The organization that I led that Henry made reference to, America's Promise, the Alliance for Youth is still there, still hard at work, celebrating its fourth anniversary, and now being led by Governor Mark Racicot of Montana, who succeeded me as chairman.

And so, Henry, thank you for that kind introduction, and I welcome the opportunity to speak to members of the committee this morning. It is a pleasure, really, to welcome my committee friends to the Department of State, and the lawyers have told me that I can no longer serve as a member of the committee, so I won't be paying the 250 bucks this year. (Laughter.) You'll have to find it someplace else, and I hope this does not give you a great deficit problem, but I suspect, looking around the room, that it will not.

But even though I am no longer a dues-paying member, I will support the work of the committee, and I applaud your steadfast support for United States multilateral economic cooperation and for the essential contribution that you make to promoting freedom around the world. And you will notice that I said freedom, not just economic freedom, because I believe very deeply, and President Bush believes very deeply, that free trade is a powerful instrument of freedom, and not just economic freedom.

It is no coincidence that in the early 1940s, as President Roosevelt prepared an isolationist America for war against fascist tyranny, he included freedom from want in his famous four freedoms. It is no coincidence that even while FDR and his administration mobilized our nation for world war, they also began to design the economic architecture of a lasting post-war peace. And it is certainly no coincidence that in 1944, at the Mount Washington Hotel in New Hampshire, the "Live free or die" state, FDR reminded the Bretton Woods delegates that the arrangements they would be making to ensure an orderly, harmonious world would "affect ordinary men and women everywhere and form the basis upon which they will be able to exchange with one another their natural riches of the earth and the products of their own industry and ingenuity."

And so the IMF and the World Bank and now the WTO are not just about exchange rates, financing infrastructure projects, eliminating trade barriers and structural reform. No. Fundamentally, these instruments are about securing the blessings of liberty and prosperity for more and more ordinary human beings on this planet who wonder if society is there for them.

And I will take every opportunity I have to get the message across to American and foreign audiences alike that in our increasingly globalized world, America's prosperity and well-being are linked ever more closely to expanding growth and stability worldwide. That is why strong United States leadership in the IMF, the World Bank and the WTO is so crucial to America's future and the world's future.

Bretton Woods has always been about shaping a better future for the world's people. The IMF and the World Bank were designed to promote a liberating stability, not to preserve a rigid status quo. Tragically, they were soon forced to operate within Cold War realities, but despite popular misconceptions, the Bretton Woods institutions were never Cold War constructs, and today they are not Cold War relics.

From their inception before the Cold War descended, Bretton Woods institutions embodied a far more hopeful vision of the world, a world delivered from the devastation of war, a world where international monetary and financial cooperation would bring a growing and sustainable prosperity to all.

Of course, 57 years ago at Bretton Woods, no one was talking about globalization. The word hadn't even been coined at that time. But that is what they were discussing in reality, globalization in its basic sense, an interconnected world in which national identity and sovereignty are preserved, but in which all countries work together to meet challenges and harvest opportunities, from which no country working alone can derive full advantage.

And that is why I believe the architects of the Bretton Woods system envisioned a world that more resembles the dynamic one we are living in now at the start of the 21st century than it does the static Cold War world that dominated the first four decades of its existence. Globalization, free trade, open markets, the Technology Revolution, economic and political reforms -- the potential they hold for humankind is incredible, and the Bretton Woods institutions and the WTO can help the world's people realize it.

But before you think my enthusiasm and excitement means that I have drifted off terra firma, let me assure you that I am well aware of the dangers that remain out there; I am well aware of the short-sighted governments that use riches, growth and a growth of riches in their societies to underwrite age-old conflicts rather than to rise above them; I am well aware of repressive regimes that opt out of the world economy, that prefer to perpetuate themselves in power rather than to meet the basic needs of their people, well aware of the proliferators who profit from instability, well aware of terrorists who exploit the discontented, the dispossessed, and the desperate traffickers who trade in human misery, criminals who feed on fraud and corruption and used technology to mask and move their illicit gains with lightning speed, well aware that there are infectious diseases that can spread rapidly in interdependent mobile worlds, that can destroy societies.

The AIDS epidemic is a tragic case in point, with the potential of destroying millions and millions of people around the world. The devastation in Africa alone is staggering. Whole generations are dying. And as bad as the situation is in Africa, we see AIDS' appalling depredation spreading in India and Southeast Asia and more recently in the Caribbean. And I believe and President Bush believes that a far more concerted international effort is necessary, and the UN will address this matter in June at a special session, and Kofi Anan spoke to it yesterday in Abuja. Our Administration, Secretary of Health and Human Services Tommy Thompson and I have formed a joint task force and are hard at work on this problem.

Let there be no doubt, ladies and gentlemen, that the wildfire of AIDS threatens to engulf whole countries and continents. And let me tell you, in today's interdependent world, we are all in the same neighborhood together and we need to get out our hoses and help put out this fire. Even more importantly, we need to engage in more effective fire prevention efforts. And if we do, we will surely live in a more secure and stable world.

Like others of my generation who served in the military, virtually my entire career was geared to defending our country, my country and its allies and friends against Cold War threats. Although my Army buddies and I wouldn't have thought of it that way when we were slogging through the jungles of Vietnam, it became clear to me later that we had played our small part in a larger effort to protect the national and international structures that promoted regional and international security. NATO and our security relationship with Japan and Korea and other Asian nations are examples. Those security structures provided a shield behind which economic development could take place despite the pressures of the Cold War.

At the same time, the international economic institutions were fostering prosperity behind our protective shield. They were helping to expand markets, create more and better jobs, enable individual self advancement, provide educational opportunities, improve health. They were sources of immense strength for the free world, bulwarks of national and international security in their own right.

The Cold War is over, but the Bretton Woods institutions continue to be what they have been all along: key contributors to security and stability. The question as I see it is not whether the Bretton Woods institutions contribute, but how can they be most effective in sustaining growth, creating conditions for new prosperity and giving ordinary people hope for the future.

And here I want to talk about an enormous challenge that is before us all in this new century, and that is eradicating world poverty. It is a goal that technological advancement and economic growth can put within our grasp at last. Certain fundamental understandings are necessary if in this century we are to liberate more and more of the world's people from the prison of poverty. We must acknowledge first that engagement with the global economy, opening up to trade and investment, is the engine of poverty-easing growth. The last thing nations should do in response to the desperate needs of the ill-housed, ill-fed, uneducated and unhealthy is to adopt policies that have the effect of slowing growth.

That is why the President supports the launch of a new round of multilateral trade negotiations in the WTO. International economic institutions and the industrialized world must work together with developing economies to help them grow faster.

Second, we must recognize the investment and education, training and health that stimulates growth, attracts capital, and opens opportunities for the poor.

Third, peace and stability, fair and accountable governance, democracy, respect for human rights and the rule of law -- these are the strongest foundations for growth and for the alleviation of poverty. Companies and governments alike must realize that openness, transparency and good government are the building blocks of a healthy investment climate. Political and economic reform must go hand in hand if either is to succeed.

And finally, we must acknowledge that official assistance and private investment alike can play catalytic roles in poverty reduction, provided that they flow to societies that embrace openness to trade, social investment, and good governance. The hard truth is that assistance and investment are ineffective in societies that are closed, corrupt or callous.

I will say it again as plainly as I can. To be prosperous, countries must invest in their people effective and inclusive health, education and labor practices, help protect poor workers from unforeseen disruption and lead to environmental sustainability. A vibrant civil society is critical in both the framing of effective economic policy and in its implementation. The people have to feel that they have a stake in the outcome, or ultimately the policy simply will not work.

Poverty is much more than a lack of income or physical resources. It is a profound state of depravation, powerlessness and vulnerability, mental as well as physical. It can be overcome, but is by no means easy. Those who would stand the greatest chance of escaping its cruel grip live in resilient, peaceful and democratic societies, with accountable leaders and institutions, growing in open economies and vibrant private sectors. But hundreds of millions of the world's poor do not live in such societies. Not yet.

The World Bank, the IMF and the other international financial institutions can do much and must do more to help willing countries build capacity so that they can participate in the global economy, capacity that supports self-propelled growth, capacity strengthened by social investments, which empower people and which free their God-given talents.

Let me now cite just a few examples of how the IMF, the World Bank and the WTO are making a critical difference in people's everyday lives all around the globe. The IMF is working to ensure that the macroeconomic framework supports growth at micro levels. In close collaboration with the Bank, the Fund has explicitly taken on the task of supporting global poverty reduction strategies. Meanwhile, World Bank-led efforts in East Timor are helping to reconstruct a devastated economy through loans to small enterprises, and through grants that are rehabilitating basic infrastructure at the village level, that lowest level where people live and where people need hope.

In Brazil, World Bank loans are helping rural workers realize their lifelong dream of owning land. The Bank's projects help the government accelerate its land reform program through a market-based mechanism in which communities of landless families themselves select and negotiate the purchase of land. What joy, what hope to own your own plot of land for you and for your family. And in just the first year of this project, 8,000 families became landowners for the first time.

Educating women has been found to be the single most effective way to reduce poverty. The World Bank-funded Senegal Pilot Female Literacy Project helps NGOs expand their programs in this regard. Since the project began in 1996, the number of literacy programs has doubled, and 90 percent of the participants are women, women who wish to be empowered, women who wish to have their own future, women who wish to take care of their families. As a result, the Government of Senegal is on track to more than having the female illiteracy rate from 66 percent to 30 percent by the year 2005.

At the same time, the WTO is working to bring the economy in transition in East and Central Europe, the post-Soviet states and Asia into the global trading system, freeing the potential of hundreds of millions of people to seek their own destiny and to realize their dreams.

In countless ways, then, the IMF, the World Bank and the WTO are helping countries institute kinds of policies that will enable them and ourselves to take advantage of the rich rewards that derive from globalization. But globalization also has its risks, and here the Fund plays an important role in helping nations cope with problems whose effects are exacerbated by integration, such as turbulence in the financial markets, unexpected capital outflows, the negative chain reactions that can result from interconnected business cycles. In particular, the IMF has helped countries deal with financial crises, and its response to the financial crisis began in late 1994. The US and the IMF organized a financial assistance package of nearly $50 billion in US, IMF and other funds.

Critics charged that the package bailed out foreign investors and caused a sharp (tape malfunction). However, the bailout enabled Mexico to overcome a short-term liquidity crisis, balance its external accounts, and avoid a default that would have jeopardized future investment. Mexico has enjoyed solid growth since 1995. Similarly, Korea and Thailand both recovered quickly from the Asian financial crisis with the assistance, and in fact stated to repay the IMF early. The IMF played a vital role. Growth in both countries then rebounded.

Of course, the success of the rescue package depends on more than just the IMF and the World Bank. The country in question must implement reforms which address the problems that led to the crisis in the first place. Though IFI assistance can help fund the adjustment, reform efforts still must be made and the political will to make those reforms happen must be there. But to paraphrase my good friend, Secretary of the Treasury Paul O'Neill, the best strategy is prevention. And here the Fund also plays a key role.

The IMF is now focusing more on the vulnerabilities of countries as part of its surveillance role. The Fund has put in place an early warning system to anticipate crises. With this has come the need for accurate, timely and comprehensive statistics, and the Fund is working on that.

So the Bretton Woods institutions are doing wonderful work today, building on a legacy of 57 years. The organizational challenges they now face are more a function of their many past successes than of any of their current shortcomings. To be sure, like so many other organizations are doing on a national, regional and global level, they too are struggling to come to grips institutionally with the post-Cold War world and the 21st century era of complex, instantaneous, borderless interactions. Foremost among the challenges of institutional reform is bringing market-oriented solutions to bear on the world's financial problems. This means bringing transparency to the IMF itself.

And I note with satisfaction that more countries are agreeing to have their economic consultation documents distributed on the Web. Transparency also entails involving the private sector more in financial workouts, since increasingly they are the main source for financing. Throughout, conditionality must be maintained, for it is only by ensuring that countries are following appropriate sustainable policies that we know they will make the best use of Fund resources.

I have every confidence that the Bretton Woods and related multilateral economic institutions are finding and will keep finding new and creative ways to contribute to international well-being, that they will not confuse stability with stasis, that they will foster growth generating change, change that frees human potential; in short, that they will not forget those ordinary men and women all over the world who President Roosevelt spoke about when he welcomed the delegates to Bretton Woods on that July day back in 1944.

As the Bretton Woods institutions continue to evolve, to strengthen themselves, to meet the challenges of a globalized world, I know that this committee will be ready to lend its ideas, its inspiration and its influence. And in turn, I want to assure you that President Bush and I and all the other members of the Bush team are committed to providing strong leadership to these vital multilateral institutions as they help to shape the 21st century of growing prosperity and freedom.

This past weekend, we had the Summit of the Americas, where 34 nations of the Americas came together and spoke about democracy and spoke about the free enterprise system and spoke about economic freedom and spoke about developing human potential. And it was a very impressive gathering of leaders, so different from what a similar gathering would have been like 12 years ago when I was National Security Advisor and many of these countries were still being run by totalitarian leaders and were not committed to democracy and free enterprise, but now they are.

One of the presidents reminded us of the real challenge that we all face at that Summit, and which you all face here, and all of us face every day. The president told the story of Maria Solidad, a peasant woman who was trying to feed her family. And globalization and democracy and economic freedom and all the other lofty terms with which we describe our duties and responsibilities don't mean much to her if she is unable to feed her children.

And so as we go about our work, always remember the Maria Solidads, always remember the ordinary people that FDR spoke of, people who are looking to those of us who have enjoyed success, to those nations that are wealthy, to those nations that have taken advantage of God's blessings to make sure we don't forget the least of God's children. I know you won't.

Thank you very much.

(Applause.)