World Bank: End ‘extreme’ poverty

Bank group president says sustainable, inclusive growth is key

World Bank Group President Jim Yong Kim called on Monday for more global efforts to end “extreme” poverty in the world by 2030 and to boost shared prosperity.

In a talk at the Brookings Institution, Kim laid out three pillars that he said will help achieve the goals. They include accelerating inclusive and sustainable economic growth, investing in human capital and fostering resilience to global shocks and threats.

A World Bank report on Sunday, titled Poverty and Shared Prosperity 2016, said that there are fewer people living in extreme poverty today, but the challenge is still enormous to hit a global poverty-reduction goal by 2030.

Kim cited the fact that income inequality between all people in the world has decreased, and inequality within nations has been falling in many countries, both rich and poor. But inequality is still far too high, both globally and within countries, including in China, he said.

He described the situation as constraining growth and breeding instability.

“This means that not only do we need to focus on growth, but we must also continue our work to reduce inequality — we have to make growth more equitable,” he said.

Kim, a physician and anthropologist by training, called for beefing-up infrastructure finance to boost economic growth, with far greater public-private cooperation on infrastructure investment. But with increasing reliance on private sector investments, the World Bank Group will have to increase its vigilance to ensure that privatization does not exclude the poor and marginalized.

“Our top priority is to end extreme poverty and boost shared prosperity, and our engagement with the private sector must be anchored in these two core values,” he said.

Kim expressed his concern of the growing isolationism and protectionism when the world needs more cooperation and economic integration and stronger partnership. He said many people expressed such concern to him at the G20 Summit in Hangzhou last month.

According to Kim, more than 1 billion people have escaped extreme poverty since 1990. “Great strides of ending extreme poverty have been made by countries such as China as a result of trade and openness of their domestic industries to global competition,” he said.

“Countries working together and especially trading together have delivered lasting progress,” said the Korean American, who took up the current job in 2012.

Kim’s talk came on the eve of the 2016 IMF/World Bank annual meeting in Washington this week.

“Much of the success in poverty reduction globally has actually been driven by China’s incredible success in reducing poverty,” said Ana Revenga, senior director of poverty and equity global practice at the bank, in a Xinhua report. Significant progress also has been made in Indonesia and India.

Despite the good news, “there is no room for complacency”, said Francisco Ferreira, senior adviser to the bank’s Development Research Group.

The World Bank report showed that half of the world’s poorest people now live in sub-Saharan Africa, while another third live in South Asia.

“The pockets of poverty that remain will become increasingly harder to reach and address,” Ferreira said.

The report forecast that the world would be unable to achieve the goal of ending extreme poverty by 2030, even under optimistic scenarios for growth and with no change in the levels of inequality. The World Bank set a target to reduce the global poverty head count ratio from 12.4 percent in 2012 to 3 percent by 2030.

China has provided a lesson to the rest of the world on how to tackle extreme poverty in a quick way, Revenga said. “If any country can show the world how to do that last mile (to end extreme poverty), it is probably China.”

Countries working together ... have delivered lasting progress.”

Jim Yong Kim, World Bank group president