World Bank Chief Targets Poverty-Free World By 2030

April 2, 2013Marketsby EW News Desk Team

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Extreme poverty could be virtually wiped out globally by 2030, said World Bank chief Jim Yong Kim in a speech at Georgetown University on Tuesday, outlining a bold agenda to boost the incomes for the poorest 40 percent of every nation worldwide, while acknowledging the extraordinary efforts required to meet this goal.

“Such a world is within our reach,” said Kim ahead of the upcoming World Bank/IMF Spring Meetings. “We are at an auspicious moment in history when the successes of past decades and an increasingly favourable economic outlook combine to give developing countries a chance – for the first time ever – to end extreme poverty within a generation.”

“Our duty now must be to ensure that these favourable circumstances are matched with deliberate decisions to realize this historic opportunity.”

“But if we are to succeed, we have to make some hard decisions and change the way we work together,” he added.

Kim, who assumed his post last year, said that his organisation’s primary objective was to lower the number of people living on less than $1.25 a day – defined by the World Bank as extreme poverty – from 21 percent of the global population in 2010 to below three percent by 2030.

To achieve the difficult goal of virtually eliminating extreme poverty, Kim described three factors necessary:

“First, to reach our goal will require an acceleration of the growth rates observed over the past 15 years, and in particular sustained high growth in South Asia and Sub-Saharan Africa.

“Second, it will require efforts to enhance inclusiveness and curb inequality, and ensure that growth translates into poverty reduction, most importantly through job creation.

“And third, it will require that potential shocks – such as climatic disasters or new food, fuel, or financial crises – be averted or mitigated.”

Kim also listed four ways in which the World Bank would assist in achieving this goal.

“First, we will use these goals to help us choose among competing priorities, as we identify the projects where we can have the most transformative impact.

“Second, we will closely monitor and observe progress toward these goals, and will report annually on what has been achieved and where gaps remain. These yearly reports with extensive publicly available data will provide a clear record of progress.

“Third, we will use our convening and advocacy power to continually remind policymakers and the international community what it will take to realize these goals.

“Fourth, and perhaps most importantly, we will work with our partners to share knowledge on solutions to end poverty and promote shared prosperity.”

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Kim noted that the first Millennium Development Goal (MDG), to halve extreme poverty, had been achieved in 2010, five years ahead of time. Governments and international institutions are meeting to update the 15-year Millennium Development Goals set by the United Nations in 2000.

However, the World Bank chief also made clear that ending poverty was not a goal, which the World Bank Group could achieve by itself.

“They are goals which we hope our partners – our 188 member countries – will achieve, with the support of the World Bank Group and the global development community,” he said.

Additionally, Kim warned that any market volatility could significantly throw back progress.

“As recent events in Cyprus demonstrate, it is too early to declare victory… In the real economy, there are some weak signals that recovery is underway… Yet we can’t take high growth rates for granted. Maintaining growth of 6 percent, let alone the 7 or 8 percent many economies achieved during the pre-crisis boom period, will require sustained reform efforts,” he said.

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Critics who monitor the activities of the World Bank warned that Kim’s actions may not be able to match his rhetoric.

“Kim is obviously very good at using soaring rhetoric to motivate people to tackle poverty but he is still very unambitious in practice and too focused on economic growth as an end in itself," said Peter Chowla, a co-ordinator at the Bretton Woods Project, a campaign group set up to monitor the World Bank, to The Guardian.

"Talk of sharing the proceeds of growth is not the same as tackling inequality, which has soared in recent decades,” Chowla added.

Oxfam, the international anti-poverty organization, also criticised the lack of a target for shared prosperity.

"It is not enough to increase the income of the bottom 40 percent in every country," said Didier Jacobs, acting head of Oxfam's Washington office, according to AFP.

"Income of the poor should rise faster than average and the gap between the very rich and poor should be reduced,” Jacobs added.