Global finance officials endorse World Bank target to end poverty

Reuters: Global finance officials on Saturday endorsed a new World Bank goal to end extreme global poverty by 2030 and emphasised that its focus should be on ensuring that the poorest benefit from strong growth and rising prosperity in developing nations.

“For the first time in history we have committed to setting a target to end poverty,” World Bank President Jim Yong Kim said on Saturday following a meeting of the World Bank’s Development Committee. “We are no longer dreaming of a world free of poverty; we have set an expiration date for extreme poverty,” he added.

The goal aimed to reduce extreme poverty to 3% globally and targets the bottom 40% of people living in each country in the developing world.

Developing economies are growing on average about 6%, lifting millions of people out of poverty and creating a new global middle class, which has also given rise to growing inequality.

“We recognise that sustained economic growth needs a reduction in inequality. Investments that create opportunities for all citizens and promote gender equality are an important end in their own right, as well we being integral to creating prosperity,” the Development Committee said.

The new World Bank target aim to guide the work of the institution, and coincides with efforts by the United Nations to draw up a post-2015 poverty strategy to replace existing goals.

New figures released by the World Bank this week show that extreme poverty globally has plunged to 21% in 2010, from 43% in 1990, with most of the world’s poor now concentrated most heavily in sub-Saharan Africa and South Asia, as China has successfully slashed extreme poverty.

Kim said climate change and the need for more investment in health and education were also discussed by ministers.

“As I talked about in several meetings, we need a plan that is equal to the challenge of a disastrously warming plant,” said Kim, who has made tackling climate change one of his main priorities since taking the reins of the institution 10 months ago.

IMF Managing Director Christine Lagarde said there was no better opportunity while developing countries are growing strongly to tackle extreme poverty.

“Timing is everything,” Lagarde said, adding that the global economic recovery was proceeding at a three-speed recovery with strong growth in emerging and developing economies. She said the IMF would step up its policy advice to developing countries on managing natural resources, job creation, financial sector development, and subsidies.

The Development Committee called for a “robust” donor fund-raising campaign by the World Bank’s fund for its poorest borrowers and urged “strong participation” by all countries.

Donors from rich and developing economies gather every three years to pass the hat around to raise funds for the Bank’s International Development Association, or IDA.

Traditionally, the United States, Britain and Nordic nations have been the biggest IDA funders, but over the past several years countries such as Brazil, India and China, Chile, Argentina and Peru have also ponied up money.

With belt-tightening across Europe and in the United States, the World Bank will have to show more strenuous oversight of how the money is used and that it does have an impact on the poor.

Kim has said more emphasis should be on helping fragile and conflict-hit countries.

“Given the fiscal pressures on donors around the world, we believe that the World Bank can and must do more to maximise the development impact of each dollar spent,” new Treasury Secretary Jack Lew said in a statement to the Development Committee.