as the dean at mentioned a little over 20 years ago, i represented the united states in the negotiations for germany's unification. i have thought about that as you consider the events of the euro zone. chancellor kohl was the chancellor of germany at that time. he had a phrase that he used. the son of a statesman is somebody you recognizes -- it is
the notion that part of a good politician rising to a states person is somebody who is a student -- a state and have to recognize the times and move with it. if you go back to 1989, there were a lot of voices that fought german unification was a pipe dream. i think that the euro zone is at a similar stage. for the success of the euro zone, for the success of the countries, for the success of political leaders, they have to move to the point where they face some of the fundamental decisions that i talked about. in the case of that particular, you can address some of the issues with liquidity support from the european central bank. the fundamental choice to be made is are you going to have a fiscal union that matches the
monetary union? if so, there are a lot of different ways that can be constructed. who will start to set out the design. in a case like europe, you have to bring along other parties. kohl was very effective using the european commission. if you do not do that, are you ready for the consequences for those that are flailing? i could take the case of the united states. frankly, i understand the tactical [inaudible] about economic leadership was the fact that people are looking for leaders to give them the straight story. as i discussed in the case of
the united states, you are having a lot of debates about cutting discretionary spending as opposed to dealing with the rate of increase of the entitlement programs. social security and health care. that is not going to address the fundamental issue. if someone wants to said -- send a signal to the market, someone has to lead on this issue. part of the challenge of a good politician is in knowing when to set out that a leadership course, help to bring people along, i will propose the alternative. if you muddle through and you're economy continues to decline and you do not have a plan, that is not good for politics or was legacy. legacy. i have spent my life trying to come up with things that have a sense of strategy, but also a
sense of how you get there and how you build political support. i believe this moment in the international system, this is the mature people have to do that. they need to recognize the changed circumstances. there is potential there. there is huge potential and that arrangement. by sticking your head in the sand, you will not deal with the problem. >> ok. right here. >> i would like to ask you -- >> what is your discipline? >> international development studies. can you talk about how easy the world bank restructuring itself? >> there is a multiplicity. the starting point is to
recognize that while we are called bank, our primary purpose is not to finance. that is a little misleading to people. as i alluded to, when the world bank group is an institution, it is really to combine three activities. it is able to get knowledge and learning and experience from developing countries to other developing countries and be able to customize it to help people come up with solutions. what distinguishes us from a university is that we do have money and we can come up with a variety of different innovative forms of doing that. we have a new intermediary for private investment, in addition to the way we used to do private investment, as well as public sector insurance. third, we have done to wonder
billion dollars of commitment since the start of the financial crisis -- $200 billion of commitment since the start of the financial crisis. what we have to try to do is view those projects to have a leveraged a fact, to have an effect on building markets. or institutions, or capacity. be able to leverage it further. there is another key aspect. to do that, as an institution, we have to see ourselves as a problem solving plan. the world bank has incredible staff, some wonder if the trained people. one of the qualities i've been trying to encourage a is when a client has an issue, the job is not to analyze the problem, it
is to solve the problem. it is not enough to bring a textbook solutions. this brings us to the world of political economy is. how do you try to transform and work with the leaders, given the challenges they face? this is critically important for being old institutions, you know, created at the mid-20th century, is the openness in transparency. so we're the first multilateral institution that created a freedom of information act. it's great for challenging us, opening the system, and having people see that behind the walls of this building not too far away, it's actually not all that secretive. and a dimension that i think will even have more power that i was talking about with the dean is this open data, open information issue. so we've opened up 7,000 data sets going back decades, free of charge, is opened up
competition for apps for development, and this is connected to people in ways we never would have foreseen before. and it's also -- it picks up on this notion of democrat tiesing development. it's not just with experts -- no apologies -- but fine universities just coming up with the right solutions. but instead, engaging people in the countries. let me just give you a practical example. we work with google on a mapping system. so you can get on our website, and we have this for our countries, the 79 poorest, and we'll have it for all the countries by the end of the year. you pull up a country, and then you can just point your finger and learn the data about a certain project. and before too long, i want to add the interactivity so that people in that community on a hand-held device could say, well, this is what you think is happening, but let me tell you what is really hang, which is probably the best way to get into some of the corruption
issues. and so the themes that i've talked about, about transparency, governance, social accountability, engaging civil society, those aren't just words. they have to be an integrated part of how the institution changes its interaction. >> ok. we have another microphone over here. >> got a student? >> yeah, maybe here in the front. >> hello. my name is andrea, and i'm a senior at the elliott school undergraduate program. and in your speech, you talked a lot about reformatting the world of multilateral. what is your vision for the world bank and its rule or its interaction with other multilateral organizations? >> well, going back to my opening comments where i referred to the fact that in 1944 you created these three institutions, one for trade, one for reconstruction and development, one for the
monetary system. you know, keep in mind that when the bank was first created, it was for reconstruction and development. the first one was to france. and so it actually didn't start to work with developing countries for a few years. so the whole model, the whole world economy, that's judge i just tried to touch on it with broad brush strokes, was so different today. in its most basic form, that was a system whereby the capital flows were so limited and restricted, or the expectations for domestic savings were such that people thought you needed to be able to have this external source of capital because you wouldn't get it locally. increasingly, the bank needs to see itself as part of a network system. so it may be u.n. agencies. so we may work with some of the u.n. agencies right now with the horn of africa or with the world food program on some of its initiatives. or, since i talked about
reconstruction, as the dean mentioned, dean brown mentioned, in a sense, reconstruction today means the bottom billions of broken states, the afghanistans, the unique changes of integrating security, development, and governance. one reason i gave the speech you referred to was that i've been in those different universes, and i was quite surprised they didn't really communicate. so the soldiers would say, oh, well, we need to create jobs quickly so people can be put to work. economists say oh, those are not worthwhile jobs. how do we try to connect these different pieces? that means working, as part of this network, not only the u.n. agencies, but developing in developing countries. it means working with n. fwfment o.'s. so, in the last significant speech i gave before our spring meeting, i talked about how the bank needs to play a role in helping develop some of the civil society groups in some of
these countries, which is a little different for the bank, because we're used to -- we focus by our charter on support for the governments or through the private sector. so we're looking at ways that we can be able to try to support some of the civil society groups to support the transparency, but also make the network differently. so we need to see ourselves as a catalyst in a much different universe, and you have to understand the changing circumstances. just to take this other one i referred to, you know, when i came to the bank, the standard intermediation model for those of you speaking financial services term, we raised that, and then we'd either make loans or equity investments. so i took the advice of willie sutton, the famous bank robber, who when asked why he robbed banks, said that's where the money s. well, i thought, how can we tap sovereign wealth funds? because that's where the money s. we now have an equity fund of a billion dollars that's
starting to do investments in africa and latin america, and we've created other funds. so it recognizes the whole change of the financial world. if you think back -- and i always recommend economic history to people or any history, it's a good point, that would have been inconceivable in 1944, 1945, or 1950, or 1960e, or 1970. closest you got was the oil shock where people were trying to take the oil money from the gulf states and put it back through major banks and lend it to latin america, and that created a mess. so these are the types of things where part of my message today is some of the principles that people talked about in mid 20th century remain very important. but the world has changed. so how do you -- how do you maintain the principles but in a very different environment? the reason i stress that is that there's always tends as in any country, but a big country like the united states to say, well, we'll go it by ourselves, we don't need other players, you know, it's time to return home, we don't need to deal
with multilateralism, that's a drty word, so on, so forth. i don't think that's right, and i think the u.s. will be more effective if it learns how to modernize and upgrade its own interaction with multilateral institutions. >> i think we have time for one more question. here in the middle. >> thanks very much. we have a chinese student at the school of international affairs. >> where you from in china? >> my question is, if you talk about china being a responsible stake hold her, i'm just wondering, from a chinese perspective, what do you think are the incentives that will encourage china to be effective and what will be the factors to might encourage them to be a responsible stakeholder? >> good question. i was building off a speech that i gave in 2005 when i was at the u.s. government, and i was talking about u.s. policy
toward china, and the theme of that speech was encouraging china to be responsible stakeholder. the core logic of that speech remains true today, which is that, over the past 30 years, china has had this incredibly successful growth, about 10% a year over 30 years. and i had the good fortune of visiting chin ain 1980 when i was living in hong kong, so i've seen with my own eyes what an unbelievable difference it makes. and the reason i asked you where you're from, when i visit china, i always try to get beyond meetings in beijing, so just last week i was up in the northeast and try to get a sense of different developments , or i referenced where i was last year, one of the poor provinces in the southwest. huge changes. but part of the message was that china too benefited from this system that was created after world war ii. the whole logic of the opening
was to leverage off this international economic system and do it in a pragmatic way. so the first and perhaps core point is that china benefited from the security stability. it benefited from the trade system. it benefited from the international financial flows and investments, a lot of the foreign direct investment that went into china, that brought technology, created jobs. so it had an interest, a self-interest in perpetuating, but also adapting and modernizing that system. and as china grows larger and a bigger part of the world economy, that's only more so. so what happens in the eurozone is going to affect what happens in china or what happens in the united states. now, it's true for china and other emerging market countries as well. but what is difficult -- and this is where the developed countries need to figure out with the developing countries the right balance or structure -- is that you still have 75%
of the people earning under $2 a day living in so-called middle-income countries. so when by to china and talk about sharing responsibilities and others, they say, well, yeah, but we still got a lot of poor people to deal with, and we still have a lot of development challenges. that's a reasonable point. but at the same time, my counterpoint is china has grown so successfully and is now so large it can't ignore the role in the international system. so, beyond that, you really have to take each other, whether it's climate change, whether it's security policy, whether it's monetary affairs, but let me give you a very small and perhaps technical one, but it shows how this can work in practice. we have a fund for the 79 poorest countries. some of you that studied development may know this. and it gives grants or long-term loans without interest, about 40-year loans, to the 79 poorest countries. because of that financing model, we have to replenish it
every three years. so we just finished the replenishments. you get money and commitments for over three years. part of the money comes back from our own profits. part of it is reflows. part of it is contributions from developed countries. when i first became president of the world bank in 2007, china, which no longer received ida funds, but had been a resip yet many years ago, made its first contribution, about $35 million, and it made another contribution, this time about $130 million. now, for china, that's significant. britain and the united states are sort of at the $4 billion level. but i went to the chinese authorities and said, you know, it's a tough time to be raising this. it would help if china prepaid some of its ida funds from the past. so, economically, it's not a big cost, but china is prepaying early, billions of dollars of its ida funds. so here's a way that we raise
$49.3 billion for i.d.a., and when you can make a couple of billion dollars of contributions to reflows, that's very helpful. so this is a way in which an emerging market country can contribute in a slightly different fashion. so part of the challenge -- we could go through other examples, and climate change as well, that it's in the self-interest of china, you know, not to have heating that melts the glaciers and himalayas and puts your country in danger. you want to continue to benefit from it. it's in china'sful is-interest to have open capital investment markets. over time, they'll need to move to an open account, which china says it wants to do. one of the reasons i was there is china believes it needs to make structural changes because it can no longer rely on pure export-led investment trade model, and those structural changes will help it make the
currency changes. the reason i got into detail here is i've talked in broad theme market terms, but there's hard work in making each of these happens, and it requires a little creativity, thinking of something new in diplomacy. but, you know, if you look at world security history, political history, or economic history, that's not totally new. and that's the challenge that now faces not only the countries, but the countries as well. >> thank you. [applause] >> that was a tour deforce, although in your case, i would have to say it's another tour deforce since i've heard you speak before. and i think one of the most important letches you conveyed was that a lot of the changes that are needed are not just the right thing to do, but the smart thing to do. one can only hope that leaders
around the world will listen as carefully and learn as much as we have over this past hour. now, i realize that as president of the world bank, you have to give addresses at many locations around the world, but i want to remind you that, in the future, the most environmentally friendly way for you to give a major address is just to walk down the street and join us here. >> good exercise. >> at george washington university. >> on behalf of my colleagues, especially on half of our students, we want to present you with this small token of our very great appreciation and admiration. >> well, thank you very much. >> one closing word -- since many of you students have just started the year, one of the reasons that i wanted to come here is the types of things that i'm talking about are things that i hope to work on, and i'm sure some of the faculty work on.
but you really, whatever country you're from, whether u.s., china, others, you have this incredible opportunity to be at this world-class university with people internationally to focus exactly on these questions. and the issues that i'm talking about are not just going to be decided by the chancellors and presidents and prime ministers that are in office today, but these are going to go on for a while. these are going to be your issues and your questions. so i think you've really been blessed to have the opportunity to get the education you've had so far and to be here, but i always like universities, because i also think there's a great potential and power that comes from a next generation, and one of the reasons i wanted to say these things is because they will be many of your challenges to address, so thank you. [captioning performed by national captioning institute]
[captions copyright national cable satellite corp. 2011] >> sunday on "news makers" representative henry waxman, ranking democrat on the house energy and commerce committee, talks about republican plans to roll back regulations on the environmental protection agency and other energy issues. that's at 10:00 a.m. and 6:00 p.m. eastern on c-span. >> the first thing, you hear the boom, you see the flash and everything, and then the next thing you hear, you hear him cry out in pain. the second thing i heard him is, you know, if i've lost anything special, you know, shoot me. >> sunday, ivan candor and rob jones, candor is the director of a documentary about his friend, marine corporal rob jones, who was severely wounded in afghanistan. the film "survive, recover, live" follow rob's journey from
coping with the loss of his legs through his rehabilitation, on c-span's "q&a." >> next, international monetary fund managing director christine lagarde on challenges facing the global economy. this is her first economic policy address since she was appointed to run the i.m.f. in july. it runs about an hour. >> good morning. good morning, everyone. i'm the director and president and c.e.o. of the wilson center, and we are honored today, as you know, to host christine lagarde, the new
chief of the international monetary fund for her first public speech in washington, d.c. i'm also pleased to recognize many of my former congressional colleagues who join director lagarde at breakfast at the wilson center earlier this morning. some of them are here, some of them had to go back to congress, hopefully to a productive congress that will solve this economic crisis. but they are or were senators susan collins of maine, kay bailey hutchison of texas, barbara mikulski of maryland, judy biggert of illinois, diana deget of colorado, barbara lee of california, and nita lowey of new york. we are also joined by some of the wilson center board members, and i want to recognize our chairman, joe gildenhorn, and by a number of
ambassadors. colonel youse smith of the bahamas, louis harold joseph of haiti, and the ambassador of iraq. welcome to all of you. it's a pleasure for me as the first president of the wilson center who happens to be a woman to host the first woman to lead the i.m.f. in its 66-year history. this is not the first glass ceiling christine lagarde has shattered. prior to becoming the i.m.f.'s managing director, she served as france's minister of finance, the first woman ever to become finance minister of a large industrial country. she was head of the european arm of the international law firm baker mcmcmckenzie, eventually becoming its first
female chair. she is also, to my knowledge, the first person ever to be on the cover of "forbes" magazine and featured in "vogue" in the same month. that was funny. director lagarde took the helm of the i.m.f. during the greatest shock to hit the global economy in our lifetimes. the series of economic aftershocks, combined with ongoing post-earthquake misery in japan, political turmoil in the middle east, and the deeply worrying euro crisis has fueled the worldwide slow doufpble as a recovering politician myself, i am well aware that while countries with deeply interconnected financial systems grapple with unique yet shared problems, their embattled leaders often find themselves with few tools left in the box. caught in a spiral of political fear and forces determined to prevent them from doing what
really needs to be done. what in the world could i be talking about? the united states has been no exception. in my view, our country has a rare second chance to lead as congress begins to debate the american jobs act and the deficit supercommittee begins its work. we must summon the courage and bipartisanship to reach beyond elections in 2012 and make short and long-term decisions in the interest of our country and the global economy. there's no great mystery surrounding what congress must do, nor need we or they start from scratch. we have simpson bowles. we have domenici-rivlin. alice rivlin is still there, right there in the front row, and the gang of sacks' plans. we must tackle the deficit and public spending. we must take bipartisan measures to promote growth,
including streamlining the tax code, something that i am heartened to hear is again under discussion. while lowering rates across the board, and we should seriously consider, among other things, a national infrastructure bank which makes sense from every angle in terms of quickly building american jobs. we must do so quickly in a bipartisan manner that gives the country and the markets renewed confidence in our stewardship. next week, the i.m.f. will meet here in washington for its annual meeting. this is yet another chance to address these problems head on and with urgency. true global leadership, balanced with deep insight into and understanding of individual national problems will be critically important next week. and in christine lagarde, we are seeing that true global leadership, clear, positive, and responsible, and obviously this morning we are all anxious to hear more.
so please join me in welcoming the managing director of the i.m.f., a woman who has shattered all ceilings, christine lagarde, to make her first public speech in washington, d.c. [applause] >> thank you very much for having me, and thank you very much for caring to listen to my remarks this morning. i would like to first of all thank the wilson center for their kind invitation, and i would like to especially recognize and thank and give my really deep appreciation to jane harman. in her long and distinguished career, jane has worked in the executive branch, academia, law. we even share the privilege of having been, both of us, chairman of law firms, which is, i can tell you, a good training for managing egos.
and, of course, congress, where she has served nine terms in the house of representatives, where we know there are no egos. she has been and continues to be a devoted public servant. thank you very much, jane, for everything that you do for having me this morning, of course, as well. there shouldn't be, there couldn't be a more appropriate venue for my first speech in washington as i.m.f. managing director. more than anyone else, it was president woodrow wilson who championed the cause of multilateralism and global fraternity. the seeds that he planted took a little bit more time than he thought to actually bear fruit, but in the post-war era, he was able to actually steal this extraordinary belief that is still the objective of the i.m.f., to make sure that
corporation is not only stability, but a better future for all. and this is at the very heart of what the i.m.f., one of these institutions has to do and has to keep doing no matter what the circumstances are. and the idea has never been more important. this is what i have been advocating for the last few weeks, collective, bold, decisive, courageous action is needed. and it will not only be in the interest of those that conduct such actions for their countries. it will be for the good of the world. that's a very wilsonian approach to economic stability. we're certainly living through very troubled time at the moment, with great economic anxiety. exactly three years ago, after the collapse of lehman brothers, the economic skies today looked troubled, they
looked turbulent, as global activity slows and downside risks increased. and we have entered into a dangerous phase of the crisis. and without this collective resolve that president wilson was advocating, the confidence that the world so badly needs will not return. and as we all know, at the heart of the economic development and the heart of growth lies confidence, confidence in ourselves, confidence in what the others can do as well. woodrow wilson once cautioned that -- and i will quote him -- the thing to do is to supply light and not heat. i believe that the i.m.f.'s job is to see and show the light when the picture seems so dark and when there is light. and shine the light on core economic problems. but now and again it doesn't hurt to turn on a little bit of
heat. even though you take the heat back. whether it's heat or hit is to be debated. now, with that in mind, let me offer the following. despite the very gloomy picture that we have at the moment, i believe that there's a path to recovery. it's indeed a narrow one, and it is certainly narrower than it was three years ago, because the volume and the amount of ammunition is different, lower. but there is a path, and it will require strong political will across the world, not just in one country, but in many countries, and it will require decisive action on the part of some central banks, which they seem to be showing to us, including this morning. it will require leadership over friendship, corporation over competition, action over reaction.
and all three components are difficult, because they have to be demonstrated, implemented by political leaders, who may have to put aside for a little while not just their ego, we all have one, but also a partisan interest, and they will have to extend their agenda to beyond the next election. let's have a quick look at the global situation as it is, and i really apologize for how brief that is going to be, because i want to get into quick analysis of what the problems are as we see them, and more importantly, what kind of solutions they are. if we look at the global economic outlook at the moment, and i'm not going to be specific on numbers, because our revised outlook will be published next week when we have our annual shareholders meeting, so i will be general and not overly specific. but overall, growth is
continuing to slow down. the advanced economies in particular are facing an anemic and bumpy recovery with unacceptablely high levels of unemployment. the euro area debt crisis has worsened. financial strains are rising. and again, without collective, bold action, there is a real risk of the major economies slip back instead of moving forward. and while many advanced economies are facing those cold head winds, many emerging markets are facing the risk of overheating with what comes with it, and that is inflation, inflation pressure, strong credit growth, and rising unbalanced current accounts. if we now turn to the low-income countries, they have experienceed more reasonable growth, but they remain highly vulnerable from elsewhere in the world because of their degree of dependency on flows
of capital and support from other countries. they've suffered as well from the commodity price volatility, which comes with heavy social costs. and that is an impact on their public finances as well, because many of those countries have to put in place subsidies and grants program to support the most underprivileged population. now, this is a bit of an inside, and yet it's a big problem.this is a big problem. i would like to draw your attention to what has taken place in the horn of africa. aid is available. there are programs in place. the imf stands ready to help, as well as other international institutions. it is a matter of political determination and the ability to set aside political ambitions to allow the support to be sent
where it should be. this is dark and gloomy. i would like to indicate here is a way of hope. when i was in the south of france in the meeting that brought together the finance ministers of 58 countries plus the head of international institutions -- finance ministers of countries like tunisia, jordan, and morocco -- there was a determination to act in a move ahead into development. to put in place a strategy and reach out to those populations and those governments that have the courage to take their destiny in their hands. there is a time for developing a strategy. there is a time for
implementing a strategy. my hope is that we will be able to work together and support those countries. it is not just a political issue. it is an economic issue. it is a matter of organizing on a regional basis exchanges and demonstrating that market access can help develop those countries that decide to move on and the ballot economically for the good of their population. getting to the root of the problem and sons of -- some of the route we analyzed, i see three distinct routes for the problems we are facing at the root of the-- problems we are facing at the bombing. social tensions are below the radar screen in some corners of
that is for the first part. the second one is more a long- term issue. it has to do with the rest up for instability. what we find in our economic studies is that the world is interconnected with major conduits of connection in the financial system. this is the result of what we have done that spills over and become a nation of the nazis of economies and the connections between them. there will be -- and the analyses of economies and the connections between them. those links are key and have to
be addressed. the third issue relates to what i call the social tensions. this is bubbling below the surface that we do not necessarily see it in advance economize. look at what is happening in chile or in less advanced economies. there are clearly social tensions under the surface. that is caused by a lot of intertwined strengths. high unemployment. this is the case in this country and many countries, particularly advanced economies. that affects the young regeneration. there have been discussions of the lost generation. we have to do our best to avoid that. without growth, we run the risk of a lost generation when it comes to jobs.
fiscal austerity strips away social protection. perception of the unfairness where wall street is treated better than main street. higher echelons society's benefit. -- higher echelons of society benefited. in the face of all these problems, what are the solutions? are there solutions? i am concerned that there are solutions. implementing those solutions will be a matter of political determination and willingness to address candidly the problems and their analysis.
because i am of a simple mind, i'd like to start with being able to remember what i preach. those solutions are mine four cards. -- four r's. the first why is repair. what do i mean by that? -- the first r is repaired. advanced countries need credible medium-term plans to stabilize and lowered their public debt ratio and gdp. that must come first. is the precondition to anything else. the degree at which is done is something on a per country analysis. it is the first condition.
consolidating too quickly and to have a plea exposes the risk of -- consolidating to quickly and too heavily exposes the risk to our economy. meditate between losing credibility and undermining growth. there is a way to do this. credible measures that deliver an anchor savings in the medium- term will create space in the short term for accommodating growth. we want to get out of the vicious circle i was describing earlier by entering into a virtue was passed. -- virtuous path. that goes to slow consolidation in the short term. at a program that delivers the savings that will be needed to
slow the debt, stabilizes, and reduce it. it will be on a per country basis. some have no choice but to cut the deficit now. they do that have the luxury of creating this path that begins low and finishes high. under certain market pressures, there is no option but to do that. many advanced economy have put together those plants. they have to stick to the plan to. they have to stick to the pace of growth and be prepared to relax and let the economy stabilizes its work. some countries have the space to allow for the growth-conducive measures in the space in the short term provided that there
way of reducingha deficits for the long run. it is not what kind of adjustment there is. it is also how the adjustment is being produced. in relation to the short term measures that would allow the growth space and be medium and long-term measures that anchor this approach to finance, the how is critically important. it goes through the kind of tax reform that broadens the base. that needs to happen in all advanced economies. it is happening in the sound. -- in some. some countries have entitlements
that are stabilized in the medium and long term. this is the kind of reform we have in mind in terms of entitlements. policy makers should deal not just with sovran -- sovereigns. i welcome president obama's recent proposal to address growth and unemployment. this must be associated with a parallel track that has medium- term actions and decisions needed to stabilize the ddebt and address the debt trajectory. it is important to consider relieving overburdened households with principal reduction programs that are
helping homeowners take advantage of lower interest rates. turning to europe, sovereigns must address finance problems through fiscal consolidation. it is also critical that banks be able to shed in their capital with a view to avoiding the deleveraging that is hurting other institutions. if we look at the second r, reform, reform is about the longer-term. repair was the immediate action that needs to be taken. it is one thing to repair, but
you have to maintain what it repair has produced. reform is about a more stable economic future tomorrow. in another section of reform, there are two critical areas that need attention. the first is the financial sector reform. there is some good news in that category. some will find there have been long discussions about liquidity ratios, the stability of financial institutions. it has been a lot faster than what has taken place in previous discussions for basel ii. basel iii applies to liquidity ratios and the overall credit
environment of banks. substantial gaps remain. in areas like supervision, particularly cross border supervision with regard to international banking institutions --cross border resolutions are still to be tackled on a global basis. there are national and regional ramifications when it comes to the national system. and the development of the shadow banking system. in the last three years, some progress has been made. not enough to be able to say in the face of the depositors, the people who put their savings in those institutions, we have done the job. it is a question that needs to be addressed urgently.
we need to develop and fine- tune tools to guard against financial risk. i am thinking about policies like having banks hold more capital in the good times so that they have those capital and counter cyclical policies that help in bad times. progress has been made. it needs to be reinforced. it needs to be level. institutions meet and the general interest need that level playing field. and did it reform banner, i would include special dimensions. unemployment must essential. it is at the core. the economy grows. if jobs are not created, it is a
massive human waste. it is especially important among the young people, who are in this lost generation sen john that we need to avoid. the third r is rebalancing. one would argue that this is a general principle and not an immediate concern. i would argue that it is a critical concern. what i mean by rebalancing is this dual rebalancing that needs to take place. a move from public support to private investment. that has not yet taken place. the second rebalancing that is equally important is the rebalancing would be that the city economies operate
differently and be served as economies operate differently. that goes through various measures. in some countries, the rebalancing is held back by a protective regulations or the lack of appreciation of exchange rates. the balancing is imported. it is a question for those countries that have massive deficits to be able to operate differently, to save more. for those countries to have massive surplus, to consume a bit more domestically. not just massive infrastructure projects, but by domestic consumption. that appreciation happen when it comes to currency. this lack of rebalancing hurts everyone. in the interconnected world i was referring to, the thought that a set of countries could
be decoupled from the rest of the world is an illusion. he advanced economy is the advanced economy. when it comes to the session, the emerging market economies will not escape. when you are a big supplier of goods, you have clients around the planet. it is as simple and basic as that. rebalancing is in the global interest. it is also in the interest of each every time the of each and every country. woodrow wilson would have appreciated that. that would be in his dacha. but fourth and final -- my fourth and final r is rebuilt. countries have buffers, but they had to use them during the financial crisis.
there needs to be rebuilding so they can protect themselves. this will enhance public investment and social safety nets. allowing countries to a ploy subsidies to protect the court from commodity price changes -- core from commodity price changes. i have a fifth r. that is the role of the imf. what is the role of the imf? it is a critical role. we can help countries with appropriate national, regional, and global surveillance. i am have been a minister of finance and trade. there are things you do not see for yourself with the issue are
in the delegates. you are trying to row this boat, but you do not understand the weaknesses of your economy. that is how it times work. decisions made in one country will affect the others. with a degree of impartiality and academic skills that are required and i would be likely to find. we have the ability to provide the level of technical its efficiency that will help countries. does the thinking of the middle east and north africa. they can build their public finance sectors. they can organize the collection of taxes to build a monetary institution. we can do that. in many of -- many corners of
the world, we do. finally, the third arm of the fund is our lending capacity. there are situations where there is nobody else but the fund that can come to support by way of lending. not by subsidies. not by dumping money without consideration. but through programs that are well established with appropriate conditionality. everybody has a pitch. i have my pitch. the international monetary fund is critical for the world. it is also critical for the that the states of america. in hard times, there is a tendency to travel around the edges and say, that is not critical. mission critical is something
else. three points. the international monitoring fund is a disciplined, organized, and i hope well managed. i will do my best for that institution. when i was asked if i would be intimidated to operate with economists, 500 of them, i was a little bit. until i came to the fund and i realize how this plan, organize, rule based it is. the principles matter over the arbitrary decisions and the discretion of do we as we please. it is an institution where my main shareholders on the united states of america. 17% of the folks are right.
that is reason number one. number two, why should we invest our money? in the dollar or euro invested in the fund goes back to the member. 187 members. they all get their money that, principal and interest. we are not in the business of subsidies. we are not in the business of giving grants. we land on the strict terms called the conditionality of our program. we lend with terms. we come to the country and though the the mission on the ground. conditionality are respected. reforms are taking place. there is special support being given. it is not the case, one is not
paid on the next tranche until there is completion of the agreement that has been made. it is important that there is stability around the world, that there is stability in all corners, and that the international monetary system is without excessive volatility. is a key to confidence. confidence is key to developing growth. that is the reason why the international monetary fund is perfectly legitimate in being accountable for its members and the money in has received and the money and has led and the money it pays back to its members. thank you for giving me the chance to pitch. [applause]
>> i want to thank, on behalf of the woodrow wilson international center for scholars, and on behalf of a sophisticated and interesting audience, i want to thank director lagarde. last weekend, she said that the g-8 meeting in france that there was hope in the room. i would observe that there is hope in this room under the discipline and organized management of christine lagarde at the imf. she will solve some of these problems. [applause] we do have about 17 minutes for questions. the question and answer session will be moderated by david leonhardt, the washington bureau chief of the "the new york
times." in 2003, he was part of a team of times reporters covering corporate scandals and was a finalist for the pulitzer prize. he won an award for magazine writing for the article "obamanomics." in 2010, he was a finalist for the pulitzer prize in commentary for his economic colorado, a prize he won this year. congratulations. [applause] this year, he was appointed chief of the washington bureau times. there are microphones around the room. after he asks director lagarde a few questions, we are asking you to form precise questions. it will be the answer -- it will
be answered by a director the guard in a precise fashion. -- director lagarde in a precise fashion. >> is david leonhardt. -- here is david leonhardt. >> what do you think are the things we have not gone as well as we might have over the last two years or three years? >> i am prepared to take some of the blame for that. if i look at europe to begin with, because of the cumbersome way decisions are implemented,
and because it is based on 17 parliamentary processes, we have not signal to the markets the degree of consolidation, the degree of accountability of the european members that it members of the euro zone were prepared to take. it has been a slow process which was directionally right, but which was to banks low and behind the curve to oppressed among the markets that the bureuropean players were prepard to shoulder the pain together. in many corners, austerity has been decided after the stimulus packages were put in place and expanded. in too harsh a way and without
distinguishing between the short-term gains of leaving a bit of space, and the long-term loss of having not killed but reduced its possibility to expand. we are moving brutally from financial crisis, the stimulus, the austerity, without letting growth take hold. that could have been better in this country. it is in many advanced economies. >> thank you. yes? >> this is from television global brazil.
it seems as if you are saying that the actions are a little knee-jerk. are you implying that our political and economic leaderships are incompetent? [laughter] >> this is the problem with the size questions. they get to the point. -- concise questions. >> this is not what i am say. the time that the moment require a collective drive. in 2009 at the time of the g-20 meeting, there was a sense of urgency, the sense of collective fate and destiny. and the ability of leaders to be nimble and ambitious and to do it together. that is the 1944 spirit as well.
this is what we need at the moment. i am is certain that political leaders are capable of that. the soy reassured to listen to the feedback and the statements resulting from the compensation that president sarkozy and chancellor angela merkel had with greece. this is the kind of focus and collective compensation that is needed. i do not know what the current g-20 summit will give the world. i strongly hope that it will be that sort of collective drive. the sentiment shared by all that whatever happens anywhere on the globe is going to happen impact at home. >> you often hear people happen -- asking, have we learned the historical lesson from the depression.
additionally, we did. you saw incredible action in the bush administration. by the federal reserve and by the obama administration when he first took office. you saw it around the world. then the politics of this crisis response that affects right and left around the world and the governing party overwhelm to the economic lessons. our response became less aggressive. do you think that is their? -- is fair?agree wit >> i would agree with that. there was strong momentum at the time. there were unbelievable decisions. to tackle the regulatory issues
when it came to the financial sector. to provide for massive financing for the imf. by then to support around the globe for the countries that were in urgent recovery situations. -- provided support around the globe for countries that were in urgent recovery situations. the economy was picking up and business as usual could recover. >> there is something on palpable about the crisis measures we have today. -- unpalatable about the crisis measures we have today. >> do you believe there are adequate -- the lin do you believe there are adequate regulations in place
breton woods institutions? >> the only one i know is the international monetary fund. the way it is structured, the way in which twice a year we were called back to our membership, we have opened the books when it comes to the degree of accountability that you referred to. we have structured programs that we cannot deviate from. we have conditions of cooperation that are straight and sometimes overly strict, which is a bit of an issue. there is enough in terms of ability to report and be accountable to the membership. it is not as if it is an organization that cannot operate without conditions and without reporting back to be membership.
>> welcome to washington. thank you for your remarks. the imf would seek $750 billion in a line of credit and use that to bailout your applying a stricter term for lending. there would be an assurance that there would be the last non- chinese head of the imf. [laughter] if you would like to comment on that, i would be delighted. i would like to get your thoughts for response on the imbalances you see that go to the legitimacy of the imf. debtor countries continue to call the shots. creditor countries are in the
minority position. do you have a planned on addressing that in terms of the governance of the imf itself compelled . >> there are advanced economies, emerging economies, and low income countries. the advanced economies have more than a majority of the voting rights. i do not know what you referred to as the creditors and the beneficiaries. the structure of the fund is as it is. there is a drive by the emerging markets in the killer. more generally, by being less represented countries to be that represented. it is an endless debate within the fund, not one that i cherish. i think the real value of the fund is to be outward looking back to the inward looking.
it does reflect the state of the world. the less represented countries that include emerging markets will be more represented in the future. it is only fair that given the rise of the gdp and the size of their country and the economy, they would be adequately represented. we will have a huge debate about that because it is an open question that the fund. -- at the fund. one of the virtues of the fund is that it is properly representing the entire global constitution of the world. it cannot be dominated by the founding fathers.
to be accepted in all corners of the world for its lending capacity -- i am thinking of india, which is associated with the imf and the way it is conducting programs. it is necessary that there is appropriate representation. i am not sure i have dealt with all issues of your question, in particular the financing by china. there are other ways to finance and support those countries that are in difficulties. multilateral, bilateral work. >> we hear statements from europe that they will not let greece failed. yet there is no specific plan to prevent this from happening. many people think that in the course we are on, bad things will happen unless we do more. how can you have confidence in these general statements that europe will not let anything bad
happen given that there are tough, politically unpalatable and difficult decisions for taxpayers and politicians to make an acceptable how should we have confidence that we will get from here to there with general statements to specific actions? >> i was encouraged by the statements from president sarkozy and chancellor angela merkel yesterday. there is a euro zone of 17 members and the future of greece is within the euro zone. that is a strongly entrenched youth-bang for both the them. -- view for both of them. their statement was their guiding principle. one of the guiding principles is, as long as a country is in
difficulty under a program performs its obligations, the members of the euro zone will support it financially without limitation. that is a strong and bold statement. the difficulty we have is that between the commitment that i made between the highest levels of government, there is usually three or four months. in the worst case, it can take longer than that. there is more integration, the creation of crisis management estimates. it requires changes. that takes 12-18 months. there is a difference between that time frame, the timeframe of democracy and seventeen problem is coming together, and
the time frame that is expected from the market, the investors, and the media. it is not as if its worthy napoleon days. were the napoleon days. [laughter] >> i want to thank you both. christine lagarde and david leonhardt. this is a typical conversation that we have at the woodrow wilson international center for scholars. i also want to thank the ronald reagan building an international trade center for providing today's venue. it is the official trade center of washington, d.c.
on a personal note, what a pleasure it is to see the new director of the imf, who happens to be a woman, so gracefully and completely to address the toughest issues that affect our world today. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> sunday on "newsmakers," henry waxman talks about republican plans to roll back regulations on the environmental protection agency and other energy issues. that is at 10:00 a.m. and 6:00
p.m. eastern on c-span. >> the first thing, you see the flash and everything. the next thing you hear is them cry out in pain. the second thing i heard was, if i have lost anything special, shoot me. >> sunday, the director of a 30 minute documentary about his friend, rob jones, who was wounded in afghanistan. it follows rob's journey in losing his legs and coping with his rehabilitation. >> the chinese premier says denied this states and europe needs to adopt a responsible fiscal and monetary policies and open their markets to chinese investments. he spoke at the summit
>> i share the new vision of thinking of the economic and financial contacts. china has an important role to play in driving growth and strengthening the global economy and global cooperation. i know how much public welfare, job creation, innovation, education, and help our key policy priorities in your leadership of china. to further support and strengthen these efforts. placing dignity and quality of life of all people at the center of future economic activity is
at the heart of the participants here, requiring a true partnership of all stakeholders. for this reason, is it sayticularly delighted to san that there is a particular emphasis on young, innovative entrepreneurs. we are committed to improving the welfare of society. you have the courage to us over many years. i would like to thank you on behalf of the 1500 new champion
staff here for your great support, which has been so essential to make this meeting a success. we are keen to hear from you on the future economic about the time and your personal vision of the world's transformation. beatty's and gentlemen, please welcome his excellency the what- ladies and gentlemen, please welcome his excellency, wen jiabao -- ladies and gentlemen, please welcome his excellency, wen jiabao of china. [applause] >> executive at the world
innovation, and to young people. diverse forms of discussion and sessions of the summer davos are lively and full of vigor, especially at the height of the financial crisis. it brought confidence and courage to the business community. the theme of this meeting represents people's shared a desire for a robust, sustainable, and balanced economic growth. a great
success. [applause] september 15, three years ago marked the bankruptcy of 11 brothers that marked the beginning -- of lehman brothers. that marked the beginning of the santa crisis. -- of the financial crisis. at the root causes of this crisis and exploring ways to sustain the growth of the global economy and
national economies. with regard to china's economic development, some people have hailed its achievements and others have expressed doubts. some are economic -- optimistic about china's economic future. others say china is in trouble. we are firm and levelheaded in our confidence. we know where we stand. the first decade of this century has brought major changes. it has all show -- also seen as urbanization in china. great progress has been made in china's comprehensive reforms
during this decade. over the past 10 years, the chinese economy has been growing by 10.5% annually. china's industrial structure has been upgraded. development in central and western processes has picked up speed. each region has a distinctive strength. urban and rural income has risen substantially. china has taken on a completely new look. its overall national strength as
it did in the -- strait has significantly increase. we continued -- strength has significantly increased. an array of important reform measures have been introduced. these measures have enhanced the vitality of michael economy and macro regulations and raise the efficiency of market allocations. -- vitality of micro economy and macro regulations and raised the efficiency of market allocations.
a social security system has been put in place. construction of the government subsidized housing has been accelerated. everyone should have access to education, medical care. housing is becoming a reality. we are removing bottlenecks hampering development and have released the initiative, enthusiasm, and entrepreneurial spirit of the chinese people. this has activated factors such as labor, capital, knowledge, technology, and management, which form the source of rapidly increasing social wealth. we are pursuing a win-wins strategy of opening up.
2001, we have speeded up efforts in conducting trade, upgrading the process of trade, and vigorously develop trade and services. we have pursued the strategy of introducing foreign capital and encouraging chinese capital to invest overseas to achieve greater balance in the chinese investments. we have worked to deepen bilateral and multilateral trade relations. china is a fully open market economics. the opening up policy has been addicted chinese abutment and
the well-being of its people and contributed to regional and global economic growth. ladies and gentleman, with its development entering a new start of stage in the second state -- decade of the 21st century, china is in an important time of political opportunity. development and cooperation remain a trend of our times. the international environment is generally conducive to china's pursuit of peaceful development. numerous factors continued, industrialization and agricultural modernization, a high savings rates and better education, a more skilled labor force, deepening the form, and
overall stability. all of these have created enabling conditions for continued economic and social the boat in china. on the other hand, we are still facing a pressing problem that is china's the ballot in. it is not yet balanced, coordinate, and sustainable. that many institutional constraints enduring scientists it -- scientific development. as the chinese population grows, it will be difficult to achieve highspeed growth over a long period of time. the new developments have not change the fundamentals of china's the ballot. we have the right conditions and
we have the ability and competence to maintain steady and fast growth of the economy and bring china's economy to a new stage of the budget. the current 12 year plan is a critical phase in china's at first to build a society of the initial asperity in all respects. taking into consideration the future -- initial prosperity in all respects. achieving scientific development, and bringing the benefits of reform and the bullet meant to all of the people, we have set the following goals and strategic tasks for these five years. china will continue to expand domestic demand with focus on
improving the structure of demand and increasing consumer demand to drive economic growth. domestic demand is crucial and a necessary choice for a big country to achieve sustainable economic growth. china has 20% of the world's population. with its per-capita gdp exceeding 4000 u.s. dollars, china has entered a key stage in the upgrading consumption. to upgrade consumption and raise the quality of life for urban and rural populations, and strengthen weakening economic and social developments. this will generate enormous domestic amounts. we will endeavor to build a long-term mechanism for expanding consumer demand, create a favorable in time for consumption, improved consumer expectations, boost spending
we'll act quickly to achieve economic growth by increasing the quality of human capital rather than by just using more workers. this will enable us to catch up with the progress in technology and to change the model of growth, and it holds the key for us to adapt to demographic changes and achieve sustainable development. we'll fully scombplement the outline of the national medium and to promote balance of development education at different levels and various times will ensure equitable education for all, promote well-rounded development of people, change innovation reoriented talents and advance education in a scientific manner and will move faster to
make china not only a big country but also a strong country in both education and human resources. this will provide strong intellectual impetus for sustaining chinas economic development. >> china will continue to do the innovation driven society, speed up the development of innovation and enhance the role of science and technology in driving economic and social development. r and d is crucial in guiding our efforts to accelerate the change of growth model. during the 12, five-year plan period we will give greater focus to r and d, and address the causes of r and d not meeting the need of economic development. we will increase input in science and technology and
raise the share of budget for r and d and gpped from 1.5% to 2.2%. we will follow closely the latest progress in overseas fron tier technologies, strengthen basic rich and research of high technologies of strategic importance and pull resources to make break throughs in developing core technologies. we will enhance capacity to protect and manage intellectual property rights and bring to play the creativity of the whole society. we will accelerate the upgrading of traditional industries by using new technologies, new materials, new techniques and new equipment. we will vigorously develop strategic industries with a focus at this stage on industries relate to energy
conservation, environmental protection, new generation information technology, biotechnology, high end equipment manufacturing, new energy, new materials, and new energy vehicles. our goal is to develop new pillar industries. so as to gain an initiative for development in the new scientific revolution and industrial revolution. china will continue to save resources and protect the environment, follow the path of green, low carbon, and sustainable development use resources in a more efficient way, and develop stronger capacity for tackling climate change. to conserve resources and protect the environment is crucial to achieving sustainable development. and this is one of china's basic state policies. we will speed up the building
of an industrial structure, a of consumption that are conducive to resource conservation and environmental protection and to promote harmony between man and nature. during the 12 five-year plan period we will raise to 11.4%. reduce energy consumption. and co2 emissions a unit of gdp by 16% and 17% respectively, and cut total discharge of major pollutants by 8 to 10%. we will improve loss regulations and standards, strengthen performance based accountability, overhaul the pricing mechanism and increase fiscal taxation, financial and
policy, and other policy incentist. we will promote the economy, develop low carbon industrial construction and transportation systems, promote energy water land and material conservation. and integrated resource utilization. we will preserve and repair the eco system, increase forest carbon sink, and to build stronger capacity for tackling climate change. china will continue to put people's interest first. pay more attention to ensuring and improving people's well being and to pursue common prosperity. everything we do is to enable all the people to have better lives. and this is the criterion to
measure the performance of all of our work. our goal is to bring the benefit of development to all, ensure and improve people's well being, and to advance social programs in all respects. we will give priority to job creation in promoting economic and social development and to create equitable job opportunities for all. we will adjust income distribution, ensure that personal income grows in step with economic growth, and that labor remune ration grows in step with increase of productivity. we will gradually share the share of person income and national income distribution and the share of labor remune ration in primary distribution.
we expect that per capita of disposable income and per capita rule income will both grow by more than 7% annually. we will put in place systems, providing basic old-age care and basic medical and health care for the whole urban and rural population. and extend the coverage of government subsidized housing to 20% of the urban population. china will continue to deepen reform and open up and resolutely remove institutional hurdles to increase the momentum of pursuing sustainable development. china ose this rapid development in the past 30 years and more to reform and opening up. and this will be equally true for suitable development and progress. we will continue to advance
both economic and political structural reform to create strong impetus for economic and social developments. we will uphold and improve the basic economic system, speed up fiscal taxation, and financial reform, reform of prices of production, reform of monopoly sectors and other important views and strive to make important measures in these reforms. we will address the institutional causes for overconcentration power and lack of checks on it. we will protect people's democratic rights and the lawful rights and interests so as to uphold fairness and justice. china cannot develop itself in isolation from the world and the world also needs china for its development. here, i wish to reiterate that
china's opening up to the outside world is a long-term commitment which covers all views and is mutually beneficial. china's basic state policy of opening up will never change. we will continue to get actively involved in economic globalization and work to build a fair and equitable international trading regime and financial system. we will continue to improve foreign related economic laws, regulations and policies so as to make china's investment environment in keeping with international standards, transparent and more business friendly. ladies and gentlemen, while the world economy is slowly
recovering, uncertainties and destabilizing factors are growing. both the renounced and eemergency nt economies have experienced slowdown in growth. solving debt risks are growing in some countries pose causing turbulence on the international financial markets. unemployment in major developing economies remain high while emerging economies are facing upward inflational pressure. all this shows that world economic recovery will be a long-term difficult and complicated process. in addressing the forum in early 2009 i said that the crisis is a global challenge. to overcome the crisis we need
to have confidence, strengthen cooperation, and to li up to our responsibility. the crisis also puts to the test the international community's sincerity, sincerity for and commitment to cooperation. and it puts to the test our wisdom as well. i still hold this view today. with so many uncertainties facing global economic recovery, the international community must have more confidence in cooperation and jointly tackle the challenges. we should strengthen the dialogue and coordination of macro economic policy and accelerate the duty of a just sound and stable new economic order. governments should fulfill their responsibilities and put their own house in order. the major developed economies should adopt responsible and effect yoif fiscal and
mandatory policies properly handle debt issues, ensure the safety and stable operation of investment in the market, and to maintain confidence of investors around the world. china's economy is generally in good shape. since the beginning of this year, its economic growth has taken an orderly shift, some being driven by policy stimulus to self-generating growth moving in the right direction of macro economic regulation. in the first half of this year china's gdp grew and its surplus decreased. we have achieved these thanks to increasing domestic consumption. a total of 6.5 million jobs have been created. prices as a whole are under
control. market supply of important goods is sure and structural adjustment of economic factors is moving forward. business profit and government revenues are increasing quite fast. people's income p has steadily increased. and their lives have further improved. since the second quarter, the economic growth has dropped somewhat. but this is mostly the result of promark and not beyond our expectation. we will address the pressing challenges in the economy and continue to implement a proactive fiscal policy and a prudent management policy. we will maintain continuity and stability in mark economic policy and make our policy responsive more targeted, flexible and forward looking in light of changes in the economy.
we will maintain control over the intensity, pace, and the focus of macro economic regulation and to strike a balance of stable and fast economic growth, adjust economic structure and managing inflation expectation. this will enable us to maintain general stability of prices as a whole, prevent major economic fluctuations, and meet this year's goals for economic and social development. i am confident that china's economy will grow over a longer period of time at a higher level and with better policy. and i am confident that china's economy will make new contribution to robust sustainable and a balanced growth of global economy. we sincerely welcome foreign companies to actively involve
themselves in china's reform and open up process and share the opportunities and benefits of china's prosperity and progress. thank you. [applause] >> we have the opportunity for one or two questions. but first i would like to thank the presentation which inspires us with optimism, not only for china but for the world as a whole. because what we need tht world is a much more comprehensive
mission of how to overcome the issues which we face. and i think your commitment to robust balance and sustained growth is exactly what we want to express also in the meeting, quality of growth. now, mr. premier, you referred in your speech to the challenges which are faced in some countries particularly on the financial system. what -- and that's my question. what could china do in order to help the world to overcome those financial challenges which we face particularly in europe and in the united
of uncertainties and destabilizing factors. the growth in major economies remains sluggish and unemployment has been high. the united states has three major tasks. namely to control public debt, to bring down budget deficit and to increase jobs by growing the economy. some european countries face a severe sovereign debt crisis most, what's most important now is to prevent the further spread of the sovereign debt crisis in europe. the fluctuations in the value of the u.s. dollar has resulted in the instability of commodity prices on international markets . new emerging economies are under inflationary pressure. under these circumstances the chinese economy is clole linked with the global economy. countries must first put their own house in order and at the
>> the united states is the biggest developed economy in the world. the united states has a strongly based economy. it has advanced science and technology and a large pool of well-trained labor force. we have the confidence that the united states will overcome the current difficulties and achieve a full economic recovery. we hope that the united states will take the right economic policy maintain fiscal and financial stability and keep the confidence of the investors and ensure the interests of global investors. in my meeting with president
obama last year, i proposed to him that china and the united states engage in large-scale financial and economic cooperation. two elements are essential in this proposal. first, the united states should open its market to investment by chinese companies so that china will turn from just buying u.s. t bonds to making investment in the u.s. market. and that will help generate more jobs in the united states. second, the u.s. should increase its exports to china and the current problem actually lies with the united states. and to resolve the problem, the u.s. needs to lift its export restrictions. i recall a remark made by former secretary of commerce gary lock of the united states. he said that if the u.s. imports from east asian countries by 1 percentage point
that will help to generate an additional 100,000 jobs opportunities in the united states. my proposal was well-received by the president and i hope that in this positive way china and the united states can work together to address their trade imbalance and enhance trade and economic cooperation. tp >>
>> the eu is china's strategic comprehensive partner. we have followed closely the development in european countries and the difficulties that some have encountered. when some european countries have suffered from the sovereign debt crisis we have on many occasions expressed our readieness to extend a helping
hand. and our readieness to increase our investment in europe. not long ago, i had a telephone conversation with the president of the european commission. in my discussion with him, i once again made it very clear that china is confident that the eu will overcome the current difficulties and china is willing to invest more in european countries. at the same time, we hope that eu leaders and leaders of the key members of the european union will take bold steps and view the eu's relations with china with a strategic vision that is we believe they should recognize china's market economy status. as a matter of fact, according to wto rules, china will be recognized as a full market economy by 2016 internationally. and to show one's sincerity on
the nuclear incident. yet, we believe that japan will have a new round of upward economic growth in the course of post-disaster recovery and reconstruction. when japan is in difficulty, china has extended a helping hand in terms of economic and trade cooperation and tourism. at the same time, we must not forget the difficulties facing the vast number of developing countries. they are the ones that have suffered most in the economic crisis. they face unprecedented challenges in terms of growing their economies, and tackling inflations. they need the help from the international community. not long ago, we have extended food aid to some african countries on two occasions and we have provided humanitarian assistance to some west asian and north african countries
that have experienced turbulence. in a word, the international community must work in concert with the spirit of solidarity in tackling the crisis and meeting challenges, and that is the sprirt that china will apply in working with other countries to meet all the challenges. thank you. >> we thank very much for this very comprehensive presentation of the challenges but also the solutions in the future of economic development of china. mr. premier, i would say you have shown the audience a vision and we have seen since china embarked into its policy
of opening up, of reform, the position has always been followed by implementation. it shows us if we have the will to overcome the challenges, we can do so. i would like to make this meeting a kind of turning point in how we look at the future. we should look at the future with optimism. if we apply our capabilities, particularly our entrepreneurial, our innovative capabilities, i think china will continue to succeed in its path to a grand, prosperous, responsible cooperative nation in the world and the world will be capable to solve its problems and together we will have a more peaceful world with
strong and as you mentioned strong balanced and sustained development. thank you again. and i would like to integrate into those things also our partners here in china, the national development and reform commission, the foreign ministry. we are grateful for this partnership and we are particularly grateful, mr. premier, that for the fifth time you have opened up this summer. >> tomorrow on "washington journal" a look at faith in the 2012 eelectric with david brody of christian broadcasting network news. after that, nelson schwartz of the "new york times" on the federal lawsuit against several large banks over mortgage backed securities sold to fannie mae and freddie mac. and later historian carl anthony on the book jack lynn kennedy, historic conversations
>> next, a discussion on the latino community and immigration. with representative charles gonzalez and senator bob menendez. this is part of an event hosted by the congressional hispanic caucus institute as part of their annual conference. this is a little over an hour. >> we're going to talk first and foremost about the state of immigration reform, lack of it. senator, you have been instrumental, you have presented a new bill once again
tackling the issue first of border security and safety, and then the reality of what to do about the millions of people who don't have documents, many of whom are united states citizens. i don't hear much buzz about that legislation. and we can imagine why. but why don't you tell us. >> well, first of all, let me say i appreciate having this panel and this is the closest i'm going to get to sitting with lewis. >> by the way, people don't know he does have a tremendous voice. >> no. >> you're killing my time. >> all right. >> but it's true. >> look, i think that for us to be able to move forward on the comprehensive reform that i have offered to the senate and lewis has been an advocate in the house, we need to change the public debate. we need to get colleagues -- and i'm not being partisan here. this is simply part of the
reality. we need to get colleagues in the republican party to join us in this effort. i noted with great interest, i rarely go to see a republican debate on television but i went home to see the republican debate last week and i saw your intervention and in that intervention you asked a very legitimate question. you said let's presume that the border is now secure. however you define that. having defined the border as now secure what do we do with 11 million individuals undockmented? and the answer of each and every one of knows candidates was to revert back to well we have to secure the border and we won't talk about that until we do. well, we cannot achieve comprehensive reform particularly in the senate where we need 60 votes unless we can get colleagues on the other side of the aisle to be engaged. which is why in my comprehensive immigration reform legislation which takes care of the border and does it in a way that many of my republican colleagues offered as well as includes the dream
act, as well as deals with the suppression of a large number of undocumented immigrants whose labor is used in an unscrupulous fashion and therefore the oppresses their wages and the wages of all others in our society. but also creates a pathway to earned legalization, which is different than amnesty. amnesty means you get something for nothing. you're forgiven. this is a pathway to earn legalization with very significant hurdles. so we have responded to and included many republican colleagues ideas as a way to say join us in this effort. because we will not achieve it. so how do we get to where we need to be? when we as a community are willing to put the capital down with all of those who seek elective office, whether the president of the united states, whether it be a united states senator, whether it be a member of the house of representatives, and says, this is our number one issue by
which we will judge whether or not to cast a vote for you. you will see the dynamics of this opportunity to make what i think is the civil rights issue of our time a reality. >> quick answer is is there a chance and opportunity do you think going forward for a bill like yours to get any traction? >> well, you know, if we can change the dynamics in which people understand. you know, when agricultural growers in this country see their crops rot in the field they understand that there has to be a pathway. when educators say to us you need to pass the dream act there will be a pathway. when in fact hotels can no longer service their guests there will be a pathway. when in fact poultry plants across the country close there will be a pathway. when there is no one to take care of an infimmed loved one by the steady hand and warm heart of a an immigrant there will be a pathway.
>> you chris cross this country probably more than most people i know meeting with precisely that community that the senator talks about. and that community is involved from top to bottom of our society economically socially. what's happening? why can't there be that traction that the senator says needs to happen? >> well, first of all, i want to say that there have been victories and there have been triumph. and we are succeeding. and i think that we should put our fight and our struggle within the consept of recent victory. we had a president of the united states that recently was speaking at national council of laraza who said during his speech there are those who simply wish me to bye pass congress when it comes to immigration and many in the audience clapped saying yes, by past congress. congress is not a friendly place. congress was a place that the
dream act was passed where 55 senators vote for clotur but never got the bill to the president's desk. congress is a place where there are many people that are enemies, really, of any progress when it comes to immigration. and people in the audience started, he said but i can't by pass congress and people said yes you can. and you want to know something? they were right. he could. and he did. and i want to thank the president of the united states and i want to thank all of those that work at the white house for issuing new guidance when it comes to deportation. 1 million people have been deported from the united states during the last 30 or so odd months. now, it is clear that if you came here as a youngster to the united states, the discretion is and the order of the day is you do not get deported from the united states. that means that 1 million young immigrants to this country get to live and survive for another
day. and that's a victory that they are not being deported. and as a matter of fact that there are cancellation of deportations. that if you are a service member of the united states armed forces, that you get an order on the one hand to serve and to go to afghanistan and be on the frontline to be there to preserve our victories and on the other you get a note that your wife is to be deported, that is not to happen any more. that you are to take into conversation that you have american citizen children, that they have to take into conversation your roots in the community. i'm going to tell you something, and for one as you know that across this country from one state to the other demanding that this administration take action, i will tell you i don't think we're going to have comprehensive immigration reform until after the next election and then i think it's still going to take us a couple of years. but during the next three years, hundreds of thousands of immigrants in this country that
will be able to stay here and that will be able to wait another day so that one day we can pass comp employee hencive immigration. and that's an important victory for our community. is there still more that needs to be done? absolutely there's more that needs to be done. but i think at the same time we need to look at our fight within the context of the victories that we do have. >> let's talk to is he sillia whose the point person in the white house and the person who has the communication through the hispanic community to the president. this was a very tough row to hoe on the issue of the president's decision to specifically say out of the 300,000 back logged cases of immigration, let's not focus primarily on those people who haven't committed a crime. let's turn things around. that's going to take time to take effect. what is the reality of as the congressman says the next
couple of years taking into conversation november of next year but from here to then and then afterwards? >> first of all, thank you for the important role that you play as an advocate for the community. i'm really proud to be here with the congressional a team in the senate and house and people who have been advocates and help us tell our story and they will the country how important this issue is. >> the announcements that you were just talking about was part of a progression of announcements and work going on for several years. we have 10 million undocumented people in this country. it's clear to anybody paying attention that we're not going to deport that entire population. it's not humanly possible, it's ridiculously expensive. so what d.h.s. is trying to do is have a strategy around the law enforcement work that it does. sowhile it's enforcing the law, as the congressman points out, it's also making strategic judgment about who is the priority and who isn't.
if you running a police department of any urban area you would expend more resources going after serious criminals than after jay walkers. d.h.s. is doing the equivalent and there have been multiple moves across the last couple of years of which the announcement is the most recent one to make sure that the guidance is very clear up and down the chain of command, that the strategy is very clear, and all of that is within the administration's authority to do. but we also all understand that even as we use our administrative authority to make the right enforcement judgments, it's not a permanent solution. it doesn't solve the problem. we need the congress of the united states. and we have the authors of key legislation here sitting at this table and they acknowledge we need bipartisan support to get this done. we went from having as senator menendez will remember. 23 voted. we're down to zero.
we had many republican cosponsors in the senate of the dream act. we had three votes in the senate last december. and we're down to zero. this is the first time in the decade the dream act has no republican sponsors. so we have to get across the finish line but we must keep our eye on that ball. it's true of immigration, true of the bill. we have a log jam that we need to break. but this is a priority for this., an economic imperative. >> i like the kind of talk about your american dream. you know, people know you as a super star, as a guy who fills stadiums and fills our house with happiness through your music. but you come from a country that has had a very tumultuous political reality and yet you have come here and made it. tell me what this issue of immigration means for the hispanic community that has its
documents. >> first, thank you very much. i'm extremely happy to be here. my story is the storyfy of a lot of immigrants. that come to this country without even knowing what it is that they're going to be able to do. but in 1978 i came in. i came in illegally because of the war in my country. we were not able to get immigration papers because the government back in 78 and 79 would not declare themselves communist so we were not able to get any kind of status in the united states. the dream act -- and the dream act and the effort that all of you guys are trying to make happen for us hispanics and for hispanics that come into this country are extremely important. i went ten years being illegal in this country, surviving
trying to make it basically because when i got out of high school could not continue to college. i had no papers, no social security. and my only dream was that i was in the united states and that i was going to make it. somehow. i didn't know how but i was going to make it somehow. and here we are 30-something years later and i'm sitting here and i cannot believe it. but we need to be able to pass these laws. we need to be able to focus in what's right and what's humanly right for a lot of the immigrants that come into this country. >> let's talk about that. because there are oftentimes is and i think we feel it more every day a disconnect between the politics of the united states and the politicians that people don't see a lot of direct correlation with what their politicians are doing for them. and yet this is the most incredible democracy in the world. let's talk about state by state efforts. there are state efforts to do dream act. there have been efforts
throughout the different states on dream act. yet they differ on the dream act nationally. what are some of the things that you think should and could be happening statewide that could maybe help seed, plant seeds for people to be able to have this dialogue on a national level? >> well, again, thank you. i appreciate. this is very important topic. and we see this issue and when i say we i say by and large the business community sees this issue as an iceberg. unfortunately, the focus across the country is on the tip of the iceberg and that's the amnesty and border fence and what part of illegal don't you understand. the dangerous part is below the surface what people aren't paying attention to and that's the demographic changes and shifts that we're seeing in this country. you can name me any industry and i will show you where there's a shortage. from health care to manufacturing to engineering to energy, to the restaurant food service industry, we're seeing
massive shortages. let's take health care for example. the elderly population is expected to double by the year 2020. meanwhile, one third of all the physicians in the united states are going to be retiring because they're baby boomers. so the question comes in, it's already been said we need to reframe the debate. and when you look at it from a demographic standpoint and a workforce standpoint it becomes very crystal clear what needs to happen. we do need to refrain this debate and here's why. for some reason many people see this issue as a gift to the hispanic community. it's not. it's fundamental and basically vital to the future workforce of this country. and when you have state by state that breaks down, let's look and see what's already happened. they did it not just by state but they did it in riverside, new jersey, and man nasssass, virginia, and hazelton, and
arizona, georgia, and alabama. and so when you have these gifted people who are here who we desperately need in our workforce, the answer becomes crystal clear. we need them in our workforce, we need them to be part of the future of this country. >> so i gave each an opening statement without interruptions. that's it. no more. let's start talking. let's have a dialogue. and let's, let me just throw some things out there and i would love for you to respond to that. this country has a 9.1 unemployment. the african american rate is almost 17. unemployment is more at 11%. they're saying it's 14 million unemployed. it's much higher when you count the people twho are working part time or stopped look forg a job. is this a time now critics would say to have a process by which 11 million people who are currently not in the system come out of the system when americans can't find a job?
is the priority of immigration reform the correct one when the situation and the economy is so dreadful for people that do have their documents and were born here? >> it's important to those people that we have an immigration reform. >> to the u.s.? >> yes. absolutely. to the american workforce. if you have 10 or 20 million people that is undocumented that's undercutting. when the president talks about it being an economic imperative he is talking both about making sure that all workers have the same protection and level playing field and he's talking about the industry all across the country, all across the business sector who are clamoring for an immigration reform because they understand how important it is to their success. we see it from a high tech industry every day. we hear it from the agricultural sector every day. these folks want their workers to be here legally. and we need a reform that makes sure thall of the workers in
the united states are here legally. that's what we're talking about. >> she's right. it's almost as though they go to the gas station and they don't pay tax. they go to the grocery store they don't pay taxes. the rent or even the home ownership they don't pay property taxes. the fact is they pay billions of tamps but just cannot access any of the programs that those tax dollars are there to us. i mean, if you look at our economy just think for one moment of 12 million people all of a sudden getting real hope. i know what they're going to do because it's almost with no hope and with all of the impedments that exist and yet they are growing and thriving in terms of economic ingenuity. we see them in our community throughout our community. now, they'll buy more homes, cars, make a deeper more committed in investment. >> that's if they get a job. but there are 14 million people who don't have a job. >> but that's my point.
look the united farm workers set up an employment agency sout there and said you want to pick garlic, there's a job for you right here. no one showed up. no one showed up to pick tomatoes. nobody is going to show up to do some of the fundamental jobs that are necessary in our economy. the same with this. >> we all see them. because you and i see them. we all sit down for dinner and see that little door opening up and we see they're watching. this is the [speaking spanish] . it's just fundamental. we meet maria every day whether we're going in the hotel room or leaving the hotel room. nobody cares. they just want a nice decent bed. it's almost as though in america only we need a apply. no those are the jobs that we're willing to do and i'm willing to state here today that those are jobs that my children and my children's