| Editor's
Note:
The
Saudi-US Relations Information Service
is pleased to provide its readers with
participants' remarks from the April
27, 2004 conference hosted by the Center
for Strategic and International
Studies and the U.S.-Saudi
Arabian Business Council.
The conference addressed U.S.-Saudi
relations and global energy security
with high-level speakers from the
United States and Saudi Arabia.
The conference explored the link
between affordable energy and economic
growth. It
is important to bring you the comments
of leaders from Saudi Arabia and the
United States on these important
issues.
The
following are introductory remarks
made by Eric Peterson, Senior
Vice President and Schreyer Chair
Holder, CSIS, and
Dr. James Wolfensohn, President, The
World Bank.
Click
below to read previous transcripts
from this conference:
U.S.-Saudi
Relations and Global Energy Security
Eric Peterson,
Senior
Vice President and Schreyer Chair
Holder, CSIS: It
also gives me great pleasure to
introduce someone who needs no
introduction, James D. Wolfensohn who
is simply an icon on the global
desktop.
Before
becoming The World Bank Group's ninth
President on June 1, 1995, he had
already established a very significant
career as an international investment
banker with parallel involvement in
development issues and the global
environment.
September 27,
1999 he became the third President in
World Bank history to be reappointed
by the bank's Board of Executive
Directors to a second five-year term.
We were
talking briefly over lunch. It would
be remarkable to look over Mr.
Wolfensohn's tenure at how many miles
he has traveled, even as his tenure as
World Bank President. During that
tenure he has traveled to at least 120
countries around the world looking at
the various challenges facing the
bank's 184 member states. And as part
of those missions he has discussed a
range of factors with governments,
representatives from business, labor,
media, non-governmental organizations,
religious and women's groups, students
and teachers, etc. This last weekend I
think it was his 17th semi-annual
meeting of the World Bank refined
[inaudible], and we're very very
delighted to welcome
him to this podium.
Mr.
Wolfensohn?
[Applause]
Dr. James Wolfensohn, President, The World Bank: Thank
you very much, Mr. Peterson, ladies
and gentlemen, Ministers. Let me first
of all acknowledge my joy of being on
the platform with my friend Ibrahim
Al-Assaf. He helped me very much in my
early years. He was Dean of the Board
of the Bank and as a result of
everything I learned from him I got a
second term. So I'm especially
grateful to him and I should
acknowledge that even our current Dean
of the Board is from Saudi Arabia.
It's another form of intervention in
this country's activities and the
world's activities which may be
unnoticed by the rest of you, but at
our Board we have a strong influence
by Saudi Arabia and we're delighted to
have that.
Secondly, I
would like to say that having had a
report on this morning's meetings and
heard Alan speak at lunch and now
heard Ibrahim speak, I wonder why I'm
here. I'm sort of a footnote on the
discussion of the future supply and
demand statistics that Alan so ably
covered at lunch. I really can't
comment on prices of this commodity as
we go forward, nor am I an expert on
the relations between Saudi Arabia and
the United States.
But I guess I
can take a few minutes to maybe give a
dimension of the issue of energy as
seen from those parts of the world
that are not represented here. The
five billion people in developing
countries out of six billion people on
the planet who, as you know, are
consumers but far more modestly than
the rich countries. Maybe one-fifth or
one-sixth of world consumption, and a
fraction on a per capita basis
depending on how you measure it and
depending on the countries between
1/15th and 1/20th per capita that in
some cases are just off the charts in
terms of no energy consumption at all
in a number of the countries.
So why would
the organizers have invited me along?
I think it's because none of us can
exist in a planet that is unstable,
and none of us can foreshadow growth
in the world without thinking about
the growth in the development world.
Whereas heretofore the demands of
developing countries may not have been
definitive or any sort of factor in
the setting
of prices, today this so clearly
changing. We project that in the next
25 years our planet will grow from six
to eight billion people, and all two
billion save 50 million, will go to
developing countries. So in the year
2025 we'll have a world of eight
billion of which seven billion will be
in developing countries. That alone is
a signal of increase in demand for
energy sources -- oil, gas, coal, and
such other forms of energy as they may
find.
Secondly, the
balance is changing. As we look
forward in our planet 50 years, we
would expect that 40 percent of global
GDP will be represented in developing
countries.
So whatever
be the position today, whatever has
been our historic view of the demand
for oil and the demand for energy,
looking forward we seen an exponential
growth and indeed in terms of economic
growth we see at the moment twice the
growth in developing countries that we
see in developed countries. For that
reason alone I guess it's worth
thinking about the developing
countries.
Then if you
look at the two major countries, India
and China, where China has 1.3 billion
people and India a billion. Even in
today's market you see the impact of
these emerging giants in terms of
their demand for energy. You only have
to look at the Chinese demand for
energy of which went up 50 percent in
the last 18 months and which is projected
to go up three times more over the
next 20 years. My guess is that's a
conservative estimate.
As we look
forward to Chinese participation in
global trade, today it runs around
three percent of global trade with the
U. S. around 13 percent. Our
projections would lead us to believe
that by the year 2017 they'll be equal
-- 12 percent each. Showing this
dramatic incline in China's
participation in manufacture and in
global trade. If you're going
to manufacture or participate in
global trade, it stands to reason your
demand for energy.
So the
Chinese influence which today is seen
in the coal markets particularly in
terms of the pressure on cooking coal
and coal for steel and also an
increased demand for gas and for oil,
it's clearly becoming a factor in
terms of economics while at the same
time we have 35 countries in
developing countries which are now or
potentially producers of oil.
We have in
the projections which have been put
out recently, we have an estimate that
over the next 25 years, and the
Ministers could probably confirm or
deny this, but our estimates would
lead us to think that as we look at
the energy investments they will be on
the order of $16 trillion over that
period of time, of which half will be
in developing countries. So this in
itself is a huge influence on
developing countries and leads to
other issues which I'll get into in a
minute which are issues of equity,
social justice, how the money's
distributed, issues of corruption,
issues of stability, all of which are
on the agenda of civil society and the
agenda of many people in the
developing world.
But at the
moment we start at a point where
unlike Alan Greenspan's description at
lunch where there can be modulations
of the use of energy in response to
costs, in the developing world, we
start with something far less
attractive that you may or may not
appreciate. 1.6 billion people in the
developing world have no access to
electricity. 2.4 billion people cook
with biomass. They go down and cut
down trees and do whatever they can to
try and cook. So for them the issue of
oil prices is not an issue. The issue
is whether they can have access to any
form of power.
So for the
countries that I represent the issue
certainly is one of price which has a
significant and direct impact on the
ability of these countries to operate,
but you have a deeper problem in terms
of what the world has set as its
goals, the so-called millennial goals,
to halve poverty by 2015 and to
improve the levels of education and
improve the levels of health, all of
which are significantly dependent on
power. Even running schools, running
hospitals, running efficient
governments, putting in highways. All
these things are relevant.
About three
weeks ago when I was in Ghana I was in
a remarkable little village or town
that was producing shoes for the
American market with craftsmen working
at it. But they had only six hours of
energy a day. They were begging me,
saying please for God's sake do
something about the energy supply. We
can produce, but we have no energy. I
could give you dozens of examples.
That's just the most recent. Where you
have this enormous desire to
participate in growth. This enormous
innovative quality in the developing
world which is absolutely arrested by
the inability to have power.
So power in
so many cases that I've seen becomes
at the core of the issue of
development. Power itself, and then
the pricing of power.
So these two
things are really central to the issue
of development, and I would say
without extending the argument too
much, central to the issue of peace in
a much broader sense than I think
we've looked at it.
I personally
do not believe that we can have a
peaceful planet unless we have a
planet that has greater equity and
greater opportunity. We have 2.4
billion people today under the age of
24. We have 1.5 billion under the age
of 15. In the next 25 years our planet
grows by 2 billion which means that at
least 2 billion will be born plus the
people that died,
the equivalent.
So we are
looking forward to a planet which is
more than 50 percent young and more
than 50 percent in need of jobs. If
you need jobs you need an environment
in which jobs can flourish and you
need power.
These are the
issues that are on our mind in the
Bank, plus one or two other which
maybe we can get to in questions. But
the issues of environment affect
significantly the developing world.
The issue of global warming, the issue
of changes in weather patterns,
impacts the developing world far more
than it impacts the developed world.
The issue of
corruption, how one deals with both
the benefits and the joys of finding
oil in an economy where you have great
divisions of wealth and how you do it
without having an impact which tears
the country apart. There are many such
countries, I'm sad to say, many such
regions. I'm just back from the Niger
Delta where this is obvious when
you
fly over in a helicopter or when you
go into villages.
So for us in
the Bank let me make concluding
points. Firstly, we think the
developing world is a world that you
all need to be thinking about. It is
the fastest growing part of the world.
It is also a humanitarian and a
challenge in relation so peace, and
it's a challenge in relation to
growth. A responsible oil and gas
industry in relation to those
developing countries cannot think just
in terms of price, but needs to think
in terms of equity needs to think in
terms of justice, needs to think in
terms of opportunity. Because an
unequal world will not be a peaceful
world and a non-peaceful world is not
much good to the oil industry.
Thank you all
very much.
[Applause]
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