Robert Zoellick has served as President of the World Bank, Deputy Secretary of State, and U.S. Trade Representative. He is currently a senior fellow at the Harvard Kennedy School.
Harvard Political Review: You’re the head of Governor Romney’s national security team, and have spoken about how the World Bank can pressure Iran away from developing a nuclear program. Can you speak to your view?
RZ: Well, I don’t know if there’s a lot that the World Bank can do with Iran – quite frankly, I think that’s a different set of issues. Where the World Bank fits more in the security picture is in countries that have been facing or are emerging from conflict. There, where the World Bank can play a constructive role is in trying to interconnect security, economics, and governments.
HPR: As President of the World Bank, you pioneered the goal of an “inclusive and sustainable globalization.” What specific steps can world leaders like the United States, China, etc. take today to facilitate that mission?
RZ: I think the bank’s role is to be a catalyst within a network. You now have much more private sector capital, NGOs, civil society, and research. We need to gather knowledge and learning, finance, etc. to strengthen institutions. One of the core challenges for the Bank will be serving rising middle income countries (the Chinas, Indias, and Brazils) while also drawing them in. But we also need sound policies for Europe and the United States, open trade markets, support for investment flows, and doing away with subsidies that inhibit developing countries’ abilities to compete.
HPR: What are some policy issues you would emphasize differently if you were Secretary of State today?
RZ: My background in foreign policy is a little different from many of my contemporaries who came up more through the political and military track. While I have dealt with those issues, I had experience with economics. I worked at the Treasury Department, as Trade Representative, etc. And so, what I’m trying to encourage and think in foreign policy, including for the State Department, is how one can effectively integrate economics as a dynamic process in your larger foreign policy agenda. This contains everything from resources and power to the basic fact that healthy economies are important for modern political systems. Economic reforms over time have been associated with democratic development.
Sometimes there’s a debate in foreign policy about idealism and power. I find that economics is actually a way that can engage both those topics, because the economic agenda focuses on private sector freedom, liberty, openness, and obviously growth opportunity, but at the same time it’s important as a fundamental basis of power.
Earlier I was in Singapore, Taiwan, and Korea, and anyone who spends time in East Asia recognizes that economic strength and dynamism is the coin of the realm. For the United States to lead and compete effectively, we have to start by fixing problems at home. I’ll share with you an observation that came from the Australian Foreign Minister, Bob Carr, a longtime friend of the United States. He said, “The United States is one budget deal away from restoring its global preeminence.” And that was striking because what he’s partly saying is that it’s not only a question of getting your financial house in order, but it’s also showing that your political system works and that your political system can deal with the challenges of the day.
But he added one other point, saying that there are countries and people in his part of the world, the Asia-Pacific, that are saying, “This time the United States isn’t up to it. This time the United States isn’t going to be able to fix its problems, so you better listen to our interests.” It’s a way of demonstrating that what sometimes looks like domestic economic issues are also fundamental to not only a country’s economic strength but also its political leadership.
HPR: Your views have been described by commentators as more mercantilist and unilateral than free trade-oriented or multilateral. Do you think this is a fair characterization?
RZ: I don’t think the mercantilist charge is accurate; I negotiated more free trade agreements for the United States by four or five times than all my predecessors and successors. I took a strategy of competitive liberalization as U.S. Trade Representative, pushing for treaties bilaterally, regionally, and globally.
The result is that the United States now has free trade agreements with over 50 percent of the Western Hemisphere’s GDP, not counting the United States. This includes Chile, Colombia, Peru, Central America and Panama, and that is important for U.S. relations. Also, now when the U.S. does free trade agreements, they’re more comprehensive, so they cover intellectual property and other issues.
HPR: In a post-Bretton Woods world, what are your views on international currency flows, especially with respect to a renewed gold standard?
RZ: I wrote a piece in the Financial Times a year or two ago talking about the need to shift thinking about the international currency system. I referred to how the G7 advanced economies should have a principle of floating exchange rates, except when others consent to intervention, a concern that Japan has raised. But, the gold reference was that we’re in an era where monetary policy is moving into new territory, and people are taking bold steps.
I’m suggesting that it’s important to look at what markets signal; my background in addition to policy has been market orientation. And so, what markets signaled through the gold price (and this is also the case for some other commodities) was some level of discomfort with what they saw the central bankers were doing with fiat, or paper, money. Not surprisingly, the central banking community doesn’t like to be criticized, but the debate has not gone away since I wrote this piece. If you think about the recent debate about QE3 in the United States, my view was that the gold price was useful as an indicator of confidence, particularly in a time when we are pursuing very unusual monetary policies.
HPR: Your career has spanned finance, government, law, academia, politics, international relations, and more. As a Harvard alumnus, what advice do you have for Harvard students hoping to make a difference?
RZ: Anybody who has the good fortune to go to school at Harvard has a wonderful world of opportunity open to them. Beyond that, I would just say two thoughts: one is that I did a joint degree with the law school and the public policy school in part because I felt that service to country and to the public was important, and I wanted to learn the skills, both analytical and managerial, to do that. I hope that people begin with different walks of life and different callings, but consider a potential avenue for public service, which I still think is the highest calling.
On a more practical side, you’re going to have to make calculated risks and judgments. When I graduated, people often started with law firms, business, consulting firms and other such jobs. It’s easy to follow that path, and there’s a lot you can learn there, and there’s a lot you can contribute there. But, now and then there’ll be an opportunity that will involve a certain amount of risk: maybe it’s working for an elected official, maybe it’s going into a government policy position. One has to assess your own life, family and other calculations.
I would just suggest that now and then that you have to make some of those calculated risks, and my experience has been – but this varies – that the greater variety of experiences you have, the broader base you have. You mentioned economics, finance, law, and other [fields] – when people have asked me what I do, I see myself as a problem-solver, and I tend to bring multiple disciplines to the task of solving problems.
This interview has been edited and condensed.