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World Bank chief: U.S. still good place to invest

December 3, 2010

The Washington, D.C.-based World Bank is as foreign to many Hoosiers as the developing countries it strives to help.

But President Robert Zoellick said Indiana, which is among the leading producers of corn and soybeans, has a vested interest in the investments the bank makes in those far-away regions.

“A lot of farm exports go to these countries,” he said. “The more growth they have, the more exports they need.”

Zoellick, president of the World Bank since 2007, was scheduled to discuss those issues and others while addressing the Economic Club of Indiana on Friday at the Indiana Convention Center in downtown Indianapolis.

Previously a U.S. trade rep and deputy secretary of state under former President George W. Bush, he was invited to Indianapolis by Indiana Gov. Mitch Daniels, who also served in the Bush administration.

The United States is the largest shareholder in the World Bank, which was founded in 1945 following World War II and provides financial assistance to help fight poverty around the world.

The bank’s operating budget has remained flat during the global recession driven by the European debt crisis. The United States is facing its own debt challenges, but Zoellick doubts they’ll reach the same severity.

“The United States is still by far the largest economy in the world,” he said. “I wouldn’t suggest the United States is facing any imminent danger. But on the other hand, these risks build up.”

Many countries, led by China, still view the United States as a good place to invest, said Zoellick, though he cautioned countries may become nervous about the value of their investments if the United States keeps printing money to buy bonds. Dumping too much money into the economy could lead to inflation and a further drop in the value of the dollar.

The World Bank has invested $142 billion in the past few years through loans grants and guarantees to improve education, health, infrastructure and private development.

The bank has 179 shareholders that provide investments to about 120 countries. Much of the attention has shifted to war-torn countries such as Afghanistan and Iraq, and others in sub-Saharan Africa ravaged by AIDS.

But the World Bank’s interests are broad, evidenced by Zoellick’s visit to Russia last week to help bring attention to saving the 3,200 tigers remaining in the wild.

“The issues haven’t gone away,” he said. “They’ve just changed their nature.”

Friday's luncheon was set to run from noon to 1:30 p.m.

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