Tough goals that simply must be achieved

THE World Bank held its annual meeting in Washington, DC, last week. Reducing poverty and inequality were high on the agenda, with a renewed sense of urgency, particularly because of two redefined priorities set by its president, Jim Yong Kim: reducing extreme poverty (people living on less than $1.25 a day) to less than 3% by 2030 and raising the incomes of the poorest 40% in each country.

Days ahead of the meeting, Kim announced a further objective: reducing global poverty levels to 9% by 2020. That would mean lifting a further 510-million people out of poverty by the end of the decade. How the World Bank and world leaders achieve these goals is a bigger, tougher question. Inequality is worsening. Critically, social exclusion — caused by unemployment, a lack of access to political, economic, educational or societal processes — is as damaging as financial poverty. Exclusion hits the old, the young and women hardest.

The need for urgent action to combat poverty and inequality, as well as other critical issues — such as threats to biodiversity, the increasing burden of chronic disease and climate change — prompted the establishment of the Oxford Martin Commission for Future Generations. Drawn from diverse political and geographical backgrounds, this group of leaders, chaired by Pascal Lamy, shares a deep concern about the gridlock that stalls too many processes and tardy and drawn-out negotiations that are supposed to tackle the world’s most pressing challenges.

The result of our year-long project of research, analysis and debate is a practical agenda for action. The report — Now for the Long Term — published yesterday, sets out a number of recommendations for change. These include a call to use social protection measures such as conditional cash transfer programmes to break the intergenerational cycle of poverty and youth guarantees to help reduce “scars” of long-term unemployment, dislocation and disconnection.

Experience from countries such as Brazil, SA, Mexico, Malawi and Zambia suggests that cash transfers can help reduce children’s poverty, either through measures directly targeted at children or indirectly through raising household income. Poor families use cash transfers to invest in their children, which can have multiplier effects by boosting funding into the local economy. In resource-rich countries, such initiatives can help redistribute resource revenues to the less advantaged. Investment in such social interventions must be accompanied by appropriate infrastructure and oversight mechanisms to ensure funds are used most effectively and reach those most in need.

In middle- and higher-income countries, about 25% of fiscal stimulus measures since the 2008 financial crisis have been targeted at social protection. This momentum must not be lost.

Other key recommendations from the report address the need for reform of global institutions, tackling climate change and improving corporate governance. They include:

Create a C20-C30-C40 Coalition to counteract climate change; a new coalition made up of Group of 20 countries, 30 companies and 40 cities. The coalition could accelerate action on climate change, with measurable targets for initiatives that include energy-efficient buildings, faster market penetration of efficient vehicles and tracking emissions;

Establish a Voluntary Taxation and Regulatory Exchange to address tax abuse and avoidance and harmonise company tax arrangements, promote information sharing and enhance transparency and governance;

Establish sunset clauses for publicly funded international institutions to ensure regular reviews of accomplishments and mandates to ensure they are fit for 21stcentury purposes;

Remove perverse subsidies on hydrocarbons and agriculture and redirect support to the poor; and

End discrimination against future generations by revising discounting methods and adjusting them to take account of the uncertainties, risks and ethical implications for the long term.

Our hope is that the report contributes to raising awareness of the urgent need to close the gap between our knowledge of key threats and actions being undertaken to address them. We have both a responsibility and the ability to create a sustainable, resilient and inclusive future for all. What is missing is the will to act.

Manuel is a member and Goldin the vice-chairman of the Oxford Martin Commission for Future Generations.