USA President of the World Bank Group, Jim Yong Kim, has declared that extreme income inequality is a disincentive to efforts at reducing extreme poverty globally, pointing out that a billion of the world's population live in extreme penury.
This figure, he said, represented a drop when compared with an estimated 1.2 billion in 2010, regretting that the development had made the attainment of the twin objectives of ending extreme poverty by 2030 and boosting shared prosperity a herculean task.
He said the recipe for bringing an end to poverty globally was to make growth more inclusive and not merely focusing on economic growth.
In his address at the ongoing Spring meetings of the International Monetary Fund (IMF)/World Bank Group in Washington DC, United States of America, yesterday, Kim argued that if all the growth recorded by countries continuesd at the same rate as over the last 20 years with income distribution remaining unchanged, poverty will only fall by 10 per cent by 2030, from 17.7 per cent in 2010.
His disclosure came as the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and her counterparts in Africa brainstormed at the sidelines of the meeting to articulate a position for presentation at the spring meetings on how to empower women.
To end extreme poverty, Kim said countries required what he described as a laser-like focus on making growth more inclusive and targeting more programmes to assist the poor directly, even as he suggested that vast numbers of the poorest- those earning less than $1.25 a day would have to decrease by 50 million people annually by 2020.
"This means one million people each week will have to lift themselves out of poverty for the next 16 years. This will be extraordinarily difficult, but I believe we can do it. This can be the generation to end extreme poverty. As extreme poverty declines, growth on its own tends to lift fewer people out of poverty because by this stage, many of the people still in extreme poverty live in situations where improving their lives is extremely difficult," he said.
Nigeria is currently listed among the top five countries in terms of number of poor with 7 per cent while India and China occupy second and third slots with 33 per cent and 13 per cent respectively.
Other countries listed along Nigeria include Bangladesh with 6 per cent and Democratic Republic of Congo with 5 per cent.
The ranking may however, qualify the five countries which account for 760 million of the world's poor, for the $70 billion International Development Association (IDA) over the next 10 years.
Other African countries with extremely high poverty density are DR Congo, where 88 per cent of the population are below the poverty line, Liberia with 84 per cent, Burundi and Madagascar 81 per cent each and Zambia with with 75 per cent.
The World Bank president lamented that increased income inequality can dampen the impact of growth in reducing poverty, adding: "Inequality is not just a problem in itself: countries with rising income inequality, the effect of growth on poverty has been dampened or even reversed."
He cited a research showing that countries where inequality was falling, a decline in poverty for a given growth was greater, adding that if there was no change in inequality, the poverty-reducing power of economic growth is less in countries that are initially more unequal. "The World Bank Group's goals of ending extreme poverty and boosting shared prosperity are closely linked. Lasting progress in ending extreme poverty also requires continued attention to what is happening to the bottom 40 per cent of the population," Kim said.
Also. the Senior Vice President and Chief Economist at the World Bank, Kaushik Basu, said: "It is sad commentary on our prosperous world that over one billion people live in extreme poverty. It is a welcome call from the World Bank Group to not just mitigate poverty but bring it to closure, and also to strive for a more equitable world. To achieve these ends, we will need determination, but also ideas and innovation, for the ways of the economy can strange."
According to him, many people remain poor due to lack of opportunity despite progress recorded in lifting people out of extreme poverty, noting that to assist the bottom 40 per cent, it was vital to know their characteristics which differ from country to country.
Basu stated that 40 per cent of the extreme poor in Bangladesh live in rural areas compared with Brazil's 23 per cent in rural areas.
Lead Economist of the World Bank's Development Prospects Group, Jos Verbeek said the complexities of identifying who the bottom 40 per cent are in each country underscored the challenges of crafting country-specific policies to effectively reach them.
This required concentration on where hardship is most pervasive in top five countries, which together are home to 760 million of the World's poor.
India accounts for 33 per cent, China-13 per cent, Nigeria-7 per cent, Bangladesh-6 per cent and Democratic Republic of Congo-5 per cent. With the addition of another five countries-Indonesia, Pakistan, Tanzania, Ethiopia and Kenya, constitutes almost 80 per cent of the extreme poor, he said.
To reach the twin goals, he said the World Bank Group will need to tailor its support depending on the level of each nation's urbanisation, the extent of its energy needs, the levels of basic services, the human capabilities of every citizen and capacities of their governments. "
Success will require taking transformational solutions to scale, whether in terms of programmes to improve sanitation in burgeoning cities, projects to ensure more efficient use of water for farming and other uses, expansion of health coverage for lower -income people, or the extension of welfare-to-work programmes in places with high youths unemployment," he noted.
His words:"Progress in improving poor people' lives will not be sustainable if the environmental consequences of economic development are not taken into account."
Meanwhile, the meeting between Okonjo-Iweala and other African finance ministers under the auspices of "Finance Ministers Community of Practice on Gender in Africa", is a pilot scheme and comprises 12 countries.
The forum is also to promote financing for gender results, and is to pursue this by evolving how to make national budgets more effective in supporting women and girls' opportunities through national budget processes and other finance ministries' operations.
It is also to fashion out ways of promoting learning and cross-fertilisation of ideas via sharing of innovative finance ministry-led approaches to women empowerment. The group of ministers will also support political momentum for gender equality goals in post-2015 agenda and associated financial commitments.
In meeting the overall objectives of the Finance Ministers Community of Practice on Gender in Africa, they will convene partners to share good practice and knowledge; promote learning through bi and multilateral activities, including, where appropriate, in-country visits.
They are also to develop a set of indicators to monitor progress, and leverage other appropriate activities. Okonjo-Iweala briefed her counterparts on Nigeria's "Growing Girls and Women in Nigeria' (G-WiN), which was designed to target projects specific ally to tghe needs of marginalised girls and women.