World Now Has New Power Centers to Create Different Perspective on Development, Says Former World Bank President

World Now Has New Power Centers to Create Different Perspective on Development, Says Former World Bank President

Feng Yuqing

Date: Thu, 03/15/2018 - 11:27 / source:Yicai

(Yicai Global) March 15 -- James Wolfensohn was once the captain of the Australian Olympic fencing team, chairman of Carnegie Hall, a concert venue in midtown Manhattan, NYC, the U.S., where he once had a cello performance with cellist Yo-Yo Ma, and a well-known Wall Street banker and billionaire. Eventually he stepped onto the world stage by serving as the president of the World Bank Group for two consecutive terms. He took it as his mission to alleviate global poverty.

Now at the age of 85, he still plays an active role in development areas. James Wolfensohn kindly agreed to give us an interview and we met him in his office on Manhattan’s Sixth Avenue.

“I do all kinds of things, and I always think that opportunities in life are endless,” he said earnestly.

While serving as the World Bank president, he laid emphasis on the World Bank’s motto “Working for a world free of poverty.” If we want to live in a peaceful world, if we want to live in a fairer world, we must care about impoverished countries in the world, he said.

A few days after the 9/11 terrorist attacks, Wolfensohn gave a speech, saying “No wall can separate poverty and wealth. We are bound together by trade, investment, and finance, as well as diseases, crime, immigration, drugs, environmental deterioration, financial crises, and terrorism.”

In fact, as early as in the 1940s, when the Bretton Woods system was just established, representatives affirmed, in their declaration, that the economic status of each country, healthy or not, will be noticed by its neighbors, near and far. Wolfensohn’s response to terrorists in the 21st century is that “no wall can prevent global communication.” This was the initial intention of Franklin Roosevelt when he founded the World Bank.

Life Story

Through his life, Wolfensohn has been continuously breaking through various walls. He was born in an ordinary middle-class family in Sydney, Australia. His father, though talented, was frustrated about his career and ran a consulting firm that struggled to make ends meet. His mother loved music. The family often had to grapple with hard times.

Wolfensohn’s father hoped that Wolfensohn could fulfill his unfulfilled dream for him. Wolfensohn skipped two grades in primary school and entered Sydney Boys High School as a star student. However, the excessive expectations of his parents became too heavy a burden for Wolfensohn. Four years later, he graduated from high school with very poor grades and could barely go to college. In his freshman year, he failed all exams.

“I went to college when I was 15. Honestly, no girls paid attention to me. They all preferred 17- and 18-year-olds,” said Wolfensohn, with chuckles. 

Wolfensohn basically had no interaction with his fellow students. Every day, he went to the student inion to read newspapers and play chess. He even skipped classes. The freshman year was a total mess for him, as he turned from a lonesome adolescent into an angry rebellious youth. His life began to change, however, when he made some friends off the campus.

As he didn’t attend classes, he had plenty of time to spare. So, he landed a job at a forest farm and spent a lot of time there. The workers at the farm showed great care to this scrawny boy who often played truant. They required him to report his academic performance to them. If he didn’t perform well academically, he would get beaten up.

To this day, in the twilight of his life, Wolfensohn is still grateful to those workers. “I couldn’t discuss them with anyone. Nobody knew about them, but they were my friends. I drank beer with them, and we talked a lot. They had their own trouble in life, but they still cared so much about me and told me how to change as a student. That’s a very important education for me.”

One day during his freshman year, he by chance got an opportunity to play fencing, and he soon fell in love with this sport. Five years later, Wolfensohn was a member of the Australian fencing team at the 1956 Summer Olympics, and two years later, he became the captain of the team.

“The most important thing I learned from fencing is self-control. This sport is not about rushing in headlong and hitting your opponent randomly with a sword. It’s a sport that requires you to use your brain. That’s why I like it.”

Fencing helped him gain self-confidence. Later, he joined the Royal Australian Air Force. “Many things happened that led me to feel confident in myself.”

Stepping Onto Career Ladder

The experience as an Olympic sportsman also opened a door for him to further advance in life. Wolfensohn matriculated into Harvard Business School. After graduation, he began to have rapid career developments in the financial circles in Sydney, London, and Wall Street, NYC.

In the late 1970s, when Chrysler, one of the three largest US auto companies, got stuck in a debt crisis, it turned to Wolfensohn, who was with investment bank Salomon Brothers, for help with debt restructuring. Wolfensohn accomplished what appeared to be an impossible mission and thus saved Chrysler from the verge of bankruptcy. From then on, Wolfensohn became a mogul on Wall Street and in Washington, DC.

In 1981, Wolfensohn and his colleague Bloomberg were both fired and got USD10 million from this severance. He used the money to found his own company. By the 1990s, Wolfensohn had already achieved incredible success. His own investment bank James. D. Wolfensohn Inc even hired Paul Volker, former chairman of the Federal Reserve and a well-known financial expert.

“I feel that I’m living in a very interesting era, an era when one can have many opportunities. You don’t have to be the son of wealthy parents to have those opportunities. I came to New York when the era was changing dramatically.”

Shortly after he moved from London to New York, Wolfensohn participated in the maintenance of an ancient building. David Rockefeller was the board chairman there, and he helped Wolfensohn establish a board of directors that included seven to eight topnotch figures in New York. Before that, they had never met each other before.

“I was very astonished. I didn’t know many people in New York. Nor was I a member of their club. But I still got this job. What they were interested in was special skills. It didn’t matter where I came from or who I was. So that’s what we did, and from then on, more and more opportunities began to emerge.”

Musician Banker

Wolfensohn is also chairman emeritus of Carnegie Hall. Soon after he turned 40, he took cello lessons from well-known cellist Jacqueline Du Pre. On his 50th birthday, he had a joint cello performance with Yo-Yo Ma on the stage in Carnegie Hall.

Jacqueline Du Pre is a close friend of Wolfensohn. Unfortunately, although she rose to fame very early, her career was cut short by multiple sclerosis at the age of 26. She was unable to perform afterwards. Jacqueline Du Pre offered to teach Wolfensohn on the condition that Wolfensohn should perform in Carnegie Hall on his 50th birthday. That’s what Wolfensohn did. Besides, at his 60th and 70th birthday celebrations, Wolfensohn also held cello concerts in Carnegie Hall with some of the most famous musicians in the world.

Wolfensohn knows many influential people and have served on many boards of directors. When John F. Kennedy Arts Center in Washington DC invited him to be the chairman, he didn’t turn down the invitation. In 1995, to commend Wolfensohn’s contributions to art, Queen Elizabeth II granted him honorary knighthood.

He often spends 40 hours in his company and 30 hours in Carnegie Hall. Sometimes, he stays in the office till 2 a.m.

“What motivates you to work so hard?” I asked him.

“Honestly, I think it’s interest. I’m surprised that there are so many opportunities out there. I had never managed Carnegie Hall before I had the opportunity. I decided to rebuild it. As for other work, whether it’s at a university, an education institution, or a church, I have an interest in everything I do.”

Poverty Alleviation

It’s such passion that motivated him to become the president of the World Bank. During an interview with Financial Times in 1996, he said, “You should have passion for development issues. For me, my passion for such issues is growing. That’s what I think about all day. I think about them in the morning, and I think about them at night, even in bed.”

Wolfensohn thinks that the most important thing he has done was that he persuaded the World Bank not to expect problems to be solved overnight. Poverty can’t be eradicated by a program of mere six months. Poverty alleviation programs take years to yield results. We have to continuously manage these programs, he says. It’s a long-term endeavor.

Over the past 20 years, millions of people have got out of poverty because of globalization. However, the anti-globalization sentiment in developed countries has already reached a global scale.

Wolfensohn was very candid about this issue. “There are always some people who think that if you give opportunities to foreigners, their own opportunities at home will decrease. That’s why some groups always dash cold water on poverty-alleviation efforts. Through my entire career, there has always been this trend of new manufacturing centers being relocated in areas with lower labor costs. Therefore, this trend will continue. My experience, however, is that at present, this imbalance is undergoing the self-correction. If you try to interfere with the process, more trouble will come.”

He also sees that the world is changing. There was a time in his life when all scientific research activities took place in the U.S. and Europe. Today, this is no longer the case as most R&D activities are carried out in China. The world has become more diverse and more closely interconnected.

China-Led Investment Bank

“Since the beginning of this century, we have seen that emerging countries are introducing many new things and new ideas. For example, China is setting up a new investment bank, and that’s a big deal.”

The Asian Infrastructure Investment Bank, AIIB, will inevitably have competition with the World Bank in development areas. Some AIIB employees were in fact still working for the World Bank six months ago. AIIB is committed to USD20 billion of investment every year, which is not very far from the World Bank’s commitment of USD30 billion.

Wolfensohn’s reaction to this issue was somewhat surprising to me. He said, laughingly, that USD20 billion and USD30 billion combined are far from enough for development. AIIB must stay in these countries long enough in order to bring about real change.

“I don’t doubt that within five years, AIIB will become a strong competitor. It will force the World Bank to reform, which is a good thing, in my opinion. If you accept, as I do, the fact that there are different power centers in the world, you will agree with me.”

With regard to the enormous changes of our times, Wolfensohn, who has experienced many momentous events, is also worried.

“I’m worried that in this era of great changes, the world may not be moving forwards peacefully. I think the world may be tumultuous, and there are many conflicts in the seemingly peaceful development environment. For example, the nuclear threat of North Korea. I hope we can resolve that issue successfully. There are ongoing wars in many other parts of the world, such as the Middle East and Africa. I think these issues will become more prominent in the next decade, and the world will have a different perspective on the value of life and the value of development.”

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Keywords: James Wolfensohn, World Movers