Can the World Bank help end poverty?

By Joni Akpederi

WELL, extreme poverty, that is. Bank President Dr Jim Yong Kim says the institution is scandalized that “more than a billion people now live on less than $1.25 a day” and that “stain on the world’s moral conscience” must be wiped out by 2030 no matter the circumstances.

The ultimatum is reminiscent of the United Nations’ botched plan of delivering the so-called Millennium Development Goals (MDGs) by 2015. The UN gave humanity 15 years to achieve the task having made the declaration in 2010. Barely two years to the target date, it is clear the good old world will not make it. Virtually all developing countries, the programme’s primary targets, have given up on meeting all six goals of providing a better life for their populations.

But the World Bank Group seems to have done its home work and come out with a plausible plan. First, President Kim says, the Bank’s self-audit showed that staff are ready to be “more than the sum of our parts” rather than less, implying a resolve to be a lot more determined to succeed in the task of fostering global development and prosperity. Pressed on live TV to give a time line for the manifestation of the new-look Bank, President Kim projected that by July 2014, “the Bank would be a different organization”.

Six months ago, the Bank’s board approved the pursuit of two goals, the first being to end extreme poverty by 2030. The second, inextricably linked to and supportive of the first, is to boost shared prosperity (aka inclusive growth) by promoting real income growth for the bottom 40 percent of global population.

On this last score, the Bank seems on the right track. The whole politico-economic upheaval of the Arab Spring, sparked off in Tunisia, has been about the exclusion of the bottom 40 percent of the population from the prosperity in North African societies. The protests spread through the Middle East before going round the world, including the United States, where it was as expressed Occupy Wall Street and similar sit-ins in major European cities. The whole point of the End Poverty campaign is to promote governance that creates opportunities for everyone to participate in the global growth in major European countries leading to greater global productivity and living standards worldwide.

To succeed, the Bank, according to Dr Kim, will seek opportunities to help countries invest in their people, through education, health and job training.

The IFC, the Bank Group’s private sector arm, will be more active in assisting corporates to create jobs to meet the estimated 600 million new jobs the world needs over the next decade. The reasoning is simple: there can be no end to poverty, if people have no jobs.

That, incidentally, is the opinion of Catholic Aid Agency CAFoD. It urges the Bank to “think small” if it must achieve its ambition of ending poverty and tackling problems of widening equality. The agency’s policy analyst Sarah Montgomery says the Bank must increase assistance to small businesses, which make up the majority of firms in developing countries. These small and micro businesses, as research has shown, are the best employment creators and veritable engine of growth providing as much as 85 percent of jobs in sub-Saharan Africa.

The Bank is already doing commendable work in fragile countries, where conflicts are either on-going or have only recently ceased. Many of these countries are in sub-Saharan Africa such as the Congo DR, South Sudan and Liberia; and of course, around the Middle East, in places like Syria, Lebanon and Jordan, which incidentally, received $150 million in emergency aid a couple of month ago.

The Great Lakes Region in East Africa recently got a billion dollars in development assistance while processes are running to send support to Lebanon, which is bearing the brunt of the war in Syria. Assistance to conflict-affected areas is billed to leap 50 percent from the IFC and IDA (the poorest country’s fund) windows over the next three years.

Not surprisingly, the Bank is stepping up its response to the challenges of climate change, now considered one of the most serious threats to global economic well- being. Climate change, experts say, can cost the world up to $1 trillion by 2050. The Bank reckons that a mere $50 billion in investment in environmental protection a year could help the world avoid such an economy-wrecking consequence.

Calling on governments world-wide, the Bank, in collaboration with the IMF, hopes to fight off the damaging effects of climate change by opting for an integrated global approach. The joint seminar, The Economic Case for Climate Action, one of the leading discussion sessions in this year’s annual meetings, featuring both institutions’ chief executives, reflects the priority status of climate change in the grand strategy in the war against global poverty.

As Dr Kim told a packed audience at the George Washington University a few days before the IMF/World Bank meetings, the world, encouraged in by the Bank, has to transform the ‘thin’ paper goal of ending poverty to ‘thick’ action as Martin Luther King advised decades ago. That way, the End Poverty Initiative will not go the ignorable way of the MDGs.

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