So­cial spend­ing is key to lift­ing na­tional in­come lev­els: World Bank head

The China Post - - INTERNATIONAL -

Mid­dle-in­come economies must in­crease so­cial spend­ing if they wish to reach the in­come level of de­vel­oped coun­tries and end ex­treme poverty, the pres­i­dent of the World Bank said in an in­ter­view pub­lished on Sun­day.

“We must change the re­la­tion­ship be­tween growth and poverty re­duc­tion for growth to have more of an im­pact. How? It is im­por­tant to in­vest in hu­man be­ings, in health, ed­u­ca­tion, so­cial pro­tec­tion,” Jim Yong Kim told top-sell­ing Span­ish daily El Pais.

“In Africa for ex­am­ple, im­prov­ing the pro­duc­tiv­ity of agri­cul­ture is key. To do this you have to in­vest in en­ergy, trans­porta­tion ... I am op­ti­mistic we can do it,” he added.

The World Bank, a Wash­ing­ton-based in­ter­na­tional cred­i­tor for de­vel­op­ing coun­tries, has set the goal of end­ing ex­treme pov- erty — lift­ing the liveli­hoods of those living on less than US$1.25 (NT$39) a day — by 2030.

Kim, who was born in Seoul and moved to the United States when he was five, said South Korea was an ex­am­ple of a na­tion that had man­aged to es­cape the “mid­dle in­come trap” through in­creased so­cial spend­ing.

“South Korea started ex­port­ing ba­sic goods — black and white tele­vi­sions, then in color — and now it ex­ports elec­tron­ics, they took mea­sures for the sec­ond step,” he said.

“But other na­tions do not do it, es­pe­cially those that reach the first phase of mid­dle in­come thanks to raw ma­te­ri­als. At this stage, I in­sist, ed­u­ca­tion is crit­i­cal.

“You need dif­fer­ent skills for the next phase of growth in Latin Amer­ica,” he added.

“Equal­ity of op­por­tu­ni­ties comes through im­prov­ing ed­u­ca­tion from a very early age to cre­ate so­phis­ti­cated in­dus­tries.”

Kim, a Har­vard-trained physi­cian, said the World Bank did not see main­land China’s new devel­op­ment bank, the Asian In­fra­struc­ture In­vest­ment Bank (AIIB), as a ri­val.

“We hope to co­op­er­ate closely with them,” he told El Pais.

De­spite Wash­ing­ton’s re­sis­tance, the main­land has re­ceived ap­pli­ca­tions from more than 50 coun­tries, in­clud­ing im­por­tant U.S. al­lies, to join the AIIB, which will aim at fi­nanc­ing in­fra­struc­ture devel­op­ment around Asia.

Wash­ing­ton sees the AIIB and a devel­op­ment bank planned by the BRICS emerg­ing-mar­ket coun­tries, the New Devel­op­ment Bank, as com­peti­tors to the World Bank and the Asian Devel­op­ment Bank, where the United States is the largest share­holder.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.