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Ending poverty and boosting shared prosperity is about realizing human potential

Ted Chu's picture
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© Vikash Kumar

I have been fascinated by the concept of frontier all my life. What brought us here? What’s next? As a kid, my favorite book was “Ten Thousand Whys,” a pop-science series with all kinds of seemingly trivial questions like “Why are there fewer stars in the sky in winter?”

I wrote my Ph.D. dissertation on the Production Efficiency Frontier Theory — how to identify the most efficient units in a production network and measure the technical frontier. Later I became more of a macroeconomist and my interest expanded to identifying countries standing on the growth frontier. Subsequently, I began studying the deepest thinkers and became convinced that humanity is on an important new frontier of cosmic evolution.

At the International Finance Corporation (IFC), I feel I can pursue my deeply held conviction about the purpose of human life. I believe there are two advancing frontiers in today’s world: one social and another technological. Economic growth, more than ever, is driven by these two frontiers. The challenge is how to allow people to take advantage of their existing productive potential, and how to move the technological frontier to new levels.

These two frontiers are inseparable in the sense that growth is increasingly about maximizing brain power. Technological advances create more wealth and capital, which in turn enable more brain power to push the technological frontier. We are far from fully utilizing the existing brain power on Earth. Millions and millions of bright and motivated young people do not have the basic necessities of life, much less an education or proper working environment to utilize their talent. This is humanity’s biggest waste and biggest potential, a cruel reality where we hope we can make a difference, for the better.

Where can one find a better place to work, given IFC’s mandate in the mix of both frontiers? Our goals — ending poverty and boosting shared prosperity — are fundamentally about mobilizing human capacity and realizing human potential.

Pushing the two frontiers is easier said than done. The social and economic convergence between the rich and poor countries has been a painfully slow and uneven process, while productivity growth in the most advanced countries has slowed after a brief burst in the 1990s. Progress, in the sense of making oneself happier, more productive, and more meaningful than the prior generation, has become less achievable for a large share of the population.

We believe we know a lot about how to push the two frontiers, but we still have much to learn, through practice. IFC, being at the intersection of the private and the public sectors, has to speak the languages of finance and impact, of technology and culture, of local conditions and global trends. We talk about how we have grown tremendously since 1956, yet we are still “a drop in the bucket” in terms of investment in the developing world. The task is unbelievably challenging and fascinating.

I leave the following questions with you. How do we make sure:

  • The role of the private sector in pushing these frontiers is well understood;
  • Our role in promoting and supporting the private sector in these efforts is as strong as it can be; and
  • We work on the most impactful programs and projects in these areas?
How do we grow IFC’s business to have the biggest impact on these frontiers? 

Comments

Submitted by kris luniku on

Ted – thanks for a timely piece on an increasingly important subject.
I very much like the framing of the discussion and the importance it has to strengthen the success and growth of our business, both on impact and scope of innovative operations.
After going through your note, in my mind came two great visionary statements: “The empires of the future will be empires of the mind” – Winston Churchill, and “If we continue to develop our technology without wisdom or prudence, our servant may prove to be our executioner” - General Omar Bradley.
I join many in strongly believing that the world of the future will be the world of mind. In the coming decades, with the help and power of neuroscience and scientific and technology discoveries, the power of mind might leave us breathtaking. Certainly, science and technology will be even stronger engines of development and prosperity. In the future, as they have done in the past, science and technology will definitely change our society in a profound way. I hope that such speed and quality of change will be equally impacting the wisdom of our social systems.
On the role of the private sector - the private sector is contributing more and more to the sustainable development. Putting the private sector to the heart of development agenda is a key factor for growth, innovation and human development. It is the private sector development that creates jobs, goods and services that the poor needs to lift themselves out of poverty and to prosper.
In this regard, time has come for a clearer and effective partnership with the private sector and address the challenges it faces, with the focus on mobilizing its knowledge, innovation, and its long-term resources for sustainable development. Efforts to help the private sector significantly increase its role/impact are not substitute for public finance and the obligations of governments to invest in the provisions of the public goods, including health and education. Furthermore, it is important that the vision to develop and engage the private sector should come primarily from the countries. In this regard, country strategies and government policies play a critical role. Important areas for attention: better operationalization of CPFs, enhance the scope and place of the private sector in SCDs, leverage the private-public investments, scale up innovation and technologies, expand the scope of blended activities, and show that the private sector engagement and its development motive can be truly commercially viable.

Submitted by Ted on

I agree - the future is in the mind, and we are still at hunter-gatherer stage in terms of developing great minds.

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