The idea that a President of the World Bank and members of his staff would soon be going around saying that a free press is a central and crucial ingredient of successful economic development would have led to lively scenes in the boardroom. Yet today, in a very different environment, that is precisely the sort of argument we are able to assert. We have benefited from the lessons of globalization as they apply to the tremendously complex and challenging task of achieving economic development in poor countries.

Globalization is teaching us a lot about the power of information, and how it can be harnessed for the betterment of humanity. It is encouraging us to believe that information is an essential weapon against poverty. It is leading us to understand that too much discretion – or secrecy, if you prefer – is misguided, self-defeating and ultimately unsustainable. And we are happy to see that so many of our shareholder governments support the case for greater openness and transparency as they witness the benefits.

Today, those of us in the developed world are becoming accustomed to the notion of globalization, even if we do not fully understand where it is taking us in an age when everything from Wall Street to the World Wide Web seems to be challenging the accepted paradigms. We are starting to understand that it is no longer possible for companies, institutions or countries to do whatever they like in isolation without attracting penalties of the kind that, in the extreme, are being suffered by the people of, say, North Korea, Myanmar, Iraq and parts of the Balkans.

No company, institution or country can afford to risk the dispassionate logic of the marketplace by pursuing policies or strategies that lead to, say, the wholesale withdrawal of investor capital, as we have seen in the recent East Asian financial crisis, or in the multinational corporations that have failed to adapt to the need for change and are being punished by consumers and investors alike. There is a price. We are all of us – companies, institutions and countries – subject today to instant analysis and judgement of our actions, with multimillion dollar decisions made and implemented in seconds. In this world of the information age, where secretiveness and censorship are under unprecedented assault, there is no place to hide. Those companies, institutions and countries that will thrive in the information age are those which throw themselves open to competition, to adaptation, to creativity, to knowledge, to the sharing of ideas and to new ways of thinking. As the "Australian Financial Review" put it in a new year’s eve editorial, "True national sovereignty will increasingly depend on how well a country can compete and negotiate in this new global reality (of 24-hour markets and supra-national regulation) rather than on its ability to shelter behind tariffs and guns".

Our hope at the World Bank is that we are meeting this challenge of the information age head-on. We believe we can continue to serve our developing country clients adequately in this new century only if we succeed in doing so. As the Australian-born President of the Bank, Jim Wolfensohn, tirelessly points out, today’s six billion people will become eight billion people in just 25 years. In the past half-century we can see that some of the objectives we in the multilateral institutions set out to achieve in the developing world have been met. Many millions of poor people have been helped to healthier, better educated, safer, more productive and more fulfilling lives as a result of the aid, advice and altruism provided by numerous institutions, organizations and governments. In a generation, life expectancy has increased from 55 years to 64, incomes per person have doubled, infant mortality has been halved, children in school have increased from two in four to three in four.

None of our countries has been more successful in achieving these gains than those in East Asia. They are now engaged in a process of recovery and adaptation from the financial crisis that is painful in the short term, particularly for the poor and disadvantaged. But it will leave these countries significantly stronger if they complete the reforms essential to combat corruption, instill the values of good governance, provide a solid legal framework, and open themselves to the benefits of a free flow of information – all of which are happening or starting to happen.

Yet despite these real successes in the war against poverty, our development challenge is getting bigger and much harder. We are in danger of losing the fight against poverty. About 1.2 billion people in the world survive on less than $1 per day; another 2 billion have less than $2 per day. Over 800 million people cannot read or write. Food production will need to double over the next 30 years to feed the additional population. And in Africa and parts of Asia, AIDS is taking a terrible toll. It is not our challenge alone. If ever a truly global challenge existed, this is it: to take on the scourge of poverty, and win. To do so we see no alternative to the use of the information revolution, in every sense, to help developing countries, to help us and to help our partners to succeed in the crucial decades ahead.

To the World Bank, the information revolution means a number of things. First, it means the need to make full use of our huge store of global knowledge about development so that everyone, world-wide, has access to the experiences, the lessons, the successes, the failures, the best-practice, of others. This applies to every field of endeavor from growing food and protecting the health of infants to reducing pollution, saving the environment, securing sound corporate governance and building strong legal frameworks. We see this not as intra-agency knowledge or inter-agency knowledge. It is development knowledge that should be accessible to all. In coming months we will be taking urgent steps to use state-of-the-art technology to bring this network of global knowledge to reality. We are working closely with a number of private sector partners to dramatically expand our ability to share knowledge and ideas.

Second, the information revolution means that there is no excuse to avoid alliances and partnerships that can get the job done quicker, more effectively and much more efficiently. The task of defeating poverty – let me stress it again - is far too big for any one institution or cause. The World Bank may be the biggest and only global development institution, but it is neither possible nor desirable for us to think that we can do it alone. In the past several years we have opened ourselves to partnership in many ways that we, and, we hope, others, have found profitable. We are working extensively with other development institutions, with NGOs, with civil society, with the media, with academia, the private sector and others to find ways of sharing knowledge and information, to determine who is best placed to take on certain tasks, and to avoid duplication, contradiction and waste.

We are aware in this context that more and more of the challenges faced by governments in the coming years will arise from global economic forces, and will reflect global economic needs that cannot always be met by governments alone. Issues such as the spread of AIDS, the need for diversification of the plant and animal gene pool, and the desirability of globally consistent financial regulatory standards, are among about 30 initiatives we have identified as needing a broad sharing of ideas, knowledge, information, research, funding and programs. They are transnational themes – themes that we like to define as global public policy. So many of the challenges we face today transcend national boundaries. The air we breathe, the health we enjoy, the crimes we suffer, the waves of refugees we face, are increasingly subject to transnational forces that demand international partnership and global solutions if they are to be managed appropriately. We have a number of promising initiatives underway, including a global partnership to develop an AIDS vaccine.

Third, the information revolution means that we can longer afford to see the work we do in the multilateral institutions as purely economic, say, or purely financial, or purely cultural, according to the roles defined in our original constitutions. To do so would be to ignore what in an era of globalization is obvious, which is that everything is interrelated. You cannot solve a complex problem by dealing in isolation with just a few of its many elements. In such a complicated business as economic development, it is misguided to believe that this is an effective way of operating.

A holistic approach to development is now increasingly accepted as the way forward, building on the five principles that are currently emphasized in our operations, namely, the need to invest in people; the need to protect the environment; the need to encourage private sector involvement; the need to strengthen the ability of governments to serve their people; and the need to promote the reforms that provide a stable macroeconomic basis for sustainable growth. Jim Wolfensohn has captured his view of the wider holistic vision in what we call the Comprehensive Development Framework, with which some of you may be familiar.

The CDF makes the case that development is not just a financial issue. Yes, a sound macroeconomic framework needs to be in place to produce growth that at the end of the day is the engine that is vital for pulling people out of poverty. Yes, we have to focus on fiscal and monetary policy, on financial and banking reforms, on corporate reform and recovery, on transparency, on capital flows and all the other components of a sound financial base. Every country needs a financial system that is properly supervised and controlled.

What we are giving equal weight to as part of the CDF, however, are social issues. It is clear today that you can’t deal with one without the other. In East Asia, for example, we quickly became aware after the financial crisis broke that there was a serious danger of social needs being neglected or forgotten as everyone focused on banking and financial reforms. So, in Indonesia, say, we restructured our entire program to ensure that fundamental social needs would be met. It is clear that social needs – be they healthcare, education, cultural heritage or whatever – are essential ingredients of economic growth and development, and are therefore part of the holistic vision.

But there is a third integral part of this holistic framework – the structural outlook. Again, we cannot look at social and financial issues effectively without taking into account the underlying structure of the economy. And for this you need solid provision for good governance, for intolerance of corruption, for a free press, and for an honest legal and judicial system embracing respect for everything from the law of contract to individual human rights. And, in fact, we now have empirical evidence which begins to back this up. Recent work by the World Bank using rule of law indicators suggests a positive correlation between the rule of law and poverty reduction. It is a question of achieving a responsible and accountable government and society. In a recent joint article, Jim Wolfensohn and the Master of Trinity College, Cambridge, Amartya Sen, the recent winner of the Nobel Prize for economics, make the case that (and I quote), "The end of the Cold War has been accompanied by a growing recognition of the importance of political, social and economic participation, by widespread demands for human rights and gender equity, and by an emerging globalized economy".

None of these issues that are so crucial to the strength of the underlying economic structure has proved more difficult to tackle than corruption. It is a major inhibitor of equitable economic development. This is why we have redefined corruption, not as a political issue (for that would conflict with the Bank’s Articles of Agreement), but as an economic and social one. As Jim Wolfensohn has put it, when he made the redefinition, "the walls did not fall down, the roof did not fall in". What people did point out, of course, is that corruption is not an issue in developing countries alone. It is a universal problem. It is even possible for people in a number of countries to claim bribes as tax deductions. So while there is work to be done on this issue globally, the only truly effective way of combating corruption is to deal with it locally. It is tremendously difficult to impose changes from outside a society. But what you can do is to create a climate for change by encouraging a flow of ideas.

And it is here that we come to this question of why the power of information is so important to the fight against poverty across the developing world. One of the lessons of the East Asian crisis is the capacity of a free flow of information to support equitable and sustainable economic growth – and, conversely, the ability of censorship and misinformation to distort and endanger it. In Australia and other developed societies, the past few years have seen an information revolution as we come to take for granted the fast, easy – some would say out of control – flow of communications engendered by the internet, by e-mail, by mobile telephones and all the other devices that are making our lives more convenient and efficient. Information has gone global. It is immediate and virtually uncensorable.

But think what this revolution is doing for the developing world. Think of countries where in the past the ability to control information has allowed governments to determine what their people know, and when they know it. Information is power. Knowledge is power. Open up the flow of information and what happens? A transparent society is what happens, where people know what is going on and can express opinions, share ideas, enter into a debate and question what is being done in their name. An open flow of information encourages honesty, responsibility and accountability. It evokes understanding. It builds investor confidence and supports the economic growth that pulls people out of poverty and gives them a chance in life.

Let me give you some examples of what I mean. We have found that despite the influence of the World Bank there are some countries where we are unable to make serious inroads into corruption practised by government officials – and where the stringency of our own anti-corruption procedures, among the most rigorous in the world, is insufficient to get to the core of the problem. So, how can we lend with confidence in such circumstances? We can use the power of information. We can publish in local newspapers the full details of a project or program loan – how much is being lent, what it is designed to achieve, who will receive it, and so on - and, at a stroke, make everything visible, transparent and accountable.

Jim Wolfensohn likes to tell the story of the time he visited Georgia and saw how President Shevardnadze was dealing with mass corruption and incompetence in the judicial system by obliging all 200 judges to take an exam on national television. Most failed, and were replaced. In Uganda we were worrying about the issue of payments to teachers who were not turning up for work. So we took the opportunity of publishing in the newspapers the money that we were providing to various districts for education. When it was determined by the people that the teachers were not showing up, public pressure ensured that their attitude changed quickly and dramatically. In Argentina, needy children in Buenos Aires were being charged more than twice as much for their lunches as those in outlying areas in a social program we were funding until we used the media to highlight the issue. Within two weeks the disparity was remedied. Such stories about the power of information are legion.

But nowhere have we seen information used to better effect than in Indonesia, a country that more than any other captures the meaning of this conference on media and democratization in Asia and the Pacific. For here you have a country that has achieved the triumph of securing a democratically-elected President, of empowering a free press, and of beginning a campaign against a system of corruption that as bad as any in the world today. You have to ask, what could have been achieved in this new environment had the media not been free to report on the government, on politics, on corruption, collusion and nepotism? Would, for example, the Bank Bali scandal – with the diversion of huge amounts of money for political purposes – have been come to light without a free press? We must doubt it.

Indonesia is a country that is coming to grips with the benefits of openness, of the need for serious legal reforms, of trying to ensure respect for human rights, of instilling sound corporate governance and the other ingredients that in the past Indonesia lacked – and has suffered painfully and expensively as a result. President Wahid has shown himself to be a reformer – and if we have learnt anything from the lessons of development, it is that developing countries that commit themselves to reform, to opening up, to transparency, to freedom of expression, are the ones that are going to succeed and prosper.

Recently we published at the World Bank the findings of our "Assessing Aid" report. This landmark analysis shows how experience points to aid only really being effective when it is applied to developing countries with sound economic management, robust government institutions and a healthy approach to openness. Providing significant amounts of money has made little or no impression on countries with a weak policy and institutional environment. It is still possible to assist development in those countries, the report argues, and indeed we must not be tempted to walk away. But the focus needs to be on supporting reformers and reforms, rather than simply disbursing money in the hope that somehow it will make a difference. In the new century this is part of the new reality being ushered in by globalization and the information revolution. Developing countries will ignore this finding at their peril. For this study offers us some authoritative guidance on how we should direct our aid and development dollars to achieve maximum bang for each buck.

It is particularly important now that we are faced with the tragedy of aid levels sinking to their lowest on record. Australia, for example, now gives less in foreign aid as a proportion of GDP – as little as about .25 per cent – than at any time in the past. Yet, internationally, if annual aid flows could be increased by only the equivalent of about 15 billion Australian dollars, taking us back to the level of a decade ago, this would lift an additional 25 million people out of poverty each year if the extra funds were to be directed to countries with sound economic policies, including the openness, transparency and free press that are now, as we know, an integral part of the picture.

I want to share with you the findings of another of our recent reports, which gives us a graphic and poignant portrait of what poor and disadvantaged individuals across the developing world really think about their plight. We have done a study of no fewer than 60,000 such people in some 60 countries. We have also interviewed 20,000 people in 23 countries. What emerges from this ambitious exercise is that poor people are upset most of all not by lack of education, say, or opportunity, or wealth, but lack of voice – the inability to express themselves; the inability to be represented; the inability to convey to those in authority what it is they think; the inability to shine a light on the conditions of inequity. An associated priority for poor people is their lack of trust in governments. They want to be able to elect their own representatives. They want to possess their own voice. As Amartya Sen, the Master of Trinity College, Cambridge, argues in his new book "Development as Freedom", development can be seen as a process of expanding the real freedoms that people enjoy.

As a recent report by Freedom House put it after a survey of progress (and I quote), "Humankind, in fits and starts, is rejecting oppression and opting for greater openness and freedom". So here, among other freedoms, is further persuasive evidence of the need for a free press in the developing world. It is an empowering act for the dispossessed – as they themselves tell us. A free press, as Jim Wolfensohn puts it, is absolutely vital for the poor. If you deny the right to that voice and to exposure of corruption and other anti-social practices in a society, you deny the right to equitable development. Freedom of the press, therefore, is not a luxury. It is absolutely at the core of equitable progress.

And we are not just saying this. We are doing something practical about it. We do not have the authority to demand press freedoms in our borrowing countries. But we are able to encourage press freedom and help it to prosper in countries such as Indonesia, Thailand and Korea. In recent years we have embarked on a global program of seminars to train journalists in investigative reporting, in economic policy, in the evils of corruption and other crucial elements of achieving the openness and accountability that are at the heart of equitable growth. So far we have trained at least 3000 journalists in dozens of countries, including Indonesia in the crucial post-Suharto phase and in a number of African countries by video conference.

We see this as of enormous importance for our client countries. We have seen the need for clean, open and effective institutions, and we recognize the corrosive effects of corruption. A free press, informed, and well trained in the skills of analysis and investigation, and, we hope, increasingly aware of its responsibility to prize accuracy and fairness, may be one of the best investments in the future a developing country can make in seizing the opportunities offered by globalization. The East Asian crisis has legitimized freedom of the press as an integral part of the development agenda, not just for this region, but for the developing world as a whole. We are starting to witness the power of information in the fight against global poverty.