World Bank Governors Endorse Historic Goals to End Extreme Poverty

World Bank

The Development Committee has endorsed the World Bank Group’s goal to end extreme poverty within a generation as “ambitious”, saying that this endeavour by the Bank was a “historic opportunity” to make a difference.

The Committee, at a forum in Washington, USA, equally confirmed the Group’s vision to promote shared prosperity and added these goals must be achieved without jeopardising the environment, magnifying economic debt or excluding vulnerable people.

World Bank Group President, Jim Yong Kim, who pushed this twin-pronged approach in a recent speech, welcomed the Committee’s support.

“I have no doubt that the world can end extreme poverty within a generation. But it’s not a given and we cannot do it alone. It requires focus, innovation and commitments from everyone. This endorsement is an important step. If we succeed, together, we would have accomplished an historic milestone,” Kim said.

The 25-member Development Committee, which meets twice a year during the World Bank/IMF spring and annual meetings, said in its communiqué that reducing the percentage of people living on less than $1.25 a day to 3 per cent by 2030 will require strong growth across the developing world, and translation of growth into poverty reduction to an extent not seen before in many low income countries.

The committee also noted that it would also require overcoming institutional and governance challenges, and investing in infrastructure and in agricultural productivity.

“Ministers unequivocally supported Dr. Kim’s vision and stated that we can count on the World Bank Group as a partner in the endeavor of ending extreme poverty and boosting shared prosperity,” said the Chairman of the Development Committee, Marek Belka.

“Dr. Kim renewed our zeal for the Bank Group's core mission of a world free of poverty. There is a historic opportunity at our reach to make critical progress,” Belka added.

The communiqué also called on the Bank Group to pay special attention to countries and regions with the highest incidence of poverty and to Fragile and Conflict-Affected Situations (FCS), as well as to the particular challenges facing small states.

A new analysis of extreme poverty released by the World Bank earlier showed that there are still 1.2 billion people living in extreme poverty (21 per cent of the developing world population in 2010) and despite recent impressive progress, sub-Saharan Africa still accounts for more than one-third of the world’s extreme poor.

The communiqué also stressed that the goal of shared prosperity -- fostering income growth of the bottom 40 per cent of the population in every country – will not be achieved without addressing inequality.

It noted that investments that create opportunities for all citizens and promote gender equality are an important end in their own right, as well as being integral to creating sustained economic growth; and added that shared prosperity also means focusing on those who, although not currently poor, are vulnerable to falling into poverty.

The Committee also gave its vote of confidence for the International Development Association (IDA) – the Bank’s fund for the poorest – as a critical tool to carry out the Bank’s mission, and called for a robust IDA17 replenishment with strong participation from all members.

It welcomed IDA17’s overarching theme of maximising development impact, including by further leveraging synergies with the Group’s private sector arm, the International Finance Corporation (IFC) and its political risk insurance agency, Multilateral Investment Guarantee Agency (MIGA). Furthermore, the Committee recognized IDA17’s focus on inclusive growth, gender equality, FCS, and climate resilience, including disaster risk management.

The role of the private sector to promote growth and job creation in achieving the goals was also noted in the communiqué. With a proper enabling environment, adequate infrastructure, and policies that promote competition, entrepreneurship and job creation, the private sector can support shared prosperity and offer real opportunities to all citizens, especially women and young adults, it said.

Source: This Day