22 April 2013

Africa: World Bank, IMF Set Ambitious Poverty-Reduction Goal

Washington — The World Bank and International Monetary Fund want to reduce to 3 percent the share of the world's population living in extreme poverty by 2030.

The ambitious goal is an extension of the Millennium Development Goal of cutting in half the percentage of people who live in poverty between 1999 and 2015. That goal was set by world leaders at the United Nations in 2000.

"We believe that we have a historic opportunity to end extreme poverty within a generation," the institutions said in a communiqué from their joint Development Committee.

"Achieving this goal will require strong growth across the developing world, as well as translation of growth into poverty reduction to an extent not seen before in many low income countries," they said in the communiqué, issued April 20 during the annual World Bank-IMF spring meetings in Washington.

United Nations Secretary-General Ban Ki-moon joined the meetings. In a statement following the sessions, World Bank President Jim Yong Kim noted that all three institutions can be more effective if they combine forces to address economic development and security.

The Development Committee said it remains committed to the Millennium Development Goals aimed at reducing hunger, improving health, especially for women and children, and achieving universal access to primary education, gender equality and environmental sustainability. It called on the World Bank to step up its support of the goals.

The committee said sustained economic growth requires investments that create opportunities for all citizens and focus on people who are vulnerable to becoming poor. It set the goal of bettering the incomes of people who are in the bottom 40 percent of every country's population.

The committee further said that achieving growth must be done in a sustainable manner. "The welfare of current and future generations requires securing the future of our planet, ensuring social inclusion, and limiting the economic debt inherited by future generations," it said.

It noted that with adequate infrastructure and policies that promote competition and entrepreneurship, the private sector can participate in developing countries' prosperity and offer job opportunities to all citizens.

The committee called for World Bank members to make strong funding commitments to the bank's International Development Association so it can support countries that address challenges such as climate change, crisis response and gender equality.

On climate change, one of the themes of the spring meetings, the committee asked the bank and the IMF to support countries that want to transition to low-carbon growth and make their cities resilient to climate risks. It noted that 3.6 billion people now live in cities, compared to 1.5 billion 20 years ago.

The committee also asked the institutions to request that countries phase out inefficient fossil-fuel subsidies that encourage wasteful consumption and to scale up efforts to adopt climate-smart agriculture. Climate-smart agriculture includes proven practices like conservation tillage, mulching, intercropping, crop rotation, integrated crop-livestock management, agro-forestry, improved grazing, and water management.

Kim added that the meetings also addressed the need for countries to invest in education and health. He said that without investments in education so that children not only go to school but also learn, and without investments in health systems that provide quality care, "countries will miss the opportunity to ... determine their competitive position in the global economy."

"Investment in people ... is the right thing to do, both from a moral and a strategic perspective," he said.

The Development Committee next meets October 12 in Washington.

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