Poverty may be falling, but 1 billion people still live in extreme poverty. Inequality is growing everywhere. What is the World Bank Group doing about this?
The World Bank Group President Jim Yong Kim and World Bank Chief Economist Kaushik Basu had some answers in a live-streamed conversation, Building Shared Prosperity in an Unequal World, with Chinese media entrepreneur Yang Lan in the lead-up to the institution’s Annual Meetings on Wednesday morning.
Yang, the host of Yang Lan 101 and a household name in China, focused on the two goals set by the World Bank Group: reducing extreme poverty globally to 3% by 2030 and building shared prosperity by boosting the incomes of the bottom 40% of the population.
“To many people who are living in poverty, the very term ‘World Bank’ sounds gigantic and far, far away,” said Yang, urging Kim and Basu to “explain to them the relevance of the twin goals of the World Bank to their daily life.”
For Kim, “shared prosperity” was embodied by a young man in Haiti, Joseph Jeune, who was transformed from emaciated to the picture of health once he had access to HIV drugs. In the early 2000s, there was an assumption such drugs would not work in poor countries. Jeune’s before and after pictures “became a symbol of all that was possible” in places like Haiti and Africa, said Kim.
“Our commitment to shared prosperity goes back to stories just like this, where people say it’s not possible that the poor can participate in society, that the poor can have jobs, that the poor can have health and education. And we want to put that to rest forever,” said Kim.
Yang pressed for details on whether the Bank Group’s twin goals are realistic. She pointed out the goal would require lifting 50 million people out of extreme poverty each year and could be affected by uncertainties, such as conflict or disease outbreaks like the current Ebola crisis.
Basu agreed that reducing poverty to 3% globally by 2030 is ambitious – a target rather than a forecast – but possible if countries get at least 4% growth a year and income distribution remains the same.
“Realistically what we are trying to do is reduce chronic poverty. We will get to that everywhere,” said Basu. Annual targets have been met over the last couple of years, and an interim goal of reducing poverty to 9% by 2020 is on track, he added.
The final stretch to the goal will be more difficult, however, Basu acknowledged. Reducing poverty requires economic policies informed by data – and there is not enough data in many developing countries. Countries also will have to maintain a 4% growth rate.
Kim said the Bank Group is moving to spur growth and accelerate progress through initiatives such as a new Global Infrastructure Facility to encourage “much more massive” investments in infrastructure in developing countries. The Bank Group is also eyeing innovative financing tools to help countries prepare for and respond quickly to shocks such as a pandemic.
“The Ebola epidemic showed us that we’re not prepared. … If we’re going to have any chance to end poverty by 2030, we’ve got to put these instruments in place that will potentially buffer the shock.”
Inequality has worsened globally, said Yang, citing recent evidence that the gap between rich and poor is widening everywhere.
Kim said the Bank Group is tackling inequality through the “shared prosperity” goal, which aims to improve access to life’s essentials, including food, shelter, health care, education, and jobs, for the bottom 40% of earners in developing countries.
Widening access to technology, smart phones, and the Internet will also make a difference, said Kim, because low-income people will become increasingly aware of how the middle class lives in their own country. “I have to assume that cries for access to that kind of life, for education and health care, will grow.”
The World Bank Group President Jim Yong Kim and World Bank Chief Economist Kaushik Basu had some answers in a live-streamed conversation, Building Shared Prosperity in an Unequal World, with Chinese media entrepreneur Yang Lan in the lead-up to the institution’s Annual Meetings on Wednesday morning.
Yang, the host of Yang Lan 101 and a household name in China, focused on the two goals set by the World Bank Group: reducing extreme poverty globally to 3% by 2030 and building shared prosperity by boosting the incomes of the bottom 40% of the population.
“To many people who are living in poverty, the very term ‘World Bank’ sounds gigantic and far, far away,” said Yang, urging Kim and Basu to “explain to them the relevance of the twin goals of the World Bank to their daily life.”
For Kim, “shared prosperity” was embodied by a young man in Haiti, Joseph Jeune, who was transformed from emaciated to the picture of health once he had access to HIV drugs. In the early 2000s, there was an assumption such drugs would not work in poor countries. Jeune’s before and after pictures “became a symbol of all that was possible” in places like Haiti and Africa, said Kim.
“Our commitment to shared prosperity goes back to stories just like this, where people say it’s not possible that the poor can participate in society, that the poor can have jobs, that the poor can have health and education. And we want to put that to rest forever,” said Kim.
Yang pressed for details on whether the Bank Group’s twin goals are realistic. She pointed out the goal would require lifting 50 million people out of extreme poverty each year and could be affected by uncertainties, such as conflict or disease outbreaks like the current Ebola crisis.
Basu agreed that reducing poverty to 3% globally by 2030 is ambitious – a target rather than a forecast – but possible if countries get at least 4% growth a year and income distribution remains the same.
“Realistically what we are trying to do is reduce chronic poverty. We will get to that everywhere,” said Basu. Annual targets have been met over the last couple of years, and an interim goal of reducing poverty to 9% by 2020 is on track, he added.
The final stretch to the goal will be more difficult, however, Basu acknowledged. Reducing poverty requires economic policies informed by data – and there is not enough data in many developing countries. Countries also will have to maintain a 4% growth rate.
Kim said the Bank Group is moving to spur growth and accelerate progress through initiatives such as a new Global Infrastructure Facility to encourage “much more massive” investments in infrastructure in developing countries. The Bank Group is also eyeing innovative financing tools to help countries prepare for and respond quickly to shocks such as a pandemic.
“The Ebola epidemic showed us that we’re not prepared. … If we’re going to have any chance to end poverty by 2030, we’ve got to put these instruments in place that will potentially buffer the shock.”
Inequality has worsened globally, said Yang, citing recent evidence that the gap between rich and poor is widening everywhere.
Kim said the Bank Group is tackling inequality through the “shared prosperity” goal, which aims to improve access to life’s essentials, including food, shelter, health care, education, and jobs, for the bottom 40% of earners in developing countries.
Widening access to technology, smart phones, and the Internet will also make a difference, said Kim, because low-income people will become increasingly aware of how the middle class lives in their own country. “I have to assume that cries for access to that kind of life, for education and health care, will grow.”
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