Kemal Dervis: A Fireman's New Blaze

Recently named head of the United Nations Development Program, Kemal Dervis is the first of what U.N. Secretary-General Kofi Annan hopes will be a series of prominent outsiders brought in to head U.N. agencies under new rules that open senior jobs to international competition. Dervis, a former World Bank executive, was credited with saving the Turkish economy from disaster after a currency crash in May 2001. His steady management turned a crisis into an opportunity: aided by a massive IMF bailout, the inflation-plagued Turkish state finally imposed fiscal discipline, and a cronyish banking sector was heavily pruned. U.N. critics hope that Dervis will bring new dynamism to the UNDP. NEWSWEEK's Owen Matthews spoke to Dervis in Istanbul. Excerpts:

DERVIS: I think the United Nations has an asset which is invaluable in the modern world despite problems, its legitimacy is still there. We need to build on that. The big challenge is for globalization to be accompanied by better governance locally and globally. [The United Nations] has to make sure that globalization, which has such potential to improve prosperity through technology and trade, indeed reaches everyone. That's where you need public policy. Markets by themselves won't achieve that. We need markets they are a great driver of progress and efficiency but markets need to be embedded in democratic institutions. This is the fundamental premise on which the work of development agencies like the UNDP must be based.

In any large organization there are sometimes failures. But we don't want to condemn all corporations because of Enron. There may have been problems with transparency, and this is being dealt with by an independent commission with the full support of the secretary-general.

Having been personally responsible as a decision maker at [a] very difficult time, it's an experience I don't necessarily recommend to others, but it does allow you to learn some very critical lessons in terms of the interactions between policy and institutional change and how it needs to be explained to public opinion. Also, I have experience dealing with international institutions from the side of the developing countries.

I think the fact that it is increasingly considered by developing countries to be their organization has positioned the UNDP very strongly in the development debate. Development is not just [an] increase in per capita income it is also about empowerment, gender equality, education, health and so on. Of course, you have to have strong economic growth to achieve all these social ends.

Many corporations have begun emphasizing more environmental and human-development concerns in their activities and I think the UNDP has been instrumental in promoting this. The driving force is investment, trade and job creation, but the challenge for the U.N. system is to make sure that the benefits from these activities reach the poorest people. Many of these restrictions are linked to deficiencies in physical infrastructure, education, health... To take the most obvious example, a worker cannot participate in economic life if he has AIDS or lacks basic education.

For many decades development aid was given to allies just because they were allies. Luckily, the cold war is over and it should be possible for wealthy nations to channel aid focusing on development, not just political alliances. Some of lessons of the past have been learned what works and what doesn't.

The United Nations is not a world government. It cannot be made responsible for the failures of individual governments. But we should be able to intervene more quickly. The latest proposals of the secretary-general are aimed at allowing a faster and more effective response. These proposals are also trying to change the United Nations [to reflect the] world's new needs and new opportunities. Important changes are needed.