Poverty is indisputably central to the World Bank as we sharpen our mission, but inequality matters too, and we underplay or ignore it at our peril. When this message comes from eminent economist and Nobel laureate Joe Stiglitz, Bank staff and the general public tend to sit up and take notice.
If you want an overview of the current debates on inequality, read Kevin Watkins’ magisterial Ryszard Kapuściński lecture. Kevin, who will shortly take over as the new head of the Overseas Development Institute, argues that ‘getting to zero’ on poverty means putting inequality at the heart of the development debate and the post2015 agreement (he doesn’t share my scepticism on that one). As a taster, here are two powerful graphs, showing how poverty will fall globally and in India, with predicted growth rates, in a low/high/current inequality variants. QED, really.
The last few months have been a busy time for inequality. And over the last few days the poor thing got busier still. Inequality is now dancing on two stages. It must be really quite dizzy.
We need an inequality goal. No we don’t. Yes we do
One of the two stages is the post-2015 development goals. At some point, someone seems to have decided that reducing inequality needs to be an explicit commitment in the post-2105 goals. The UN System Task Team on the Post-2015 UN Development Agenda wrote a report on inequality and argued that “addressing inequalities is in everyone’s best interest.” Another report by Claire Melamed of Britain’s Overseas Development Institute argued that “equity, or inequality, needs to be somehow integrated into any new framework.” Last week a group of 90 academics wrote an open letter to the High Level Panel on the Post 2015 Development Agenda demanding that inequality be put at the heart of any new framework.
Photo: Farida Parveen is a successful entrepreneur in Manikgong district, she was destitute until taking a loan to start a small poultry farm. © 2011 CGAP contest.
Youth are particularly vulnerable to economic problems. They often don’t have access to financial services due to lack of education and employment. Governments are aware of this and are working to find solutions.
The world has become relatively less poor in the last few decades. People under conditions of extreme poverty -- that is, living on less than $1.25 per day -- have declined as a proportion of the world population, from 52 percent in 1981 to 22 percent in 2008.
The extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. The authors find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.
Read the working paper to know more.
Driven by the rapid growth of urban population in developing countries, the world had become more urban than rural by 2007. This trend is expected to continue in the years ahead. Almost all of the future growth in the world population will be concentrated in the urban areas of developing countries. The United Nations projects that developing countries will almost double their urban population by 2050, adding a further 2.4 billion urban dwellers (figure 1).
Among the evocative winning photos in the World Bank’s recent “Picture Inequality” contest was one that hit home for me.
It shows a skinny teenager crushing stones so they could be used to construct gravel roads in Nepal. The picture captured the sense of helplessness many youth feel in Nepal, a landlocked country in South Asia that is struggling to recover from a decade-long civil war. And it brought to mind the saying a photograph is worth a thousand words.
The photographer, Niraj Prasad Koirala, 24, of Nepal, was one of 10 winners whose photographs and statements best captured inequality and described how they would make a better world. Koirala’s photo was one of 11 chosen by a panel of experts from 756 photos received between October 25 and December 16, 2012.
"I was very happy when I got to read the winning message from the World Bank. It was my one of the greatest moments in life," says Koirala.