When President Barack Obama announced that the United States would cut CO2 emissions from its coal power plants by 30 percent below 2005 levels by 2030, he didn’t just talk about climate change – he was equally forceful about the local benefits that the regulations could bring. He stressed that those regulations would reduce pollutants that contribute to soot and smog by over 25 percent, reductions that could avoid up to 6,600 premature deaths and 150,000 asthma attacks in children; and that the regulations would build jobs, benefit the economy, and be good for the climate.
Demonstrating the value of multiple benefits that result from many policies and projects can provide a compelling economic rationale for action. It can speak to broad constituencies, local and global, and demonstrate the climate-smart nature of good development. A new report prepared by the World Bank in partnership with the ClimateWorks Foundation – Climate Smart Development: Adding up the benefits of actions that help build prosperity, end poverty and combat climate change – sets out to do just that.
Despite Africa’s great diversity of cultures and climates, countries on the continent often speak the same language when it comes to tackling common development challenges. Senegal and Uganda recently did just that, teaming up to exchange best practices to boost agricultural productivity and employment on both sides of the continent.
I witnessed this knowledge exchange firsthand as I accompanied a Ugandan delegation led by Hon. Maria Kiwanuka, Uganda’s minister of finance, planning, and economic development, on its visit to Senegal. Their core mission was to seek out innovative ways to boost economic growth and create job opportunities for the country’s burgeoning youth, a challenge faced by Uganda and Senegal alike. As both countries continue to experience an increase in urbanization and population growth, and currently have economies that are predominantly based on agriculture, one common answer to this rising challenge is the enhancement of agricultural productivity and the development of agricultural value chains.
From time to time, countries experience rapid economic growth without a significant decline in poverty. India’s GDP growth rate accelerated in the 1990s and 2000s, but poverty continued to fall at the same pace as before, about one percentage point a year. Despite 6-7 percent GDP growth, Tanzania and Zambia saw only a mild decline in the poverty rate. In the first decade of the 21st century, Egypt’s GDP grew at 5-7 percent a year, but the proportion of people living on $5 a day—and therefore vulnerable to falling into poverty—stagnated at 85 percent.
In light of this evidence, the World Bank has set as its goals the elimination of extreme poverty and promotion of shared prosperity. While the focus on poverty and distribution as targets is appropriate, the public actions required to achieve these goals are not very different from those required to achieve rapid economic growth. This is not trickle-down economics. Nor does it negate the need for redistributive transfers. Rather, it is due to the fact that economic growth is typically constrained by policies and institutions that have been captured by the non-poor (sometimes called the rich), who have greater political power. Public actions that relax these constraints, therefore, will both accelerate growth and transfer rents from the rich to the poor.
Some examples illustrate the point.
It’s 38°C (99°F) in Ouagadougou, the capitol city of Burkina Faso, today—and it’s been this hot all week. The end of the warm season is near, but in places like Ouaga (pronounced WAH-ga, as its better known), temperatures stay high year-round. These are the African drylands: hot, arid, and vulnerable.
Over 40 percent of the African continent is classified as drylands, and it is home to over 325 million people. For millennia, the people of these regions have adapted to conditions of permanent water scarcity, erratic precipitation patterns, and the constant threat of drought. But while urban centers like Cairo and Johannesburg have managed to thrive under these harsh conditions, others have remained mired in low productivity and widespread poverty.
The World Bank has been partnering with a team of regional and international agencies to prepare a major study on policies, programs, and projects to reduce the vulnerability and enhance the resilience of populations living in drylands regions of Sub-Saharan Africa.
I met a young rice farmer during my recent trip to Myanmar. He has a tiny plot of land on the outskirts of the irrigation system and could harvest only one rice crop a year. Even if he worked hard, and the weather was at its best, he produced only enough rice to feed his family for 10 months. During the last two months of the rice-growing season, he would walk around his village, a small plastic cup in his hands, and ask neighbors if he could borrow some rice. This would happen year after year.
Unfortunately, this story is not uncommon. A majority of Myanmar’s laborers work in agriculture. A third of them live below the poverty line and depend on rice for survival.
There’s been a lot of talk about food riots in the wake of the international food price hikes in 2007. Given the deaths and injuries caused by many of these episodes, this attention is fully justified. It is quite likely that we will experience more food riots in the foreseeable future—that is, if the world continues to have high and volatile food prices. We cannot expect food riots to disappear in a world in which unpredictable weather is on the rise; panic trade interventions are a relatively easy option for troubled governments under pressure; and food-related humanitarian disasters continue to occur.
In today’s world, food price shocks have repeatedly led to spontaneous—typically urban—sociopolitical instability. Yet, not all violent episodes are spontaneous: for example, long-term and growing competition over land and water are also known to cause unrest. If we add poverty and rampant disparities, preexisting grievances, and lack of adequate social safety nets, we end up with a mix that closely links food insecurity and conflict. The list of these types of violent episodes is certainly long: you can find examples in countries such as Argentina, Cameroon, Pakistan, Somalia, Sudan, and Tunisia showcased in May’s Food Price Watch.