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World Bank President Robert Zoelick argues the U.S. cannot surrender its role as the global financial head.
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With the US drowning in fourteen trillion dollars in debt can we still afford to be the financial back -- to the rest of the world.
-- -- is on assignment in Asia and while in Australia He spoke to the World Bank president who warned.
The US not to surrender its leadership now and -- were pleased to have him join us by telephone.
Hi there David so what is Asia's view of the US now.
Well -- I mentioned earlier talking Euro or do you think.
Asia like they've put their money where they can make a profit side and 0% interest they can't make profit on the US dollar.
They don't see any way to make profit on -- US economy right now because it's not growing.
And they don't have a lot of faith in the US government to come up with a policy that will put.
Business back in the driving seat so they're focused on what's happening in Asia irony in the world bank of course is the fact that.
That the US contributes money to an organization.
That is partly involved and bailouts in Asia.
Will probably -- the Asians are reluctant to let to put their money.
In the US because you're so much action going on in Asia we're actually contributing some about money.
To Asian markets it is very direct and -- -- the president of the World Bank tried to make the point in an interview.
The Australian American leadership dialogue the other day that in fact we're not really putting that much money into the World Bank in the -- that there is leverage.
Took got a lot of money out of taxpayers' pockets that marketplace to -- most of you have thought about.
Alright let's go ahead.
Pretty self finance I mean we have a capital contribution came from countries we -- our markets that are -- -- retained earnings for the poorest countries we get money firm.
Our contributors including the United States.
And the main argument I would try to make the people in the US congress is is that.
Whatever contribution they make gets leveraged buy a lot of other countries -- that we leverage it -- petition Tripoli financial institution that my dad.
And so it can serve America's interest to -- a better credit in the US government does right.
Well I don't Larry -- and yeah but that the fact is it.
Must concern is somewhat.
Not just on the money level but on trade issues and a whole level of different issues that the US.
Has been very engaged in over the past fifteen years we may be.
In a in a disengaged.
Moment.
The point that I -- weather in the -- -- -- bank had honors an American is the fact that it would be a big mistake for the United States to step back and you see this in the discussions here in Austria.
-- with the rise of China Austria's an ally India.
America has to play a role and the World Bank as part of that is a multi -- institution.
But -- is America maintaining its security obligations.
Now what about the whole issue of -- it's the market meltdown and whether we're in the midst of another witness is open for discussion may be we're not but.
There are -- there are people who want bailouts there are people who think that the problems that French banks are having.
Are gonna lead to another round of bail -- There's no political will for that not only not in America but not in the in Europe is is there a chance that it will be done them.
Well it -- varies by country I think right now.
We have mood in the past couple weeks into a different phase speakers.
Uncertainties coming out of the Euro zone.
Which is Greece -- as they have trouble dealing with Greece -- -- that it starts to spread and lack of confidence to being with other issues.
To that -- -- have to be dealt with by the Europeans with the IMF support.
In the US case -- get a different circumstance I think it was a combination of some of the issues with the debt limit and that is slowing of growth.
Again led markets to be -- -- about.
Whether political officials can be on top of this from both parties to restore growth in the United States people are focused on cutting spending.
And a lot of that's focused on what they called discretionary spending.
They're gonna have to get at the entitlements to really build a sense of confidence about dealing with that and and deficits.
But just -- a growth strategy and part of that talks about some of the ideas that I hope for building.
Bipartisan support of a broad -- tax reform.
International systems us of a trade.
I used to be the US trade representative free trade doesn't costing him but He had Dimon and ends up being one of the best growth strategies you have so.
The United States is about 4% of the world's population.
About 20% of the world's economy it's gonna depend on successful growth and development around the world.
In the United States has got to be engagement that weather with trade with investment with private sector -- institutions like the World Bank.
Alright David a fantastic interview there but boy to hear.
Zealot again the World Bank president suggests that America have to play a role with whatever is going on perhaps in Europe with so much focus on the French banking certain credit crisis.
The sovereign debt crisis senior -- fallen for over a year now -- racist a lot of concern understandably.
Well -- again it's a very tough sell -- -- tribe AIG episode I like to got Bob Zoellick is a free market guy He really a He believes in the free market he's involved in this international banking structure that has not.
Historically been friendly to the free market the more the bulk status approach so he's he's trying to change the culture of the World Bank -- -- free market oriented.
Policy but.
In the midst of the popular rebellion against any kind of bailout of the financial system does have a -- sell.
Interesting statistic the US is 20% of the global economy interest think we definitely you know make an impact David Aslan thank you so much.
